Volkswagen Dieselgate: VW 'Unethical,' Top German Civil Court Orders Compensation In Emissions Scandal

KEY POINTS

U.S. regulators found software on VW diesel engines gave false readings during testing
VW recalled 11 million vehicles worldwide in 2015
Billions already have been paid out to motorists but at least 150,000 suits still are pending

Germany’s top civil court on Monday ordered Volkswagen to pay compensation up to the total value of the vehicle to consumers affected by the diesel emissions scandal, ordering the company to pay an estimated 28 billion euros (nearly $30.5 billion).

VW (VOW3.DE) earlier this year established an 830 million euro ($904 million) to compensate car owners caught up in dieselgate, which forced the company to recall more than 11 million vehicles worldwide in 2015 because of software for its EA189 diesel engines that manipulated emissions results. So far, 750 million euros (nearly $817 million) has been paid out from the fund.

Volkswagen settled with U.S. owners for 10 billion euros ($10.9 billion) early on after U.S. regulators uncovered the issue. The company also set aside 31 billion euros ($33.8 billion) to cover costs. Settlements also were reached in Canada and Australia. About 90,000 cases are pending in England and Wales.

“The behavior of the defendants is to be deemed unethical,” Stephen Seiters, the presiding judge of the Federal Court of Justice, ruled. The landmark ruling opens the way for German VW owners whose vehicles were equipped with devices that gave false emissions readings during testing to claim compensation.

“For the majority of the 60,000 pending cases, this ruling provides clarity,” Volkswagen said in a press release. “Volkswagen is now seeking to bring these proceedings to a prompt conclusion in agreement with the plaintiffs.”

The ruling stemmed from a case filed by Herbert Gilbert who paid 31,500 euros ($34,311) for a VW Sharan in 2014.

“It is the ruling I was expecting, which not only helps me, but also helps many thousands of plaintiffs who are still waiting in line to end their lawsuits,” Gilbert told reporters after the ruling was issued.

Cases to be heard in July will determine whether owners who bought their vehicles after the scandal broke also are entitled to compensation.

Volkswagen already has settled with 240,000 other German drivers, who will receive as much as 6,250 euros ($6,250) each.

The European Court of Justice is considering the case, as well, and whether newer diesel engines also were manipulated illegally.