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Volkswagen reaches £193m settlement with UK owners over Dieselgate

The Volkswagen Group has today announced it has reached an out-of-court settlement with the group action representing car owners in England and Wales caught up in the Dieselgate scandal.

The German auto giant will pay £193million to the 91,000 motorists represented by the law firms driving the Volkswagen NOx Emissions Group Litigation in the UK, it confirmed on Wednesday.

Volkswagen will make a separate contribution to cover claimants’ legal costs and other fees, it added.

The case was due to go to trial next January.

Volkswagen today confirmed it has reached an out-of-court settlement with UK drivers impacted by the Dieselgate scandal worth £193million

The group action represents buyers in England and Wales of Volkswagen Group cars – including Audis, Seats and Skodas – with the EA189 diesel engine, which was found in September 2015 to emit more of the air pollutant nitrogen dioxide than the company claimed.

The group action, which was launched in 2019, has been spearheaded by law firms Slater and Gordon, Leigh Day and PGMBM and reached the High Court in December last year for a five-day hearing.

It was created after the German car maker had originally refused to compensate owners of affected diesel models in the UK citing EU law.

The Volkswagen NOx Emissions Group Litigation was granted in 2020 after the High Court had ruled that emissions-testing software fitted to cars with the diesel engine had been designed to cheat emissions testing regimes, amounted to unlawful ‘defeat devices’.

The group action has argued that dealerships had misled consumers during the purchase process as nitrogen dioxide levels were lowered under the lab conditions and were – in real-world driving scenarios – emitting up to 40 times the legal limit of NOx.

The Volkswagen Group, which has already spent some £25billion globally on legal costs, compensation and vehicle buybacks since the Dieselgate scandal broke, today said an out-of-court settlement with UK drivers was ‘the most prudent course of action commercially’. 

‘No admissions in respect of liability, causation or loss have been made by any of the defendants in the group action as part of the settlement,’ the vehicle manufacturer confirmed in an official statement. 

‘In Volkswagen’s view, the legal costs of litigating this case to a six-month trial in England, and then in relation to any further appeals by either party, were such that settlement was the most prudent course of action commercially.’

It added that it is not participating in the distribution or allocation of the settlement amount, which will be ‘allocated between the claimants in proportions agreed amongst the various claimant solicitors’ firms and those from whom they take instructions’.

‘The Volkswagen Group would, once again, like to take this opportunity to sincerely apologise to their customers for the two mode software installed in the EA189 vehicles,’ the statement continued.

‘The Volkswagen Group will continue to work to rebuild the trust of their customers here in England and Wales. This settlement represents an important further stage in that process.’

Philip Haarmann, chief legal officer of Volkswagen AG, described the scandal as a ‘deeply regrettable event’ and said the settlement was ‘another important milestone’ in its wake.

In a statement issued on Wednesday the Volkswagen Group said the settlement represents its efforts to 'rebuild the trust of customers in England and Wales'

In a statement issued on Wednesday the Volkswagen Group said the settlement represents its efforts to ‘rebuild the trust of customers in England and Wales’

Lawyers representing claimants in England and Wales said it had been the biggest consumer group action ever to be brought before the English courts.

David Whitmore, boss of Slater and Gordon, commented: ‘The settlement avoids the need for a lengthy, complex and expensive trial process and we are delighted to have achieved this settlement for our customers as a result of the group action.’

Its co-lead solicitor, Leigh Day, represented by Bozena Michalowska and Shazia Yamin, added: ‘We are pleased that Volkswagen has repeated its sincere apology for the use of the prohibited two mode software. 

‘We are delighted that this case has finally been settled for our clients and the claimants in the NOx emissions litigation. 

‘We have been unwavering in our belief in our clients’ case, that is why we have fought long and hard for this outcome. We are clear that it was in the interest of our clients to settle this early.’

Tony Winterburn, a partner and head of consumer protection litigation at PGMBM, who acted on behalf of more than 15,000 claimants, said: ‘This is a good day for the Claimants and is the culmination of five years of hard-fought litigation.’

PGMBM client Haresh Kainth, 37, from Cambridge who bought an Audi A4 with the EA189 diesel engine, spoke of his relief at the case finally being concluded. 

‘I am glad that after six years VW have settled, and the matter is now resolved. It is a good day for all the claimants.’ 

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