Civil lawsuit against VW will prove a costly affair | Business| Economy and finance news from a German perspective | DW | 05.01.2016
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Civil lawsuit against VW will prove a costly affair

After the US authorities filed a civil lawsuit against German carmaker Volkswagen over its emissions-cheating scandal, analysts are trying to figure out how much the lawsuit will cost VW. There will be no cheap escape.

Experts confirmed Tuesday the US Justice Department's allegations against Volkswagen carried penalties that were likely to cost the Wolfsburg-based auto maker billions of dollars.

Violating the Clean Air Act by installing illegal devices to thwart emissions tests in the lab with about 600,000 vehicles affected in the US alone would cost VW dearly, they argued.

The German carmaker could face fines in theory exceeding $90 billion (83.3 billion euros), meaning as much as $37,500 per vehicle and per violation of the law, based on the current complaint.

And US authorities made it clear they were serious about not letting VW off the hook. "The United States will pursue all appropriate remedies against Volkswagen to redress the violations of our nation's clean air laws," Assistant Attorney General John Cruden said in a statement.

More to come

The civil lawsuit reflects the expanding number of allegations against VW since the company first admitted last September to installing defeat devices in several of its diesel cars.

Volkswagen's admissions mean there's almost no way for the carmaker to defend itself in court, all the more so since in a civil lawsuit the US government does not have to prove the degree of intentional deception at Volkswagen.

Instead, the auto maker is likely to seek to negotiate a lower penalty by arguing that the maximum would be "crippling to the company and lead to massive layoffs," as lawyer Daniel Riesel of Sive, Paget and Riesel remarked.

But even if VW manages to strike a deal there, more trouble might be coming its way soon. This is because the civil lawsuit does by no means preclude the US Justice Department from pursuing criminal charges.

Volkswagen itself has not yet revealed anything about its future defense strategy. It only said Monday night it was carefully studying the civil suit and would continue to cooperate fully with US authorities.

hg/nz (Reuters, dpa)

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