VW car owners to vent their anger in German class-action suit | Business| Economy and finance news from a German perspective | DW | 01.11.2018
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VW car owners to vent their anger in German class-action suit

New German legislation taking effect on November 1 is enabling duped VW car owners to fight for compensation in the country's first-ever class action suit. But angry consumers will have to hurry up.

German carmaker Volkswagen on Thursday got a taste of the anger felt by German diesel drivers as consumer groups filed the country's first class-action suit over VW's large-scale emissions cheating scandal.

Their legal action had been made possible by new legislation that was hurried through to beat a year-end statute of limitations for claims against the auto manufacturer.

"Volkswagen will remember the day as the moment the kid gloves of the politicians were replaced by the boxing gloves of consumer advocates", said Klaus Müller of Germany's VZBV consumer federation.

Justice Minister Katarina Barley said an estimated 2 million VW car owners might benefit from the new law, although the suit starts on a much smaller scale.

Difficult resale

Many owners of VW diesels have grown increasingly irritated by the cheating scandal's fallout as they face plummeting resale values and driving bans in big cities due to pollution concerns. They're also angry about the government, feeling Berlin has been slow to take on the car industry even as cheating suspicions spread to many other carmakers.

VZBV and Germany's largest motoring club, ADAC, kicked off the class-action suit Thursday by lodging a complaint with a regional court in Braunschweig near VW's headquarters in Wolfsburg in the German state of Lower Saxony.

If the judges deem the case admissible, authorities will open a register allowing other consumers to join the collective action. In principle, everyone is eligible who bought a Volkswagen car with a diesel EA 189 engine from November 2008.

The collective suit has the benefit of letting plaintiffs bundle their complaints, saving the time and cost of suing the defendant individually.

But talking about a US-style class-action suit isn't quite right. Unlike in the United States, judges here only rule on whether or not damages should be awarded, without determining an amount.

No plain sailing

This means that even if German judges should find that VW should compensate drivers, each plaintiff would still have to go back to court to enforce individual claims.

Volkswagen has been mired in legal woes since it admitted in 2015 to installing emissions-manipulating software in some 11 million vehicles globally. In the US, the carmaker offered buybacks on top of $10,000 (€8,800) in compensation.

VW insists it has no legal obligation to repeat such a deal in Germany or elsewhere in Europe. "All the cars are technically sound and roadworthy," the carmaker said in a statement, adding that it had fully complied with all recall requirements.

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