VW faces €8.2bn in damage claims from investors

A year after the VW emissions scandal, the German car giant has been hit with damage claims in the district where it is based in Germany.

Photo by: Reuters
Photo by: Reuters

A Volkswagen logo is pictured at Volkswagen's headquarters in Wolfsburg, Germany, April 22, 2016. REUTERS/Hannibal Hanschke/File Photo A Volkswagen logo is pictured at Volkswagen's headquarters in Wolfsburg, Germany, April 22, 2016.

Volkswagen has been hit with damage claims from its investors for €8.2 billion over its emissions scandal in the legal district where the carmaker is based, a German court said on Wednesday.

Last September, Environmental Protection Agency (EPA) discovered that many VW cars being sold in the US had a “defeat device” in diesel engines which detected when they were being tested and could change performance accordingly to improve results.

Although EPA's findings cover 482,000 cars in the US only, VW has said close to 11 million cars worldwide, including 8 million in Europe, are fitted with the so-called "defeat device."

Under laboratory conditions, meaning putting the car on a stationary test rig, the device would put the vehicle in a “safety mode” resulting in the engine to run below normal power and performance.  

But, once on the road, the engines would switch out of this test mode resulting in the engines emitting nitrogen oxide pollutants up to 40 times above what is allowed in the US.

Now a year later, close to 1,400 lawsuits have been filed at the regional court in Braunschweig near Volkswagen's Wolfsburg headquarters alone.

Monday marked the first business day after the anniversary of VW’s diesel emissions test-rigging scandal, and the Braunschweig court said it had received close to 750 lawsuits alone on that day.

Court also said it had brought in extra staff to process suits submitted by shareholders concerned Sept. 18 - the day VW’s manipulations were disclosed a year ago – could be the deadline to file.

Plaintiffs said Volkswagen did not inform shareholders quickly enough over its cheating software, which was installed in up to around 11 million vehicles worldwide.

Volkswagen is facing lawsuits and investigations across the world but has consistently said it did not break capital markets rules and regulations in the disclosure of its cheating.

€3.3 billion claim, which is the biggest at the Braunschweig court, was filed by lawyer Andreas Tulip on behalf of institutional investors around a year ago.

The court disclosed additional complaints on Wednesday, saying they included a filing by institutional investors for €30 million in damages, two investor groups demanding €1.5 billion and €550 million respectively and an investment company that sued the carmaker for €45 million.

The court stated that it would take close to four weeks to process the additional claims.

German state pension funds have also filed complaints.

So far VW has set aside nearly $18 billion to cover the cost of vehicle refits and a settlement with US authorities, but analysts think the bill could rise much further as a result of lawsuits and regulatory penalties.

Reuters, TRTWorld and agencies