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Volkswagen to pay £193 million to British diesel car owners in out-of-court settlement

£26 billion and counting

Remember dieselgate? In 2015 it emerged that Volkswagen had been using software in its diesel cars to cheat lab-based emissions checks. The fallout has been rumbling on ever since and now Volkswagen will hope to have drawn a line under it all, at least in England and Wales, with a multi-million-pound out-of-court payout to drivers affected.

The settlement follows action taken against the German car giant on behalf of VW diesel owners in the High Court. The group claimed that VW had misled them as to the environmental sustainability of their cars, and that the second-hand value of those cars had been seriously affected by the scandal.

The case also covered VW Group’s subsidiary brands Audi, Seat and Skoda.

Rather than fight the case, Volkswagen has promised to pay £193 million in compensation to some 91,000 vehicle owners across the UK. However the carmaker said in a statement that the settlement makes no admission of liability; instead the payment was “prudent” given the legal costs of defending itself in court. 

Philip Haarmann, chief legal officer at Volkswagen, said: “The Volkswagen Group is pleased that we have been able to conclude this long running litigation in England & Wales. The settlement is another important milestone as the Volkswagen Group continues to move beyond the deeply regrettable events leading up to September 2015.”

A spokesperson for Volkswagen added: “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 Volkswagen Group will continue to work to rebuild the trust of their customers here in England and Wales.”

Responding to VW’s settlement, the two firms of solicitors who brought the case welcomed the payments for their clients.

Slater and Gordon CEO David Whitmore said: “Over the last five years, Slater and Gordon have rightly dedicated a significant and unwavering commitment to this case, providing an expert voice to a round 70,000 claimants. 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.”

Bozena Michalowska and Shazia Yamin, lead solicitors at Leigh Day, said: “We are pleased that Volkswagen has repeated its sincere apology for the use of the prohibited two mode software.

“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, which acted on behalf of more than 15,000 claimants in the litigation, said: “This is a good day for the claimants and is the culmination of five years of hard-fought litigation.”

The payment of £193 million isn’t the only cost to VW. It will also pay a contribution towards the legal costs of the claimants. It’s something of a drop in the ocean, though, when you consider that Volkswagen has globally had to pay out more than £26 billion in fines and compensation. 

A separate case brought against VW in Scotland is ongoing. 

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