VW Dieselgate Emissions Scandal: The mistake that keeps on giving

October 28, 2019

2 min read

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What's going on here?

Volkswagen’s (VW) “defeat device” designed to circumvent emissions tests by providing false output recordings from their vehicles has resulted in far-reaching and costly litigation across various jurisdictions.

What does this mean?

In 2016, a $14.7 billion settlement was agreed upon in the US after VW admitted putting software designed to cheat emissions tests in 11 million vehicles worldwide.  In 2019, an Australian class action by consumers in the Federal Court resulted in a minimum pay-out of $87 million, with the potential to rise to $127 million. Furthermore, an agreed settlement of $75 million between VW and the Australian Competition and Consumer Commission was recently rejected, on the basis that an even higher settlement would be justifiable.

Following an array of successful case outcomes against VW worldwide, a group litigation proceeding (identifiable as Class Actions in other jurisdictions) is now due to commence in the UK in Spring 2020, with a pre-trial hearing taking place this December.

What's the big picture effect?

Group or class action litigation is useful, as it allows for one person to bring a claim for a group of people, however large, who have also suffered loss from the same event.

Whilst the use of group litigation in the UK is comparatively lower than within other jurisdictions, this may be attributed to the procedure to bring a claim. Whereas many jurisdictions such as Australia retain an “opt out” process, which requires any potential members of the group to disengage themselves from the case and ask not to be a part of it, the UK maintains an “opt in” process for group litigation proceedings.

Historically, there has been limited use of group litigation in the UK. However, more recently there has been a notable rise in such actions. As observable from the reporting of HM Courts & Tribunals Service, there has been a total of 105 group litigation orders reported in the UK, of which the VW NOx Emissions Group is the most recent. The rise of group litigation may be attributable to the various benefits; by having a group of individuals who pool resources and gain confidence through sharing risks and costs of the case, they are better placed to litigate against well-funded and well-resourced opposition, which is typically a large corporation.

Whether the group litigation due to take place in the UK will be successful remains to be seen. Yet, in consideration of the success of previous class actions and the fact that such cases against VW have been brought across a range of jurisdictions, this evidences a sufficient global effort to deter such scandalous actions from reoccurring in the future.

Report written by Karolina Smolicz

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