US court approved $14.7 Billion Settlement in VW emissions cheating scandal

Publish date: October 27, 2016

Written by: Charles Digges

NEW ORLEANS – A federal judge in the United States has approved Volkswagen's $14.7 billion settlement over the carmaker's vehicle emissions scandal, US media reported this week.

NEW ORLEANS – A federal judge in the United States has approved Volkswagen’s $14.7 billion settlement over the carmaker’s vehicle emissions scandal, US media reported this week.

The case represents the largest civil settlement in automaker history, and the largest false advertising case the US’s Federal Trade Commission has ever dealt with, said National Public Radio.

As part of that settlement, Volkswagen has also committed to providing $2 billion in funds to install charging or fueling infrastructure for zero-emission vehicles, noted the Green Car Reports news portal.

The process of compensating affected US car owners is to begin immediately, with the first buybacks expected to happen within the next few weeks, the TechTimes reported.

This will mean Volkswagen will pay as much as $10 billion to owners. In addition, the carmaker has come to an agreement with the United States under which it will pay nearly $5 billion in environmental remediation, US media said.

“The US VW settlement is a welcome step towards internalizing the conventional car industry’s heavy footprint on human health and the environment,” said Teodora Serafimov, a policy adviser with Bellona Europa.

The tentative deal was announced in June. On Tuesday, it was approved by US District Judge Charles Breyer, who found it was “fair, adequate, and reasonable,”NPR reported.

Under the terms of the decision, Volkswagen will buy back or repair vehicles involved in the scandal. This means paying as much as $10 billion to owners to owners of 2.0 liter diesels that were previously billed as “green” diesel vehicles with low emissions.

The cars, however, had been fitted with a so-called defeat device that caused them to perform differently during emissions tests, giving them the appearance of having lower emissions than they really had.

The defeat devices were found not only in Volkswagens released from 2009 to 2016, but Audi and Porsche vehicles that rolled off the assembly line in the same period.

Under the terms of the agreement, the court said funds to compensate owners must be made available within 10 days of final approval, and the buyback program must begin immediately.

The settlement deal requires Volkswagen to recall 85 percent of all affected cars by June 30, 2019. Failure to do so will require the company to pay an additional $85 million into the environmental mitigation trust, said the TechTimes.

Volkswagen told NPR that the claims process for buybacks has already begun. The company is reviewing owner submitted documents, said the carmaker on its settlement website.

Once approved, owners can expect buybacks or repairs within 90 days.

Some 311,000 affected owners in the US have until Sept. 1, 2018, to submit a claim. A spokeswoman for the carmaker told NPR that the company expects the first transactions to take place around mid-November.

VW faces a number of other legal challenges related to the emissions-cheating debacle.

There are lawsuits against the German carmaker in other countries. In the US, the company could also face criminal charges.

Bellona’s Serafimova, however, doesn’t anticipate the scandal will generate a similar compensation in fines and buybacks in Europe, which was also heavily impacted by the Volkswagen defeat devices.

“Unfortunately, it is unlikely that we will be seeing fines of similar magnitude being imposed on VW in Europe namely because of the softer regulatory regime but most importantly because of Germany’s determination to protect its own car industry,” she said. “The conventional car industry has repeatedly shown its heavy influence on the EU decision making arena over the past year by causing delays and watering down the revision of the outdated EU emission testing regime.”

Several US states have filed lawsuits accusing VW of violating state environmental laws by cheating on emissions tests. This summer the company announced a proposed settlement with dealers who claim losses caused by the scandal.