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The 380,000 German car owners fighting VW might wait years for any compensation

Jill Petzinger
Jill Petzinger, Germany Correspondent, Yahoo Finance UK
Volkswagen’s plant in Wolfsburg, Germany. REUTERS/Fabian Bimmer

Volkswagen’s 2015 emissions-cheating scandal may be disappearing in the rearview mirror for US consumers, but Germans saddled with affected diesel cars have yet to see a cent of financial compensation.

VW has agreed to pay over $25bn (£19.4bn) in compensation to car owners, states, and dealers in the US, as well as buy back some half million affected diesels. In VW’s homeland of Germany, the company has so far gotten off with simply offering a cheap software upgrade for 2.8 million polluting diesels — unlike the more expensive engine overhaul offered to US drivers.

Class action lawsuits made up of a collective of individual claimants did not exist in Germany until 2018, when the government approved what is called a Musterfeststellungsklage, or “model declaratory proceeding” (MDP).

The country’s first such suit will be against Volkswagen, and around 383,000 consumers have now joined the proceeding. Sarah Hoare from the Consumer Rights Association (VZBV), which is representing the consumers, estimates that the suit could last for around two years. Then individual claims cases could take another two to three years.

The German version of the class action is quite different than the US suit. People must be represented by consumer rights organisations — in this case the VZBZ — and the judge will only decide whether or not Volkswagen is at fault and should compensate car owners.

“This case is about whether a company has acted unlawfully,” Hoare from the VZBV told Yahoo Finance UK, adding that the court first needs to establish that VW owes damages caused by their manipulation of the emissions software in the cars. “The Higher Regional Court of Braunschweig will not order the payment of damages to the persons concerned in its judgment.”

If the court rules that Volkswagen should compensate consumers, the claimants then need to bring individual suits against the car company, in which they claim a specific amount of damages based on the loss of value of their cars.

The consumer rights association “assumes that a company, which has been convicted in a designation claim, may, considering its public reputation, signal readiness to reimburse the damages without the need for a second claim.”