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Dieselgate: German court orders VW to compensate car owner in landmark case

Jill Petzinger
·Germany Correspondent, Yahoo Finance UK
·2-min read
25 May 2020, Baden-Wuerttemberg, Karlsruhe: Herbert Gilbert, plaintiff against the car manufacturer VW in the diesel scandal, is standing before the Federal Court of Justice (BGH), before the beginning of the pronouncement of judgement, at a sign with a federal eagle and the lettering Bundesgerichtshof. According to the ruling, Volkswagen is in principle obliged to pay damages to car owners affected by the diesel scandal. Plaintiff buyers, who want the money for their car back, must however have the kilometres driven credited, the Federal High Court (BGH) in Karlsruhe decided on Monday. Photo: Uli Deck/dpa (Photo by Uli Deck/picture alliance via Getty Images)
25 May 2020, Baden-Wuerttemberg, Karlsruhe: Herbert Gilbert, plaintiff against the car manufacturer VW in the diesel scandal, outside the Federal Court of Justice, before the pronouncement of judgement. Photo: Uli Deck/picture alliance via Getty Images

Nearly five years after Volkswagen’s (VOW.DE) emissions-manipulation scandal came to light, a court in Germany ruled today that VW must compensate a car owner for the price of his diesel vehicle.

The Federal Court of Justice in Karlsruhe said the plaintiff should be awarded the full purchase cost of his car, minus the value of the mileage already driven.

This landmark ruling in a case brought by an individual consumer against the world’s largest carmaker is likely to pave the way for thousands more claims like this.

The plaintiff, a pensioner called Herbert Gilbert, sued VW for “deliberate moral deception,” saying he had wanted to buy an environmentally friendly car and felt “tricked.”

Gilbert bought a used VW Sharan diesel in 2014, and in 2015 learned that it was one of the vehicles equipped with the illegal “defeat devices” that made readings of nitrogen oxide much lower in test situations that they were on the roads.

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“This ruling will help thousands of other plaintiffs who have been stuck in their proceedings to finally reach a conclusion,” Gilbert said today.

The Wolfsburg-based car giant admitted in September 2015 that it had installed emissions-manipulating software in 11 million vehicles worldwide.

Last week, VW reached a €9bn (£8.05bn) out-of-court settlement in a case accusing chief executive Herbert Diess and supervisory board chief Hans Dieter Poetsch of market manipulation. The suit alleged that the managers should have informed shareholders about what was about to happen, before the scandal broke and the VW share price totally tanked.

Compared to the US, Canada, and Australia, where Volkswagen has paid out billions in compensation, customers in Germany have been at the back of the line when it came to recouping damages and many have found themselves saddled with diesels they could not sell.

In February this year, a court ordered VW to pay €830m in a class-action suit brought by the German consumer federation. The ruling meant 260,000 customers will get between €1,350 and €6,300 in compensation for their cars, depending on age and the model.

Today’s ruling, coming from the highest civil court in the country, will serve as a guide for further cases against VW—there are still some 70,000 individual lawsuits pending.

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