Volkswagen will have to partially reimburse its customers in Germany

A report in AFP states that in a judgment which should be decisive for tens of thousands of proceedings, the highest German court on Monday ordered Volkswagen to partially reimburse a customer who had bought a car equipped with a rigged diesel engine, five years after the revelation of this sprawling scandal.

This is the first notable legal setback for the automobile giant in Germany, in this Volkswagen scandal which has plunged the German automobile industry, pillar of the country's economy, into a historic crisis from which it is still struggling to get out.

The judges of the German Federal Court (BGH) have notably considered that the purchase of a car fitted with a rigged engine constituted damage in itself, even if, as Volkswagen had argued, the vehicle remained "usable".

Volkswagen will now "offer" amicable solutions to settle "a large part of the 60,000 individual proceedings in progress" explains the group in a press release.

With the amicable agreement signed at the end of February to avoid a mega-trial of German customers, and the end of an important criminal investigation, Volkswagen is approaching the judicial epilogue of the "dieselgate".

The Karlsruhe Court was interested in the case of Herbert Gilbert, 65, who had bought a used Volkswagen Sharan diesel in 2014, one of the 11 million vehicles in which the manufacturer admitted in September 2015 to have placed software rigging polluting emissions.

By equipping its cars with software capable of making them appear less polluting than they actually are, the German car group "knowingly and systematically deceived for several years" the authorities, "with a view to profitability", explained the judge Stephan Seiters.

Volkswagen's behavior "is objectively qualified to be contrary to moral standards" and "particularly blameworthy", he insisted.

The Court of Appeal had ruled in favor of the pensioner, ordering the manufacturer to pay 25,616 euros and to take back the vehicle - a sum lower than the purchase price of 31,490 euros because the judges took into account the loss of value due to the use, reasoning validated Monday by the Federal Court.

The decision comes after the end of an unprecedented trial in Germany in April, similar to an American class action involving hundreds of thousands of applicants.

Volkswagen will spend at least 750 million euros to compensate 235,000 customers under an amicable agreement, a sum that may seem small compared to the more than 30 billion euros that the scandal has already cost the manufacturer, mainly in the United States.

Some 60,000 individual customer claims are still being tried in German courts, and the Federal Court ruling will be crucial for them.

So far, Volkswagen has already settled tens of thousands of cases. According to several investigations by the German press, the manufacturer mainly tried to delay the arrival of the "dieselgate" before the High Court to take advantage of the loss of value of the vehicles, which VW denies.

In criminal proceedings, the page is turned for the current boss Herbert Diess, referred to a court in September 2019 by the Brunswick prosecutor's office for manipulation of the markets, alongside the director of the supervisory board Hans Dieter Pötsch. The two have just avoided a trial for the settlement of 9 million euros as part of an agreement with the justice system.

The only major investigations remaining concern ex-boss Martin Winterkorn dismissed for "manipulation of the stock market price" and "aggravated fraud", and the ex-CEO of Audi Rupert Stadler. Another investigation by the Stuttgart prosecutor's office targets Mr. Pötsch.

There remains a large lawsuit from investors, who are demanding reimbursement for the spectacular fall in Volkswagen's share price. A crucial point is who, in the highest ranks of the business, was aware of the cheat and the associated financial and legal risks.

The end of the criminal investigation against certain leaders has strengthened the manufacturer's position in this case. But the BGH, far from absolving senior officials, considers in its judgment that "strategic decisions on the development and use of" fraudulent software required "at least the knowledge and approval" of the Executive Board of the 'time.

Also Read:

VOLKSWAGEN RESTARTS PRODUCTION IN GERMANY AFTER CORONAVIRUS LOCKDOWN

VOLKSWAGEN I.D. BUZZ TO BE LAUNCHED IN 2022 | VW HIPPIE VAN

TESLA BECOMES WORLD'S SECOND-MOST VALUABLE AUTO-MAKER OVERTAKING VOLKSWAGEN

THE NEW VOLKSWAGEN TOUAREG R HYBRID TO WORLD PREMIERE IN GENEVA MOTOR SHOW 2020