Over the years, none other than the Volkswagen’s so-called dieselgate scandal has attracted as much attention from the news. You would also think that after three years things would taper off, but no. VW finds itself yet again going against German courts that sided with the consumers this time. And this time, it could end up costing the German carmaker a lot more than it originally thought.
VW Finds Itself In Front Of Yet Another Gigantic Obstacle
Board members at the VW head offices must be wondering when this scandal will finally be put to rest. VW seems earnest in its desire to move into a cleaner and healthier future. And despite exaggerated PR marketing and advertising stints, the car company has been very active painting itself a greener face. It has also put its money where its mouth is by launching a country-wide electrification initiative called Electrify America. Overall, the company has been very active in moving on. But that hasn’t been the case with consumers still holding a grudge against the giant automaker for being cheated.
Consumers are not having it, and dieselgate still rages at this time with owners suing Volkswagen. And so far the response has been a devastating blow to the carmaker. Judges are siding with their countrymen condemning the former car giant. In an even more bizarre twist of fate, a wave of lawsuits is piling up and the giant is started to feel the Atlas effect.
Germany is in shock and is holding VW accountable for what it calls its criticism of VW’s unethical and immoral behavior. This also spells the radical departure of how such “incidents” were dealt with in the past, usually quietly and away from public scrutiny. But these days are different for corporations and their legal departments are doing their best to get VW out of the line-of-sight.
Can VW Avoid The Buck?
The gist of the problem is whether or not VW can avoid paying car owners in Europe. It still naively believes that software updates are sufficient to appease an enraged clientele.
Up until now, we felt VW had a pretty good chance of leaving its past behind and moving onto an electric world. But this growing string of lawsuits will slow down the company and we can expect more talks about what it will do tomorrow as it scrambles today.
UPDATE: We reached out to Nikolas Nieder (founder of FairOne) to understand the legal situation around diesel cars in Germany a little better.
What was the legal situation in Germany, and what was the situation in the US?
In the US, VW came under legal fire from two sides: The authorities sued VW for violating the “Clean Air Act.” In addition, VW was exposed to a large number of class action lawsuits from private car buyers. In the summer of 2016, VW was able to negotiate a settlement for 15 billion US dollars. The car buyers were generously compensated. For example, they could return their cars and get the purchase price back – and collect up to $10,000 in additional compensation. Quite different in Germany: Since there are no class actions, consumers have to enforce their claims on their own and at their own risk. Because there is no legal leverage, VW does not offer any compensation to German buyers. The buyers should simply have a software update installed – and VW considers the matter done.
Thus, German car buyers are massively worse off than buyers in the US.
What’s the development in Germany now, and what is the legal trend?
The first wave of lawsuits was mainly based on warranty law, i.e. the car buyers sued the dealers with the argument that the increased emissions represented a defect. These claims are since the end of 2017 time-barred, but there is another promising legal strategy: Many cars have been financed by car banks. The loan agreements with these car banks often contain certain incorrect legal instructions. This gives car buyers the opportunity to withdraw from the loan agreement with the car bank. Since the loan agreement is linked to the car purchase agreement, the purchase agreement is also considered revoked at the same time. As a result, the buyer can leave his car in front of the bank’s door and get his money back.
What does that mean to car buyers in Germany that were cheated and would like to “give their car” back?
This means that buyers of diesel cars still have a very good chance of getting rid of their car by legal action. They can either get rid of their car by revoking their loan agreement if they financed the car, or they can sue VW directly for deception. If the buyers have legal protection insurance, they do not incur any cost risk either, as legal protection insurance has to cover the costs.
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