VW Drivers May Struggle to Win Damages as Court Queries Losses

(Bloomberg) -- The 470,000 diesel-car owners who signed up for a case against Volkswagen AG may face an uphill struggle after a German court questioned whether they really lost anything because of the emission-cheating software in their automobiles.

Drivers have been able to use their cars, leaving “the central issue” of what they actually lost, Presiding Judge Michael Neef said Monday, the first day of hearings. The court will also review whether any loss in value was solely linked to vehicle bans that came only two years after the diesel scandal broke. Even if the court finds damages, claims may be lowered because of drivers’ continued use of their cars over time, he said.

“It doesn’t make sense to us that drivers should be granted the right to use cars for free,” said Neef, who spoke for all three judges hearing the case. “Otherwise, we would have to grant punitive damages that do not exist under German law.”

Almost four years after the company’s use of illegal software that cheated on emissions tests was disclosed in the U.S., many German owners of Audis, VWs, Seats or Skodas are still waiting to get a payout. Lawmakers passed a law a year ago that allows consumer groups to bring sample suits on behalf of buyers, giving them a simpler way to sue.

The diesel-emission scandal haunted VW since September 2015, when it admitted using the software in 11 million diesel vehicles. The toll has so far reached 30 billion euros ($33 billion) in fines and other expenses for the firm. The consumer suit is likely to drag on during a period when it’s facing a shift to electric cars and slower sales in some key markets.

Monday’s comments are preliminary and may still change, Neef said. The court will review the issues and discuss them further at a Nov. 18 hearing in Braunschweig, a venue close to VW’s Wolfsburg headquarters.

The judges are pondering whether to join other German tribunals that have granted the lawsuits because owners faced the risk that their cars could be banned from roads by transport authorities and suffered losses in resale values. Any ruling in the mass case is likely to influence similar suits and claims worldwide.

The case is: OLG Braunschweig, 4 MK 1/18.

©2019 Bloomberg L.P.

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