Lawyers try to lure claimants away from Dieselgate settlement

21 April 2020

Lawyers have spent tens of millions of euros in a last-ditch attempt to dissuade Dieselgate claimants from accepting a settlement offered by Volkswagen (VW). The company looks set to face a new wave of individual claims as ′no-win, no-fee’ lawyers sign up thousands of German consumers.

Using Google and social media advertising campaigns, law firms are going after existing VW claimants. They are offering thousands of euros in upfront compensation, alongside promises of winning even more from the carmaker.

VW’s offer ′far too low’

This week VW agreed to pay out €620 million in compensation to 200,000 car owners as part of the Dieselgate lawsuit in Germany. Those owners will soon receive a binding agreement from the carmaker, with two weeks to review the offer – before 5 May when the payments will be made.

These 200,000 claimants make up part of the landmark class-action lawsuit brought forward by German consumer group VZBV, representing 260,000 people. According to Volkswagen, some 21,000 cases are still to be processed in the coming days. The company has also extended its deadline for consumers to upload their documents to its online portal until 30 April.

In February this year, VW set aside €830 million for German drivers impacted by the 2015 emissions cheating scandal. Depending on the age and model of their vehicle, owners can expect between €1,350 and €6,250. Vehicle refits, fines and provisions related to the scandal have so far cost VW more than €30 billion globally.

Speaking with the Financial Times (FT), Claus Goldenstein, head of the law firm Goldenstein & Partner, said that this amount was ′far too low’. His firm represents more than 20,000 claimants and is signing up a further 50 a day who have opted out of the settlement. Goldenstein claimed that it enjoyed a near 100% success rate of Dieselgate claims, securing an average of €17,510 in compensation.

COVID-19 impact

But law firms are facing an uphill battle to get claimants to turn down the settlement, with the coronavirus (COVID-19) impacting people’s incomes. Any additional income might be a relief for those who have been made redundant or face extended furlough periods.

Also speaking with the FT, lawyer Christopher Rother, who has signed up 12,000 individual claimants said, ′people are now short of cash, many have been made redundant, or are furloughed, so they are happy for any compensation they can get.’

The pay-out also comes at a problematic time in terms of the COVID-19 pandemic. VW announced last week that it was withdrawing its financial outlook for 2020, reporting an 80% fall in operating profits in the first quarter. Earlier in the month, it estimated that the pandemic was costing it around €2 billion a week.

COVID-19’s impact is compounding with developments for VW in the Dieselgate case. At the start of this month, the UK High Court found that the carmaker did install defeat devices. In January, six managers were also charged with ′deliberately misleading’ authorities and customers.