The UK High Court has rejected the vast majority of compensation claims brought by 1.6 million car owners in the long-running Dieselgate scandal, dealing a major blow to one of the largest group lawsuits in British legal history.
In a ruling on Thursday, Justice Timothy Smith dismissed claims that Volkswagen, Audi, Skoda, and Seat owners suffered direct financial loss because their vehicles were fitted with illegal software designed to cheat emissions tests. The judge found that while the carmaker deliberately misled regulators, the owners did not pay more for their vehicles than they were worth at the time of purchase, and the scandal did not cause them to incur additional costs.
Scope of the Ruling
The decision covers the core economic loss claims brought by approximately 1.6 million UK motorists. However, the court allowed a smaller group of claims to proceed, including those related to vehicles that were later recalled and those where owners could prove they sold their cars at a loss specifically because of the scandal. The judge also permitted claims for distress and inconvenience caused by the recall process to go forward, though these are likely to be modest in value.
Volkswagen welcomed the ruling, stating it 'confirms that there is no basis for the vast majority of claims.' The company added that it would 'continue to defend the remaining claims vigorously.'
Reaction from Claimants' Lawyers
Lawyers representing the car owners expressed disappointment and indicated they would seek permission to appeal. 'This is a setback for millions of motorists who were misled by Volkswagen's deliberate cheating,' said James Oldnall, a partner at Slater and Gordon. 'We believe the judge erred in his interpretation of the law, and we will be pursuing an appeal.'
The class action, known as the 'Dieselgate' group litigation, was filed in 2016 after Volkswagen admitted to installing defeat devices in 11 million vehicles worldwide, including 1.2 million in the UK. The devices could detect when a car was undergoing emissions testing and temporarily reduce nitrogen oxide emissions to comply with legal limits. On the road, the vehicles emitted up to 40 times the legal limit.
Impact on Consumers
The ruling means that most of the 1.6 million claimants will not receive any compensation for their vehicles' diminished value or for the cost of repairs. However, those who sold their cars after September 2015, when the scandal broke, may still be able to claim if they can demonstrate a specific loss. The court also left open the possibility of claims for 'loss of use' during the recall period, which could result in small payments for some owners.
Volkswagen has already paid billions of dollars in fines and compensation in the United States, where owners received thousands of dollars each. In the UK, the company has faced regulatory fines but has resisted paying compensation to individual consumers, arguing that the cars were safe and that owners suffered no financial harm.
What Happens Next
The remaining claims will proceed to trial, but they represent a fraction of the original lawsuit. Legal experts say the ruling significantly reduces Volkswagen's potential liability in the UK, which could have reached into the billions if the full claim had succeeded. The case is likely to be appealed, and the final outcome may depend on the Supreme Court.
Consumer rights groups criticized the decision, saying it let Volkswagen off the hook. 'This ruling sends a terrible message that companies can cheat and get away with it as long as they don't directly hit consumers' wallets,' said a spokesperson for Which? The court's decision underscores the difficulty of proving financial loss in mass tort cases where the product's market value is not clearly diminished at the point of sale.
