Volkswagen has set aside at least £5 billion in an attempt to deal with any legal action that occurs as a result of the emissions scandal. The company could face collective action from shareholders and customers who purchased diesel cars with ‘defeat devices’.
Potential Litigation in European Market
Just under 500,000 cars are expected to be recalled after devices that told the car when it was being tested for emissions and when to reduce said emissions. The defeat devices, which were discovered in the American market has seen shares fall in the company by over 30%, however, it is unclear if the European market had the same devices attached, potentially creating a loophole regarding litigation.
Although the company has set aside funds, Environment Protection Agency (EPA) has warned that the violations since 2008 may run into 8 billion in fines alone.
A first class action against the Volkswagen Group was filed in San Francisco, with experts warning that further claims will likely follow in Germany and the UK. One of the top investors in Volkswagen in Europe said: “If we can with some certainty establish that we, as investors, were misled by the company, and that has affected our returns, then I cannot rule out that we would seek compensation from the company.”
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Launching collective claims in Britain is tougher than in the United States, with claimants being with a common interest to be automatically grouped together even if they did not opt in together. Opt-out class action lawsuits are being introduced on October 1. However, a case against VW in the UK could be painstakingly long.
If you require advice regarding commercial litigation, contact us today by getting in touch with our team of expert solicitors.