Leigh Day, Slater and Gordon and PGMBM settle first Dieselgate claim

The Volkswagen Group (VW Group) and claimants in the Volkswagen NOx Emissions Group Litigation reached an out of court settlement yesterday (25 May).

This group action concerned claims which first became public in September 2015, made in respect of the two mode software installed in certain Volkswagen Group vehicles with EA189 diesel engines.

The scandal – often known as ‘Dieselgate’ or ‘Emissionsgate’ – began after the United States Environmental Protection Agency (EPA) issued a notice of violation of the Clean Air Act (United States) to the VW Group.

The agency found the VW Group had intentionally programmed turbocharged direct injection (TDI) diesel engines to activate emissions controls only during emissions testing in the lab, which allowed the vehicles' NOx output to meet US standards during the regulatory testing phase. In reality, they emitted up to 40 times more NOx when being driven. The software was deployed in around 11 million cars worldwide between 2009 and 2015.

No admissions in respect of liability, causation or loss were made by the defendants and the terms and conditions of the settlement are confidential.

Leigh Day, Slater and Gordon and PGMBM were the court-appointed Steering Committee that represented claimants in the conduct of the litigation. Leigh Day and Slater and Gordon were appointed the co-lead solicitors.

The VW NOx emissions group litigation is the longest running of nine emissions cases Leigh Day is bringing in the wake of the Dieselgate scandal. This is the first case to settle. The firm said the settlement was “very good news” for thousands of its clients and “an important milestone” for all vehicle owners bringing claims against other diesel vehicle manufacturers.

The settlement applies only to claims in the Volkswagen NOx Emissions Group Litigation and is not legally binding any other claims relating to other engines in England and Wales or any other jurisdiction; however, Leigh Day said it hoped the settlement would “send a clear message” to the other vehicle manufacturers and encourage them to settle.

It said in the VW Group’s view, the costs implications of a six-month trial in the English courts, and any further appeals, were such that settlement was the most prudent course of action.

Philip Haarmann, chief legal officer of Volkswagen AG, commented: “The Volkswagen Group is pleased that we have been able to conclude this long running litigation in England & Wales. The settlement is another important milestone as the Volkswagen Group continues to move beyond the deeply regrettable events leading up to September 2015.”

The agreed settlement has resolved circa 91,000 claims that were being brought against various VW Group and dealer entities in that group action in England and Wales. A payment of £193m will now be made to the claimants by the VW Group. It will also make a separate contribution towards the claimants’ legal costs and other fees.

The VW Group will not be involved in the distribution or allocation of the sums; these will be allocated between the claimants in proportions agreed among the various claimant solicitors’ firms and those from whom they take instructions.

Lead solicitors at Leigh Day, Bozena Michalowska and Shazia Yamin, said they were “delighted” the case had “finally" settled. They added: “We have been unwavering in our belief in our clients’ case, that is why we have fought long and hard for this outcome. We are clear that it was in the interest of our clients to settle this early.”

Slater and Gordon CEO David Whitmore said the firm was “passionate” about securing the best possible outcome, and that he was “immensely proud” of the result.

He added: “Over the last 5 years, Slater and Gordon have rightly dedicated a significant and unwavering commitment to this case, providing an expert voice to around 70,000 claimants. The settlement avoids the need for a lengthy, complex and expensive trial process and we are delighted to have achieved this settlement for our customers as a result of the group action.”