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Compensation for VW owners in the US

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VW’s American subsidiary has agreed to compensate owners of affected diesel vehicles in the US, to the tune of approximately US$10 billion. The proposed settlement includes a payment of around US $5,100 to US $10,000 per vehicle, in addition to a buy-back of the vehicles (at the pre-emissions scandal value) or fix of the vehicle (at the owner’s option).

In addition, VW proposes to pay US $2.7 billion in fines to the US Environmental Protection Agency and the California Air Resources Board. It also proposes to invest US $2 billion in clean-emissions technology.

The proposed settlement has been negotiated between legal representatives for Volkswagen and class action lawyers in the US. It was deposited with a US District Judge in San Francisco on 28 June 2016.  A hearing is to be held on 26 July 2016, at which the Judge will decide whether to grant preliminary approval to the settlements. 

The buy-back price will be based on the September 2015 US National Automobile Dealers’ Association “Clean Trade In” value of the car, adjusted for options and mileage (“Vehicle Value”). The additional compensation payment (which, at a minimum, will be US $5,100) is calculated at 20% of the Vehicle Value, plus US $2,986.73.

The settlement covers approximately 460,000 VW and 15,000 Audi 2.0l diesel vehicles in the US. It does not cover affected Audi, Porsche and VW vehicles in the US with 3.0l TDI V-6 diesel engines.

There is no proposal from VW to provide similar compensation to owners of affected VW, Audi and Skoda vehicles in New Zealand.

Matthias Müller, Chief Executive Officer of Volkswagen AG is reported as saying “We take our commitment to make things right very seriously and believe these agreements are a significant step forward”. However, VW AG states on its website that the agreements announced “are not an admission of liability by Volkswagen. By their terms, they are not intended to apply to or affect Volkswagen’s obligations under the law or regulations of any jurisdiction outside the United States”.

To the extent that statement determines what happens in New Zealand, it suggests that it will be necessary to take legal proceedings to obtain compensation for affected vehicle owners in NZ.  If you are the owner of an affected vehicle in NZ (and have not already registered), please register your details to confirm your interest in pursuing a group action.