New emissions blow for VW as German court backs damages claims

Volkswagen cars at a facility in Wolfburg. A court has ruled that Volkswagen must buy back cars from owners who bought vehicles rigged to cheat in emissions tests. (AP)
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Updated 26 May 2020

New emissions blow for VW as German court backs damages claims

  • Scandal has already cost firm more than €30 billion; ruling serves as template for about 60,000 cases

KARLSRUHE, Germany: Volkswagen must pay compensation to owners of vehicles with rigged diesel engines in Germany, a court ruled on Monday, dealing a fresh blow to the automaker almost 5 years after its emissions scandal erupted.

The ruling by Germany’s highest court for civil disputes, which will allow owners to return vehicles for a partial refund of the purchase price, serves as a template for about 60,000 lawsuits that are still pending with lower German courts.

Volkswagen admitted in September 2015 to cheating in emissions tests on diesel engines, a scandal which has already cost it more than €30 billion ($33 billion) in regulatory fines and vehicle refits, mostly in the US.

US authorities banned the affected cars after the cheat software was discovered, triggering claims for compensation.

But in Europe vehicles remained on the roads, leading Volkswagen to argue compensation claims there were without merit. European authorities instead forced the company to update its engine control software and fined it for fraud and administrative lapses.

Volkswagen said on Monday it would work urgently with motorists on an agreement that would see them hold on to the vehicles for a one-off compensation payment.

It did not give an estimate of how much the ruling by the German federal court, the Bundesgerichtshof (BGH), might cost it.

Volkswagen shares were 0.5 percent lower. The BGH’s presiding judge had signaled earlier this month he saw grounds for compensation.

Costs mount

“The verdict by the BGH draws a final line. It creates clarity on the BGH’s views on the underlying questions in the diesel proceedings for most of the 60,000 cases still pending,” Volkswagen said.

A lower court in the city of Koblenz had previously ruled the owner of a VW Sharan minivan had suffered pre-meditated damage, entitling him to reimbursement minus a discount for the mileage the motorist had already
benefited from.

The court at the time said he should be awarded €25,600 for the used-car purchase he made for €31,500 in 2014.

“We have in principle confirmed the verdict from the Koblenz upper regional court,” said BGH presiding federal judge Stephan Seiters.

Volkswagen had petitioned for the ruling to be quashed altogether by the higher court, while the plaintiff had appealed to have the deduction removed.

A Volkswagen spokesman said that outside Germany, more than 100,000 claims for damages were still pending, of which 90,000 cases were in Britain.

The carmaker also said it had paid out a total of €750 million to more than 200,000 separate claimants in Germany who had opted against individual claims and instead joined a class action lawsuit brought by a German consumer group.

The carmaker said last month it would set aside a total of 830 million for that deal.

In a separate court, Volkswagen agreed last week to pay €9 million to end proceedings against its chairman and chief executive, who were accused of withholding market-moving information before the emissions scandal came to light.


Singapore Airlines drops ‘flights to nowhere’ after outcry

Updated 29 September 2020

Singapore Airlines drops ‘flights to nowhere’ after outcry

  • Several carriers have been offering short flights that start and end at the same airport to raise cash

SINGAPORE: Singapore Airlines said Tuesday it had scrapped plans for “flights to nowhere” aimed at boosting its coronavirus-hit finances after an outcry over the environmental impact.
With the aviation industry in deep crisis, several carriers – including in Australia, Japan and Taiwan – have been offering short flights that start and end at the same airport to raise cash.
They are designed for travel-starved people keen to fly at a time of virus-related restrictions, and have proved surprisingly popular.
But Singapore’s flag carrier – which has grounded nearly all its planes and cut thousands of jobs – said it had ditched the idea following a review.
The carrier has come up with alternative ideas to raise revenue, including offering customers tours of aircraft and offering them the chance to dine inside an Airbus A380, the world’s biggest commercial airliner.
Environmental activists had voiced opposition to Singapore Airlines launching “flights to nowhere,” with group SG Climate Rally saying they would encourage “carbon-intensive travel for no good reason.”
“We believe air travel has always caused environmental harm, and it is now an opportune moment for us to think seriously about transitions instead of yearning to return to a destructive status quo.”
The airline said earlier this month it was cutting about 4,300 jobs, or 20 percent of its workforce, the latest carrier to make massive layoffs.
The International Air Transport Association estimates that airlines operating in the Asia-Pacific region stand to lose a combined $27.8 billion this year.
The group also forecasts that global air traffic is unlikely to return to pre-coronavirus levels until at least 2024.