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Volkswagen AG’s Legal Woes Continue to Expand

Automaker enduring two diesel-scandal lawsuits in Germany.

by on Sep.13, 2018

Former VW Group CEO Martin Winterkorn is accused of failing to provide info about the diesel scandal soon enough.

Volkswagen AG’s legal woes from the fallout from rigging of diesel emissions tests continue to expand as it faces a class action lawsuit courtesy of a new law in Germany designed to protect the interests of consumers.

The Federation of German Consumer Organizations, or Vzbv, said it would undertake “pioneering work” with motorists’ lobby group ADAC, or General German Automobile Club, by filing for damages on behalf of Volkswagen owners with diesel engines.

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The class action was made possible after the German cabinet approved a law that allows consumer protection organizations to litigate on behalf of the consumers, avoiding the high costs of individual lawsuits. 

Vzbv said it would aim to show that owners of VW, Audi, Skoda and Seat cars with Type EA 189 diesel engines were intentionally harmed by the Volkswagen’s use of software to cheat emissions tests.

(Investor suit against VW AG gets underway in Germany. Click Here for the story.)

VW owners in the U.S. impacted by the diesel scandal are running up against a deadline to get their cash.

Volkswagen said the possibility did not change its view that there was no legal basis for consumers to make claims in connection to the diesel issue in Germany. Vzbv is looking obtain compensation for 2 million owners of diesel cars that violated emission standards.

Meanwhile, in separate litigation brought by shareholders that began this week in a crowded German courtroom, the judge said former VW CEO Martin Winterkorn was slow to address emissions test cheating that led to huge U.S. fines and the aforementioned lawsuit.

(Click Here for more about VW offering big deals on fixed diesel leftovers.)

The question of the role of top Volkswagen executives in the diesel scandal will be vital in determining the outcome of the suit in which investors are seeking $10.4 billion in damages for share price losses suffered when the scandal became public.

VW admitted in 2015 it had used illegal engine control devices to cheat U.S. emissions tests.

(To see why VW was penalized again for diesel gate scandal, Click Here.)

In another development, Herbert Diess, Volkswagen’s current chief executive officer, told an internal company publication that the brand needs higher profits and must become significantly more efficient to finance its future.

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