Volkswagen to Pay Out Billions in Emissions Cheating Settlement

The Associated Press reported this morning that German automaker Volkswagen has agreed to take a series of steps in the form of a $10.2 billion settlement to settle claims arising from its unprecedented diesel emissions cheating scandal in the United States. Although details of the settlement could be changed and tweaked before Tuesday, which is when the court is expected to formalize the agreement, AP is reporting based on its conversations with two people briefed on the matter that a bulk of the money will compensate 482,000 vehicle owners.

Preliminary Settlement Details

These are owners of cars with 2-liter diesel engines that were fraudulently programmed by Volkswagen to turn on emissions controls during lab tests and then turn off while on the road. The majority of the cash from the agreement will be used to compensate owners, repair the cars and buy them back.

Some of the money will go to government agencies as penalties and for a program to remediate the environmental damage caused by the pollution. Owners would have a choice between selling their vehicles back to VW at the value before the scandal broke out or keeping the cars and let the company repair them. Owners would also be compensated between $1,000 and $7,000 depending on their cars’ age, with an average payment of $5,000.

Justice for Consumers

Volkswagen’s fraudulent actions have not only affected consumers whose vehicles have been devalued as the result of the scandal, but have also damaged the environment, affecting millions of others. The Environmental Protection Agency said the VW cars can give off more than 40 times the legal limit of nitrogen oxide, causing respiratory problems in humans.

We understand that we are still a few days away from the final court decision. But, the California class action lawyers at Bisnar Chase are pleased to hear that this agreement is headed in the right direction. Contrary to arguments often set forth by tort reform advocates, this case shows that class action lawsuits do work. They do help consumers seek and obtain justice for corporate wrongdoing. It’s almost always impossible for one victim or a few victims to stand up against a major multinational corporation. But class action lawsuits have that power to demand accountability from corporations, which would otherwise remain largely unaccountable.