$15bn Volkswagen settlement clears first hurdle

A $15bn (€13.6bn) settlement over carmaker Volkswagen’s emissions cheating scandal has cleared a key hurdle, with a federal judge giving preliminary approval to a deal that includes an option for owners to have the firm buy back their vehicles.

Lawyers for Volkswagen owners sought approval from US District Court Judge Charles Breyer, who is overseeing consumer lawsuits and government claims that the German company’s diesel engines cheated on US emissions tests.

The terms call for the firm to spend up to €10bn buying back or repairing about 475,000 Volkswagens and Audi vehicles with 2-litre diesel engines and paying their owners an a extra $5,100 to $10,000 each. Details about the repairs have not been finalised.

The judge’s decision allows lawyers to notify vehicle owners of the terms, including using a settlement website to determine how much compensation they would get.

The owners could object and opt out, allowing them to pursue action against Volkswagen on their own.

Judge Breyer, expected to make a final decision in October, praised the efforts of lawyers and a court-appointed settlement master who helped broker the deal.

“I don’t know that I need to make any grand observations about the settlement,” he said. “It appears in your presentation today as it appeared when you filed your documents that an enormous effort has been devoted to achieving a series of goals.”

The settlement also includes $2.7bn for unspecified environmental mitigation and an extra $2bn to promote zero-emissions vehicles. It does not cover about 85,000 Volkswagens and Audis with 3-litre engines also caught up in the emissions scandal.

Volkswagen acknowledged the cars were programmed to turn on emissions controls during lab tests and turn them off while on the road.

Investigators found that the cars emitted more than 40 times the legal limit of nitrogen oxide. The firm faces billions more in fines and possible criminal charges.


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