The VW litigation could increase the popularity of group actions in the UK, says Jade Grieg

22 / 03 / 2017

Solicitors Harcus Sinclair and Slater and Gordon are leading the group litigation against Volkswagen following the diesel emissions scandal which has affected 1.2 million Volkswagen, Audi, Seat, and Skoda vehicles in the UK. The action seeks compensation of approximately £3,000 per car for around 27,000 affected British motorists, with the number of those joining the action increasing daily.

The German car manufacturer has admitted that 11 million of its vehicles were fitted with so-called ‘defeat devices’, the effect of which was to reduce nitrogen oxide (NOx) emissions during testing to cheat the emissions test. Disturbingly, the emissions produced by the affected VW vehicles were up to 40 times the legal limit of NOx when used on the road. According to Harcus Sinclair, ‘the key allegation is that the affected cars should not have been certified as fit for sale’ because they produced higher levels of NOx emissions than permitted.

On 30 January 2017, Harcus Sinclair’s application for a group litigation order was heard by Dame Barbara Fontaine, who adjourned the hearing to allow more drivers to sign up to the claim. The claim provides an opportunity for affected UK VW owners to seek compensation and for VW to be penalised for its actions. Funding for the claim has been secured, meaning that there will be no cost to the individuals involved in the group litigation. If the group litigation is successful, it is likely to act as a powerful deterrent to car manufacturers, therefore curbing the behaviour in question. If successful, VW could ultimately have to pay out hundreds of millions of pounds to those affected in the UK.

In the US, VW has reached a £15bn settlement with 500,000 US drivers, some of whom received compensation of up to £8,000. That is in stark contrast to the position in the UK, where VW has not offered compensation, is arguing that the affected vehicles did not breach the European emissions regulations, and has said that it intends to ‘defend the claims robustly’.

The stance taken by VW has come under scrutiny from Labour MP Louise Ellman, chair of the Transport Select Committee, who has said that although VW’s evidence was not credible, the ‘government has lacked the will to hold VW accountable for its actions… There is a real danger that VW will be able to get away with cheating emissions tests in Europe if regulators do not act.’ The committee added that VW’s decision to compensate US-based customers but not those in the UK was ‘deeply unfair’.

The scandal has dominated the headlines since news broke of VW cheating emissions tests. The high-profile nature of the case has raised awareness of group actions and the redress that can be sought when individuals with similar complaints join forces against giant corporations. This in turn increases access to justice, which may otherwise be denied when individuals are faced with an uncertain outcome and costs risks.

In the light of this case, particularly if the group litigation is successful, it seems likely that group litigation will become increasingly popular in the UK, with individuals able to benefit from strength in solidarity while also minimising the costs risks at play.

Please click here to read the full article first published in Solicitors Journal on the 21 February 2017.