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Volkswagen’s Settlement is the Largest in History

» Posted August 31, 2016Resources | Share This Post

When a car has a problem or does not perform as promised, this can have a serious cost for the vehicle's owner. The California car lemon law helps to protect car owners from financial losses, but sometimes it can be hard to actually get the appropriate outcomes without help from an experienced legal professional.

The good news is when there are car problems legal action can result in remedies when the right steps are taken. Just recently, for example, Volkswagen agreed to pay $14.7 billion to settle legal claims arising from an emissions scandal. The settlement was the largest in history, and it shows the power of the legal system to obtain remedies when the law is on your side.

Volkswagen Emissions Scandal Leads to Historically Large Settlement

Tech Times reported on the settlement of the Volkswagen scandal. The scandal arose once it was shown that VW had lied about the emissions from its diesel vehicles. The cars were rigged to produce less emissions when being tested than they do when on the roads.

Both the government and private citizens who owned Volkswagen cars began to take action against the automaker.  Volkswagen eventually reached a $14.7 billion deal. Of this money, $10 billion is allocated to repairing or buying back as many as 475,000 cars that were affected by the emissions problems. 

Volkswagen also agreed to provide additional compensation to car owners who bought Volkswagens with a two-liter diesel engine.  Another $2.7 billion will go to the EPA to provide funding for environmental damage resulting from the emissions.  Finally, another $2 billion will go towards projects aimed at developing cleaner vehicles and researching zero-emissions technology.

Of the money to be used to compensate consumers, there are formulas in place that will determine how the cash should be used to pay owners for losses.  Payouts to individual owners are expected to be set based on the value of the vehicles prior to the scandal hitting when the faked emissions data came to light.

In August of 2015, the average price of a Volkswagen diesel vehicle was around $13,000. Now, each owner will likely be paid an estimated $5,100 to $10,000.   Owners who got rid of the cars after the scandal came to light are also going to be provided with half of the amount of compensation that is paid to current owners of the problem cars.

The deal doesn't include 90,000 vehicles with three-liter diesel engines, which reports indicate had a different device installed to try to defeat emissions testing.  Close to 500,000 vehicles are going to be covered in the settlement, but this is only around 4.3 percent of approximately 11 million Volkswagen cars that were impacted by the scandal.

The settlement does show, however, that sometimes the laws can work to provide remedies for car owners. Owners of vehicles with many types of defects should determine if California’s lemon law could provide them with protection in dealing with problems with their cars and obtaining remedies for the losses that those problems cause.

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Posted By: Danyel Jerald