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Germany Struggles with VW Diesel Claims

Germany’s legal system is being swamped by damage claims from owners of diesel-powered Volkswagen cars that VW rigged to evade European standards.
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Germany’s legal system is being swamped by damage claims from owners of diesel-powered Volkswagen cars that VW rigged to evade European standards, the Financial Times reports.

Some 463,000 customers have signed up for a collective lawsuit that seeks compensation for lost resale value of the affected vehicles. The claims are being aggregated under Germany’s new declaratory model action (DMA) option, which is similar in concept to a U.S. class-action lawsuit.

A DMA is intended to prevent German courts from being clogged by tens of thousands of individual lawsuits over the same issues. But FT says the size of the VW case is overwhelming Germany’s Federal Office of Justice.

The justice office had been told to expect fewer than 34,000 DMA-related applications from consumers per year. Now, in addition to the 463,000 complaints about VW diesels, the office is struggling to process 77,000 last-minute requests to withdraw from the DMA.

FT says the withdrawals, each of which must be processed individually, were prompted by lawyers who suggested that VW owners could win a bigger settlement by going it alone. The deadline to withdraw from the DMA was two months ago.

A German court in Braunschweig has urged VW to work out a settlement for the DMA lawsuit by Dec. 31. But the company claims it can’t do so until the justice office clarifies the number of participants remaining in the group lawsuit.

FT points out that the resulting tidal wave of paperwork is delaying a decision and reducing the likely compensation to diesel owners, who are eroding the value of their cars as they continue to drive them.

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