| 4:05 PM EST

VW’s Diesel Payout Scheme Goes Back to the Drawing Board

VW, consumer groups give it another try
#europe #Volkswagen

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Last week Volkswagen was all set to pay as much as $900 million in compensation to customers for selling them diesels that dodged European emission laws.

Now it’s back to the bargaining table. The court-driven mission is to revive the original version of the plan, which VW had been negotiating with VZBV, a group of consumer groups that represent the owners.

Test Case

Image: Volkswagen

This is landmark stuff. Until 2018, Germany had no mechanism akin to America’s class-action lawsuit, which enables one court to aggregate similar complaints and orchestrate a single settlement on behalf of the group. It’s been everyone for himself or herself until now.

Being able to group plaintiffs under a single settlement reduces the caseload on the courts, makes it easier for wronged consumers to win compensation and standardizes the payments that result.

The German version of class-action lawsuits allows consumer protection groups to litigate on behalf of people with a similar grievance.

Do-It-Yourself

VW and VZBV broke off their talks earlier this month, sidelining a near deal to compensate hundreds of thousands of diesel owners. VW was put off that plaintiffs’ lawyers insisted on $54 million to administer the payouts.

The carmaker rejected the demand. VW vowed to make payments according to a formula it had worked out with VZBV, but do so through its own special online registration service.

The option would be better than nothing. But it would compensate only those consumers who tracked down VW’s website and applied for payment. It also left VW in control of the restitution process.

Now What?

Reuters reports that VZBV and VW confirm they will resume discussions. The two sides didn’t say when. VZBV reiterates its original objective of creating and implementing a fair, equitable and transparent payment system.

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