Dieselgate

Class-action suit looms over VW in Austria

Volkswagen
VW is trying to get out of the Dieselgate spiral. Source: DPA

Dieselgate has already cost Volkswagen $30 billion. But now, the scandal over manipulated diesel engines to cheat on emissions tests could get pricey for VW close to home.

In Austria, a potential class action suit is looming over the world’s largest carmaker. The Austrian Consumer Protection Association (VKI) demands damages for diesel buyers for alleged fraud.

Austria’s right-wing Minister of Social Affairs Beate Hartinger-Klein and Austrian Chamber of Labor President Rudolf Kaske have given a mandate to VKI for the lawsuits against Volkswagen. “Since VW persistently refuses to offer compensation to customers in Austria out of court, we are following this path,” Ms. Hartinger-Klein said.

“Since VW persistently refuses to offer compensation to customers in Austria out of court, we are following this path.”

Beate Hartinger-Klein, Austrian Minister of Social Affairs

The clock is ticking, because the statute of limitations runs out this September for claims by VW customers in Austria.

Meanwhile, the German carmaker is defending itself against the looming lawsuit. “There has been no final judgment in Austria in which claims by affected vehicle owners against Volkswagen were approved. There is, therefore, no reason for the VKI to intervene or to file a class-action lawsuit,” said a VW spokesman on Wednesday. “Volkswagen handles all proceedings in Austrian courts with due diligence and considers the claims made so far unfounded.”

But consumer advocates in Austria would beg to differ. According to the VKI the case is about a “significant depreciation” of VW cars and “negative consequences of the software update”.

The advocates based in Vienna emphasized: “There are clear signs that VW is directly liable to the victims and is, therefore, the one who has to answer for the manipulations.” In September 2015, VW admitted that it had installed an illegal software for diesel engines of its VW, Audi, Seat, and Skoda vehicles.

The Wolfsburg-based carmaker then promised customers a free software update. Around 395,000 vehicles in Austria were affected by the recall. However, the overhaul still has not been fully implemented to this day, said Ms. Hartinger-Klein and Mr. Kaske. Following the software update, the VKI in Austria has received numerous consumer complaints. They have reported increased fuel consumption and performance dips.

The lawsuit is free for the damaged VW consumers. On behalf of the Social Ministry and the Chamber of Labor, the VKI takes on the legal costs risk at the 16 regional courts in Austria. A class-action lawsuit brought forward in only one court is not yet possible in Austria.

The impending lawsuit is a highly sensitive issue for Volkswagen, since the Piech and Porsche families, who control significant parts of VW, live in Austria.

Hans-Peter Siebenhaar is Handelsblatt’s correspondent in Vienna. Stephanie Ott adapted this article for Handelsblatt Global in New York. To contact the authors: siebenhaar@handelsblatt.com and s.ott@extern.handelsblatt.com.

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