Update on Volkswagen’s emissions scandal

U.S. developments

Over the last months, it has been reported that Volkswagen reached a 15 billion dollar settlement with the authorities, the consumers and the car dealers in the United States. Contrary to these developments, Volkswagen has raised a motion to dismiss the ADR investor case. The judge will hear this motion during a trial on December 16, 2016. Furthermore, the U.S. Discovery Proceedings under section 1782 that has been initiated by the Foundation and several other parties is still pending in court and is expected to be further dealt with by January 2017.

Lack of EU solution

Despite the aforementioned settlement in the U.S., Volkswagen remains completely reluctant in compensating the damage suffered by the EU consumers and investors. The Foundation considers the disregard of the company highly inappropriate. The damage is essentially based on the same factual circumstances, being the fact the Volkswagen has unlawfully installed defeat devices in its vehicles and concealed (or failed to disclose) this information. Based on the applicable financial market rules, Volkswagen was obligated to disclose this information to the market and should have reported about its dishonest behavior in the financial statements of the company.

German proceedings, criminal inquiries and pressure from the EC

Volkswagen’s conduct has led to a global waive of litigation. This waive also includes the initiation of a KapMug proceedings (a German class action). It is important to note that the actual KapMug proceedings has not commenced yet. Currently, the German court has not yet appointed a model case. For that reason, it is still not possible for the other investors (which are not joining in the KapMug proceedings as a party) to register their claims. After the start of the KapMug proceedings it is expected that it would take years of litigation before a final decision has been rendered. This means that the investors’ patience to have a decision on their claims will be tested to a maximum.

A recent development has been the infringement decision from the European Commission dated 8 December 2016.


In general the EC has announced pursuing legal action against 7 Member States for failing to set up penalties systems to deter car manufacturers from violating car emissions legislation, or not applying such sanctions where a breach of law has occurred. In addition, the EC is also opening infringements against Germany, Luxembourg, Spain and the United Kingdom – the Member States that issued type approvals for Volkswagen Group AG in the EU – for not applying their national provisions on penalties despite the company's use of illegal defeat device software.

Meanwhile, the German public prosecutors are still investigating the knowledge and involvement of Volkswagen’s (former) management within this scheme. This investigation would probably result into even more public facts about Volkswagen’s wrongdoing and will further expand the financial exposure of Volkswagen. Nevertheless, Volkswagen keeps denying its liability and rejects to take full responsibility. This conduct is completely in contradiction with Volkswagen’s earlier statements, in which it was publically apologizing for its actions, promising to cope with the consequences of the scandal and to restore the trust of the public.

It appears that Volkswagen has chosen the risky path of long-term trench warfare in Europe. This attitude could lead to an indeterminate future for the company. It is needless to point out that the reluctance to fully settle the case is considered deeply dissatisfying within the EU public domain and specifically by the investors that have suffered damage as a result of Volkswagen’s wrongdoing.

Possibility for final closure

Once more the Foundation expresses the need for closure to this case, either for the benefit of the future of the company as well as for the compensation of the aggrieved parties. To that end the Foundation has offered (and is still offering) Volkswagen a reasonable and fair solution by means of reaching a collective settlement which can be declared binding by the Amsterdam Court of Appeal.  In that way the company could address the aftermath of the scandal on a pan European scale.

By means of this update the board of the Foundation stresses to its (potential) participants that it will continue to represent their interests. The Foundation will proceed with its efforts in achieving full and final closure to this case. With the initiative of the Foundation Volkswagen could trust that it will find a reliable opponent in reaching a global solution.