Claimant firms Slater & Gordon and Leigh Day are gearing up to represent what could be thousands of European car purchasers after Volkswagen (VW) admitted to rigging diesel engine emission tests in the US and Europe.
In what could be one of the largest automaker scandals in recent history, Porsche-maker VW, which has brands such as VW Golf, Beetle and Passat under its belt, confirmed 1.19m VW vehicles have been affected in the UK alone, of which more than 500,000 are VW passenger cars, and nearly 400,000 are Audi.
According to VW, only diesel vehicles with EA 189 EU5 engines are affected in the UK.
Earlier this month, VW confirmed it would recall up to eleven million vehicles that cheated tests involving its diesel engines – which will likely result in regulatory inquiries, criminal investigations/prosecutions, and shareholder class actions on both sides of the Atlantic.
German prosecutors have also launched an investigation into the former chief executive of Volkswagen Martin Winterkorn, who recently stood down, as a result of the diesel emissions-rigging scandal.
In a letter to VW, Leigh Day product liability specialist Bozena Michalowska-Howells, said: ‘Whilst we welcome the news that repairs will be undertaken to upgrade the affected cars to comply with EU Nitrogen Dioxide emission standards, such repairs may result in reduced fuel efficiency and increased CO2 emissions which in turn may impact upon the Vehicle Excise Duty payable and other associated costs. Our clients are also very concerned about the impact of the use of defeat devices on the re-sale value of their cars.’
Slater and Gordon head of litigation Jacqueline Young added: ‘More than 500 people have contacted Slater and Gordon in the past few days to register their interest in signing up to a group action against Volkswagen. We have called on VW to urgently provide clarity on exactly the extent of the problem. VW must also come clean about how long the practice has been on-going and who within the executive authorised or condoned this practice.’
Jones Day partner Johannes Perlitt, who quit Clifford Chance (CC) after 14 years to join the US firm in March last year, is understood to have taken a large chunk of the defence work. While at CC, Perlitt advised VW on its combination with Porsche to create the Integrated Automotive Group.
Long-time adviser Clifford Chance, which represented VW and Volkswagen Group of America Finance, on the issuance of $2.8bn of bonds by Volkswagen Group of America Finance in May this year – led by partner George Hacket – has not been instructed as defence counsel at this stage. Freshfields Bruckhaus Deringer and Quinn Emanuel Urquhart & Sullivan are also understood to be in the process of pitching for VW work in the UK.
In the US, Quinn Emanuel has teamed up with consumer rights firm Hagens Berman to file a class action complaint in Los Angeles’ federal court against VW and its US subsidiary, for cheating emissions tests, falsely advertising its vehicles and defrauding consumers.
Kirkland & Ellis, was instructed in the US after VW was initially under investigation by the US Environmental Protection Agency (EPA) for breaching the Clean Air Act, with environmental partner Stuart Drake understood to be representing. Washington DC-based Drake specialises in Clean Air Act related litigation and has represented companies whose products are subject to air pollution control regulation by the US EPA and various State government agencies. Some of Drake’s automotive-sector clients include General Motors Corporation and Toyota Motor Corporation.
Germany headquartered VW has already set aside around $6.5bn for expected costs relating to the scandal, although the company is expected to face penalties of up to $18bn.
VW said in a statement: ‘Step by step, affected customers will be contacted, with details of a process to get their vehicles corrected in the near future. In the meantime, all vehicles are technically safe and roadworthy. Under the action plan, the Volkswagen Group brands whose vehicles are affected will present the technical solutions and measures to relevant responsible authorities in October.’