Dieselgate scandal: Volkswagen has to pay damages, rules court

In a groundbreaking ruling, the German Federal Court of Justice in Karlsruhe has asked German carmaker Volkswagen to compensate the owner of one of its vehicles affected by the diesel scandal. This paves the way for thousands more lawsuits against the one of the biggest carmaker.

The court ruled on Monday that Volkswagen has to pay compensation to motorists who purchased vehicles with manipulated diesel engines, a major blow for the carmaker in its home market as it continues to reel from the emissions scandal.

The ruling comes almost five years after Volkswagen admitted to cheating on emissions tests involving millions of diesel engine cars.

Monday's hearing specifically concerns the case of a 65-year-old Herbert Gilbert who bought a diesel-powered Volkswagen Sharan minivan in 2014. It was one of the 11 million cars fitted with the faulty engines by Volkswagen. The vehicle, which cost 31,500 euros, was equipped with an EA 189 diesel engine, the type of engine at the heart of the scandal.

The scandal surrounding illegal exhaust technology in millions of Volkswagen vehicles was exposed in autumn 2015. At that time it became clear that the nitrogen oxide emissions of the EA189 engine type were much higher than tests on the test bench showed. The software was responsible for activating full exhaust gas purification only on the test bench.

Both sides had appealed against the Koblenz judgment. The plaintiff had paid just under 31,500 euros for the car in 2014 and wanted the full price back. Volkswagen didn't want to pay anything. The carmaker had always argued that the cars were fully usable at all times.

According to Volkswagen, around 60,000 cases are still pending. The court judgment today is likely to pave way to resolve several of these pending cases.

The scandal has so far cost Volkswagen more than 30 billion euros in damages and fines. In the United States, authorities had banned the affected cars from roads, triggering claims for compensation. However, these cars were not take off the road by the European authorities. This helped Volkswagen to argue that claims for recompense from customers in its home region were without merit. The European authorities forced Volkswagen to update its engine control software to ensure that anti-pollution filters are activated and fined Volkswagen for fraud and administrative lapses.

(With inputs from agencies)