DISGRACED car giant Volkswagen is facing fresh criticism after lawyers acting for more than 100 Scots customers were told the company was not liable for compensation over the emissions scandal.

Patrick McGuire said he was ready for a courtroom showdown after receiving a letter from VW's lawyers refusing to pay out because the company's cars had 'not lost value'.

It comes less than a fortnight after VW's new chief executive, Matthias Mueller, claimed the manufacturer was "working on an attractive package" to compensate customers "for reduction in residual value of our cars".

It follows revelations that millions of their diesel vehicles worldwide, including 1.2m sold in the UK, had been secretly rigged to cheat emissions tests.

Sales of new Volkswagen cars were down 28 per cent year-on-year in Scotland in November, with other affected brands in the VW Group - including Seat and Skoda - faring even worse.

HeraldScotland: Patrick McGuire, partner at Thompsons, is leading the casePatrick McGuire, partner at Thompsons, is leading the case

Mr McGuire, of Thompson's solicitors, said: "The letter that we've received is just utterly juxtaposed to all the public pronouncements.

"It stands in stark contrast to everything that VW has said publicly across the world. It's been mea culpa, mea culpa, mea maxima culpa in every single press release.

"Is this another example of VW and saying one thing and doing something else?"

VW has hired one of the world's oldest and most elite legal firms, Freshfields, to handle its UK affairs. The firm also represents the Bank of England.

Mr McGuire added: "By no means are they showing a willingness to pay compensation.

"Their letter is robust, strong and it's suggesting that as far as they are concerned, there is nothing for which the victims should be entitled to receive compensation.

"They simply deny that [the emissions scandal] will have any impact on the value.

"Now, even on the most basic and puerile logical analysis, that is just clearly wrong. We are into the most basic demand and supply curve economics: demand has gone down. It's as simple as that.

"You don't need a lawyer to tell you what that does to the ticket price of the vehicle."

Mr McGuire said Thompsons have responded with a "very robust" letter of their own.

HeraldScotland: New VW chief executive, Matthias Mueller, said the company were preparing 'attractive packages' for customers who had seen the value of their cars dropNew VW chief executive, Matthias Mueller, said the company were preparing 'attractive packages' for customers who had seen the value of their cars drop

The letter from Freshfields to Thompsons states: "The VW Group is continuing to monitor the re-sales of affected vehicles. Industry experience has shown that even where there has been a safety recall, which this is not, there is no identifiable impact on resale values.

"Further, several factors will affect the value of an affected vehicle, including the condition at the time, the year it's being sold, the dealership's independent stock profile.

"The affected used cars are still being sold and there has been no change to the Volkswagen Group's trade-in policy."

VW is preparing to recall all affected models from January in order to replace the illegal defeat devices with new technology free-of-charge.

The letter also rebuffs a "potential claim" for inconvenience, adding that customers "should not incur any out of pocket expenses".

Mr McGuire said the Glasgow-based firm would not be bowed by "bully-boy tactics".

"I think Freshfields think it's David versus Goliath," he said. "They think they can bear their extremely large worldwide network down on us, but we don't see ourselves as Davids in this situation. "We are absolutely up for this fight.

"If it means going to court, that's exactly what we'll do."

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A spokeswoman for VW said they were unable to comment.

Michael Horn, VW’s US chief executive, has blamed "a couple of rogue engineers" for fitting the software and insisted senior bosses knew nothing.

The European Parliament voted last week to set up a committee to investigate the VW scandal and whether regulators failed to prevent cheating by carmakers in vehicle pollution tests.

Mr Horn has also pledged "to make things right with our customers."