Thousands of Scots motorists win right to bring £20m compensation battle against VW

Volkswagen, which is vigorously denying liability, now has to lodge defences by no later than June 17, 2021.

The claim surrounds the use of a defeat device to cheat on emission tests, which allowed VW to claim the cars had better green credentials than was actually the case.

READ MORE: Volkwagen owners join 'biggest class action in Scottish history'

The civil case argues that without the cheat device, the car's fuel efficiency and performance will drop and that the customer will lose out with a car that is worth less when it comes to be resold.

In September 2015, Volkswagen Group announced that 11 million vehicles worldwide, including almost 1.2 million in the UK, were affected, prompting a flurry of litigation around the world.

The aftermath of the scandal was VW payout more than 30 billion euros (£26 billion) in fines, recall costs and civil settlements and led to criminal charges by German prosecutors against current and former senior employees.

In 2017, while paying £12.3 billion to settle claims in the US and buy back polluting cars, VW's UK boss Paul Willis said there was "no legal basis" for similar claims in Britain and insisted to MPs on the transport select committee that he "misled nobody" and that his company did not set up cars to cheat emissions regulations.

He insisted then that fewer than half of the UK vehicles caught up in the Volkswagen emissions scandal had been fixed. Around 470,000 of the 1.2m vehicles fitted with software to cheat environmental tests had been dealt with, he said.

But he was attacked for failing to give answers to straight answers, repeatedly using phrases such as “to the best of my knowledge” and “I can’t recall” and at one point the committee chairman Louise Ellman accused him of failing to tell Parliament the whole truth about the diesel emissions scandal. It's an allegation Mr Willis refuted.

Patrick McGuire, partner at Thompsons solicitors, which is the lead agents in the group proceedings, representing 2000 of the Scottish car owners said of the Lord Ericht's decision: “This is a significant step forward for the 5,000 Scottish VW, Audi, Skoda and Seat owners seeking fair recompense for the financial harm caused to them by emissions scandal.

"Despite the best efforts of Volkswagen’s lawyers to block the progress of the case at every stage the Court of Session has formally allowed the first case under the new group proceedings rules to proceed against the Volkswagen Group. We will pursue the case fully and unwaveringly to secure financial justice for all 5,000 claimants.

“I hope that their efforts to block the group proceedings will be the last roll of the dice by VW’s lawyers and their clients will finally face up to their legal and moral responsibility to their once loyal owners who fell foul to emissions scandal.”

He argued that there was a clear breach of consumer laws and expected that compensation was a matter of when, not if.

READ MORE: Volkswagen 'cheated' European emissions standards

Last year saw the first significant ruling on mass litigation brought in England and Wales over the 'dieselgate' emissions scandal.

The English litigation was filed back in 2016, but reached what lawyers described as “a decisive court battle” at a preliminary hearing in December, 2019 when the High Court was asked to decide whether software installed in VW cars was a “defeat device” under EU regulations.

Mr Justice Waksman in the High Court ruled that Volkswagen installed unlawful software to cheat emissions tests in thousands of cars that were sold in Britain.

The judge backed assertions made by 86,000 motorists who bought Volkswagen cars and diesel vehicles made by Volkswagen but branded Audi, Seat and Skoda.

Lawyers for the motorists had argued the automaker cheated European emissions standards, which were designed "to save lives", by installing unlawful "defeat devices" in its diesel vehicles. This meant that the vehicles were emitting up to 40 times the legal limit of nitrogen dioxide.

On a judgment delivered remotely in April last year, Justice Waksman ruled that "the software function in issue, in this case, is indeed a defeat device" under EU regulations.

He said he was "far from alone in this conclusion", referring to "numerous courts and other bodies in various other jurisdictions (which) agree that the software function here is a defeat device".

The judge also stated that “a software function which enables a vehicle to pass the test because (artificially) it operates the vehicle in a way which is bound to pass the test and in which it does not operate on the road is a fundamental subversion of the test and the objective behind it”.

He added: “In other words, it destroys the utility of the test because it makes it impossible for performance under it to be the approximation of normal driving conditions and performance which it is intended to be.”

In August, Volkswagen lost an appeal over that ruling, which could mean the group action can now continue, according to consumer action law firm Your Lawyers.

Volkswagen pointed out that the decision did not determine the points of loss, liability and causation, which was to be decided at a later trial.

While VW accepted that 8.5 million vehicles in Europe were fitted with software that could detect when they were being tested for emissions, Mr Willis said four years ago that cars affected showed no change in fuel consumption and, from all the data he had seen, there had been no detrimental effect to the residual value of vehicles.

The car company had denied that the software amounts to a "defeat device" under EU law or in the UK.

In the UK it was estimated that around 1.2 million diesel engine cars are affected by the emissions scandal.

Of the UK vehicles affected by the crisis, there were estimated to be 508,276 Volkswagen cars, 393,450 Audis, 131,569 Skodas, 79,838 VW commercial vehicles and 76,773 Seats.

A Volkswagen Group spokesman said of the Scottish class action: “Volkswagen Group maintains that there is no legal basis for these claims and that it is not liable to Scottish claimants as alleged. Scottish customers have not suffered any loss or damage as a result of the NOx issue and are therefore not entitled to compensation. Volkswagen Group will robustly defend itself against any litigation in Scotland.

"It is misleading to say that Volkswagen Group has sought to block proceedings. It has co-operated with the Court at every stage and the court has in fact awarded Volkswagen Group its expenses from the claimant lawyers for much of the proceedings that have occurred to date. Volkswagen Group is defending itself against legal claims, as is its right.”