analysis
Because VW cheated on emissions values, around a quarter of a million customers received compensation. On the other hand, thousands of clients who joined the lawsuit filed by the service provider “myRight” are left empty-handed.
It seems unfair: Four years ago, a quarter of a million people received compensation of up to around 6,000 euros from VW due to the diesel emissions scandal. Thousands of participants in a lawsuit filed by a legal service provider, however, receive: zero euros. Even though they are victims of the same fraud scandal, even though they had to accept the same intentional immoral harm, even though they too had taken legal action. Did they bet on the wrong horse?
That horse goes by the name “myRight”, in German “MeinRecht”. 33,000 VW fraud diesel owners initially assigned their claims to this legal service provider. The goal: successful collective proceedings before the Braunschweig regional court, at the headquarters of VW. In return, “myRight” assumed all costs and risks in order to assert claims for damages and receive a 35 percent success commission. That sounded so tempting that a total of 15,000 people joined the collection process in 2017 and another 18,000 the following year.
Model declaratory action concluded with comparison
But there are only 150 left, says a spokesman for the Braunschweig regional court. They did not resort to individual lawsuits, settle out of court or withdraw. Instead, they showed patience: They and their legal service provider are still waiting for a verdict six years after the first lawsuit was filed. After all: it could be spoken on April 22nd.
“It was a good thing for consumers. But it cost us a lot of life energy,” says “myRight” founder and managing director Sven Bode. “With the knowledge we had back then we would do it again, but not again with the knowledge we have now.”
Because while “myRight” was waiting for Justice to get going, the Federal Association of Consumer Organizations launched a model declaratory action against VW and concluded a settlement four years ago: Those who joined the lawsuit were able to get an average of around 15 percent of the original purchase price received from VW.
Consequences of the BGH ruling
For both sides, this meant the risk that they would now be making a loss with later judgments – the judges could either award consumers more damages than in the comparison or deny VW’s intent. However, consumers and manufacturers focused on safety and obviously preferred the sparrow in the hand to the pigeon on the roof. That’s how the handshake happened. According to estimates, VW let the sparrow cost more than 750 million euros.
The company could perhaps have saved a lot of the money. Because the dove left feathers over time. She was quite upset by a ruling by the Federal Court of Justice shortly after the consumer advice center settlement. Accordingly, VW should reimburse the purchase price as damage, but should be able to offset the kilometers already driven against it.
And: The expected mileage of a car is 250,000 kilometers. “As a result, many consumers will no longer receive compensation due to the number of kilometers driven in the emissions scandal,” said “myRight” and terminated 4,000 of its frequent drivers. “The Federal Court of Justice has set incentives to cover up fraud for as long as possible and then drag out the proceedings for as long as possible because in the end there is no longer any compensation to be paid,” says Bode, annoyed.
Commission plus legal fees from VW
It sounds different from the VW Group: “The business model of ‘myRight’ is aimed at asserting even unfounded claims in order to increase their negotiating power, largely without checking,” explains a spokesman for Volkswagen AG. “That is why the claims must be examined particularly carefully in court in individual cases, which takes a considerable amount of time.”
Time costs money. “myRight” therefore offered clients the opportunity to withdraw promising cases from the collective proceedings and instead support them in individual lawsuits. “More than 5,000 individual lawsuits from Braunschweig out into many regional courts: That is highly inefficient because each regional court has to deal with the legal questions again. But it is ten times faster,” says Bode, who has a doctorate in economics, shaking his head and proudly showing two of the “3,807 positive ones “Individual lawsuits”: VW had to pay damages sometimes more than 40,000, sometimes more than 20,000 euros – significantly higher than the maximum of 6,257 euros that the consumer advice centers received in comparison.
According to Bode, that fat pigeon did exist. But apparently she especially likes to fly onto the roofs of law firms: According to documents available to Stiftung Warentest, a VW owner received less compensation than “myRight” and the law firm it commissioned earned from her case.
Because while the owner had to transfer the commission to “myRight”, VW also covered the costs of the law firm commissioned. In numbers: 1,200 euros in damages on the one hand are offset by 650 euros in “myRight” commission and 1,100 euros in office costs. When the consumer advice centers compared the sample, it would have been 2,500 euros – for the driver alone.
“Intentional immoral deception”
This is all annoying for those who now have to look into the tube without any problems because they perhaps drove their fraudulent diesel until they were dismissed by the TÜV. Did they actually not suffer any damage, as the BGH case law suggests? “VW deliberately sold customers a car that they did not want to buy. Many wanted an environmentally friendly car,” said Bode. He draws a comparison to an earlier consumer scandal: “You buy lasagna, but there is horse meat in it. This is a deliberate immoral deception.” In addition, the affected car buyers were repeatedly threatened with driving bans or shutdowns.
Technical considerations suggest that the cars burned more money in addition to diesel: the developers of the fraudulent engine “EA189” apparently failed to balance consumption, performance, exhaust emissions and durability. In order to comply with environmental standards on paper, they installed control software that only reduced exhaust gases on test benches. “Tricksen was probably the only option,” said Tesla boss Elon Musk in an interview with the British “Auto Express”.
After this was discovered, the Federal Motor Transport Authority obliged VW to update the software. This supposedly allowed the vehicles to comply with emissions standards and, according to experts, hardly changed the factors of consumption and performance. Was that at the expense of durability? One of the four variables would logically have to take a back seat in favor of the other, otherwise why wouldn’t the engineers have put the optimal engine on the road straight away?
Fraud engine with a “good reputation”?
In fact, affected drivers and workshops report clogged exhaust gas recirculation valves or demolished turbochargers. They suspect that the software update reduced nitrogen oxides, but created more soot, which caused long-term damage to components and led to costly repairs. But is the damage just a result of wear and tear or is it actually the result of the software update, i.e. fraud? And how does this affect resale?
At least used car dealers who buy these fraudulent diesel engines with a lot of mileage are dismissive: “In the countries where the car goes, the engine is taken apart, cleaned and reassembled for 300 or 400 euros. Soot residue then doesn’t matter,” explains a dealer who does not want to be named.
His further statement is tragically funny: “The good reputation of the engine” counts much more than its history of fraud. “He easily drives half a million kilometers.” What the judges at the Federal Court of Justice set as a value of zero can still fetch a used car dealer around 3,000 euros, depending on the overall condition, because new cars became scarce as a result of the war in Ukraine and a gap in the used car market was created. “There is no difference to cars without cheating software. But of course: the fraud matter is also included in the price discussions,” says the dealer and smiles.