German Court Allows Lawsuit that could Cost $4B for Volkswagen

The District Court in Braunschweig has said that it will allow a collective lawsuit to go forward against VW that could end up costing the automaker up to €4 billion. That’s according to a report today from the Wall Street Journal.

The cases are being brought by investors who argue that Volkswagen’s emissions scandal unfairly cost them billions. Volkswagen argues, though, that it fulfilled its requirements.

“Volkswagen still believes it dutifully fulfilled its responsibilities to inform capital markets,” a spokesperson  told the Wall Street Journal in an email.

Collective lawsuits work differently in Germany than they do in the US. There, one suit is chosen to be a pilot case, and its ultimate ruling is applied to all other cases. The Braunschweig court has said that it will pick a pilot case by the end of 2016.

The Wall Street Journal reports that the court has received as many as 170 individual suits against VW that together amount to about €4 billion in damages from retail and institutional investors.

[source]