Hausfeld Rechtsanwälte has recently written to car manufacturer Volkswagen following the revelation in 2015 that it had been using defeat devices in certain of its diesel engines, the effect of which was to artificially lower the amount of noxious emissions when the vehicles were being tested. Hausfeld is seeking compensation for VW, Audi, Skoda and SEAT car-buying customers, investors, and the general public for the environmental harms.
Oxera’s team of experts in impact assessment and damages quantification has been assisting Hausfeld to identify the range of harms that VW’s actions are likely to have caused. In particular, we have been exploring the harm caused as a result of the following.
- Car owners—individual and fleet: car owners in the EU may have suffered impacts such as loss of residual value in their vehicle, poorer fuel economy, loss of brand prestige, and, depending on the responses of national governments, they may also pay higher vehicle tax.
- Investors: investors are likely to have suffered potentially significant harm due to the reduction in the value of VW shares. The loss in value to shareholders is likely to have been significant, particularly to institutional shareholders holding large volumes of securities.
- Environmental harm: there is a potentially more general impact, in that a variety of vehicles have been driving substantial mileage with non-compliant engines. One can estimate the additional levels of NOx and CO2 that they are likely to have produced, and consider the potential impact on the health and wellbeing of European citizens.
- Competitors: there may be harm to VW’s competitors, via sales and market share going to VW, which competitors would have otherwise captured.
Oxera’s preliminary analysis suggests that VW’s defeat devices have the potential to have caused substantial harms, as shown in Table 1.1.
Table 1.1 Summary of potential harms caused by VW’s defeat devices
Enno Eilts, Oxera Partner, noted:
‘The potential harm from VW’s defeat devices is multi-faceted. The general public might have suffered from harmful emissions, investors from loss of share value, competitors from lost sales, and car owners from increased running costs or loss of capital value. Oxera’s initial analysis suggests that the overall damage is likely to be worth many millions of euro.’
Full report available here.