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VW Scandal Fueling Class-Action Lawsuits

Volkswagen's cheat switch scandal has littered the news recently, and now officials and law firms firmly expect the scandal to become one of the biggest ever group legal claims. The legal warnings come as the company's CEO, Martin Winterkorn is stepping down.

For Volkswagen, the legal problems may just be beginning. The United States, where it was first discovered that VW's cars were fitted with software to dodge emission tests, has already filed multiple class-action lawsuits. It is expected that lawsuits will soon arise from the UK and other analysts believe this could quickly become an international suit.

Estimates believe up to 11 million cars worldwide are affected, which has many legal experts predicting a mega-lawsuit. Boz Michalowska, a consumer goods expert in the UK has stated, “If is shown that this piece of software defeated the European testing then Volkswagen would be in a very similar position as in the US and may well then have to call in their cars with all resulting costs involved.”

Another expert, James May, believes that the Volkswagen scandal may reveal many other carmakers who are dodging emission tests as well. When asked if he was surprised at what has emerged about the German car-maker, Mr. May said, “I am surprised, to be honest. I also, I don't know if I should say this, I wouldn't be surprised if they turned out not to be the only ones.”

VW is already preparing for lawsuits and has set aside nearly $7 billion to cover the costs of the scandal after it was ordered to recall half a million diesel models built in the last seven years in the United States.

VW could also face a fine of up to $16 billion, criminal charges for its senior executives and costly legal actions launched by both customers and shareholders. They have since hired the same US law firm that defended BP after the Deepwater Horizon oil disaster.