Nearly five years after Volkswagen’s diesel-cheating software came to light, 446,000 German car owners still wait for a cent of compensation. That could finally change. On 5 January 2020, Volkswagen and the Federation of German Consumer Organisations, known as VZBV, confirmed they had opened settlement talks. The negotiations are preliminary and confidential. They were urged by the Braunschweig Higher Regional Court last September.
The stakes are concrete. This is Germany’s largest consumer class action ever. It covers 446,000 buyers. They paid for cars advertised as “clean diesel.” Instead, those cars carried defeat devices – software that detected test rigs and cut nitrogen-oxide output. On real roads, emissions soared to 40 times the legal limit. Volkswagen later admitted 11 million cars worldwide, including Audi, Seat and Skoda models, had the rigged EA 189 engine. In Germany alone, 2.4 million vehicles were sold with it.
U.S. consumers began receiving cash payments in 2016. German owners got nothing comparable. They argue resale values dropped. They argue they bought based on false data. The class action demands Volkswagen repay a proportion of the purchase price. The VZBV, backed by the law firm Hausfeld, filed the lawsuit in January 2019. It was the first “Musterfeststellungsklage” – a new type of collective action made possible by a change in German civil procedure in November 2018.
That legal change was crucial. Before it, German consumers had no efficient way to bundle similar claims. Each owner had to sue individually. The new procedure lets qualified consumer groups file one lawsuit representing thousands. The VZBV did exactly that, registering the case on behalf of 446,000 diesel buyers.
What is at risk now is not just money. It is the credibility of Germany’s consumer protection system. The scandal erupted in September 2015 when the U.S. Environmental Protection Agency accused Volkswagen of fitting the defeat devices. Criminal probes, shareholder suits and regulatory fines followed. By the start of 2020, Volkswagen had booked more than €30 billion in provisions for penalties, buy-backs and retrofit costs globally. Yet German owners still had no payout.
The settlement talks are a direct result of the court’s push. If they succeed, 446,000 people could finally see compensation. If they fail, the case continues – and the court will decide. Either way, the outcome will set a precedent for future class actions in Germany. The VZBV lawsuit is the test case for a new legal tool.
Volkswagen faces pressure on multiple fronts. The €30 billion in provisions covers global costs, but that figure is not fixed. More claims could push it higher. The company has already admitted the cheating. The question is how much it will pay German owners who bought the cars in good faith.
The talks are early. Nothing is settled. But the fact that Volkswagen and the VZBV are at the table, after years of legal gridlock, marks a shift. For 446,000 people, the wait may finally have an end in sight. For German consumer law, this is a test of whether collective action can deliver real remedies.
