Investors in Germany sue Volkswagen over diesel emissions scandal
15 March 2016
The first large-scale securities lawsuit brought by institutional investors against Volkswagen AG has been filed in Germany, with several leading law firms joining forces with German counsel to bring the action.
The suit, stemming from Volkswagen's admitted use of emissions-cheating software in diesel-powered vehicles, was filed on behalf of 281 institutional investors across the globe including the US, Canada, the UK, Europe, Asia, and Australia.
The lawsuit, which seeks to recover losses of over €3.2 billion (over $3.5 billion), was brought by German law firm TISAB, with the support of a legal and funding consortium consisting of leading US securities class action law firms Kessler Topaz Meltzer & Check, LLP and Grant & Eisenhofer PA as well as international investor protection firm DRRT and Ireland-based litigation funding company Claims Funding Europe Ltd.
The investor suit, filed at the Regional Court in Braunschweig yesterday, to preserve certain claims from expiration under German law, alleges that Volkswagen breached its duties to investors by failing to timely publish information in connection with the company's widely reported emissions scandal affecting at least 600,000 vehicles sold in the US and thousands more internationally.
The affected VW diesel vehicles were sold with so-called ''defeat-device'' software designed to fool motor vehicle emissions tests into calibrating approved levels of greenhouse gas exhaust while the cars were operating. In the US, the Department of Justice had filed its own lawsuit that could lead to billions of dollars in penalties against VW for the deception.
The consortium of law firms and funders will continue to coordinate and support further claims for institutional entities against Volkswagen AG in Germany and under German law, and expect to file claims on behalf of additional institutions before mid-September 2016, when the statute of limitations on certain additional claims threatens to lapse.