Volkswagen to pay $175
million to U.S. lawyers suing over emissions
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[October 15, 2016]
By David Shepardson
WASHINGTON (Reuters) - Volkswagen AG
<VOWG_p.DE>, in another step to move past its costly diesel emissions
cheating scandal, has agreed to pay $175 million to U.S. lawyers suing
the German automaker on behalf of the owners of 475,000 polluting
vehicles, two people briefed on the agreement said on Friday.
In August, the lawyers in the class action litigation sought up to
$332.5 million in fees and costs for their work in a $10 billion
settlement that gives U.S. owners of 2.0 liter polluting cars the
ability to sell back their vehicles to Volkswagen (VW).
The latest deal with the lawyers means VW now has agreed to spend up to
$16.7 billion to compensate U.S. owners and address claims from states,
federal regulators and dealers arising from the "Dieselgate" scandal.
The amount to be paid out to lawyers was first reported by Reuters on
The resolution of legal fees clears another hurdle as the world's No. 2
automaker looks to resolve all of the outstanding aspects of a scandal
that disrupted its global business, hurt its reputation and led to the
ouster of its chief executive officer last year.
VW in September 2015 admitted using sophisticated secret software in its
cars to cheat exhaust emissions tests, with millions of vehicles
worldwide affected. The cheating allowed VW's U.S. vehicles sold since
2009 to emit up to 40 times legally allowable pollution levels.
The $175 million includes attorneys' fees and other costs, according to
the sources, who spoke on condition of anonymity.
Lawyers for the owners of polluting vehicles and a spokeswoman for
Volkswagen declined to comment.
Lead plaintiff lawyer Elizabeth Cabraser, who is part of a committee of
22 lawyers overseeing the owner suits, said in August the amount sought
in attorneys fees was far less than the "judicially established
benchmark" for class actions of approximately 25 percent of the
U.S. District Judge Charles Breyer on Tuesday is set to hold a hearing
in San Francisco on whether to grant final approval of the vehicle
owners' settlement announced in June, which would be the largest-ever
automotive buy-back offer in the United States. Breyer must also decide
whether to approve the legal fee agreement.
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A VW sign is seen outside a Volkswagen dealership in London,
Britain, November 5, 2015. REUTERS/Suzanne Plunkett/File photo
VW has agreed to spend up to $10.033 billion to buy back the vehicles and
compensate owners. It may also offer vehicle fixes if regulators approve. Under
a timetable announced this summer, regulators could approve a fix for some 2015
VW diesel vehicles as early as next month.
In addition, VW has agreed to pay up to $1.21 billion to compensate U.S. VW
brand dealers, pay more than $600 million to 44 U.S. states, spend $2 billion on
zero-emission vehicle promotion and infrastructure, and another $2.7 billion to
offset diesel pollution.
It still faces billions of dollars in potential fines from the U.S. Justice
Department in its criminal probe into VW's cheating scandal, and must resolve
the fate of larger vehicles that were not part of the initial $10 billion
VW and U.S. regulators are in continuing discussions over whether the automaker
should agree to buy back 85,000 larger 3.0-liter Porsche, Audi and VW vehicles
that also exceeded U.S. emission standards, and whether it should offer
additional compensation to those owners.
VW may have to pay additional owner attorneys' fees as part of a separate
potential 3.0-liter settlement, the sources said.
(Reporting by David Shepardson, Editing by Soyoung Kim, Will Dunham and Diane
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