Volkswagen mulls legal action against former boss

Volkswagen is considering legal action against its former chief executive Martin Winterkorn for negligence over his part in the Dieselgate emissions scandal, a spokesman for the company said on...

Volkswagen is considering legal action against its former chief executive Martin Winterkorn for negligence over his part in the Dieselgate emissions scandal, a spokesman for the company said on Sunday.

Mr Winterkorn is already facing criminal charges in the US over his role in the affair, although the case is unlikely to go to trial as Germany does not extradite its citizens.

But a civil lawsuit from VW could potentially ruin him, according to German legal experts who said the company could seek damages of more than €100m (£88m).

“The investigation has been going on for quite some while and is conducted independently of the authorities’ investigation,” Michael Brendel, a spokesman for the VW supervisory board, said.

Mr Winterkorn was VW chief executive in 2015 when it emerged that the company had rigged software on 11m cars to enable them to cheat emissions tests. He initially tried to cling on to his position but resigned five days later saying he was “utterly sorry”.

Invetsigations over his role in the affair in the US and Germany have centred on how much he knew about the emissions rigging. He has always maintained he was completely unaware it was going on and that he resigned because he “accepted responsibility for the irregularities” as chief executive.

Q&A | Volkswagen’s “dieselgate” emissions scandal

Credit: PAP/DPA/Hendrik Schmidt

What did VW do?

The company falsified emissions data on its diesel vehicles, pretending they were cleaner than they are. The deceit was exposed by US researchers.

How exactly did it cheat?

By installing a piece of software into computers on its cars that recognised when the car was being tested – a so-called “defeat device”. This fine-tuned the engine’s performance to limit nitrogen oxide emissions in lab conditions. When used on the road, the emissions levels shot back up.

How widespread is the problem?

11m cars worldwide had the software installed; 1.2m of them in the UK.

Which models are involved?

The issue affected the VW Jetta, Beetle, Audi A3 and Golf models from 2009 to 2015 and the Passat in 2014 and 2015. Audi, Seat and Skoda cars are also affected, as well as VW vans. Some diesel and petrol vehicles also have “irregularities” around carbon dioxide emissions.

What were the consequences?

VW offered to fix affected models and started the recall in January 2016. As of late 2017, the scandal had cost VW in the region of $30bn including criminal damages in the US and buy-backs of faulty vehicles. Senior VW executive Oliver Schmidt was sentenced to seven years in prison for evading American clean-air laws.

The company has not admitted wrongdoing in the EU and is resisting claims for compensation. It is facing investigations and court cases from consumers in over a dozen countries. UK lawyers are preparing a case on behalf of around 55,000 aggrieved motorists.

He said he had decided to step down “in the interests of the company even though I am not aware of any wrongdoing on my part”. He declined to comment yesterday [SUN] on the possibility he could be sued by his former employer.

German legal experts said last week’s decision by US prosecutors to unseal criminal charges of conspiracy and wire fraud against Mr Winterkorn over the affair had left him exposed to a civil lawsuit.

“With the charges in America, Winterkorn’s fate has taken a dramatic turn,” Prof Gregor Bachmann told Frankfurter Allgemeine Sonntasgzeitung newspaper.
Under German law, managers can be held liable not only for harm caused to a company by their own direct actions, but also for any failure of internal control mechanisms.

VW could seek to hold him liable for any losses caused by “negligent breach of duty”. The scandal has already cost the company €25.8bn (£22.8bn) and it is facing a €10bn lawsuit from shareholders in Germany.

Unlike in a criminal case, the burden of proof would be on Mr Winterkorn to prove he did everything possible to detect wrongdoing at the company and punish those responsible.

The former chief executive was paid more than €100m during his time working at VW, and is currently entitled to an additional €30m (£27m) pension.

“In a worst case scenario, all this money would be gone,” Prof Bachmann said.

Mr Winterkorn faces a possible 25 years in jail under the US charges. American prosecutors last week issued a warrant for Mr Winterkorn’s arrest and branded him a fugitive from justice. While he is safe from extradition as long as he remains in Germany, he could face arrest if he leaves the country.

He also faces a possible criminal case in Germany, where prosecutors say they are still investigating the case.

How the Volkswagen scandal unfolded

2009

Volkswagen begins installing “defeat devices”

The devices bypass tougher anti-pollution standards introduced in 2008, capping legal nitrogen oxide (NOx) emissions.•

2013

Abnormalities found in tests

Researchers from the International Council on Clean Transportation and West Virginia University find an inconsistency between the NOx emitted by VW vehicles in lab tests and on the road.•

May 2014

EPA investigation begins

The Environmental Protection Agency (EPA) begins an investigation into VW. The back-and-forth between the two lasts more than a year, as VW argues that third-party tests of its cars are flawed.•

3 September 2015

VW admits tricks

VW admits that it has used sophisticated software to trick regulators. Its software monitors steering, engine use and barometric pressure to determine whether the car is being tested for emissions.•

18 September 2015

VW’s deception goes public

The EPA makes VW’s deception public, leaving the Germany company facing up to $18bn (£12bn) in fines, as well as potential legal action from the Department of Justice, FBI and the European Union.•

23 September 2015

VW CEO resigns

In the wake of the scandal, CEO Martin Winterkorn resigns. Since the EPA came out on the previous Friday, VW shares have lost a third of their value, and the company’s reputation has been tarnished.•

25 September 2015

Matthias Muller named CEO

The head of sister brand Porsche, Matthias Mueller, is named CEO. VW says that 5m cars were affected by the emissions scandal, down from an initial estimate of 11m•

30 September 2015

1.2m affected cars in the UK

Volkswagen reveals the number of affected cars on UK roads – more than a 10th of the total worldwide.•

7 October 2015

VW predicts recall in January 2016

New VW chief executive Matthias Mueller says the company is likely to start a recall of cars affected by its emissions scandal in January, and that he hopes all affected cars will be fixed by the end of 2016.•

8 October 2015

US boss grilled by Senate. German prosecuters raid VW HQ

VW HQ in Wolfsburg (Photo: Alamy)

Volkswagen US boss Michael Horn admits he was made aware of a “possible emissions non-compliance” in the spring of 2014 and makes a “sincere apology” while appearing in front of the US Senate.

Meanwhile, in Wolfsburg, Germany, VW headquarters are searched by prosecutors to “secure documents and data storage devices” that could identify those involved in the alleged manipulation.•

18 October 2015

VW’s first quarterly loss in 15 years

The company announces a pre-tax loss of €2.5bn, due to holding back €6.7bn to cover the cost of dealing with the emissions scandal. CEO Matthias Mueller outlines a new strategy focusing on “qualitative growth” over simply outselling rivals.•

4 November 2015

Scandal spreads to petrol engines

VW shares fall another 10pc as the company admits that “inconsistencies” have been detected in CO2 emissions from both diesel and petrol engines.•

16 November 2015

Inquiry into “not fit for purpose” vehicle testing system

Britain’s vehicle testing system is “clearly inadequate” according to MPs, who launch an inquiry into it following the Volkswagen emissions scandal.•

7 December 2015

Britons face extra £50 bill after recall

Owners of Volkswagen, Skoda, Seat and Audi cars face being billed an extra £50-a-year as VW recalls one in ten diesels on British roads.

The Group announce it will call in 1.2m cars in the UK.•

8 December 2015

Volkswagen suspended from FTSE ‘ethical’ index

Volkswagen is suspended from the index of socially responsible investments. FTSE Russell, the London Stock Exchange’s index provider, removes the German carmaker from its FTSE4Good list and barred its re-entry for at least two years.•

10 December 2015

VW bosses: scandal was caused by culture that ‘tolerated’ rule breaking and misconduct

VW admits the scandal was the result of systematic failures and a culture that “tolerated” rule-breaking and misconduct by employees.

Revealing early findings of investigations into how the “dieselgate” scandal occurred, Hans Dieter Potsch listed three main causes, including: “an attitude in some units of the company that tolerated breaches of rules.”•

4 January 2016

US legal action

The US Justice Department, on behalf of the Environmental Protection Agency, files a lawsuit against VW. The US government is seeking a potential $46 billion fine for violations of the Clean Air Act.•

9 September 2016

Key witness

As part of a plea deal, Volkswagen engineer James Liang admits that the company’s US engineering department was fully aware of and complicit in fitting “defeat devices” to diesel vehicles.•

18 September 2016

Other carmakers potentially implicated

A study by the Transport and Environment group highlights inconsistencies between ‘on the road’ emissions and lab tests in a number of other car models. It suggests that some of the blame for further defeat device use should lie with national governments for failing to adequately regulate their motor manufacturers.•

25 October 2016

US court ruling

US judges ruled that Volkswagen must offer a full buyback or repair plus compensation deal on 475,000 vehicles. In addition, the company must pay a total of $4.7 billion in environmental compensation.•

8 December 2016

EU legal action

The European Union begins legal action against the governments of Germany, the UK, Spain and Luxembourg. These countries are accused of failure to act on behalf of consumers against Volkswagen, in the same way that the United States government had. Czech Republic, Lithuania and Greece are also warned about their actions over the scandal.•

11 January 2017

Further charges

Volkswagen pleads guilty to conspiracy to defraud the US government and pays a further $4.3 billion in penalties. Six German VW executives are individually charged for their alleged roles in the scheme.•

20 March 2017

New UK legal case

More than 35,000 motorists in England and Wales join a class action lawsuit against Volkswagen, over its actions during “dieselgate”.•

3 May 2018

Charges filed against CEO

In the United States, former Volkswagen CEO Martin Winterkorn was indicted on fraud and conspiracy charges relating to the emissions scandal. He has denied any knowledge of the rigged tests.

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Source: The Telegraph 

Featured Image: Getty Images 

 Inset Image: AP Photo/File 

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