Volkswagen To Pay At Least $87 Million To Australian Car Owners

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A multi-million dollar class action case has been settled by Volkswagen resulting in a pay out of a minimum $87 million to around 100,000 Australian motorists. The settlement comes after it was revealed Volkswagen had used a 'cheat system' to hide its true emissions in 2015 in a scandal known as 'Dieselgate'.

In Australia, Volkswagen Will Have To Explain Its Dieselgate Software Under Oath

100,000 Volkswagen, Audi and Skoda cars in Australia are affected by the company's 'cheat software', the dual-mode switch that detected emissions testing conditions and changed vehicles' performance to create lower emissions. Two open class action lawsuits are underway, and a Federal Court judge has ordered the manufacturer to explain on the stand exactly why the software was installed.

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Volkswagen Group Australia, which houses the Volkswagen, Volkswagen Commercial Vehicles and ŠKODA brands, has reached a settlement with class-action plaintiffs in Australia but it's still subject to approval by the Federal Court of Australia. A minimum of $87 million will be available for compensation and if all vehicle owners participate, it's expected they each will receive $1400.

The compensation will extend to vehicles of the EA189 engine family. Specifically, it affects 1.6L or 2.0L 4 cylinder TDI diesel engines, manufactured between 2008 and 2015. Some popular models include the Jetta, Beetle, Passat and the Golf. In order to claim compensation, you'll need to have owned one of the affected models on September 18, 2015.

Volkswagen Group Australia explained the settlement was a "significant step towards fully resolving the diesel lawsuits in Australia."

"The settlement, on a no-admissions basis, concerns five class-action lawsuits covering all affected vehicles in Australia," the company said.

"Volkswagen expects the proceedings will be concluded in 2020."

Volkswagen fitted the affected cars with "defeat devices" in order to evade pollution controls by giving false readings of emissions. It was first noticed in 2014 when an organisation, International Council on Clean Transportation, noted discrepancies between emissions readings and took it into further testing. Eventually, it was revealed that the cars had a defeat device, which would detect when a car was being emissions tested and activated the car's emissions-curbing systems.

The ACCC brought about proceedings on Volkswagen in response to this investigation. In September 2018, the ACCC successfully compelled Volkswagen to undertake a review of its customer guarantee obligations and Volkswagen agreed it would "offer refunds, replacements or repairs" to customers where guarantees were not honoured.

"We have successfully sought Volkswagen's commitment to improve its complaints handling systems to ensure compliance with the automatic rights consumers have under the Australian Consumer Law, which cannot be excluded, restricted or modified," then-ACCC Commissioner Sarah Court said in a statement. "[September 7 2018's] action ensures Volkswagen will place consumer guarantees under the Australian Consumer Law at the centre of their approach to consumer complaints, as every car manufacturer should do."

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