VW emissions scandal: $14.7bn settlement approved as biggest in US history

Volkswagen has been given approval for its $14.7 billion (around £11bn) settlement with owners of cars in the US affected by the emissions scandal.

The settlement money, which is the largest sum in US history, will be used to compensate some 475,000 drivers. Owners can choose between getting the software fix or selling their car back to VW. They will also get additional compensation payments of between $5100 to $10,000, regardless of which choice they make.

The final approval follows comments from US District Judge Charles Breyer last week that indicated he planned to approve the deal.

No change for Europe

Volkswagen continues to draw criticism from political figures as it stands by its decision to not offer compensation to European customers, despite the mounting pressure to do so.

Spokesmen from Volkswagen have claimed that compensation is not necessary in the UK and the rest of Europe because the fix is less extensive and customers will, therefore, have their cars back soon after they have been recalled.

A further $2bn (around £1.5bn) will be put into the development of zero-emissions vehicles, such as hydrogen fuel cell cars and electric vehicles, while $2.7bn (around £2bn) will be put into environmental mitigation.

In the UK, it was recently revealed that Volkswagen offered to cover the cost of government retesting of vehicle emissions. However, the offer was only extended to Volkswagen Group vehicles, rather than all of the cars tested from various manufacturers, which reportedly cost a total of £2m. 

The results of the retesting scheme revealed that only Volkswagen Group products used the so-called ‘defeat devices’, the discovery of which sparked the emissions scandal.

VW also reached a "partial settlement" with 44 US states last month for a total of $603m.

In a further move, the states of Maryland, New York and Massachusetts are all filing lawsuits against the manufacturer, accusing it of violating state environmental laws and defrauding regulators, according to Reuters. These lawsuits would be in addition to the $14.7bn compensation package.

Jimi Beckwith and Doug Revolta