Tuesday 24 January 2017 8:23 am

A US judge has approved VW’s $1.2bn settlement with dealers

Volkswagen's dealers will receive a $1.2bn (£1bn) settlement, after a US judge approved it.

The 650 dealers will receive an average of $1.85m due to the car company's diesel emissions scandal and US District Judge Charles Breyer said they will be paid over 18 months.

Breyer said the settlement was "fair, reasonable, and adequate".

VW has also agreed to keep making volume-based incentive payments to dealers and will allow them to defer capital improvements for two years.

Earlier this month, VW said it had negotiated a $4.3bn draft settlement with US regulators over the emissions-rigging scandal and said it would plead guilty to breaking certain US laws.

It had already agreed to a $15bn civil settlement with environmental authorities and car owners in the US.

And law firm Harcus Sinclair has applied for a group litigation order against VW on behalf of thousands of owners of cars manufactured by the firm. That's the first such claim in the UK.

The scandal emerged in September 2015 when the US Environmental Protection Agency (EPA) found that many VW cars sold in the country had software to detect when they were being tested and tweak the performance to cheat the tests.

The German company then admitted cheating emissions tests in many other countries too, including the UK.