Volkswagen may face a record-breaking £30bn lawsuit from shareholders over emissions scandal
GERMAN car-maker Volkswagen could be set for more trouble, after it has emerged that one of the world’s biggest law-firms is planning to make a record-breaking multi-billion pound legal attack on the company.
Law firm Quinn Emanuel, which has won almost €50bn (£32bn) for clients and represented major companies including Google and Fifa, has been retained by claim funding group Bentham to make a case for VW shareholders over the diesel emissions scandal. The lawsuit could result in as much as £30bn in damages being paid out to shareholders.
Bentham’s chief investment officer Jeremy Marshall told City PM that both firms are in the process of assembling a large-scale class action against VW after the car-maker admitted to using “defeat devices” to cheat emissions tests.
Since the admission, around €25bn has been stripped from the German company’s stock market value. Now Quinn Emanuel and Bentham are in talks with some of VW’s biggest investors to ask them to join the claim. News of the claim was first reported in the Sunday Telegraph.
It is likely that any action would be pursued in Germany under the Securities Trading Act. Quinn Emanuel hopes to file the first wave of actions by February. According to Marshall, pursuing a lawsuit in Germany will allow the case to move much quicker and may be preferable to shareholders.
Due to the amount of shareholders involved in the case and its pursuit in Germany, it is likely that two claims will have to be filed against the auto giant.
Marshall added that finding a start-date was “more difficult as you would need to decide when the market was initially deceived.” Damages could be calculated as far back as 2007, when VW is alleged to have started developing the emission-cheating devices.
VW’s two biggest investors, Porsche and the German state of Lower Saxony, are unlikely to sue over losses as their own interests are closely linked to the auto company’s health. Bentham, however, believes that the amount of trading carried out in the last five years means that “the top 200 shareholders still incurred multi-million pound losses.” Between January 2011 and the mid-September scandal there have been around 1.5bn trades in Volkswagen shares.