Washington — Volkswagen (VW), in another step to move past its costly diesel emissions cheating scandal, has agreed to pay $175m to US lawyers suing the German vehicle maker on behalf of the owners of 475,000 polluting vehicles, two people briefed on the agreement said on Friday.
In August, the lawyers in the class action litigation sought up to $332.5m in fees and costs for their work in a $10bn settlement that gives US owners of 2.0l polluting cars the ability to sell back their vehicles to VW.
The latest deal means VW now has agreed to spend up to $16.7bn to compensate US owners and tackle claims from states, federal regulators and dealers arising from the "Dieselgate" scandal. The resolution of legal fees clears another hurdle as VW looks to resolve all of the outstanding aspects of a scandal that disrupted its global business, hurt its reputation and led to the ouster of its CEO in 2015.
VW in September 2015 admitted using secret software in its cars to cheat exhaust emissions tests, with millions of vehicles worldwide affected.
The cheating allowed VW’s US vehicles sold since 2009 to emit up to 40 times legally allowable pollution levels.
Lawyers for the owners of polluting vehicles and a spokeswoman for Volkswagen declined to comment.
Lead plaintiff lawyer Elizabeth Cabraser, who is part of a committee of 22 lawyers overseeing the owner suits, said in August the amount sought in attorneys fees was far less than the "judicially established benchmark" for class actions of approximately 25% of the settlement amount.
US District Judge Charles Breyer on Tuesday is set to hold a hearing in San Francisco on whether to grant final approval of the vehicle owners’ settlement announced in June, which would be the largest-ever automotive buy-back offer in the US. Breyer must also decide whether to approve the legal fee agreement.
VW has agreed to spend up to $10.033bn to buy back the vehicles and compensate owners. It may also offer vehicle fixes if regulators approve. Under a timetable announced this summer, regulators could approve a fix for some 2015 diesel vehicles as early as November.
In addition, VW has agreed to pay up to $1.21bn to compensate US VW brand dealers, pay more than $600m to 44 US states, spend $2bn on zero-emission vehicle promotion and infrastructure, and another $2.7bn to offset diesel pollution.
Reuters
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