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ARTICLE · 27 MARCH 2017

Dirty Diesel Done Dirt Cheap? VW Settles "Clean Diesel" Scandal

Affleck Greene McMurtry LLP
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VW recently employed a quick settlement strategy to deal with the fallout from its admission, in September 2015, that it had installed software to cheat on emissions tests on 11 million diesel powered VW and Audi vehicles.

CanadaLitigation, Mediation & Arbitration
W. Michael G. Osborne
W. Michael G. Osborne
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Volkswagen recently employed a quick settlement strategy to deal with the fallout from its admission, in September 2015, that it had installed software to cheat on emissions tests on 11 million diesel powered Volkswagen and Audi vehicles. On October 15, 2015, a recall of approximately 8.5 million vehicles in Europe was announced.1 By December 2016, Volkswagen had reached interconnected settlements with regulators and class action plaintiffs in the US and Canada.

Volkswagen's strategy was obviously designed to put as much distance between itself and the emissions scandal, as quickly as possible, in order to begin repairing the damage to its brand. The question is, how much mileage did Volkswagen get out of this strategy? Did it pay more, or less, than it would have otherwise? Is Volkswagen's strategy a model for other major brands facing similar crises, or an exceptional case?

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