A US judge on Tuesday granted final approval for a $14.7 billion class action settlement in Volkswagen's diesel emissions cheating scandal, the largest such automaker settlement in history. The buyback deal at the same time also resolved some claims brought by US and California environmental regulators who had sought penalties for Volkswagen's violations of pollution laws.
"Final approval of the 2.0 liter TDI settlement is an important milestone in our journey to making things right in the United States and we appreciate the efforts of all parties involved in this process," Hinrich Woebcken, president and CEO of Volkswagen Group of America, said in a statement.
The settlement offers compensation to nearly a half-million owners of polluting Volkswagen and Audi diesel-powered vehicles in the US which the German automaker has admitted configuring to deceive emissions tests. This allowed some cars to emit almost 40 times the permissible levels of harmful nitrogen oxides. Owners of 2.0 liter diesel-powered cars will be eligible for buybacks, penalty-free lease terminations or free modifications to fix the vehicles' emissions. All participants will also receive cash payments.
In addition to $10 billion for compensation to owners, Volkswagen will create a $2.7 billion fund for environmental remediation, and provide $2 billion to promote the use of "zero emissions" vehicles within the United States. "The settlement adequately and fairly compensates class members," US District Judge Charles Breyer wrote in an opinion approving the deal. "While plaintiffs might ultimately prevail on their claims, the settlement provides benefits much sooner than if litigation were to continue. Moreover, litigation would cause additional environmental damage that the settlement otherwise reduces."
Breyer had granted preliminary approval for the settlement in July, praising the "enormous efforts" by all sides to reach an agreement and avoid a trial. Volkswagen's parallel agreement with US authorities will require it to modify or remove 85 percent of the vehicles from the roads by June 2019 or face steep additional penalties.