Judge set to decide on $15B Volkswagen settlement

U.S. District Court Judge Charles Breyer was scheduled to consider the settlement during a hearing on Tuesday and appeared inclined to approve it.

The move allowed VW and its attorneys to begin collecting data from the auto owners who are set to receive compensation as part of the settlement.

“This is a very fair and reasonable settlement. and it allows Volkswagen to turn the page and begin to make things right in the United States and begin to re-earn the trust of our customers”, he said. Those with leased vehicles will receive an average of $3,500 in compensation and can terminate their leases.

VW also agreed to put up $2.7 billion over three years to enable government and tribal agencies to replace old buses or to fund infrastructure to reduce diesel emissions. Vehicle buybacks are expected to begin as soon as final approval is granted, lawyers said in court.

Breyer is expected to grant final approval to the settlement on October 18, according to Volkswagen.

“We have designed a settlement that places the consumers – the owners and lessees – in a central, decisive role”, said Elizabeth Cabraser, lead attorney for Volkswagen owners.

US attorney Joshua Van Eaton said authorities are now testing the 3-liter vehicles in a process that will take another month and must be resolved before a deal can be reached.

VW and Audi owners whose cars qualify for the buyback will also have the option to refuse the buyback and have the cars fixed so that they comply with Environmental Protection Agency (EPA) standards. Under a consent decree with the Justice Department, Volkswagen faces steep fines if it doesn’t hit an 85% participation rate by June 2019. “It’s not a simple settlement”.

Among other things, the diesel emissions scandal caused a swapping-out of top VW managers at the headquarters in Wolfsburg, Germany, and a major shift in the company’s new auto development plans toward electric vehicles over the coming 10 years – such as the all-electric minivan prototype pictured above.

Separately, VW announced a settlement with 44 US states, the District of Columbia and Puerto Rico that will cost at least $600 million, bringing the total to as much as $15.3 billion.

Volkswagen still faces a Justice Department criminal probe over the emissions scandal and potential civil and criminal penalties. At a court hearing on Tuesday in San Francisco, Justice Department lawyer Joshua Van Eaton said the German automaker had been meeting with regulators in recent weeks and planned to offer a new fix proposal in August.

New York Attorney General Eric Schneiderman recently lobbed his own lawsuit against the company. Doing so may result in civil and/or criminal penalties.