Volkswagen compensation fund to open for diesel owners looking to sue over nitrogen oxide emissions.

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Volkswagen Compensation Fund Created To Keep Emission Cases Out of Court
Volkswagen compensation fund to open for diesel owners looking to sue over nitrogen oxide emissions.

— A Volkswagen compensation fund will be opened to address owner complaints and concerns about illegal nitrogen oxide emissions and the loss of value of the VW vehicles.

VW says Kenneth R. Feinberg has been retained to gather information to compensate a possible list of 600,000 vehicle owners in the U.S. Feinberg is highly experienced in creating and administrating compensation funds, including funds created for victims of the GM ignition switches, the BP oil spill and the attacks in New York on September 11, 2001.

Although official terms haven't been released, the VW emissions compensation fund will be used to keep cases out of court. Legal battles can take years, be complex and very expensive. With Feinberg offering alternative compensation, Volkswagen can try to please its customers, put the mess behind them and possibly save money in the long run.

The fund can also benefit VW owners who don't want to hire attorneys or wait years for legal issues to clear through the system. However, attorneys for owners will likely tell clients to reject an offer if it's less than what could be gained in court.

The Volkswagen compensation fund is in its earliest stage as Feinberg seeks to meet with government regulators, owners and attorneys to decide the best course of action. VW hasn't said how claims will be administered or what a claimant must do to apply to the fund. The automaker also says it doesn't know the cost involved or if owners will be offered cash or other types of compensation.

Considering Volkswagen hasn't said how it will remedy the affected diesel cars, Feinberg will have a difficult time reaching a conclusion about cost until more is known about related recalls.

Volkswagen says it needs the experience of Feinberg to handle the extreme complexity involved in the emissions scandal. Feinberg says his goal in creating the fund is to meet claimants' needs and this beginning creation phase will probably take about three months.

The VW claims resolution program will be aimed at 2-liter and 3-liter diesel vehicles with emissions "defeat devices" or other software used to illegally alter emissions levels.

Many of those owners and their attorneys have said the only reasonable action VW should take is an offer to buy back the cars and end the lingering questions of owners. Feinberg says at this point that option is one of many that will be considered for the compensation fund.

In the GM ignition switch compensation fund, Feinberg had over 4,300 claims to shuffle through concerning deaths and injuries caused by the faulty switches. Feinberg approved 124 death and 275 injury claims, less than 10 percent of submitted claims.

His job will be easier compared to his work in administering funds to victims of GM's deadly ignition switch defects. Instead of trying to determine the value of life and limb, Feinberg will work with VW owners to primarily determine the loss of value of the vehicles.

While Mr. Feinberg gets to work on the VW compensation fund, the automaker is still working with the Environmental Protection Agency and the California Air Resources Board on an agreement to recall the vehicles.


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