Volkswagen faces another class action suit

By Jhoo Dong-chan

Volkswagen (VW) is facing another class action law suit from disgruntled customers who bought the German automaker’s gasoline-powered Golf 1.4 TSI. The prosecution said that the company was found to have given false emissions data for the hatchback model and therefore was sold illegally in Korea.

According to industry sources, Monday, 26 owners of the 7th generation Golf 1.4 TSI filed a collective lawsuit with the Seoul Central District Court against Volkswagen and its local unit, Audi Volkswagen Korea, along with their dealerships for what they call illicit gains from cheating on emissions tests.

Lawyer Ha Jong-seon, who represents the owners at Barun Law, said he will help other owners of the car if they want to join the action. The company has sold 1,567 cars since March last year.

“The automaker sold the model with deceptive information about emissions,” said Ha.

“Under the Civil Code Section 110, its sales contracts with Korean consumers should be invalidated and Audi Volkswagen Korea should refund the purchase price of the cars to the customers.”

The 7th generation Golf 1.4 TSI model first failed an emissions test conducted the government in May 2014, but finally passed it after allegedly installing a software device to cheat emissions tests in November 2014.

On Monday, the 26 owners also filed a petition with the Ministry of Environment, demanding an all-out examination on all models of Audi and Volkswagen.

Models of the German automaker, including the 3-liter diesel engine model found in the Porsche Cayenne, are named in the petition.

The petition also requests that the government stop considering the automaker’s recall plan, which has been found to have defeat devices in its EA189 diesel-engine models. The plan was rejected three times due to “slipshod” details, and the government plans to order VW to refund the purchase price of the cars to the consumers or exchange the affected cars for newer models.

The Korean consumers’ legal and petition moves are attributed to the automaker’s reaction in the U.S.

According to various foreign press outlets including AP and Reuters, VW is expected to not only exchange cars or provide refunds to American consumers but also pay each consumer a maximum of $10,000 in compensation. Some said the total compensation in the U.S. may reach $10.2 billion (12 trillion won).

Plus, previous owners who had driven Volkswagens before the scandal came to the surface are also included in the automaker’s compensation plans.

Separate from the compensation plans, Volkswagen is also expected to pay $4 billion in fines for environmental damage.

In Korea, however, the automaker is sticking to its original position that it does not have any plans to compensate consumers because it has yet to be convicted of any crime.

“We don’t have anything to officially comment about at this point,” said an Audi Volkswagen Korea official.

“The compensation takes place in the U.S. Since Korea has a different set of environmental regulations, it is natural for us to have a different set of consumer plans.”