Each of Volkswagen’s 650 dealers will receive an average of $1.85 million in a $1.2 billion settlement approved by a U.S. judge on Monday over the automaker’s diesel emissions scandal.
U.S. District Judge Charles Breyer said the U.S. dealers would be paid over 18 months and said the settlement was “fair, reasonable, and adequate.”
As part of the settlement, VW agreed to continue its volume-based incentive payments to dealers and will allow them to defer capital improvements for two years. VW has now agreed to spend up to $22 billion in the United States to address claims from owners, environmental regulators, U.S. states and dealers stemming from the excess vehicle emissions.
The settlement stems from VW’s admission in September 2015 that it had installed secret software in its diesel cars to trick exhaust emissions tests into seeing the cars as cleaner than they actually were. In reality, VW’s diesels emitted up to 40 times the legally allowable pollution levels. Dealers claim that the resulting scandal tarnished the brand and cost them sales.
“The Volkswagen-branded franchise dealer class-action settlement finalized today represents an outstanding result for Volkswagen’s affected franchise dealers who, like consumers, were blindsided by the brazen fraud that VW perpetrated,” said Steve Berman, managing partner of Hagens Berman and lead attorney for the dealers.
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