VW hit by first German investor lawsuit as investors write to other carmakers

€800bn investor coalition engages with 11 major carmakers in wake of scandal

A potential flood of domestic investor claims against Volkswagen has kicked off with a private investor suing the German auto giant for damages stemming from the diesel emissions scandal.

It comes as a coalition of 19 investors with over £625bn (€836.9bn) in assets under management has written to 11 major carmakers to call for improved reporting of their public policy interventions on emissions standards.

The letters to Volkswagen, BMW, Honda, Daimler, General Motors, Ford, Fiat, Peugeot and Toyota request detailed information on the lobbying position they are taking on emissions legislation currently being debated in the US and EU. Signatories to the letters include AXA Investment Managers, Swedish National Pension Funds AP2, AP3, AP4 and AP7, Environment Agency Pension Fund, and WHEB Group.

Meanwhile, in Germany TILP, a Tübingen-based law firm has filed suit on behalf of a private investor seeking an initial €20,000 in compensation for the steep fall in VW’s share price caused by the scandal. VW’s share shed one-third of its value after the company admitted on September 20 that it had cheated during tests of its diesel engine emissions by US regulators.

The lawsuit alleges that VW violated German securities law by failing to disclose to details of the plan to rig diesel emissions.“We have documents showing that Volkswagen decided to manipulate the emissions back in June 2008,” said TILP. VW denies the charge, insisting that it disclosed what it knew about the scandal in a timely manner. The automaker refused TILP’s offer of an out-of-court settlement, leading the firm to file the lawsuit with a district court in Braunschweig.

According to TILP, the lawsuit is just a prelude to further legal action it expects institutional investors in Germany to take against the automaker. “Around 1,000 investors, both private and institutional, have contacted us regarding suing VW for the fall in the stock price. Of this group, several dozen have already indicated that they want us to represent them,” said Marc Schiefer, a lawyer with the firm.

Schiefer also said that as the institutional investors had never been involved in a lawsuit like this before, there were a lot of details to be worked out. “For example, such investors want to be sure that they are not taking on VW alone but instead are part of a group,” he said.

Meanwhile, German shareholder association DSW has advised VW’s investors to await the results of an external investigation into the scandal before considering litigation. According to the DSW, the automaker’s investors have until September 2016 to take any action.