Germany opens door to mass lawsuits in swipe at Volkswagen

Germany's lower house of parliament passed the legislation that could see carmakers face class-action lawsuits— Reuters pic
Germany's lower house of parliament passed the legislation that could see carmakers face class-action lawsuits— Reuters pic

BERLIN, June 14 — Germany will allow interest groups to sue on behalf of consumers, taking a tentative step toward US-style class-action lawsuits in a bid to make it easier to collect damages from big companies in the aftermath of Volkswagen AG’s diesel-cheating scandal.

Germany’s lower house of parliament passed legislation Thursday in Berlin. Lawmakers were pushed by Chancellor Angela Merkel’s coalition to approve the bill in time for diesel car owners to join a case against VW before a potential deadline elapses at the end of the year.

“Car owners can now quickly enforce their rights,” Johannes Fechner, a lawmaker for the Social Democrats, Merkel’s junior coalition partner, said in Thursday’s parliamentary debate. “Consumer groups can now move ahead.”

The bill is yet another attempt at introducing some form of collective redress in Germany—which has no real equivalent to class actions as they are known in the US. The law enables consumer groups to get legal issues cleared in court. Consumers can then rely on the findings to pursue individual claims. The law goes into effect starting in November, just over three years after Volkswagen acknowledged widespread cheating on diesel-emissions tests. — Bloomberg

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