London law firm Harcus Sinclair – acting under a damages-based agreement and supported by Slater & Gordon – has secured third-party litigation funding to start the first group litigation arising from the Volkswagen emissions scandal.
It has linked up with Therium Capital Management in applying for a group litigation order in claims against VW, Audi, SEAT and Skoda, representing 1.2m cars.
Harcus Sinclair will be the lead solicitor on the record but is working together with Slater & Gordon “to ensure the best possible outcome for as many affected vehicle owners as possible”.
The website created for vehicle owners to join the action said that while US claimants received an average $8,000 before costs (£6,588), “damages payments in the UK are likely to be more modest”.
It said that under the litigation funding agreement, Therium would pay any up-front insurance premiums, pay the disbursements associated with the case, pay the fees due to Slater & Gordon under its conditional fee agreement, and provide working capital support to make it possible for Harcus Sinclair to “sustain” its damages-based agreement.
“Provided that the compensation received is enough to give [Therium] more than a return of three times what they have risked, together with the return of their capital, the overall fee that will be taken from your compensation is 30%. The cost of distributing the settlement fund will be in addition to that fee.”
The key allegation is that the affected cars should not have been certified as fit for sale because they produced higher levels of harmful emissions than the rules allowed. It is also alleged that the affected vehicles only passed official emissions tests because their engines were fitted with a ‘defeat device’ which reduces the emissions under test conditions.
Harcus Sinclair said it would make a claim for exemplary damages if it could show that VW deliberately fitted the defeat device to increase its profits.
Damon Parker, head of litigation at Harcus Sinclair, said: “We have paved the way for consumers who trusted but were let down by VW, Audi, Seat and Skoda to seek redress through our courts. It is only right that UK car owners affected by the scandal have the opportunity to seek compensation.
“We have secured funding so that those affected can bring this claim against VW at no cost to themselves. The group action aims to ensure that, if VW is found to have misled consumers about the environmental damage caused by their cars, they are penalised accordingly so as to discourage this sort of behaviour from happening again.”
Jacqueline Young, head of group litigation at Slater & Gordon, added: “VW has shown utter contempt, not just for the rights and health of their UK consumers but also for the environment. This legal action is the best opportunity that British customers will have for holding VW to account over this scandal.”
The application for the group litigation order will be heard in the High Court on 30 January.
Harcus Sinclair has instructed Oliver Campbell QC, Adam Heppinstall and Nazeer Chowdhury of Henderson Chambers to deal with the substantive claim. Greg Treverton-Jones QC of 39 Essex Street is advising on “the propriety of the group arrangements” – the website said he has “blessed” all of the documents claimants agree to before being able to join the claim.
Finally, Alex Hutton QC of Hailsham Chambers has been instructed to advise on the funding arrangements and to ensure that the claimants’ financial interests are protected.