'Dieselgate' remains unresolved. Court overturns settlement decision

Ten years later, the Volkswagen emissions data manipulation scandal—known as "Dieselgate"—continues to generate buzz. Now, a lower court ruling has been overturned by Germany's highest court of appeal.

In a statement, the Federal Court of Justice (Bundesgerichtshof) announces the annulment of a decision that upheld a Volkswagen agreement regarding civil liability insurance coverage for former executives.

At this higher court, it was understood that the Superior Regional Court will have to rehear and decide the case . At issue is a legal challenge by shareholders to liability agreements with two former directors.

Volkswagen's annual general meeting approved the agreement in July 2021. It provided for payments of €11.2 million to former CEO Martin Winterkorn and €4.1 million to former Audi director Rupert Stadler . The insurers also agreed to pay €270 million.

This was the company's way of resolving their civil liability in the case. The internal investigation concluded that both had been negligent in their actions in connection with the emissions scandal.

However, investor protection associations—as shareholders—are contesting the decision. They consider the resolutions null and void or subject to challenge for failing to meet certain legal requirements—such as the vesting period or the violation of the "prohibition on capital restitution to shareholders"—as were the former directors in question.

Court finds that information was insufficient

Previously, the plaintiffs' lawsuit had been dismissed in a regional court, before the appeal was dismissed in the appellate court. The Federal Court of Justice's decision now upholds the plaintiffs' claims.

Insufficient information is provided about the financial situation of the former directors in question, making it impossible to "conclude to what extent any liabilities could be covered by the former directors' own assets".

And it further reads: "The Federal Court of Justice could not reliably determine whether the assumption made in the report of the board of directors and the supervisory board had been sufficiently explained in the light of the information provided at the general meeting."

Arrests and millions paid in fines

It was in 2015 that the emissions falsification scandal at the Volkswagen Group became known. Since then, more than €32 billion in fines have been paid, in addition to Rupert Stadler being sentenced to a suspended prison sentence and a €1.1 million fine.

Martin Winterkorn is still on trial in Germany and faces up to ten years in prison, but his health forced the trial to be suspended. Last May , the Braunschweig Court sentenced two former Volkswagen executives to prison terms for fraud and two others to suspended sentences.