Upto $332.5 Million in fees, costs could be Sought by Lawyers in Volkswagen Case

Up to $332.5 million in fees and costs for their work would be charged by the lawyers for Volkswagen AG vehicle owners who had worked in a $10 billion settlement over claims the automaker used software to cheat on emissions testing. This was revealed in a court filing in the case recently.

The amount that are to be paid as attorney fees have not yet been decided upon between the plaintiffs’ lawyers and Volkswagen, the filing late Wednesday in a federal court in California said. In connection to the work done by the lawyers of the plaintiffs in the case for settlement that was announced in June and which covers vehicles with 2.0-liter engines,  reasonable costs and fees has been agreed to be paid by Volkswagen.

For a total of $332.5 million, no more than $324 million in fees and up to $8.5 million to cover other costs would be requested by the lawyers, said the attorneys in the filing. The “judicially established benchmark” for class actions is to the tune of about 25 percent of the settlement amount and the amount that is skated to be requested is significantly less than the “judicially established benchmark”, lead lawyer Elizabeth Cabraser said.

“But this is not an ordinary case, this is not an ordinary settlement, and this will not be an ordinary fee request,” the filing said.

Lawyers’ fees could be as high as $3.5 billion, carious reports had speculated, she said.

The judge overseeing the litigation would have to approve of a final request for the fees. according to court filings the fees will not be deducted from the settlement fund and will be paid separately by Volkswagen.

While saying that the decision ultimately rests with the judge, the automaker will pay attorneys’ fees that “reasonably reflect” the work of the lead plaintiffs’ lawyers in connection with the settlement, Volkswagen spokeswoman Jeannine Ginivan said.

“Overwhelmingly positive feedback” about the deal have been given by those lawyers said affected owners.

A hearing on final approval of the settlement is set for Oct. 18.

After Volkswagen admitted last year it intentionally misled regulators by installing secret software that allowed U.S. vehicles to emit up to 40 times legally allowable pollution, several litigations were filed in US courts and the settlement stems from those litigations.

Owners of up to 475,000 vehicles will be eligible for buybacks, lease termination and other compensation under the deal which received preliminary approval last month.

The settlements also entail that environmental remediation and promoting emission-free vehicle technology would require the company to also pay an additional $4.7 billion.

However similar unresolved claims over approximately 85,000 vehicles with 3.0-liter engines are not covered under the deal.

After a federal judge gave the German automaker preliminary approval to buy back up to 475,000 vehicles, another legal hurdle was cleared last month for Volkswagen’s $14.7 billion settlement.

(Adapted from Reuters)


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