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Emission scandal: VW faces huge US class-action lawsuit

2016-02-25 09:17

BILLION DOLLAR LAWSUIT: A class-action lawsuit filed in a San Franciso court could see Volkswagen pay billions of dollars in damages to owners over fixing pollution cheat devices on its diesel-engine cars. Image: AFP/ Paul J. Richards

Washington - Volkswagen faces potentially huge damages to pay over pollution cheat devices on its diesel-engine cars in a class-action lawsuit filed in a San Francisco court this week.

Lawyers consolidated the cases of almost 200 owners of VW, Audi and Porsche diesels equipped with the devices into a suit that accuses the German auto giant of major damages to the environment and to owners of more than a half million of the cars sold in the United States.

"Fraudulent scheme and conspiracy"

The case, filed late Monday (22 February) in the federal district court in San Francisco, accuses Volkswagen AG, its US VW, Porsche and Audi arms, several top company executives and German auto parts giant Bosch of racketeering in "one of the most brazen corporate crimes in history, a cautionary tale about winning at any cost."

The main charge, for a "fraudulent scheme and conspiracy" to market and sell the cars, makes use of the broad RICO Act, originally designed for use in combatting organized crime.

The charges also include fraud, warranty violations, and unjust enrichment.

"From 2009 to 2015, Volkswagen sold and/or leased approximately 580 000 dirty diesels that its defeat device disguised as clean," the suit says.

"In doing so, Volkswagen secretly turned the most environmentally-conscious consumers into some of the biggest polluters on the road and charged them a premium in the process."

Volkswagen has admitted the existence of the illegal cheat software on its cars, which limits the output of toxic nitrogen oxides to US legal limits during emissions test by regulators.

But when the vehicles are in actual use, the software allows them to spew poisonous gases at up to 40 times the permitted levels.

Vehicles lost value

The suit said owners of the cars have suffered losses on the vehicles' value and also have suffered in discovering that they were adding more pollution to the air than they thought they were.

It also estimated the damages to the health of Americans generally from the extra toxic gases in their air at $450 million.

The suit said: "Volkswagen actively concealed the defeat devices and actual emission levels of the Class Vehicles to pad its profits and avoid the perception that the Class Vehicles did not comply with federal and state laws governing clean air and emissions.

"Volkswagen valued its profits over the trust that Plaintiffs and other Class members entrusted to it."

580 000 cars in the suit

There was no total estimate of the penalties requested in the lawsuit, but it could conceivably run into the billions of dollars, given the 580 000 cars potentially represented by the suit.

Plaintiffs have asked for compensation for losses on the cars by owners, including buying them all back; environmental reparations; and what could be sizeable federal and state damages under the RICO law.

Read more on:    emissions scandal

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