A statement issued by VW last week said customers can expect a payment per vehicle of approximately $1,400 if all affected vehicles participate in the action.
A statement issued by VW last week said customers can expect a payment per vehicle of approximately $1,400 if all affected vehicles participate in the action.

Volkswagen to cop fines in new ‘dieselgate’ deal

Volkswagen is set to pay "substantial" fines after agreeing to settle a lawsuit with the ACCC surrounding the carmaker's diesel emissions scandal.

But full details of the settlement have been kept confidential ahead of a penalty hearing on October 3.

A legal expert familiar with the case said the ACCC would not settle for less than a "very substantial" fine.

The ACCC launched legal action against Volkswagen in September 2016 alleging the manufacturer engaged in "misleading or deceptive conduct … in relation to diesel vehicle emission claims".

The issue surrounds software fitted to diesel vehicles such as the Volkswagen Golf and Audi Q5 capable of detecting whether the car is undergoing emissions and fuel economy tests and modifying its operation to produce fewer emissions.

The ACCC declined to comment on the issue, which is still before the courts.

Ford agreed to pay a $10 million fine in 2018 for what the ACCC described as "unconscionable conduct" in the way it handled complaints surrounding faulty dual clutch "power shift" transmissions.

Ford's $10 million represents the record for an ACCC fine paid by a car manufacturer.

ACCC chair Rod Sims told a Committee for Economic Development of Australia lunch in January that the watchdog would seek larger penalties in the future, and that $10 million "really is loose change" to large companies.

Volkswagen has been ordered to pay more than $30 billion in fines and penalties in the US. German regulators hit Volkswagen with a 1 billion euro fine in June 2018.

Australian Volkswagen spokesman Paul Pottinger said the civil suit lodged by the ACCC "has now been resolved in-principle" and "Volkswagen expects the proceedings to be concluded by the end of 2019".

The agreement comes one week after Volkswagen agreed to in-principle settlement of customer class action lawsuits affecting around 100,000 cars.

It came "on a no-admissions basis" on the part of a manufacturer which insists it has not broken Australian laws.

A statement issued by VW last week said customers can expect a payment per vehicle of approximately $1,400 if all affected vehicles participate in the action.

The figure is substantially less than what was offered to US customers, some of whom had cars bought back by the brand.

Cameron Moore, representing Maurice Blackburn Lawyers' class action, told the Federal Court today that the $1400 figure was inaccurate.

Mr Moore said that figure would only apply if every applicable owner elected to share part of a payout between $87 million and $127 million, and that the final figure is likely to be "substantially in excess" of $1400.



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