COURT RULING ON VOLKSWAGEN GROUP

[Anchor Lead]

The South Korean court ruled that the Volkswagen Group, responsible for fabricating emission reports on its diesel vehicles, should pay Volkswagen buyers 10% of their vehicle purchase prices in damage compensation. This is the Korean court's first ruling on the so-called "Dieselgate", that eruptedback in 2015. This ruling is also expected to leave far-reaching impacts on dozens of similar ongoing lawsuits.

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​The so-called "Dieselgate" refers to the 2015 incident when the Volkswagen Group was found to have manipulated the diesel vehicle emission tests. The South Korean court handed down its first ruling that recognized the German company's responsibility to pay out damage compensations. The court ruled that the firm should compensate Volkswagen and Audi buyers with a portion of vehicle purchase prices.

[Soundbite] KIM JI-HYANG(SEOUL CENTRAL DISTRICT COURT) : "The court decided that the companies that manufactured, imported, and sold these vehicles should pay 10% of vehicle purchase prices as damage compensation to vehicle buyers."

The judges determined that the manufacturer, Volkswagen Group, is responsible for inducing car purchases with its false and exaggerated ads that used terms like "eco-friendly diesel vehicles.' Vehicle importers and dealers must also provide compensations, because they are obligated to provide warranty service for the vehicles with manipulated emission test results. However, the court limited the compensation amount to 10% of the car purchase prices, as the manipulation was not serious enough to demand the total purchase price or nullify the purchases. Volkswagen Group argued that they don't have to pay damage compensation since consumer losses have been restored through recalls. But the court didn't accept the argument. Because the court allowed provisional execution, plaintiffs stand to receive between 1.5 and 5.8 million won per person even before the court ruling becomes final. The compensation amount varies depending on the car model and excludes interests.

[Soundbite] HA JONG-SEON(ATTORNEY FOR PLAINTIFF) : "This is a landmark ruling because it is the first win for plaintiffs in an automobile-related class action suit."

The latest court decision is expected to leave far-reaching impacts on dozens of other lawsuits linked to falsified diesel vehicle emission reports.