VW hires Kenneth Feinberg to handle cheating claims

Associated Press

Volkswagen has hired Washington lawyer Kenneth Feinberg to figure out a way to compensate owners of diesel-powered cars that the company rigged to cheat on emissions tests.

Feinberg is among the nation’s top compensation experts and has been praised for handling victims’ compensation programs in the General Motors Co. ignition switch scandal, the BP Gulf oil spill, and the Boston Marathon bombing among other cases.

The German automaker said in a statement Thursday that Feinberg will design and administer an independent claims program for people who own both 2-liter four-cylinder and 3-liter six-cylinder diesel cars. More than a half-million cars in the U.S. with both engines have software that cheats on emissions tests, and several federal agencies are investigating Volkswagen’s conduct.

Feinberg’s extensive experience in handling complex claims “will help to guide us as we move forward to make things right with our customers,” Michael Horn, VW’s U.S. CEO, said in the statement. The company says Feinberg will develop a “fair and swift” program.

Feinberg, in a call with reporters Thursday, said he and Camille Biros at his law firm will work with Volkswagen to design a claims protocol on the rules, terms and conditions for processing eligible claims. He said in the past, setting up a process has taken 60-90 days.

He said he wants to gather input from vehicle owners, their lawyers and regulators and that the program could offer more than one remedy. He indicated vehicle buybacks or checks could be a possibility. Owners who accept a remedy would waive their right to sue the automaker, Feinberg said.

“Everything is on the table,” Biros said. “We haven’t ruled anything in or out at the moment.”

The program will be voluntary, but the goal is to offer remedies that are attractive for owners to remove or divert lawsuits from the courts, Feinberg said.

“We think we should have somewhere in the neighborhood of potentially 500,000 claims,” Biros said.

Feinberg declined to say how long the program may take to complete and said it was “premature” to estimate how much a program may cost.

Volkswagen has admitted to installing software on 482,000 four-cylinder diesel engines in the U.S. that turns on pollution controls for government tests and shuts them off when cars are driven on roads. The software can detect when the cars are on a treadmill-like device called a dynamometer, which governments use for the tests. The EPA says they can emit up to 40 times more harmful nitrogen oxide pollution than allowed under the Clean Air Act.

In addition, the U.S. Environmental Protection Agency and California Air Resources Board have accused VW of cheating on six-cylinder diesels. VW has said suspect software is on about 85,000 of the bigger vehicles.

Several models from the Volkswagen, Audi and Porsche brands dating to the 2009 model year are included in the scandal.

Texas attorney Bob Hilliard, who is representing more than 4,000 Volkswagen vehicle owners, said he hopes the independent claims process will allow his clients to be “fairly compensated.”

“VW, by hiring Ken, has shown it understands there will be no discounts on this settlement,” Hilliard said in a statement. “VW understands it owes each of my clients the full purchase price plus additional damages and fees.”

Volkswagen has submitted plans to fix the four-cylinder cars to the EPA and CARB, which are evaluating them. CARB must respond to VW by Tuesday.

Detroit News Staff Writer Melissa Burden contributed.