VW prepares to pay up to 500,000 emissions victims Feinberg handled GM ignition switch claims, BP oil spill and 9/11 victim compensation claims

Alisa Priddle, Detroit Free Press and Chris Woodyard, USA TODAY | Detroit Free Press

Volkswagen said Thursday it has hired Kenneth Feinberg, one of the nation's best known victim compensation attorneys, to handle claims resolution resulting from its diesel-emissions scandal.

On a conference call with reporters late Thursday, Feinberg said VW asked him and colleague Camille Biros of the Feinberg Law Firm to design and administer a claims program for owners of eligible vehicles with emissions problems, diverting them from the court system while providing a remedy for potentially 500,000 VW owners.

Volkswagen has admitted rigging emissions systems in diesel cars to beat emissions testing. The company said it wants to do right by its customers now, after lying about its actions for years.

Feinberg said he has no idea of the cost involved -- nor has Volkswagen given any indication of how much it intends to spend to appease car owners who choose to settle their claims through the compensation fund rather than taking VW to court for lying about the performance of its cars with diesel engines. It is impossible to assess cost without knowing what the remedies are, he said.

Feinberg and Biros will design and administer the independent claims resolution program for owners of Volkswagen, Audi and Porsche vehicles with either 2-liter and 3-liter diesel engines. The number of settlements could reach about 500,000, Feinberg said.

The first step is to meet with Volkswagen, regulators, owners, lawyers involved in the many lawsuits already pending and others to come up with a protocol of how the compensation fund will pay claimants. Feinberg said that will likely take 60 to 90 days.

The end result could be a menu of possible remedies to cover the cost of vehicles that do not burn as cleanly or perform as well as VW led customers to believe. Many angry owners have demanded VW buy back the cars that have also lost some of their resale value in the wake of the confession that the company lied for years.

Most recently, Feinberg served as the independent administrator in charge of General Motors' claims surrounding faulty ignition switches. He determined that 124 death and 275 injury claims were valid from among 4,343 claims filed. Biros said Thursday the GM claims process is wrapping up and should be complete by the end of January.

Feinberg rose to fame through his handling of the compensation programs from the BP oil spill disaster in the Gulf of Mexico and for victims of the 9/11 terrorist attacks in New York in 2001.

"His extensive experience in handling such complex matters will help to guide us as we move forward to make things right with our customers," said Michael Horn, CEO of Volkswagen Group of America, in a statement.

There is no sense yet of how long the process could take. Volkswagen has not said how it plans to repair the vehicles to make them compliant with emissions laws, and how it will affect their performance.

Feinberg said the GM process took 18 months; BP took 16 months and the 9/11 claims extended over 33 months.

In those cases at least 92% of eligible candidates chose to forego the courts and use the compensation fund process for a quicker and easier resolution.

Feinberg said while the VW scandal does not involve death or injury, many of the issues are the same. The fund must determine who is eligible, what is the proof requirement, what is the remedy, the scope of release from liability and the payout.

Once the protocol is announced, the next phase is accepting individual claims, voluntarily, from car owners. Feinberg said he will encourage owners and their lawyers to use the fund rather than the courts.

The final stage is signing, the release, surrendering rights to litigate and receive payment.

Feinberg said he does not see funds like this as a precedent. "These programs are an aberration," he said, in today's litigious society.

"It is clear that Volkswagen is taking a very serious approach," Feinberg said.

Contact Alisa Priddle: 313-222-5394 or apriddle@freepress.com. Follow her on Twitter @AlisaPriddle