(Reuters) - Lawyers for Fiat Chrysler Automobiles NV and owners of the automaker’s diesel-powered vehicles are in settlement talks over allegations of excess diesel emissions, a court-appointed adviser said Tuesday.

A screen displays the ticker information for Fiat Chrysler Automobiles NV at the post where it's traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 12, 2016. REUTERS/Brendan McDermid

In May, the U.S. Justice Department sued Fiat Chrysler, accusing the company of illegally using software that led to excess emissions in nearly 104,000 U.S. diesel vehicles sold since 2014. Numerous suits have been filed by vehicle owners.

Court settlement master Ken Feinberg said at a court hearing in San Francisco Tuesday that “term sheets” or proposed settlement documents have been exchanged between Fiat Chrysler and diesel owner lawyers.

Feinberg said the proposals were briefly discussed at a meeting Tuesday with the parties, along with the Justice Department, California Air Resources Board and German auto supplier Robert Bosch GmbH [ROBG.UL], which develops diesel vehicle systems, and has also been sued by diesel owners.

Feinberg said it was “a very healthy discussion on how we might get to yes.” He added he would hold a day of settlement talks in Washington between the Justice Department and Fiat Chrysler in January, along with another day of talks between the automaker, Bosch and diesel owners.

There are parallel talks between the Justice Department and Fiat Chrysler and the company and diesel owners aimed at reaching settlements.

“We’re looking for different substantive ways to secure an early comprehensive settlement,” Feinberg said, adding a settlement could occur before testing on vehicles is completed in March. “Everybody in good faith is certainly trying to figure out how we might achieve a comprehensive settlement.”

In July, Fiat Chrysler won approval from federal and California regulators to sell 2017 diesel vehicles after it came under scrutiny for alleged excess emissions in older diesel models.

Fiat Chrysler lawyer Robert Giuffra said in court the company remains confident it can use updated emissions software in the 2017 vehicles as the basis of a fix to address agencies’ concerns over 2014-2016 diesel vehicles.

Justice Department lawyer Leigh Rende declined to comment in court on the settlement talks.

She said company testing on the proposed fix began on Dec. 17 and would take about three months. The government will then have 30 days to review the results and expects to make a determination by the end of April.

Regulators have said Fiat Chrysler diesel vehicles had undisclosed emissions controls that allowed vehicles to emit excess pollution during normal driving.

The company has denied wrongdoing, saying there was never an attempt to create software to cheat emissions rules.

Fiat Chrysler’s emissions case came after Volkswagen AG’s VOWG_p.DE diesel emissions scandal prompted increased industry scrutiny.