British VW drivers start 'dieselgate' claim in High Court

By Kirstin Ridley

LONDON (Reuters) - Lawyers for more than 50,000 British car owners kicked off a lawsuit against Volkswagen in London's High Court on Tuesday in a battle for compensation over a diesel emissions scandal that has engulfed Europe's largest carmaker since 2015.

The three-day hearing will determine whether the claims can be managed collectively under a Group Litigation Order (GLO) and will set a deadline for claimants to sign up to what lawyers say could become the largest group action in British legal history.

Volkswagen has said about 11 million cars worldwide - and 1.2 million in the UK - were fitted with software that cheated diesel emissions tests designed to limit noxious car fumes and carbon dioxide (CO2) pollution.

VW agreed to pay up to $25 billion in the United States to settle claims from owners, environmental regulators, states and dealers. It offered to buy back 500,000 polluting U.S. vehicles.

The company has not reached a similar deal in Europe, where it faces billions of euros in claims from investors and customers in the worst business crisis of its 78-year history, dubbed "dieselgate".

Law firm Slater and Gordon, which says it represents more than 40,000 claimants in Britain, alleges VW deceived people into buying cars that breached emissions regulations by installing "defeat devices", engine management software designed to mask pollution levels.

The German company dismissed the allegations and said it intended to defend itself robustly. It said it had broken no English laws, that British drivers had suffered no loss and that the legal proceedings were premature and unfounded.

"We ... are confident of a successful outcome," the firm said in a statement. It said it had not been established that the software was an illegal defeat device and emphasised that the U.S. situation was "materially different".

"The vehicles are different, the regulatory environment is different and the technical measures are different. The affected vehicles in the UK do not cause more pollution on the road than expected," it said.

Volkswagen has offered European drivers a software update removing a mode that operated when cars were experiencing test conditions.

Slater and Gordon, one of at least three law firms acting for affected VW, Audi, SEAT and Skoda drivers in England and Wales, alleged that the software fix had led to mechanical problems.

It said it had surveyed more than 11,600 affected car owners who had agreed to the VW fix. Some reported that cars lost power at high speed, had poorer fuel efficiency and engine power and that cars had "juddered", it said.

VW said the survey's methodology had not been explained and that it was in the financial interest of respondents to allege they had suffered damage.

"We have implemented the technical measures in over 840,000 vehicles in the UK and in over 6.4 million vehicles across Europe and the overwhelming majority of customers with these vehicles are satisfied," it said.

Lawyers say that if the case was not settled, it might not come to trial before 2020.

(Editing by Edward Taylor and Edmund Blair)