Two million diesel car owners could join VW class action in Germany

BERLIN (Reuters) - Around two million diesel car owners in Germany could join class action lawsuits to seek compensation from Volkswagen, Justice Minister Katarina Barley said on Wednesday.

The German cabinet approved a draft law on Wednesday that paves the way for class action against the carmaker, which in 2015 admitted it had used illegal software to cheat U.S. diesel emissions tests.

The draft law aims to make it easier for people to join a legal test case, thereby avoiding high costs that might otherwise put them off bringing legal action. Only certain associations are entitled to bring proceedings.

"There are estimates that some two million diesel car owners could benefit from this legal action," Barley said.

Owners of cars with illegal software are allowed to claim damages only until the end of 2018 so Chancellor Angela Merkel's coalition government wants to ensure the law takes effect on Nov. 1, 2018 at the latest.

"We are making this type of suit so public now to signal to the affected diesel drivers that they have a relatively short window in which to take their claims to court," said Barley.

Environment Minister Svenja Schulze said: "This is an important instrument, especially for affected diesel drivers in the Volkswagen case."

But Volkswagen said the draft law didn't change the fact that it believes the claims against it in Germany are unjustified, and that it expects the vast majority of them to be rejected.

Klaus Mueller, head of the federal association of consumer protection bodies, said the Volkswagen scandal was "only the tip of the iceberg" and the draft law could help consumers to make use of their rights in many other areas.

(Reporting by Hans-Edzard Busemann; Writing by Joseph Nasr and Michelle Martin; Editing by Mark Potter)