Photographer: Krisztian Bocsi/Bloomberg

Volkswagen Suits May Have German Court’s Fax Machine Overheating

  • Thousands of new cases will be filed by the end of Monday
  • Electronic filing systems are still in infancy in Germany

There was one thing Andreas Tilp and Klaus Nieding needed most for taking a wave of Volkswagen AG investor cases to court: a pickup truck.

Nieding had a load of 5,000 suits sent Friday from his office in Frankfurt to Braunschweig, about 350 kilometers (218 miles) away. Tilp’s 1,000 or so complaints were scheduled to arrive in a transport vehicle Monday, traveling more than 500 kilometers from his office in the southern German city of Kirchentellinsfurt.

There was no other way to do it: Lower Saxony, home state to Volkswagen doesn’t offer electronic filing for civil litigation. The court in Braunschweig, the legal district that includes VW’s Wolfsburg headquarters, is expecting thousands of cases by the end of the day.

Investors are lining up to sue in Germany, where VW shares lost more than a third of their value in the first two trading days after the Sept. 18 disclosure of the emissions scandal by U.S. regulators. Monday is the first business day after the anniversary of the scandal and investors fear they have to sue within a year of the company’s admission that it had equipped about 11 million diesel vehicles with software to cheat pollution tests.

The lawsuits disclosed so far are seeking 10.7 billion euros ($11.9 billion). The Braunschweig court intends to release more numbers this week. The tribunal needs to review all the cases, which may take a few days, court spokeswoman Maike Block-Cavallaro said by phone. As of 3:30 p.m. Monday, the court had received a total of about 1,000 suits on top of the more than 400 cases that had been filed earlier, she said.

Volkswagen has consistently argued that it has followed all capital-markets rules and properly disclosed emissions issues in a timely fashion.

The super-sized filing is yet another example of the sheer scale of the scandal that’s haunted VW for a year. It forced the German carmaker into the biggest recall in its history to fix vehicles or get them off the road entirely. The fines already levied are among the steepest against any manufacturer, and the carmaker has built up massive provisions to absorb the hit.

Consumer Claims

While the investor lawsuits pile up in Braunschweig, consumers affected by the scandal are focusing their efforts on Brussels. European Union Justice Commissioner Vera Jourova will meet with VW’s Francisco Javier Garcia Sanz on Sept. 21 as part of a campaign to persuade the company to offer car owners significant compensation. Currently, the company is only offering repairs to European customers whereas Americans got packages worth thousands of dollars.

Tilp and Nieding also announced they would file additional suits in Stuttgart . Tilp said he will file a 500 million-euro case against Porsche Holding SE and VW. Nieding’s suit targets Porsche and seeks about 2.2 billion euros, arguing executives served on boards of both companies so Porsche should have reveled the diesel issues on its own.

The Braunschweig Regional Court has brought in four extra clerks to handle the suits and register the paperwork in the tribunal’s computer system. Things would be easier if cases could be filed online -- like U.S. lawyers can, said Jan-Michael Seidel, the court’s vice president.

"For suits like these, electronic filing would be very helpful," Seidel said in an interview Friday. "But the justice system is like a supertanker, things are moving slowly. It will still take a while until we’ll have it."

Hesitant Lawyers

Germany’s 16 states have rolled out electronic filing systems at different speeds and are far from covering the whole country. The plan is to introduce it nationwide by 2018, but it’s unclear whether that deadline can be met, according to Germany’s Federal Ministry of Justice.

Even where the technology is available, lawyers are still hesitant to file electronically, said Alexander Druckenbrodt, a litigator at law firm Kaye Scholer in Frankfurt.

"I don’t know many colleagues who use it," he said.

When time is short, faxing continues to be the most common way to communicate with the courts. Deadlines typically elapse at midnight and fax machines can run hot just before the clock strikes 12. Relying on that could be risky, Druckenbrodt said.

"Since everyone thinks Monday’s key, it’s pretty likely that you won’t get through via the court’s fax machine," he said. "In such a situation I would never file a brief via fax. You’d rather send via courier, who delivers the package directly.”

But Nieding said the fax line will hold up and praised the staff for their efforts.

"The court in Braunschweig has been great, they even gave us the cell number of an officer who would unlock us the courthouse should our truck arrive after hours," he said Friday. "Our filings are way too voluminous, the packages don’t fit in the court’s letter box."

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