Understand Your Rights. Solve Your Legal Problems
These days, however, prompted by several different factors, many are seeking out this fast-growing sector because it is perceived to be an independent profession in its own right. Amanda Hamilton, chief executive of the National Association of Licenced Paralegals (NALP), provides a comprehensive beginner's guide to the paralegal profession below.
This very much depends on what experience and qualifications you already have. You may already be a paralegal without realising it. For example, you may already be involved in some kind of legal task in your current working life. On the other hand, you may have just completed a legal course and don’t know where to go from there.
Whatever the situation you find yourself in, there are a few tips to follow. Firstly, if you haven’t already done so, gain knowledge of academic and procedural law. Just because you may have been involved personally in some legal matter (be it a divorce, or defending a claim made against you) this does not give you carte blanche to advise or assist others.
The paralegal profession is currently unregulated, and that means that anyone can refer to themselves as a ‘paralegal’, whether or not they have legal qualifications or competency. Therefore, it’s important to distinguish yourself from others by gaining a recognised legal or paralegal qualification.
Secondly, become a member of a professional paralegal body. Such an organisation can advise and support you through your career, but be discerning about which to join. Do your research.
Thirdly, gain as much experience as possible.
You may already be a paralegal without realising it.
Many paralegal jobs advertised state that experience is required. But how can you gain experience if you can’t get a job? The answer to that is, don’t apply for jobs that are advertised through recruitment companies since they will only get their commission by providing exactly what their clients want.
However, most paralegal jobs that you find are through agencies, so what can you do? Be clever by going directly to the law firms or companies. Once social distancing allows, visit the firms as face to face contact is always the best option. It will have much more impact than sending out your CV or emailing. I know it sounds old fashioned, but these days everyone (and I mean everyone) uses technology. Person to person contact seems to have gone out the window, so if you show initiative, such as physically visiting a firm or company, they will most definitely remember you! Just be aware of social distancing and other hygiene measures in place to protect you, and the firms you visit, from the virus.
The Law is so vast and covers every legal concept imaginable. You therefore have to be particular not only about what areas of law you wish to practise, but also which sector to work in. The best advice is to think about what it is you enjoy. What are your hobbies? This seems like an odd question but every single organisation will have an element of legality to what they do. This includes sectors such as sport (premier league football clubs, athletic associations, etc.), and fashion (retail companies, fashion design etc.), cars (car manufacturers, distributors, outlets, etc.) Wouldn’t it be great if you could work within a company that reflects your hobby?
Working within such an organisation can be diverse too. You may have enjoyed studying employment law, in which case you join the human resource department, drafting employment contracts for professional footballers. Alternatively, you may be involved in drawing up or scrutinising commercial contracts.
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Since COVID-19, our working lives have changed drastically, with most who have retained their employment, working remotely. As a paralegal you may have recently been released from employment, but don’t despair! There are several other working methods to consider. As stated above, you could find employment in a variety of different employment settings, but you can also work as a freelance and a contractor.
In an effort to get back on their feet, many law firms will be thinking about the most cost effective method of utilising resources. This may include outsourcing work to an independent paralegal or paralegal firm, rather than employing paralegals or solicitors full time to do the job. This can be on a freelance (job-by-job) basis or as a contractor (a contract for a set period of time). The beauty of working in this way is that from your point of view, you become self-employed and are able to negotiate your own hourly, daily or contract rate. From the firm’s viewpoint, whatever they negotiate with you will mean that they are better off as they do not have to pay out for your PAYE and National Insurance contributions, or your pension.
It’s a win-win scenario for all concerned.
That’s why no matter how strong a partnership is, disputes are bound to happen - and when they do, you should be prepared and know how to resolve the issues.
This article will discuss some of the most common reasons for partnership disputes and ways to resolve them.
Financial disputes are one of the top causes of partnership disagreements. Many business attorneys who represent warring former partners observe that these disputes often arise from day-to-day management of the company, such as how money should be used or allocated, or when a partner starts mixing personal expenses and errands with business ones. The disputes always worsen when the company undergoes financial difficulties, as the question of each partner’s liabilities and profit distribution will turn into a disagreement if it is not clearly stated in the partnership agreement. This can end up causing legal disputes between the two partners, which can end up destroying the partnership and the business.
To avoid these disputes, it is very important to make the ownership rules clear from the start. This includes clear indication of how much time and effort each person is putting in and how much he or she is getting in salary as a reflection of that work; having details of the profit distribution covered in the partnership agreement; and enforcing tighter controls of money disbursements and expenditures by having both partners approve expenses before payment.
To avoid these disputes, it is very important to make the ownership rules clear from the start.
Intellectual property is another sensitive subject that often leads to partnership disputes. These disputes will usually revolve around a partner making the case that he or she owns the intellectual property that the company is using, and the company claims that the intellectual property belongs to the company as an entity and not to any individual partner. Legally speaking, if an individual owns the intellectual property (IP) but allows the company to use it without documenting it, the individual might risk losing their IP rights and the court can rule that the IP belongs to the company.
To prevent such disputes from happening, the IP owner should take steps to show that they own the rights by having clear documentation from the start. If a dispute then results in these rights, the IP owner can revoke the company’s licence. This documentation and implemented rules will help prevent unforeseen issues down the road.
Another type of dispute that often takes place in a business partnership is each party’s authority in the company. Usually, each partner will be in charge of specific areas. For example, one will handle the company operations, while the other overlooks the company’s financial matters. Without a clear separation of duties, partners can overstep their boundaries and believe their ideas are the best, without respecting the other person’s expertise. One partner may think it is important to spend more money on marketing, while the other insists on improving production and unit cost. These disagreements can delay company processes, and hinder a company’s performance and growth potential.
It is crucial to draw a line on the areas of authority and set a chain of command to ensure everyone respects and follows these rules. This will sometimes require you to sit down with your partners from the start and decide who will make what decisions.
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Once a company reaches a certain level of development, partners may have differing ideas on how to take the company to the next level. One partner may want to invite foreign investment or pursue M&A opportunities, while others want to keep it strictly domestic or family-owned. These disagreements on the direction of the business can be serious and change the company’s future completely. There is no good way to prevent it except for discussing it thoroughly with your partner in different case scenarios, evaluating the risks and opportunities for each direction, and making the decision together.
Just as a married couple that goes through difficulties and ends up finding a divorce attorney to resolve their issues, sometimes partnership disputes also have to seek professional advice as the parties cannot resolve the differences by themselves. To prevent a fall-out in a business partnership, it is most important to maintain an open and frank dialogue with your partners from the start on issues of authority, money distribution, ownership rules, and rights to intellectual property. Minimising the possibilities of disputes is the best way to ensure a business will run smoothly and successfully.
Epic Games, developer of Fortnite, has filed antitrust complaints against both Apple and Google in California federal court after its game was removed from both the Apple App Store and the Google Play Store.
Fortnite was banned from the Apple App Store following the game’s latest update, which offered players a discount on in-game currency purchases if they bought directly from Epic. These payments would bypass Apple, whose App Store terms and conditions entitle it to receive a portion of between 15% and 30% of purchases made in apps distributed through its platform.
Epic appeared to have expected Apple’s reaction, as it announced a legal challenge within minutes of the app’s removal. It also released a short film titled ‘Nineteen Eighty-Fortnite’, parodying a famous Apple television advert released in 1984 in reference to George Orwell’s novel Nineteen Eighty-Four.
“Apple's removal of Fortnite is yet another example of Apple flexing its enormous power in order to impose unreasonable restraints and unlawfully maintain its 100% monopoly over the iOS In-App Payment Processing Market,” Epic wrote in its complaint, in which it also referred to Apple’s cut of in-app purchases as a “tax” against which its direct payment option gave customers “a competitive alternative”.
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In response, Apple issued a statement on Thursday decrying the legal challenge. “Epic has had apps on the App Store for a decade, and have benefited from the App Store ecosystem — including its tools, testing, and distribution that Apple provides to all developers," it wrote. "The fact that their business interests now lead them to push for a special arrangement does not change the fact that these guidelines create a level playing field for all developers and make the store safe for all users.”
Fortnite’s direct payment update also affected its Google Play Store iteration, resulting in its removal from the platform several hours after the iOS app store ban.
Epic’s complaint against Google is predominantly concerned with the company’s compulsory 30% cut of sales made through apps on its Play Store, and also takes aim at Google’s former corporate conduct slogan “Don’t be evil”.
“Google has relegated its motto to nearly an afterthought, and is using its size to do evil upon competitors, innovators, customers, and users in a slew of markets it has grown to monopolise,” Epic wrote.
In its complaints, Epic specified that it was not seeking monetary compensation, but an injunction that would undo the companies’ app stores policies for all developers.
Daniel Bonner, Director of Client Solutions at Level 2 Legal, explains how legal teams navigate the complexities of international antitrust reviews.
While the global pandemic appears to have provoked a downturn in M&A transactions after a decade-long bull run, Goldman Sachs analysts expect the current cycle to be short-lived. EY’s Brian Salsberg is already anticipating “there will be a relatively short M&A window that opens as the COVID-19 crisis ends, during which bargains will be had by those with the liquidity and the risk tolerance to move quickly.”
When M&A activity picks up again, transactions that raise anti-competitive concerns may be subject to investigatory antitrust requests from the EC and their home countries. Companies that also operate outside the EU may be subject to similar requests from regulatory bodies in other jurisdictions. Responses to antitrust reviews—known as “second requests” in the US—are typically high-volume, document-intensive, high-stakes discovery projects with aggressive, non-negotiable deadlines. When antitrust scrutiny expands to include multiple international jurisdictions, the stakes become even higher, and project scope and complexity can quickly spin out of control. How do corporations, their counsel, and legal services providers successfully respond to antitrust reviews that span multiple countries?
International antitrust reviews are altogether different from high-volume eDiscovery projects for litigation, where a top priority may be controlling costs. Here, speed and efficiency are crucial, as most M&A contracts tie funding and final sales price to specific timelines. Dealmakers include robust compliance budgets in the transaction price to ensure all necessary resources are online when regulatory approval hangs in the balance. Also, regulators structure their requests in a way that requires massive volumes of work to be completed at warp speed, and deadlines are firm. Very broad requests—for example, a request for production of every document related to market and competition impact in 4 to 6 weeks—are not uncommon.
Here, speed and efficiency are crucial, as most M&A contracts tie funding and final sales price to specific timelines.
While technology typically plays a leading role in litigation-based eDiscovery projects, the complexity of multi-jurisdictional international antitrust reviews prioritises process and workflow considerations. Corporate counsel, law firm attorneys and the firm’s preferred alternative legal services provider (ALSP) must work together towards precise production candidacy guidelines that account for potential overlap between compliance requirements, as well as jurisdictional-specific strategy where requests vary. And as the narrative unfolds in real time, teams must be ready to pivot quickly while maximizing every second of billable time.
Technology assisted review (TAR) should be used to streamline responsiveness workflows, but attorneys must perform the nuanced analysis required to preserve privilege and ensure compliance with all applicable privacy laws. As production decisions are finalised, careful consideration must be given to GDPR and US privacy law, factoring in the source of the data and the complex privacy frameworks that come with international data transfer and production. While TAR models do not lend themselves to this type of analysis, predictive coding and active learning classifiers—trained with input from attorney subject matter experts (SMEs)—often play a key role in providing answers to early questions and setting strategy. Initial results must be sampled, validated and cross-checked. These technologies, which are now embraced by regulators in the US and are quickly gaining traction in Europe, are also crucial in culling the data set for review and production.
Assembling a qualified review team is one of the most important tasks when responding to regulatory requests, and COVID-19 also adds another layer of complexity. Because reviewers are dispersed geographically and working from home, they must be thoroughly comfortable with remote working technologies like Zoom and Microsoft Teams and Citrix-based VPN access, and they must be able to adhere to strict project cybersecurity protocols. In my own organization (an ALSP), reviewers undergo initial screening tests for competence. Then they are trained extensively on relevance and other project details, which in the case study example below included the legal nuances that distinguish differences between UK and US privilege laws and privacy regulations. Prospective reviewers are tested again, after which the individuals who don’t meet project standards are off-boarded. There simply isn’t time for mistakes.
Assembling a qualified review team is one of the most important tasks when responding to regulatory requests
To get a better sense of the scale and complexity of international antitrust review projects and see these principles in action, let’s take a brief look at a recent project my organisation managed for an AmLaw and Global 100 firm. The transaction in question was proposed by a company based in the UK that does significant business in US markets. Once the transaction was announced, a second request was issued by the US Department of Justice (DoJ), followed shortly by a Request for Information (RFI) from the European Commission (EC).
Between the two requests, over 12 million documents from more than 100 custodians were at issue. Subject Matter Experts (SMEs) trained a Technology Assisted Review (TAR) model to identify potential production sets for the DOJ, while search terms provided by the EC were used to identify the potential production sets for the EC.
We then ran filters for privilege and Personally Identifiable Information (PII) against each universe. Client privilege in the UK is significantly different from privilege laws in the US, which meant documents in queue for production to both regulators were reviewed separately for potential privilege issues in each jurisdiction and logged and redacted as necessary. Similarly, a large subset of documents required separate review to ensure compliance with US and GDPR privacy law during production.
Along the way, we recommended meaning dataset reduction strategies and were able to defensibly address and exclude more than 25% of the review population. A team of attorneys that was initially 20-strong during Early Case Assessment (ECA), TAR training, and project kickoff ramped up to more than 100 within a few days, then reviewed the screened documents for privilege and PII for each regulatory body in about a month’s time. In order to complete the project on time, the review team was active about 20 hours per day.
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Successful completion of international antitrust review projects like this one requires close attention to the following best practices:
Litigators who are accustomed to complex, high-volume eDiscovery challenges are often amazed at the demands imposed by multi-jurisdiction international antitrust reviews. These are high-pressure, ultra-heavyweight projects requiring precise planning, deep process and workflow expertise, advanced technology and the brute force labor of a crack review team. They aren’t for the faint of heart.
The Solicitors Regulation Authority (SRA) has shut down Kingly Solicitors Limited, stating that the firm failed to comply with one or more of the terms of its licence.
“An intervention means the SRA has closed a firm with immediate effect,” said an SRA spokesperson. “It will stop the firm from operating, take possession of all documents and papers held by the firm, and take possession of all money held by the firm (including clients' money). It is not responsible towards employees or trade creditors of firms that it has intervened in.”
The SRA has also launched an investigation into Kingly’s directors, Champika Ratnayake, Simon Hutcheson and Simon Crosby Peacock. In a statement, the body added that there “is reason to suspect dishonesty” on the part of Nurul Miah as a manager of Kingly Solicitors.
Miah, who is not a regulated lawyer, resigned as a director of the firm in May 2019.
Kingly (previously RH Legal, and which trades under several different names), is a 16-office law firm consolidator with 180 staff nationwide. Its headquarters is in London, but Legal Futures notes that it also holds offices in Beverley, Bristol, Harrogate, Leighton Buzzard, Market Weighton, Menai Bridge, Milton Keynes, Northallerton, Redcar, Ripon, Settle, Stockton on Tees, Watford and York.
The firm’s website states that it has been “acquiring proactive, agile and successful law firms across the UK” since 2016, with its most recent acquisition being London-based criminal law firm Hughmans in 2020.
It is unusual for the SRA to intervene in a firm of this size. Its most recent comparable intervention was the closure of 18-office firm Blavo & Co in 2015.
The Commission Nationale de l'Informatique et des Libertés (CNIL) has begun a preliminary investigation into TikTok’s handling of user data after it received a complaint.
“The CNIL began investigations into the tiktok.com website and the Tiktok application in May 2020,” a CNIL spokesperson said. “The CNIL had indeed received a complaint at that date.”
The spokesperson confirmed that the investigation was exploring the amount of information provided to TikTok users, the transfer of data from within the EU and measures taken to protect children on the platform.
TikTok said in a statement: “Protecting Tiktok users’ privacy and safety is our top priority. We are aware of the investigation by the CNIL and are fully cooperating with them.”
The video-sharing app, owned by Chinese parent company ByteDance, is already the subject of investigation by US, EU and Dutch authorities due to privacy concerns. Recently, President Trump issued an executive order calling for the app to be sold to a new owner or else be banned from the US within 45 days.
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“Children's data is rightly a top concern for parents, governments, regulators, and children themselves,” commented Helga Turku, data protection and privacy director at HewardMills. “[TikTok’s] popularity grew very quickly in a short period, and now the pressure will be on TikTok to demonstrate that it has established a robust data privacy program able to properly protect users.”
CNIL is practiced in investigating tech giants, having made headlines in 2019 for striking Google with a $57 million fine (which was upheld in June), the largest fine successfully levied against one of the Big Five to date.
Judge Ethan Schulman has issued a preliminary injunction to prevent Uber and Lyft from classifying their drivers as contracted freelancers rather than paid employees.
The decision came in response to a lawsuit filed against the companies in May by the state of California, alleging that both Uber and Lyft misclassified their employees under the state’s Assembly B5 labour law (AB5), which was passed in 2019 and took effect on 1 January 2020.
Under AB5, workers in the California gig economy are entitled to sick pay and holidays, and it is more difficult for companies to classify as contractors instead of employees – who are entitled to minimum wage and benefits.
While Uber has made changes to its business model since AB5 took effect, including allowing drivers to set their own rates, Schulman was not persuaded that their drivers qualified as contractors rather than employees. In his ruling, he cited one of the three elements that AB5 presents as criteria for classifying workers as contractors: that they perform duties outside the company’s regular business.
He wrote, “it's this simple: defendants' drivers do not perform work that is 'outside the usual course' of their businesses."
Uber and Lyft were granted 10 days to appeal the decision, and an Uber spokesperson has told The Guardian that the company intends to appeal immediately.
“When over 3 million Californians are without a job, our elected leaders should be focused on creating work, not trying to shut down an entire industry during an economic depression,” he said.
The significance of the ruling has been commented upon by legal experts. Mike Feuer, Los Angeles City Attorney, described the decision as “a resounding victory” for affected drivers.
Dentons, the world’s largest law firm by number of lawyers employed, and Durham Jones & Pinegar, a firm of nearly 100 lawyers based in Salt Lake City, announced their combination on Monday.
The move marks the latest step in what Dentons is referring to as “Project Golden Spike”, a bid to form “a truly national law firm in the United States” while allowing member firms to retain their defining characteristics. It is also the largest combination between law firms to be announced since the outbreak of the COVID-19 pandemic.
Joe Andrew, global chairman of Dentons, hailed the move as an important part of the developing Project. “This combination with Durham Jones & Pinegar is a testament to our commitment to helping clients navigate this New Dynamic,” he said.
“As the largest law firm in the world, we are constantly finding new ways to support our clients, wherever they may be. As we have seen from our initial Project Golden Spike combinations of Dentons Bingham Greenebaum and Dentons Cohen & Grigsby with Dentons US, when we work together, we are better able to help all our clients meet the evolving challenges they may face.”
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In a statement, Dentons CEO Elliott Portnoy also commented on the usefulness of the combination in helping to connect Dentons with a growing market for its clients. “The Salt Lake City metropolitan area is a model for the New Dynamic economy: a community with a history of strong economic growth and stability that continues to foster a vibrant, diverse group of innovative businesses and initiatives,” he said.
Durham Jones & Pinegar is one of the largest firms in Utah, maintaining offices in Salt Lake City, Ogden, Lehi and St. George. They offer legal services related to business and financial law, banking, IP, estate planning, mergers and acquisitions, real estate, family law and various other fields.
“We are excited to be combining with Dentons, a widely respected law firm that, like us, clearly prioritises innovation and adaptability, especially during these extraordinary times,” said Todd Leishman, chairman and president of Durham Jones & Pinegar. “Our combination with Dentons will allow our clients to continue to be served by lawyers they know and trust, who can now connect them to colleagues across the country and around the world.”
Hunters Law LLP's Daniel Watson offers Lawyer Monthly his insight on the UK government's newest legislation regarding Wills.
The impact of COVID-19 on the legal system has been widespread. The UK Supreme Court building has been shut for more than four months, during which time its cases have been conducted by video conference. Similar use of technology has been applied in multiple courts throughout Britain and worldwide.
This rapid uptake of remote audio and video technology is set to be mirrored, to a limited extent, in the execution of Wills in England and Wales. The government recently confirmed that, as of September, Wills can be witnessed remotely by video link (e.g. Zoom, FaceTime, etc.) and still comply with the formalities of the Wills Act 1837. Given the uncertainty which had previously surrounded Wills that were witnessed via video link, this is a welcome and pragmatic response to some of the challenges created by the pandemic.
Except in limited circumstances, two independent adults currently need to be physically present with a testator (the person making a Will) when witnessing their signature. Otherwise, a Will would not meet the statutory requirements for valid execution: the consequence being that the Will in question would be invalid. As a result, the testator’s estate would pass under any previous Will, or alternatively under the intestacy rules (which apply where someone dies without a valid Will).
Except in limited circumstances, two independent adults currently need to be physically present with a testator (the person making a Will) when witnessing their signature.
From September, English law will fall into line with many other jurisdictions. Scottish law was amended shortly after lockdown in March, allowing video conference facilities to assist in witnessing a testator sign their Will during the pandemic. In England, this procedure will be similarly permitted, provided that the quality of video and sound is sufficiently high to see and hear clearly what is happening. Nevertheless, the government has stated that video-witnessing should be a last resort, and that physically present witnesses must be used where it is safe to do so. The government has set out examples and guidance of how the video-witnessing process might be conducted.
These measures are set to be retroactive from 31st January 2020 - the date of the UK’s first confirmed COVID-19 case. This will provide reassurance to those finding it difficult to comply with the Will-signing formalities because of social distancing or illness. It will also give comfort to those who have already used video technology in executing their Wills during the pandemic, and who may be uncertain about their validity.
Obviously, there will be scope for challenging the validity of Wills witnessed by video link. In 2019, the number of challenges against Wills increased significantly, and this trend is expected to be exacerbated by lockdown (and, arguably, as a result of allowing video-witnessing). Good evidential records should therefore be kept (e.g. a recording of the video-witnessing). In any event, the new video-witnessing measures are intended to remain in place only until 31st January 2022 (or for longer if deemed necessary), after which Wills must return to being made with physically present witnesses.
One cautionary point in relation to video-witnessing is that a Will is only valid once testator and witnesses have physically signed the Will. Where a Will is posted to witnesses for signature (after the testator has signed and the witnesses have witnessed the signature by video-link), there is a risk that the testator could die before the witnesses have physically signed the Will. In such circumstances, the Will would be invalid. The process should therefore be completed as soon as possible after the testator signs (ideally within 24 hours), to mitigate this risk.
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Pending the relevant legislation coming into effect in September, a testator could, now, decide to have their Will witnessed by video link, on the basis that the above changes are intended to be retroactive. However, for the moment, it would be advisable to continue to witness Wills in the testator’s physical presence where possible, until the legislation comes into effect. Video-witnessing should be viewed as a last resort in any case. Until September, witnessing through a window, or outdoors while social distancing (either of which should meet the formalities of the Wills Act 1837), may be the most acceptable methods.
Video-witnessing of Wills raises the question of whether electronic signatures on Wills could be the next step. Could a testator or witness sign a Will electronically using an e-signature, rather than a traditional, handwritten signature? Legally, this is a complex area, bringing with it myriad issues: signature-authenticity, higher evidential burdens, technological wherewithal, and inevitably, an increased risk of litigation. Electronic signatures on Wills could potentially compound opportunities for undue influence and fraud vis a vis the testator; it was for this reason that the government decided not to allow electronic signatures as part of the new legislation relating to video-witnessing.
But these practical difficulties are not insurmountable, particularly as technological infrastructure and cyber-security continue to develop. With appropriate safeguards against fraud and undue influence, it is tempting to believe that the law on making a Will could finally – and permanently - be brought into the 21st century.
Aman Johal, Director of Your Lawyers, explains the current state of the crisis and the expected impact of the US settlement.
Since Volkswagen’s ‘dieselgate’ scandal first broke in the US in 2015, the car manufacturer’s manipulation of emissions data has unfolded to become a global crisis. The case is high-profile not just because of the violation of consumer rights, but also as a major environmental and health scandal. It is estimated to have affected as many aisiss 11 million vehicles worldwide in countries across the globe, and the increased emissions could be responsible for up to an additional 5,000 deaths per year as a result of increased air pollution levels in Europe alone, according to one study.
Over the past five years, ‘dieselgate’ has become an issue that is being tried in courts across the world. In the UK, Your Lawyers pioneered High Court action in January 2016 in what has become one of the largest ever consumer action cases in England and Wales, representing over 10,000 claimants and previously being appointed with a position on the Steering Committee responsible for the overall conduct of the litigation.
A court ruling on this litigation is expected before the end of 2022.
It was revealed last month that US consumers who purchased cars with defeat devices installed have been awarded $9.8 billion in settlements to date. The Federal Trade Commission (FTC) announced that Volkswagen agreed to buy back or repair more than half a million of the affected vehicles. Claimants have been awarded between $5,100 and $10,000 in compensation, which is in addition to the estimated value of the vehicle in some cases. The settlements are a landmark moment for Volkswagen and the ‘dieselgate’ crisis globally as UK lawyers continue to focus on the court action being pursued by owners here.
Over the past five years, ‘dieselgate’ has become an issue that is being tried in courts across the world.
The FTC report described the settlements as “one of the most successful consumer redress programs in history.” The pay-outs place Volkswagen just behind the $206 billion Philip Morris tobacco settlement in 1998, and the 2016 $20 billion payments agreed to resolve claims of environmental damage following the BP oil spill in the Gulf of Mexico.
The FTC report revealed that almost 90% of claimants chose to return their vehicle through a buyback scheme or terminate their lease rather than have the recall measures put in place. This figure appears to reflect a change in sentiment and the loss of consumer confidence in the VW brand. The original lawsuit stemmed from an advert labelling Volkswagen models as “clean diesel”. In reality, vehicles were emitting up to 40 times the legal limit of nitrogen oxides in the US.
Misleading consumers can have disastrous effects for a business, both financially and for their reputation. A study by Gartner into customer experience found that 48% of consumers who have a negative experience with a brand will tell 10 or more others. In December 2015, just months after the defeat devices were discovered, VW sales dropped by 25% in the US and 20% in the UK. With the settlement rulings repositioning the ‘dieselgate’ scandal at the centre of the consumer mindset, the negative repercussions for the Volkswagen brand in America could continue to be far-reaching and long-lasting.
In April, it was announced by the High Court that UK motorists had won one of the first key stages of the action against Volkswagen. The Judgement ruled that the software installed in vehicles was a "defeat device" under EU rules, despite the continual denials from the manufacturer.
Although the American verdict is not binding in UK law, emissions regulations in the two countries are somewhat similar, and both British and American motorists bought the vehicles under false environmental credentials. Following the UK court’s ruling that Volkswagen’s software could constitute as a defeat device, courts could draw influence from the rulings in the US. Previously, Your Lawyers estimated that claimants could be due a compensation pay-out of around £8,500 per individual, meaning the manufacturer could be liable to pay a total of up to £10.2 billion to UK customers. The ruling to give US drivers compensation in addition to the estimated value of the vehicle could increase pressure on Volkswagen, and we could see UK courts draw influence from the mechanics of the settlements across the Atlantic.
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The high-profile backlash VW faced in the wake of the ‘dieselgate’ scandal may just be the tip of the iceberg. This year alone, Mercedes-Benz, Fiat and Nissan and Renault have all faced publicised allegations over the alleged use of defeat device technology. Whilst carmakers have been quick to robustly deny claims that they have done anything wrong, we remember that VW was clear in asserting a similar position when faced with lawsuits as well.
Mercedes-Benz has already been fined £776 million by German prosecutors after 774,000 vehicles were recalled in 2018. Accusations have now reached UK shores, with an estimated 500,000 vehicles potentially affected. Drivers who have owned or leased a Mercedes-Benz diesel car or van registered between 2009 and 2018 could be eligible to claim compensation with Your Lawyers. Allegations against Nissan and Renault estimate that up to 1.4 million of their vehicles sold in Britain could be fitted with technology that could amount to a defeat device, allegations which, like VW, they deny.
Any form of emissions deception is unacceptable. We will continue to work hard to hold vehicle manufacturers to account if they have used software that amounts to an illegal defeat device under EU law. Vehicles producing dangerous levels of nitrogen oxide and other harmful emissions can cause increased deaths and irreparable environmental damage, and there are good reasons as to why we have stringent emissions regulations here in the UK. Any carmaker found to be flagrantly breaking the rules is not only in breach of consumer rights, but is also responsible for the adverse impact to human health and the environment.
We can only hope that rulings such as the recent US settlement will positively influence dieselgate verdicts in the UK and beyond.
