FAQ

What are the precise allegations Volkswagen AG is facing?
It was established that the German car manufacturer had installed manipulative software in its diesel vehicles. The software detects when a vehicle is in a workshop and on the test bench. These circumstances are identified using a combination of different parameters. For example, the accelerator position is combined with the unchanging steering angle or values from ESC. If the software detects that the vehicle is on the test bench, it switches to "clean mode". This entails adjusting fuel injection timing, airflow and combustion stroke to achieve better emission values and comply with the relevant emission standards. The software brought about emission values that were compliant with US standards. In actual fact, the emission values exceeded the standard by up to a factor of 35. The software is named "Defeat Device" and was installed in type EA 189 diesel engines with 1.6 and 2.0 litre engine capacities in models manufactured between 2009 and 2015.

How was this manipulation discovered?
A study dated 15.05.2014 undertaken by the University of West Virginia for the ICCT research institute uncovered that exhaust emissions were being manipulated. This study demonstrably exposes the elevated exhaust gas values of the diesel engines used. The ICCT also published a press release dated 30.05.2014 which referred to the manipulation of the exhaust gas values. At this point, negotiations commenced between Volkswagen AG and the responsible environmental agencies, CARB (California Air Resources Board) and the EPA (Environmental Protection Agency), the intention of which was to clarify the allegations of manipulation.

Volkswagen AG did not announce this publicly. Only after further negotiations and more correspondence with the EPA did Volkswagen AG admit the manipulations to the EPA on 03.09.2015. This is proved by a written communication of the EPA dated 18.09.2015 which was sent to Volkswagen AG, Audi AG and the Volkswagen Group of America Inc. summarising the correspondence with Volkswagen AG up to that date. However, no ad hoc announcement was made. The public statement on manipulation was only made on 19.09.2015, at which point the share prices started to collapse. However, a corresponding ad hoc announcement was only made on 22.09.2015.

What will happen to vehicles that are affected?
The affected vehicles will be repaired and the software removed as part of a major recall campaign. 500,000 vehicles in the USA alone are affected. In Germany, it is estimated that the recall campaign will involve several million diesel cars. The campaign is set to begin in January 2016 and be completed by the end of the same year.

Has the investigation into the facts of the emissions scandal been concluded yet?
No. The German Federal Financial Supervisory Authority (=BaFin) is still investigating when, at the very latest, Volkswagen AG would have been required to publish an ad hoc announcement.

To what are affected investors in shares of Volkswagen AG entitled?
Affected investors may demand compensation from Volkswagen AG based on the Wertpapiershandelsgesetz (=WpHG, German Securities Trading Act), for example if they purchased financial instruments "too expensively" or sold them "too cheaply".

If the investigation into the facts should show that individual members of the board acted deliberately and knowingly supported the fraud, action can be brought against them under the tort provisions of the German Civil Code.

Which "financial instruments" may be entitled to compensation?
The enforcement of claims for compensation pertains above all to the financial instruments of Volkswagen AG, to be specific the preference shares (ISIN: DE0007664039), the ordinary shares (ISIN: DE0007664005), the 7% corporate bond (ISIN: XS0412443052), the 4.625% hybrid bond (ISIN: XS1048428442) and the 3.50% hybrid bond (ISIN: XS1206541366). But also shares of the Porsche SE are included.

Do I have to get an attorney now or should I act at a later point in time?
For now, investors who are affected and who invested in Volkswagen AG shares are not required to do anything. However, our many years of experience show that having optimum legal counsel from the start helps to avoid possible stumbling blocks. Also, one should consider the statutes of limitation.

When will potential claims lapse?
§ 37 (4) WpHG does not show any limitation ruling anymore. In its old version, valid until July 10th 2015, there was a limitation ruling that has been nullified. Unfortunately, the German legislator forgot to implement an interim ruling regarding the statute of limitation. So, the limitation period has to be calculated based on general legal principles. Regarding the Volkswagen case there are three relevant points in time:
 
a)  As far as claims have emerged before July 10th 2012, § 37b (4) WpHG is applicable in its old version. For that period of time the claims are subject to prescription and cannot be part of our claim.
 
b) § 37b (4) WpHG in its old version said that a claim is subject to prescription after one year calculated from the point in time when the shareholder has positive knowledge of an omitted ad hoc message. At the latest three years after the omission of an ad hoc message the claim is subject to prescription.
But the VW shareholders had positive knowledge in September 2015, when this ruling was no more applicable.
 
So, based on general legal principles this means: As far as claims have emerged on or after July 10th 2012 until July 9th 2015, according to § 37 (4) WpHG in its old version combined with the general rulings regarding the prescription in §§ 187, 188 BGB the claims could not lapse. Regarding the unconsciousness of the shareholders related to the usage of the defeat device, because no ad hoc message was published, §§ 195, 199 (3) BGB are now applicable and the claims that have emerged on or after July 10th 2012 until July 9th 2015 will be subject to prescription for the first time on December 31st 2018. §§ 195, 199 (1) BGB says that damage claims lapse in three complete calendar years after claimant’s gaining knowledge (in September 2015).
 
But let us underline that this question is not ruled by law but just by general principles. To be on the safe side and to avoid any risk of prescription we recommend to file claims within one year after receiving knowledge of the fraud. That means that claims should be filed before September 18th 2016. Only this timing will prevent any discussions about prescription.
 
c) For claims that have emerged on or after July 10th 2015 alone §§ 195, 199 (1) BGB are applicable. With positive knowledge or grossly negligent ignorance the claims are subject to prescription on December 31st 2018.
 
§ 195 BGB says that the regular prescription is three years. According to § 199 (1) BGB the regular limitation period begins with the end of the year in which the claim has emerged. That means that on December 31st 2015 the limitation period began and will end on December 31st 2018 as the claims have emerged in September 2015, when the manipulations became known in public.
 
That means that the first point in time regarding prescription is December 31st 2018. Especially for purchases before July 9th 2015 we recommend to file claims before September 18th 2016.

Can I engage my own attorney to work on the case?
Of course you may retain any attorney of your choice to represent you. However, when retaining the Nieding + Barth partnership, you have the advantage that one of Germany's leading investors' advocates will be working for you. Moreover, not only do we possess the national and international knowledge required to act on your behalf in this investment case, we also maintain close ties to relevant institutions, which will benefit you as our client.

Will my legal expenses insurance cover the legal fees?
Whether or not your legal expenses insurance will cover the costs of retaining us must be clarified on a case by case basis and will depend on the underlying terms of your legal expenses insurance policy. As part of engaging our services, we will clarify if your legal expenses insurance is obliged to assume the costs. We will also take care of all correspondence with the legal expenses insurance company concerning its grant of confirmation of cover at no additional charge to you. If the legal expenses insurance grants confirmation of cover, all our work on your behalf will be free of charge to you with the exception of any excess.

When will an action be brought and against whom? How long will it take?
We believe that there is no need to bring an action for the moment. At this point in time, for practical purposes the issue is not about legal enforcement of your claims; it may not even come to this. First of all, we are required to assert your claims – well-prepared and substantiated – out of court and to observe possible deadlines to your advantage. This may already result in a partial or complete success. For this reason, it is too early to discuss details regarding the duration of a possible suit (which is more than likely to move through several court levels and entail a number of risks).

Volkswagen AG is the main defendant. It is our firm opinio juris that, based on a number of legal aspects, Volkswagen AG is liable for the losses incurred by the shareholders through the fall in the value of their securities that resulted when the scandal involving manipulated emissions was uncovered. It may also be possible to assert claims for compensation against members of the board.

However, in order to make explicit statements on this matter an investigation of the circumstances is required, which is underway at present. At the moment, investigations have only just begun. It will also be necessary to wait for statements by the German Federal Financial Supervisory Authority (=BaFin).

Currently, numerous private and institutional VW shareholders have engaged us. Together with DSW Deutsche Schutzvereinigung für Wertpapierbesitz e.V. (Germany's largest shareholders' association), the vice president of which is the undersigned, we are working on establishing as broad a basis as possible of institutional and private VW shareholders and owners of other VW financial instruments from Germany, Europe and the USA to effectively ensure a joint enforcement (also by way of action) of possible claims for compensation on the one hand, while accompanying it with steps taken under stock corporation law on the other.

In so doing, we will not be relying on suits filed as quickly as possible and based on largely unsettled information on the facts (risking either a quick dismissal of the suit or else the refusal of supplementary facts due to tardiness) but instead are presently focusing on forming the largest possible base of aggrieved parties while also endeavouring to obtain the best possible clarification of the facts required to substantiate claims.

Is Nieding + Barth Rechtsanwaltsaktiengesellschaft able to guarantee repayment of the capital I invested?
No. Such a guarantee would be suspect at best and fraudulent at worst. You can be sure that we will do everything in our power to enforce your legitimate claims in the best possible way.

To what costs am I exposed in the event of a suit?
As a rule, the attorney's fees in suits in Germany are fixed in the Lawyers Compensation Act (=Rechtsanwaltsvergütungsgesetz, RVG). Costs for suits can become considerable. Thus, our foremost goal, in the event that a suit is even necessary, is to bundle private and institutional claims where possible in order to achieve cost advantages on the one hand and a greater impact on the other hand. In all cases, we will give you timely notification prior to initiating court action and also inform you of the costs in advance. Therefore, there is no need to fear that costly steps will be undertaken at your expense and beyond your control. You are always in charge of the situation and in each case will decide if further steps are to be undertaken and at what cost.

Will there be something like a class action or collective redress?
Up to the present time, the German legal system does not know the concept of "class action" as such. However, it is possible to file a so-called investor's model case under the KapMuG (=Capital Markets Model Case Act).

In due course, we will decide on the most effective and cost-efficient way to proceed for our clients. You will of course be informed in good time, so that you can decide if you would like to take part in our strategy.

Is a model case even possible for investors?
According to § 1 Paragraph 1 KapMuG, proceedings under this act may be taken, amongst other circumstances, in civil actions in which a claim for compensation is being asserted by reason of an incorrect or misleading item of public capital market information or the lack of capital market information.

If for example he is asserting a claim before the courts for compensation for reason of incorrect capital market information, every investor may apply for the institution of model case proceedings. The application for model case proceedings is published by the court in a special register of proceedings in the electronic version of the Federal Gazette. The proceedings are stayed with the publication of the application for model case proceedings in the register of proceedings. If ten or more parallel applications for model case proceedings in different legal actions are filed for the clarification of the same model issue within six months, the trial court requests a model case decision from the competent Superior Regional Court (Oberlandesgericht).
 
Once the model case proceedings become pending in the Superior Regional Court, the investors' litigation affected by this is stayed. The Superior Regional Court appoints a claimant to be the model claimant ex officio. All other claimants are joined to the model case proceedings.

In this way and unlike an American class action, all claimants are sure of their right to be heard. The Superior Regional Court makes its decision based on an oral hearing. An appeal to the Federal Court of Justice against the decision of the Superior Regional Court is admissible. As a result of their joinder, the final and absolute decision on the model case binds the model claimant as well as the other claimants . The individual actions are then decided by the Regional Court (Landgericht) on the basis of the model decision.

Nieding + Barth Rechtsanwaltsaktiengesellschaft is aiming for just such a model case proceeding in the present case for all owners of VW financial instruments eligible to assert a claim. Such instruments include not only the shares but also the bonds of Volkswagen AG.

What will retaining you cost me, exactly?
If your legal expenses insurance does not agree to cover the costs or you do not hold a legal expenses insurance policy, we can arrange a package price for our out of court work.

The package price for out of court work makes the costs you can expect to incur transparent. We base it on the Lawyers Compensation Act, which is stipulated by law as the basis for lawyers' compensation in Germany. Needless to say, we will not initiate further steps that might incur additional costs without your express approval.

In proven cases of hardship we are willing to come to an individual arrangement that takes the economic circumstances of each case of hardship into consideration.

If your legal expenses insurance will cover the costs, our work will generally not incur costs for you (other than a "retained amount" or "excess" that may be agreed in individual cases).

Is Nieding + Barth Rechtsanwaltsaktiengesellschaft more expensive or cheaper than its competitors?
Nieding + Barth Rechtsanwaltsaktiengesellschaft will make aggrieved parties an offer that is worth its price. Allow us to explain why we hold this view.

Experience: We have more than twenty years of experience in the field of investor protection, and as we each have successfully completed over ten thousand cases we are well-acquainted with all aspects of this complex field of law. In addition, through our work with other law firms in cases involving Phoenix, AMIS, DBVI, K1, S&K, Prokon, Solar Millennium and WGF, we have acquired valuable experience in how large and intricate collective cases are managed. We represent approx. 10,000 clients in the aforementioned cases. Independent law journals acknowledge our dedication to rendering top-class legal work.

Capacities: Experience has shown that a "rapid deployment force" is required, especially at the outset when a case of this magnitude is emerging, which systematically inspects the material while quickly identifying promising defendants with sufficient capital to cover liabilities.

Infrastructure: In our own estimation, we possess the human resources and a technical processing standard that is unparalleled in processing major collective capital market cases. For example, we provide affected investors with a project-specific information portal that is being constantly updated at www.wolfsburggate.de which in addition to offering the latest information also answers many basic questions of private and institutional investors. The web-based solution also offers the opportunity to process correspondence and data traffic more rapidly. Hence, it is even possible to engage us through the website.

Network: Our many years spent dedicating our efforts in high-profile cases on behalf of aggrieved investors has provided us with an excellent network of experts from many fields (e.g. investigators, industry insiders, politicians, etc.), which we can draw upon reliably at short notice in critical instances.

Public pressure: Experience shows that collective cases involving several thousand investors quickly evolve into cases of political significance. After all, investors are also voters. In addition, the question arises as to whether the responsible authorities in the countries involved satisfied their supervisory and control function and if the legislature acted in keeping with the matter's significance and supranational guidelines. Individual investors are often almost helpless when facing this political and administrative complex. A representation of affected investors, strong in numbers and determination, thanks to its own "political" weight is able to negotiate with the defendants on what amounts to a level playing field, and use targeted communication measures to bring about the public pressure necessary – a substantial advantage for aggrieved parties.

Will fees also be incurred if I do not receive money from the defendants?
Yes. In Germany, attorneys are only permitted to work on a contingency basis in individual cases and circumstances that are narrowly defined. This is why the fees for our services are not based on the outcome. Moreover, we always request advance payment. If we take this case for you and win, as a matter of principle the opposite party will bear the costs to the extent incurred. However, for the settlement we intend to achieve in the matter we have a combined offer which effectively includes a contingency fee component (settlement fee according to the Lawyers Compensation Act) .

Will there be other costs besides the package price?
Our package price covers all attorney's fees incurred for out of court work. In the event that a settlement is agreed for the damage incurred by the individual investor, the statutory settlement fee according to the Lawyers Compensation Act will also be payable – in effect, it is a contingency fee, as it only becomes due if a settlement is reached. Should you engage us for a possible court case following our out of court work, we will charge the statutory fees for attorneys in accordance with the Lawyers Compensation Act (RVG).

How will I be looked after if I engage you, and how will I be kept informed?
Owing to the large number of requests we receive daily, we wish to avoid contact by telephone as far as possible. We are happy to correspond with you by post, fax or e-mail. You can find important details at the dedicated website www.wolfsburggate.de. However, please understand that information of special relevance is reserved for our clients. There is a protected client section where you may obtain this information and which you may access with a password we will provide after you have engaged us. We will advise the public at large via press releases in situations that are of particular importance.