VW sued for emissions: Report

VOLKSWAGEN is facing the possibility of a multi-billion-dollar fine after the United States justice department filed a lawsuit alleging that the German giant broke the US Clean Air Act by deliberately producing vehicles with insufficient emissions control software.

According to Reuters, if the justice department successfully proves that the affected vehicles violated the environmental protection regulations, each vehicle could attract a $US37,500 penalty ($A52,000).

With around 600,000 models under the microscope in the US, a successful lawsuit could therefore result in as much as $US22.5 billion of fines for the company ($A31.3b), but Reuters is reporting that figure could “in theory” blow out to as much as $US90 billion (A$125.3b).

“The United States will pursue all appropriate remedies against Volkswagen to redress the violations of our nation's clean air laws,” said assistant attorney general John Cruden, head of the departments environment and natural resources division.

According to a senior justice department official, Volkswagen knew it was distributing vehicles that would contravene regulations, which were in place to protect the US environment and air quality.

By suing Volkswagen, the Justice Department is looking to hold the car-maker accountable for the emissions test cheat device, that allowed some diesel-powered Audi, Porsche, Skoda – although this brand does not have a presence in the US – and Volkswagen vehicles to pass only when being scrutinised under assessment conditions.

VW is being investigated for its responsibility regarding the defeat device in several global regions, but the US is the first to pursue the company for damages relating to violated environmental protection laws.

In Australia, the number of affected vehicles and exactly which local emissions regulations they might breach is still being established, although a small Sydney-based law firm has filed a class action which is attempting to retrieve owners' payments for non-compliant vehicles.

Volkswagen has previously stated that it would be reassigning funds it had set aside for development projects to help address and resolve the crisis, but if it is hit with the latest estimates for fines, it may be too much for its piggy bank.