Volkswagen has engaged the law firm Kirkland & Ellis, who defended BP in the aftermath of the Deepwater Horizon disaster in 2010.
According to multiple sources, including The Guardian and Bloomberg, Volkswagen has hired Kirkland & Ellis to help it deal with investigations, as well as any impending civil and criminal claims.
Sources have told Bloomberg that the US Justice Department has begun a criminal probe into Volkswagen’s use of defeat devices to pass emissions testing.
German federal and state institutions have begun or are contemplating starting investigations into the company. Action has also been mooted in France and the United Kingdom, while South Korea has reportedly already started one.
Automotive News understands that at least 25 class action law suits have already been filed against Volkswagen in the US.
The explosion at the Deepwater Horizon took place in April 2010, killing 11 people, and contaminating the Gulf of Mexico with vast quantities of oil. In 2012, BP plead guilty to 14 criminal charges and paid US$4 billion ($5.7 billion) in restitution. In 2015, BP paid out a further US$18.7 billion ($26.8 billion) to resolve all federal, state and local government claims.
Earlier this week, an EPA spokesperson stated that it could levy a fine as high as US$18 billion ($25 billion) for Volkswagen’s use of software to help it illegally pass emissions tests.
Although it’s unlikely the maximum penalty will be meted out, the cost in terms of remediation, legal fees, lawsuits, and fines, not to mention the company’s sullied reputation, will almost definitely run into the billions.
Volkswagen has provisionally set aside 6.5 billion euros ($10.4 billion) to deal with the situation.
Cover photo by Flickr user Ideum â€" ideas + media.
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