More and more lawsuits because of the diesel scandal are bringing the judges to the brink of stress. And now EY is also being targeted, and not just because of Wirecard.

Files from diesel lawsuits are on a table in the Stuttgart Regional Court.

Dhe diesel scandal is still causing violent waves after five years: At the Stuttgart Regional Court, more and more motorists are demanding compensation because their diesel car has lost value due to driving bans such as in the city of Stuttgart. The Mercedes drivers in particular are becoming more and more active. In the first half of 2020 alone, around 1,700 diesel lawsuits were brought against the Daimler Group, reported the President of the Regional Court Andreas Singer on Friday: “That is more than in the entire past year with 1,500 lawsuits against the Stuttgart carmaker.” VW drivers have been active as plaintiffs – since 2018 the regional court has recorded the receipt of 3200 complaints here.

In the case of Mercedes, high nitrogen oxide levels in the exhaust gas are often attributed to the fact that the exhaust gas treatment was switched off outside a certain temperature range, because otherwise the engine might have been damaged. The Federal Court of Justice will deal with the admissibility of this so-called “thermal window” on October 27th. Depending on the outcome of these proceedings, even more drivers should feel encouraged to sue Daimler. So far, Daimler has insisted that there was no tampering with the Mercedes cars, but last autumn accepted a fine of 870 million euros for negligent breach of duty of supervision.

Millions of lawsuits over truck cartel

Under the dominance of the auto industry in the Stuttgart region, the regional court is groaning in other areas. In addition to the diesel lawsuits, there are a number of capital investor lawsuits, which primarily focus on the fact that Daimler or Porsche SE (as the parent company of Volkswagen AG) may have informed their investors too late about price-sensitive events in connection with the diesel scandal – which is why investors so-called Would have suffered exchange rate difference damage. The claims in almost 100 proceedings against Daimler amount to 906 million euros. Around 250 proceedings are pending against Volkswagen AG and Porsche SE. Institutional investors alone are claiming damages of 711 million euros in eleven lawsuits.

The third complex from the auto industry concerns the truck cartel of Daimler, MAN and Iveco, which brought 280 actions before the Cartel Chamber before the Stuttgart district court. This involves claims for damages, sometimes for individual trucks, sometimes for thousands, with a total claim amount of around 600 million euros. The damage incurred for each individual truck must be checked.

Five new positions planned

The plethora of procedures as well as their complexity bring the district court to the brink of resilience, says District Court President Singer. The number of pending civil proceedings alone has increased by a fifth to a good 10,000 proceedings within a year and a half. “We are fighting the flood of lawsuits with all our strength,” said Singer: “But it is also clear that we are dependent on further reinforcement in view of the sheer mass.” As part of the 2020/2021 double budget, the district court had been assigned five new posts.

“A strong, independent and effective judiciary is an essential location factor for a successful economic region”, is Singer’s plea: “Only if we succeed in enforcing the law in a reasonable time can the economy plan reliably and act legally.”

Wirecard shareholder sees himself cheated by 10 million euros

In order to be able to cope better with the flood of lawsuits, the Stuttgart Regional Court has set up special chambers, including a chamber with specialists for capital market information and another one dealing with cartel claims. There have also been specialists in business and tax advisory law for years. This chamber is likely to prepare for a number of lawsuits in the Wirecard scandal, because EY, the company that audited Wirecard’s annual financial statements, is based in Stuttgart. It should only be a matter of time before the first lawsuits against the examiners land at the Stuttgart Regional Court. Among other things, the Berlin law firm Schirp has announced that they will sue EY on behalf of Wirecard shareholders. In one case, an investor is said to see himself cheated out of almost 10 million euros.

The special chamber is currently dealing with a lawsuit against EY in connection with the insolvency of Maple Bank. The insolvency administrator is demanding 95 million euros in damages. In connection with the so-called cum-cum or cum-ex transactions (tax-saving models for dividend payments), the bank was incorrectly advised by EY as a tax advisor and, in turn, the annual financial statements were audited by EY as auditor, the argument goes. Because of the tax reclaim by the tax authorities, the transactions were lossy and ultimately led to the insolvency of the Maple Bank, is the argument of the plaintiff insolvency administrator.