Volkswagen (VOW3.DE) has agreed a £193m ($242m) out-of-court settlement with UK drivers impacted by the Dieselgate scandal.
The German car manufacturer said the move was “the most prudent course of action commercially”, and that it was working to rebuild trust with customers.
It confirmed that payment will be made to the 91,000 motorists represented by the law firms driving the Volkswagen NOx Emissions Group Litigation in the UK.
The company will also make a separate contribution to cover claimants' legal costs and other fees, meaning each driver will receive just over £2,000 in total. The group has already paid out more than €30bn (£26bn) worldwide.
The case was due to go to trial in January 2023 on behalf of buyers in England and Wales of Volkswagen Group cars. This included Audis, Seats and Skodas with the EA189 diesel engines.
Lawyers said the trial would have been the biggest ever brought by a group of consumers in the UK.
In September 2015, it was found that these vehicles emitted more of the air pollutant nitrogen dioxide than the company claimed.
The company has said about 11 million cars worldwide, and as many as 1.2 million in the UK, were fitted with software that cheated diesel emissions tests designed to limit noxious car fumes and carbon dioxide (CO2) pollution.
“No admissions in respect of liability, causation or loss have been made by any of the defendants in the group action as part of the settlement,” Volkswagen said in an official statement.
“In Volkswagen's view, the legal costs of litigating this case to a six-month trial in England, and then in relation to any further appeals by either party, were such that settlement was the most prudent course of action commercially.
“The Volkswagen Group would, once again, like to take this opportunity to sincerely apologise to their customers for the two mode software installed in the EA189 vehicles.”
David Whitmore, chief executive of Slater and Gordon, which represented around 70,000 of the claimants, said: "The settlement avoids the need for a lengthy, complex and expensive trial process and we are delighted to have achieved this settlement for our customers as a result of the group action."
Meanwhile, Ben Smyth, investment officer at Therium Capital Management, which funded the UK class action, said: “The settlement that was agreed by the claimant committee is a victory for affected car owners and the impact that this legal action has had on corporate governance on the one hand and the importance of access to justice for consumers on the other cannot be overstated.”
Watch: Dieselgate: EU accuses Volkswagen of delaying compensation claims across the bloc