Manfred Doess, General Counsel at Volkswagen AG, has navigated his company – a global household name in the automotive world – through one of the thorniest legal battles in recent history: that concerning the “diesel crisis” imbroglio, which affected thousands of Volkswagen owners worldwide, as well as dealers and environmental agencies. Although the full scope of the litigation is far from over, the all-consuming class-action litigation did finally conclude in April 2016 with one of the most groundbreaking settlements on record. Doess made a point of appearing at the Benchmark Litigation 2017 awards ceremony in February to deliver an address that was at once candid, contrite and uplifting, eliciting a standing ovation from the capacity crowd. Doess recently spoke to Benchmark editor Michael Rafalowich, who introduced Doess at the ceremony, during which time he put forth his concerns, his convictions and his projections.
From a legal professional’s standpoint, how has Volkswagen progressed internally since the diesel crisis began?
The conduct behind the diesel crisis is not consistent with our values and Volkswagen deeply regrets it. Since this behavior came to light, we have worked tirelessly to make things right for our affected customers around the world. We have also begun the biggest change process in our company’s history, through our “TOGETHER – Strategy 2025” program. It has integrity at its core.
Changing corporate culture in a company the size and complexity of Volkswagen takes time, but we are on the right path and have already taken significant steps to strengthen accountability and enhance transparency.
What is Volkswagen doing to make sure that something like the diesel crisis does not happen again?
Since the end of September 2015, Volkswagen has implemented important measures to address the diesel crisis and realign the Group for the future. This includes adopting initiatives that have enhanced operational processes and reporting and control systems to ensure responsibilities are clear, a more robust whistleblower system and new, stricter standards in emissions testing practices.
The Volkswagen Group will leave no stone unturned to prevent violations of any laws and identify such violations as early as possible.
How instrumental were Volkswagen’s U.S. national coordinating counsel Robert Giuffra and Elizabeth Cabraser, the Plaintiffs Steering Committee lead, in reaching settlements in the U.S. in such a short period of time?
Bob and Elizabeth exemplify the utmost professionalism that all the lawyers involved in the settlements showed throughout the negotiations. This was an enormous undertaking and lawyers for the U.S. government, the State of California and our regulators, as well as for private plaintiffs and Volkswagen, spent countless hours working toward a resolution.
The key tenet of our legal strategy was that we needed to make things right for affected customers and the environment as fast as we could. Counsel on all sides understood this. They worked with incredible intensity and mutual respect and they made extraordinary efforts to reach these agreements in such a short time span.
What are some of the other notable litigation challenges you have faced during your career? How does the diesel matter rank among those?
Every litigation brings a unique set of challenges and issues. Certainly, the lawsuit I oversaw when I was at Porsche, which was brought by 19 hedge funds seeking €1.2 billion in damages, was incredibly demanding, and we defeated those claims in the end. That said, nothing I have worked on has come close to the size, scale and complexity of the diesel crisis. It has required strict attention to detail on each case, and at the same time, an understanding of how each litigation fits in to the big picture of resolving this global issue and making things right for our customers and other stakeholders.
Volkswagen has set a goal of being a world-leading provider of sustainable mobility – how are you able to do this while also resolving thousands of cases in Europe and elsewhere related to the diesel crisis?
It’s certainly true that the Group continues to face unprecedented challenges. At the same time, we are pursuing the biggest transformation in our history. This change process is being driven both by our response to the diesel crisis and by the forces shaping the future of our industry. We have solid foundations and great brands and talented employees around the world who are dedicated to ensuring that Volkswagen emerges stronger than before.
You’ve had the opportunity to work with lawyers in North America and the rest of the world – have you noticed any notable differences in how they approach their work?
I have had the opportunity to work with a large number of highly-skilled attorneys around the world, both in-house and external, who are at the top of their profession in many different practice areas. I am grateful to all of them for the guidance and support that they have provided me since I became General Counsel. The progress that Volkswagen has made in addressing the diesel crisis globally is due in large part to their unceasing efforts on behalf of the company.
The speech you made at the Benchmark Litigation 2017 awards ceremony was decidedly candid, direct and impassioned. What were your impressions of that moment? What was it like for you to address a room full of litigators?
Thank you for saying so. The lawyers in attendance truly represent the best in the profession, and I was honored to speak to them. The attorneys I had the fortune to work with labored tirelessly and often at great personal sacrifice through what at times seemed like one, months-long negotiating session. I’m sure all of the lawyers at the awards ceremony could relate to what that is like.
Are there any passages from your address that you would like to relay to readers who were not there to hear it first-hand?
I discussed how Volkswagen understood that the best way to resolving the diesel crisis in the United States was not through protracted court battles. Instead, we determined to achieve a series of collaborative settlements as quickly and fairly as we could with the U.S. authorities and lawyers acting on behalf of affected drivers. The resulting resolutions have been unprecedented in their speed and scope. They are right for our customers, right for the environment and right for our company.