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Volkswagen pleads guilty to three criminal counts for cheating emissions in the US – but it still refuses to pay compensation to UK owners

A day of reckoning arrived for shamed carmaker Volkswagen in the US on Friday – but it still will not pay out on emissions cheating in Britain.

The German car firm pleaded guilty to three felony counts, as part of a $4.3 billion plea agreement reached with the Justice Department in January over the reputation-hammering diesel emissions scandal that emerged in September 2015.

But despite agreeing to pay a total of $25 billion in fines to US authorities and compensation to the American 580,000 car owners affected by the scandal, Volkswagen continues to refuse payouts for European drivers affected, including the 1.1 million in the UK.

Volkswagen has pleaded guilty to three criminal counts for cheating emissions in the US

VW general counsel Manfred Doess made the plea on the company’s behalf in Detroit on Friday, after receiving authorisation from VW’s board of directors.

‘Your honor, VW AG is pleading guilty to all three counts because it is guilty on all three counts,’ he told the court.

But despite all this, VW has refused to compensate European and UK car owners, arguing that a ‘technical fix’ can make cars compliant with standards.

Yet, VW admitted recently that of the estimated 1.1 million UK cars affected, just 470,000 of the vehicles had received the software updates.

US District Judge Sean Cox accepted VW’s guilty plea on the three counts: conspiracy to commit fraud, obstruction of justice and entry of goods by false statement charges.

Under the recently-agreed multi-billion dollar deal with the Justice Department, VW has committed to sweeping reforms, new audits and oversight by an independent monitor for three years.

An assistant US attorney, John Neal, told the court that the test-cheating tactics were ‘a well thought-out, planned offence that went to the top of the organisation’.

He added that VW could have faced $17 billion to $34 billion in fines under sentencing guidelines, significantly more than the $4.3 billion deal it has agreed to.

Today’s hearing marks 18 months since the automotive group was found to have installed defeat devices in 580,000 US vehicles to enable it to beat emissions tests over a six-year period.

The Environmental Protection Agency discovered that these vehicles emitted up to 40 times the legal pollution limit as part of an investigation that concluded in September 2015.

The scandal in the US has taken the total cost for Volkswagen in the US to $25 billion

What does this mean for UK owners?

Volkswagen’s US guilty plea is still expected to have little impact for UK drivers, of which 1.1 million are effected by Volkswagen’s emissions test cheating.

Despite growing pressure from owners, lawyers and the government, the company has refused compensation for those affected.

Paul Willis told the Transport Select Committee last month that Volkswagen had ‘not misled anyone’ in the UK

The carmaker has argued that a ‘technical fix’ can make cars in the UK compliant with standards, and that it was a failure of regulation which caused the problem.

The recall process for the affected cars was originally scheduled to have concluded by the end of 2016.

However, last month Volkswagen UK director Paul Willis admitted that just 470,000 of the vehicles had received the software updates.

Speaking to the Transport Select Committee on Monday 20 February, Willis said: ‘We did not fit defeat devices to our vehicles in Europe.

‘We never sold cars on emissions levels. We have not misled anyone on anything.’

Willis added that between one and five per cent of affected owners had bought models based on their green credentials and that the value of these vehicles would remain unaffected when the software update had been carried out on them.

Lawyers have said UK owners have been left with no choice but to sue the company.