Volkswagen’s efforts to draw a line under the Dieselgate scandal have been thrown back into doubt after Germany’s highest civil court struck down shareholder approval for a 2021 settlement with former executives and their insurers.
The Federal Court of Justice in Karlsruhe annulled the resolution that had endorsed a package of payments from Martin Winterkorn, the group’s former chief executive, and Rupert Stadler, then head of Audi, alongside a €270 million contribution from the carmaker’s directors’ and officers’ insurers.
Winterkorn had agreed to pay €11.2 million and Stadler €4.1 million, but judges ruled that shareholders were denied sufficient information. The court said questions about the personal assets of the executives had not been allowed, nor was it disclosed that the settlement released other managers from liability. That “transparency deficit” was enough to invalidate the vote.
The case will now return to a lower court, where shareholder associations are challenging the adequacy of the payments compared with the tens of billions of euros Volkswagen has already shouldered in fines, settlements and compensation since the emissions scandal erupted a decade ago.
Volkswagen insisted that “the reasons for the agreement remain valid” and that it would seek to achieve the same outcome through a different legal framework.
The bulk of the contested payout was to come from insurers led by Zurich, joined by AXA XL, Allianz Global Corporate & Specialty and several Lloyd’s syndicates. Under the arrangement, insurers from Volkswagen’s 2015 programme were to contribute €261.9 million and those from its 2021 programme a further €8.1 million. Zurich also established a provisions account, with AXA XL and Allianz AGCS paying €50 million into it.
The scale of the contribution had already marked one of the largest D&O settlements in Germany, drawing comparisons with Siemens’ €100 million insurance-backed deal over bribery claims in 2009. The annulment now casts uncertainty over whether a similar structure can be resurrected.
For the D&O sector, the ruling underscores the exposure insurers face when corporate governance failures reach systemic scale. German courts have reinforced the principle that shareholder approval must rest on full disclosure, raising the risk that contested settlements may unravel years after they were brokered.
If the annulment is upheld, Volkswagen may have to renegotiate with its insurers and former executives, a process likely to extend an already protracted legal saga. For the industry, it could embolden claimants and shareholders to test the robustness of insurance-backed resolutions in other jurisdictions.
Nine years after Dieselgate began, the scandal continues to ripple across boardrooms and insurance markets alike. For carriers with continental exposure, transparency disputes are now as material to liability as the underlying misconduct.
