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Decision on VW settlement expected soon

dpadpa 18/10/2016

A US federal judge says he's "strongly inclined" to approve a massive buyback and compensation offer from Volkswagen for owners of polluting diesel vehicles.

A US judge says he is "strongly inclined" to approve a multibillion-dollar settlement over Volkwagen's emissions test scandal, but he says it could take up to another seven days before his definite order.

A decision on the $US14.7 billion ($A19.2 billion) settlement affects hundreds of thousands of owners of diesel cars sold by Volkswagen and its subsidiaries in the US.

Judge Charles Breyer, who gave preliminary approval to the settlement in July, praised it on Tuesday during a three-hour hearing in US District Court in San Francisco but said he wanted to examine it one more time before he rules definitively.

Robert Giuffra, a lawyer for Volkswagen, said during the hearing that owners of the cars have overwhelmingly accepted a settlement offered by the German auto maker.

More than 339,000 owners of VW diesel cars with 2.0-litre engines had already registered to accept the compensation offered by the company, Giuffra said.

The number of owners who have rejected the terms of the settlement was less than one per cent.

The settlement has been offered to US customers who bought about 475,000 Volkswagen diesel cars equipped with 2.0-litre engines.

Owners have until 2018 to make a decision on whether to accept the offer.

Breyer said in July the deal was fair and reasonable after hearing US authorities, plaintiffs and Volkswagen make their cases.

Settlements with US prosecutors and dealers came later, increasing the overall amount of the settlement from $US14.7 billion to $US16.5 billion.

The existence of the software was revealed in 2015 when US regulators fined Volkswagen after it found that software installed in the cars evaded US emissions testing.

Under the settlement the German auto maker would spend up to $US10 billion buying back or repairing the 2.0-litre diesel cars, which include cars made by Volkswagen subsidiary Audi.

VW has also agreed to compensate owners between $US5100 and $US10,000 each.

The maker will also spend $US2.7 billion to support environmental projects, with an additional $US2 billion earmarked for research on reducing emissions.

The agreement would bring to an end hundreds of civil lawsuits filed against Volkswagen by US consumers, who can choose to accept the offer or opt out and pursue litigation on their own.

While it appears the final approval of the settlement will be a formality, the case is far from over.

Volkswagen and regulators still have to come up with a solution for 85,000 cars with 3.0-litre engines, which allegedly also have illegal software to cheat on emissions tests.

Individual US states also are suing Volkswagen over the affair.

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