VW, Mercedes suffer blow in German legal fight over diesel

Volkswagen and Mercedes suffered another blow in the long-running litigation over customers’ right to payouts when their diesel cars were equipped with rule-breaking software to sidestep anti-pollution systems.

In a key ruling judges at Germany’s highest civil court decided they would allow more drivers to collect compensation and said carmakers can now escape liability only if they can prove there was no way to know the software they used was illegal.

The judges sent the individual cases back to the trial courts to have them determine if and how much compensation can be sought under these guidelines. In cases of negligence, car owners can’t return the vehicle and get the full price back, they ruled. Instead, they can get 5 per cent to 15 per cent of the car price minus the monetary advantages they had, like using the car over the period.

The Federal Court of Justice in Karlsruhe was reacting to a March ruling by the European Union’s top tribunal that said the block’s emission rules also protect individual car owners, not just the public interest, and that national law must allow them adequate redress.

The outlook for interest rate cuts is changing - so should Irish borrowers be worried?

---

Extend EV grant to second-hand purchases, says PwC

---

Card data suggests it’s not all doom and gloom in the hospitality sector

---

Latest euro zone inflation figures suggest ECB will move slowly on rates

---

Before that, Germany generally didn’t grant compensation unless the carmaker acted intentionally, which is usually hard to prove.

“The owner of a car equipped with a defeat device suffers losses because of the risk that using it may be banned,” the top court said in a statement after the ruling. “In favour of the purchaser, it must be assumed that the owner wouldn’t have bought it at full price.”

Mercedes said the trial courts still need to determine whether the specific software used qualifies as a defeat device. Until another landmark EU court ruling from July 2022, authorities always approved the technology, so there was no way that Mercedes could have known it acted illicitly, the company said.

VW said it would win the retrials. In a case involving a VW-brand vehicle, the national transport regulator found the software was legitimate and VW could rely on these findings. In a suit concerning an Audi model, the driver purchased the car after the defeat device had been disclosed, so customers were adequately informed, VW said.

The diesel-rigging scandal was exposed in 2015, yet its repercussions continue to haunt the German car industry. Volkswagen and Mercedes are still entangled in hundreds of suits by drivers seeking compensation. Monday’s ruling could see even more drivers start an action as it now lowers the bar for collecting money related to cars produced after the scandal broke.

The scandal has been seen as a contributing factor to the jump in popularity of electric vehicles in recent years.

Irish car buyers increasingly opted for electric vehicles this year, according to the Central Statistics Office, with the battery-powered cars now accounting for 16 per cent of new vehicles registered in the State in March.

That compared to 13 per cent in March 2022, and continues trends seen in recent months. A further 2,180 hybrid vehicles were registered last month, along with 1,336 plug in hybrids. – Bloomberg