VW likely to face international implications over District Court case

On Tuesday, Castlebar District Court in Co Mayo will play host to the latest chapter in the multibillion-euro Volkswagen emissions scandal.

On one side is the global auto giant with revenue last year of €213 billion, which has admitted fitting more than 11 million of its cars with so-called cheat devices, designed to deceive US emissions tests.

On the other is Eithne Higgins, a nurse and mother of three from Boyle, Co Roscommon. Mrs Higgins is the owner of a 2010 Seat Leon 1.6 TDI SE – one of the estimated 110,000 Irish cars affected by the scandal.

Tuesday's hearing is believed to be the first to seek that the car firm make public the original expert opinion and technical evidence it used to develop a fix for the affected engines. It comes on the back of an interim order of discovery granted to Mrs Higgins in the Castlebar court by Judge Mary Devins on June 7th.

International ramifications

The Mayo case is likely to have international ramifications. In Germany alone, 2.8 million vehicles are part of the recall over the scandal, with 1.2 million in Britain. Globally it affected five million vehicles at VW brand, 2.1 million at Audi, 1.2 million at Skoda and 1.8 million light commercial vehicles. Seat said 700,000 of its diesel models were affected.

In June, Volkswagen agreed a $15 billion deal with US officials and an estimated 500,000 US car owners.

The deal didn't placate European owners affected, particularly after Volkswagen chief executive Mattihas Müller made clear in an interview with German newspaper Die Welt that a similar settlement this side of the Atlantic would be inappropriate and unaffordable.

Already the Higgins case has made the front page of the Wall Street Journal and an in-depth feature in Germany's business newspaper, Handelsblatt.

It has also attracted the attention of high-profile international lawyers. The solicitor representing Mrs Higgins, Evan O'Dwyer, has teamed up with US legal heavyweight Michael Hausfeld among others. Hausfeld was part of the team that negotiated the US settlement with VW. Previously he has represented Native Alaskans whose lives were affected by the 1989 Exxon Valdez oil spill.

Wrongdoing denied

Volkswagen in Ireland, represented by A&L Goodbody, has repeatedly denied any wrongdoing and said that it will look for costs against Mr O'Dwyer's client. On Thursday, the car firm unsuccessfully sought an adjournment of Tuesday's hearing to allow more time to consider the affidavits presented on behalf of Mrs Higgins.

Part of the car firm’s defence is likely to be that, in many countries, the so-called defeat devices – effectively cheat software code – did not violate local laws. It was designed to illicitly bring nitrogen oxide (NOx) emissions from the EA189 diesel engine range below US legal limits. While diesel engines commonly have high NOx emission levels, linked to respiratory illnesses and premature deaths, NOx is bizarrely not a priority in official European emissions tests. It is not even measured during the NCT.

Volkswagen AG has claimed the US payments were due to the fact the cars could not be engineered to meet the US standards without the cheat devices and therefore vehicles had to be replaced. In Europe, they claim, the cheat devices are being removed during recalls of the cars without an impact to either fuel economy or CO2 emissions. The latter is important as it is the basis for the Irish motor tax regime.

Those watching the Castlebar case will be hoping evidence in court will reveal the technical details to see if they back up VW’s public assurances on fuel economy or CO2 emissions levels. The lawyer for Mrs Higgins is also likely to argue that the scandal has impacted on her car’s resale value and even her ability to resell it.

The maximum award from a District Court is set at €15,000. However, for international observers, the real merit in the district court case will be Volkswagen’s response to the judge’s discovery order.

From Australia to South Korea to Ireland, governments and consumers are ratcheting up legal and regulatory demands against Volkswagen. What emerges may have significance to millions of motorists caught up in the scandal. It could also ultimately have a significant impact on one of the world’s biggest auto giants.