First Dieselgate ruling by Germany’s top court set to flag legal clarity

The car company had argued that no damage had been caused to the customer by installing the exhaust software, as the vehicle could be used at any time and the software's installation had not caused any loss of value or other defects. EPA-EFE/ULI DECK / POOL [EPA-EFE/ULI DECK / POOL]

Germany’s Federal High Court (BGH) will announce later on Monday (25 May) its first ruling in the Dieselgate emissions scandal, which is set to guide other courts and have a major impact on the entire auto industry. EURACTIV Germany reports.

The Karlsruhe court will rule on the case of Herbert Gilbert, the owner of a VW Sharan, who sued the car manufacturer for damages linked to wilful deceit and demanded the vehicle’s purchase price be refunded in full.

Following the court’s factual assessment in an oral hearing on 5 May, it seems highly likely that the judges will largely uphold his claim.

“The court followed our legal opinion in its assessments on 5 May,” said Gilbert’s legal representative, Claus Goldenstein, owner of law firm Goldenstein & Partner.

“Since the judge has already carried out his assessments very firmly, we do not expect there to be any surprises on Monday,” Goldenstein told EURACTIV Germany in an interview.

VW set for Dieselgate legal showdown

Germany’s main court for civil and criminal matters will hear a diesel emissions scandal case for the first time next week. The ruling is expected the same day and it could impact proceedings across Europe. EURACTIV Germany reports.

Judge doubts VW’s argument

On 5 May, presiding judge Stephan Seiters expressed clear doubts about VW’s case, which argued that no damage had been caused to the customer by installing the exhaust software, as the vehicle could be used at any time and the software’s installation had not caused any loss of value or other defects.

Before the proceedings had even begun, VW was confident that the BGH would follow this argumentation but this hope was dashed by the presiding judge in early May.

In a preliminary assessment, he stated that the plaintiff had been “harmed by the purchase of a manipulated diesel vehicle […]” and did not share VW’s argument that the usability of the vehicle had always been guaranteed.

However, Seiters supported the line of reasoning of the Koblenz Higher Regional Court, which had previously had the case on its docket. The regional court held that VW did not have to refund the full purchase price to the client, but that the kilometres driven had to be credited against any compensation payment.

In concrete terms, this means that a so-called compensation for use must be deducted from the purchase price, which can be calculated individually using a specific formula. Essentially, the more kilometres the car was driven, the lower the compensation.

The Federation of German Consumer Organisations welcomed the BGH’s previous assessments as “quite pleasing” but described the deduction of compensation for use as a “drop of bitterness”.

German Dieselgate victims earn VW pay-out

Volkswagen is set to pay €830 million in compensation to Germans that bought a car fitted with emissions test-duping technology. A top consumer protection group said the offer is “not generous” though and is a fraction of what US drivers were awarded.

Car companies threatened by new wave of lawsuits

Dieselgate could flare up once again as the court’s pending decision could provide clarity with regards to the legal situation of car owners. Currently, there are about 60,000 pending proceedings in Germany.

“The ruling makes it clear what all other courts have to take into account in these proceedings,” said Goldenstein, whose law firm handles more than 20,000 such cases.

But a VW spokesperson said that the car firm does not expect many new lawsuits as a result of the judgement, pointing to a high acceptance rate for settlement deals and the statute of limitations.

According to Goldenstein, the scandal is nevertheless unlikely to end with the ruling today, citing a “wave of lawsuits that could hit VW”, as affected car owners who had not previously taken legal action could be encouraged to do so because of the soon-to-be-established precedence.

VW is likely though to attempt to reach an agreement with the plaintiffs of similar cases in ongoing proceedings to make a settlement payment.

The decision of Germany’s highest court will also have consequences for other German automotive groups.

In this context, Goldenstein speaks of a “signal effect”, because “almost all car manufacturers have integrated illegal switch-off devices in their diesel vehicles”, the lawyer said.

A consumer-friendly ruling by the BGH would also serve as guidelines for proceedings against VW in other European countries since all actions are initially brought before the Braunschweig Regional and Higher Regional Court.

“The ruling will be a starting signal for all Europeans to sue VW in Germany,” emphasised Goldenstein, whose law firm represents clients from several European countries. However, he added that it would have to be examined in each individual case whether plaintiff claims had already become statute-barred.

US says VW also violated emission rules in larger engines

The Volkswagen emissions-cheating scandal widened Monday (2 November) as US regulators said the German automaker also included illegal “defeat devices” on its larger 3.0 liter diesel engines over the past three years.

[Edited by Sam Morgan]

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