Automakers owe compensation for diesel emissions cheating devices, German court rules
By Sourced Externally
June 27, 2023
Automakers must pay compensation for diesel vehicles fitted with illegal emissions controlling devices, Germany’s highest federal court ruled on Monday, in a case that could potentially cost Volkswagen Group, Mercedes-Benz and others millions of euros.
Companies could owe owners between 5 percent and 15 percent of the purchase price of their vehicle, the court ruled, in a case against VW, its Audi brand and Mercedes-Benz that has implications for similar lawsuits.
The judge overturned previous dismissals by courts of such claims and referred them back to courts of appeal. It was up to automakers to prove that their so-called defeat devices were functional and not illegal, she said.
VW said it expects German courts to reject any compensation claims from car owners because they are not illegal, a spokesperson said.
Defeat devices are mechanisms or software that can change vehicle emissions levels, leading to numerous court disputes over whether manufacturers use them improperly to mask the true pollution levels of their vehicles.
Automakers argue the devices, which are only switched on at certain temperatures, are needed to protect the engine and are in line with the law.
But European courts are increasingly backing car owners and environmental groups calling for recalls and compensation on vehicles with such devices, a high-cost hangover from the industry’s 2015 diesel scandal – which centered on VW – at a time when it is under pressure to focus on the transition to electric vehicles.
Monday’s decision was a change from the court’s previous position that automakers could only be charged if they had intentionally installed an illegal device, after the European Court of Justice decided owners were owed compensation even in cases where the damage to plaintiffs was caused by negligence.