Volkswagen AG and Mercedes-Benz Group AG suffered another blow in the long-running litigation over what customers can claim if diesel cars were equipped with rule-breaking software to override anti-pollution systems.
(Bloomberg) — Volkswagen AG and Mercedes-Benz Group AG suffered another blow in the long-running litigation over what customers can claim if diesel cars were equipped with rule-breaking software to override anti-pollution systems.
The Federal Court of Justice, Germany’s highest court in matters of civil law, on Monday issued a key ruling saying it will allow more drivers to collect compensation. Carmakers can now escape liability only if they can prove there was no way to know the software they used was illegal.
The top 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% to 15 % of the car price minus the monetary advantages they had, like using the car over the period.
The judges are reacting to a March ruling by the Europeans 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.
Before that, Germany as a rule didn’t grant compensation unless the carmaker acted intentionally which is usually difficult 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 favor 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 didn’t respond to an email seeking comment.
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 cases are: BGH, VIa ZR 335/21 et al.
(Updates with ruling details throughout)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.