The Volkswagen Scandal: A Legal Viewpoint AI 110
The Volkswagen Scandal: A Legal Viewpoint From a legal perspective, the situation around the Volkswagen (VW) emissions scandal has both public and private law aspects but in this article we will deal only with the latter. František Honsa, Partner in BBH, advokátní kancelář, s.r.o., a prominent Czech law firm with an international presence talks us through the scandal and the legal implications.
Company: BBH, advokátní kancelář, s.r.o. Name: JUDr. František Honsa, Ph.D. Email: legal@bbh.cz Web: www.bbh.cz Address: Klimentská 1207/10, Prague 1, Postal Code 110 00 Telephone: +420 234 091 355
Lawyers all around the world agree that affected customers have suffered or may suffer some harm as a consequence of VW’s fraud. At the moment it is not entirely clear what such harm may consist of. This uncertainty results from the lack of relevant information about the solution of the emissions fraud and the impact of such solution on the relevant vehicles and their owners. In particular, according to Czech law, a number of claims might arise as a result of VW being guilty of emissions fraud, such as claims relating to, inter alia, compensation for time spent in car services, for the impairment of a vehicle’s performance, for increase of diesel consumption and costs of operation, for impaired price of the sale of the affected cars or for moral harm caused to environmentally conscious customers who bought a vehicle from VW thinking that it is environmentally friendlier than it actually was. A legal assessment of claims may vary according to particular circumstances of every case. We are convinced that VW’s fraud should be qualified as an act which is in contradiction with good morals and as such is an illegal act. Pursuant to Czech law, any harm caused by wilful breach of good morals should be compensated. VW must be aware that it breached emissions regulations while using the software that can recognise when a vehicle is being tested for emissions levels. In order to regain the trust of its customers, VW America has introduced the socalled Goodwill Package. Based on this package, the owners of 2.0-liter diesel vehicles are eligible to receive a USD 500 Volkswagen Prepaid Visa Loyalty Card, a USD 500 Volkswagen Dealership Card and a no-charge 24-hour Roadside Assistance for three years without prejudice to their right to seek compensation before the court in respect of any possible claims against VW connected with the fraud. Recently, VW has indicated that its European customers are not likely to be provided with a similar package. Therefore, the affected European customers may ask themselves a legitimate question: “Are European citizens to be considered as second category citizens to Americans?” No, they are not. It is hardly acceptable that such double standard treatment should be justified by the fact that, unlike the European vehicles, the American vehicles had been labelled as “Clean Diesel”. It is necessary to point out that in both cases VW abused the trust of its customers and intentionally used a “defeat device”. VW is certainly aware that the common law and continental law systems each differ in their approaches to how respective harm is compensated. The main difference manifests in a practical way, particularly
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with respect to the enforcement of compensation claims. Even if the legal concept of class action is not advanced in the Czech Republic and it might be more costly to achieve adjudication of a remedy by the court in the Czech Republic, it is without any doubt that an illegal act which causes harm should be properly compensated. We are of the opinion that VW should compensate all its world-wide customers affected by its emissions fraud equally, regardless of the concept of law and the way it is enforced. It would seem fair that VW should offer its European customers the same goodwill package as it did to its US customers. Multinational corporations, such as VW, significantly affect a large portion of the world’s social and economic affairs and their behaviour has considerable impact on the world’s economic and social environments. Such influence, therefore, bears great responsibility. These corporations should always act as an example for others and if they do not follow their responsibility, relevant instruments, such as law, which serve for ensuring that the proper compensation is granted, should be used. This scandal has impacted not only on the entire automotive industry, but also the whole industry of diesel technologies, including diesel fuels producers and distributors. It has sped up the negotiation process within the EU regarding the implementation of new real driving emissions legislation pursuant to which the road shall be added as a new environment for emission testing and certification. What is likely to ensue in the immediate future? VW has announced that the respective affected European vehicles should be subject to an authorised inspection and servicing in order to perform some minor technical adjustments, however, it still remains unclear what impact such servicing may have on the performance and diesel consumption of such vehicles. The Czech government officials said, after meeting with the remaining representatives of the Visegrád Group, that the owners of affected vehicles would probably not have the obligation to undertake such service stop as there is no law in the Czech Republic which would impose such obligation on the relevant owners. However, they also stated that they would expect VW to persuade at least 80% of the owners of affected cars to undergo such service stop. Czech government officials also said that the injured customers should obtain proper compensation from VW. Whether at least part of such compensation will be provided voluntarily, as VW did in the US, is currently unknown. It can be expected that if VW fails to adequately address the compensation of European customers, such customers may seek compensation before the courts regardless of a more costly approach of continental law to the adjudication of compensation.