Description
A car manufacturer cannot rely on the existence of an EC type-approval to evade its liability for illegal manipulation devices. This was ruled by the EU Court of Justice in a recent judgment in case C-666/23.
The specific case
Two purchasers of diesel vehicles of the German manufacturer Volkswagen asked a German court for damages, claiming that their vehicles were equipped with an allegedly illegal manipulation device. This is software commonly referred to as thermal range, designed to reduce exhaust gas recirculation when the outside temperature drops below 10°C, causing nitrogen oxide emissions to increase. In one of the two vehicles, the software was already present at the time of purchase; in the other, it was installed later, during a software update.
Considering, on the one hand, the arguments presented by Volkswagen and, on the other hand, a ruling by the German Federal Court of Justice, according to which a manufacturer can invoke an unavoidable error on the unlawfulness of the system as a ground for exemption from liability, the German court hearing the case decided to refer the case to the EU Court of Justice. The reference for a preliminary ruling concerned the interpretation of Article 5 of Regulation (EC) No 715/2007 of the European Parliament and of the Council on type approval of motor vehicles with respect to emissions from light passenger and commercial vehicles (Euro 5 and Euro 6 standards) and on access to vehicle repair and maintenance information.
The right to adequate compensation
First, the Court clarified that a car manufacturer cannot escape its liability for the installation of an illegal manipulation device simply because the vehicle or system in question has been type-approved by the competent national authority.
Indeed, EC type-approval is a procedure that certifies the conformity of a vehicle, component or system with the technical requirements of European safety, environmental and performance regulations. However, this certification does not imply that the national authority has approved or confirmed the manufacturer's assessment of whether the device installed is lawful.
The Court also clarified that the manufacturer's liability applies both when the illicit device was installed at the production stage and when it was added later, for example through software updates.
Finally, the Court addressed the issue of the quantum of damages. EU law, in principle, does not prohibit the deduction of the benefit derived from the use of the vehicle from the amount of compensation payable to the purchaser, nor does it prohibit compensation from being limited to an amount equal to 15% of the purchase price. However, it is essential that the compensation be commensurate with the actual damage suffered. It is therefore up to the national court to verify whether the possible deduction of the benefit or the limitation of the amount still guarantees fair and proportionate compensation.
This is not the first time that Volkswagen has been implicated in events related to the use of emission manipulation software. Already in 2015, the German group was at the centre of the so-called Dieselgate, a scandal that revealed the presence, on millions of vehicles sold worldwide, of devices capable of falsifying pollutant emission tests. These systems allowed cars to comply with legal limits only in the test phase, while in real driving the emissions were significantly higher. The consequences were enormous: vehicle recalls, maxi-sanctions by the American and European authorities, and a series of lawsuits promoted by consumers and associations in several countries. In Italy, the class action promoted by consumers has been declared finally admissible, with Adiconsum among the promoting associations.
The Volkswagen affair and the Court of Justice's decision underline the importance of a precise European regulatory framework, which regulates both polluting emissions and manufacturers' obligations towards the after-sales market. Regulation (EC) No. 715/2007 is one of the pillars of European light-duty vehicle legislation. It has two main objectives: to set increasingly stringent limits on pollutant emissions (introducing the Euro 5 and Euro 6 standards) and to ban the use of manipulation devices that alter emission control systems.
Alongside this environmental aspect, the regulation also protects competition in the after-sales sector: Article 6 obliges manufacturers to provide, in a free, standardised and non-discriminatory manner, all the information necessary for the diagnosis, repair and maintenance of vehicles. This information includes technical manuals, wiring diagrams, fault codes, reset procedures and software updates, so that independent workshops can also operate safely and in accordance with the law.
As of 1 September 2020, a large part of the rules on access to information were brought into Regulation (EU) 2018/858, which strengthened the already existing rules. The new regulation introduced more detailed requirements on electronic formats, timeliness of data publication and controls by national authorities, as well as stronger supervisory powers by the European Commission. In this updated regulatory framework, the right to access technical information is recognised as an essential element in ensuring a transparent, competitive and consumer-friendly care market.
Source and image: European Consumer Centre Italy - ECC-Net Italy