Automotive and Mobility07.09.2021 Newsletter
What's the latest on? The diesel scandal - An overview of the most recent decisions
In a summer that was dominated by bad news, the diesel scandal increasingly took a back seat in the news coverage. However, the matter did progress and “Dieselgate” decisions were pronounced. In July 2021, the Federal Court of Justice (Bundesgerichtshof - BGH) pronounced a series of decisions that further advance the legal processing of the matter - at least as far as the affected buyers are concerned.
It all began with two landmark decisions of the competent VI and VIII Civil Senates: firstly, that VW had intentionally harmed its customers in an unethical manner by putting vehicles with diesel engines containing a so-called defeat device onto the market (judgement of 25 May 2020 - docket No. I ZR 252/19). This contained control software that detected whether the vehicle was on a test bench or in normal road traffic. Accordingly, the engine emitted less nitrogen oxide on the test bench than on the road. The second ruling was that the vehicles equipped with impermissible defeat devices were defective and that legal warranty claims therefore existed (indicative court order of 8 January 2019 - docket No. I ZR 225/17).
Affected customers were thus awarded a damage claim in the amount of the purchase price paid minus the compensation for the use of the vehicle - in return for surrendering the vehicle. Alternatively, in cases where this was still even possible, affected customers could demand delivery of a vehicle without the "defect" of the defeat device.
The civil court processing of the diesel scandal is by no means concluded, however, as there were and are of course a wide variety of different cases. Their particularities are now being considered successively by the judges of the BGH.
In order to be able to cope with the flood of litigation, the BGH temporarily set up a so-called "relief panel of judges" on 21 July 2021. This VIa Civil Senate is responsible for all new "diesel cases" received by the BGH as of 1 August 2021. The prognosis: it's far from over.
Compensation for damages after reselling an affected vehicle
By judgement dated 20 July 2021 (docket No. VI ZR 575/20), the VI Civil Senate ruled that the resale of the vehicle with a defeat device fundamentally does not render the damage claim invalid. Since the persons affected are only entitled to damages upon the surrender and transfer of ownership of the vehicle, the proceeds of the sale received for the vehicle to be returned then take the place of the vehicle to be returned. In other words, the damaged car owner ultimately receives the difference between the purchase price he paid at the time of acquisition and the proceeds he received on the resale - minus the compensation for use.
Deduction of a “bonus for switching”
If, on the other hand, the claimant has given the VW vehicle with a defeat device in payment for the vehicle of another manufacturer and has additionally received a “bonus for switching”, this is not to be deducted from the damage claim in VW’s favour. In contrast to the Aurich Regional Court, which dealt with the case at first instance, the VI Civil Senate ruled on 20 July 2021 (docket No. VI ZR 533/20) that the bonus for switching was paid on the basis of the claimant's decision to switch from one car or car brand to another and therefore had nothing to do with the value of the VW vehicle given in payment. VW was therefore not entitled to it.
Replacement delivery of a successor model
On 21 July 2021, the VIII Civil Senate decided in four similar cases (docket No. VIII ZR 254/20, VIII ZR 118/20, VIII ZR 275/19 and VIII ZR 357/20) that consumers who have purchased a new vehicle with an impermissible defeat device can, within the scope of their statutory warranty rights, also demand the replacement delivery of a successor model that has been manufactured in the meantime. However, this only applies if the consumers in question assert this claim within the statutory warranty period, i.e. within two years of concluding the contract.
The background to this decision was that dealers were increasingly refusing to comply with buyers’ demands for a replacement vehicle without a defeat device, pointing out that the model supplied was no longer available as a new vehicle, and instead only offering a software update.
Although the buyers suing in these proceedings were unsuccessful, as it was not until some seven or eight years later that they asserted their claim against the sellers for a replacement delivery - this was not due to the fact that the vehicles originally purchased by them could no longer be procured brand-new as the model had been replaced. The BGH clearly stated that a replacement delivery is not impossible and thus excluded if a successor model (facelift, model maintenance measure, new series/generation) has come onto the market in the meantime instead of the originally purchased vehicle model. However, this does not apply without restriction, as it would otherwise be unilaterally to the detriment of the economic interests of the sellers. The BGH has therefore found a solution that is in line with the interests of both parties: a procurement obligation that includes subsequent models is limited from the outset to the period within which the occurrence of a warranty case and a corresponding request for a replacement delivery can be expected.
Claim to compensation of the "reduced value" (minor damages)
The damage claim of the buyer of a VW car with a defeat device can also be aimed at receiving compensation for the "reduced value" of the vehicle. By judgement dated 06 July 2021 (docket No. VI ZR 40/20), the VI Civil Senate decided that it was also possible for buyers to keep the vehicle with the defeat device and to demand compensation from VW in the amount by which they had bought the vehicle at too high a price (so-called “minor damages"). According to the BGH, a comparison of the values of the performance (vehicle) and counter-performance (purchase price) at the time of concluding the contract is decisive for assessing the amount of the minor damages.
However, it constitutes a special case if a software update has been installed in the vehicle in question, which served to eliminate the inadmissible test bench detection software. It therefore still remains to be clarified in subsequent proceedings on the amount of the claim whether and to what extent there was a difference between the objective value of the vehicle and the purchase price at the time of purchase, and whether and to what extent this difference in value has been reduced by the software update. The damage assessed in this way ("reduced value") then accounts for the disadvantages associated with the defeat device or the software update (as a possible advantage).
The automotive and mobility sector group at Oppenhoff advises clients on topics such as e-mobility, autonomous driving, shared mobility and connectivity. Its clients include leading OEMs and component suppliers in Germany and abroad.
Dr. Fee Mäder
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