EU Court Dismisses Volkswagen's Defense in Diesel Compensation Cases

Volkswagen has faced another setback in its ongoing battle against compensation claims from diesel vehicle owners, as the Court of Justice of the European Union (CJEU) ruled that the automaker cannot rely on a legal defense concerning the use of defeat devices in emissions control. This ruling comes from a case originating in Ravensburg, where two buyers of VW diesel cars sought compensation due to their vehicles being equipped with allegedly illegal defeat devices that reduced emissions control effectiveness under certain conditions.

The court stated that a manufacturer cannot evade liability simply because a type approval was granted by national authorities for a specific vehicle model or the defeat device itself. The CJEU emphasized that the existence of type approval does not automatically imply that the defeat device is lawful. Consequently, the manufacturer remains liable whether the defeat device was integrated during the vehicle's production or added later.

In terms of the compensation amount, the CJEU indicated that a recommendation from the Federal Court of Justice (BGH) regarding damage payments is generally permissible. However, it stressed that any compensation awarded must adequately reflect the damage suffered. The BGH had previously established a framework for lower courts, suggesting that compensation should range between 5% and 15% of the purchase price without necessitating detailed examinations in each individual case.

Additionally, the CJEU confirmed that it is compatible with EU law for compensation to be adjusted by the amount that represents the benefit derived from the use of the vehicle in question.

Volkswagen responded to the ruling with a measured tone, suggesting that its implications are minimal. The company noted that the impact of the ruling will depend on how the BGH implements these directives into national law, although it anticipates that the effect on Volkswagen will be limited due to the dwindling number of pending diesel cases in German courts.

This latest ruling adds to a series of decisions from the CJEU regarding the diesel scandal, which has already seen the court lower the barriers for compensation claims from affected car buyers in a previous ruling in 2023.