Automotive Emissions Crisis - Product Liability

Author:Mr Neil Beresford and Helen Bourne
Profession:Clyde & Co

In Australia consumers might choose to commence actions either separately or by way of class actions arising from a common cause. Claims will be based upon common law, the Federal Australian Competition Law and State and Territory Sale of Goods legislation. Class actions have become more prevalent in recent years owing to the public listing of plaintiff firms and the prolific growth of largely unregulated litigation funders.

Individuals may seek compensation for loss of use or loss of value of the vehicle. Financiers may seek compensation from dealers if the value of the vehicle is affected. Dealerships may seek compensation in response to claims by individuals or financiers. Exemplary damages are also available in various jurisdictions.

In Canada motions for certification of class actions by owners and lessees of affected VW models have already been served and filed in many jurisdictions (Quebec, Ontario, Saskatchewan, and counting). Most class representatives/petitioners seek national representative status against VW and have not yet targeted VW dealers. Canada does not have Multi-District Litigation (MDL), and the consolidation of class actions depends largely on the ability of the plaintiffs' lawyers to agree on which firm will take the lead in each jurisdiction. All class actions should eventually be consolidated into a single national class action run out of Ontario with possible outliers in Quebec and/or BC.

The plaintiffs are likely to raise allegations of fault including fraud by concealment, negligence, negligent misrepresentation, and breach of express or implied warranty.

The damages sought will likely encompass the alleged diminished value of the targeted cars and/or a partial price reimbursement based on the assertion that owners and lessees would not have paid so high a price had they known the actual emission figures. The awards sought in the initial actions are between $5,000 and $10,000 per owner/lessee. Punitive damages of up to $20M are also being claimed, as most consumer protection acts open the door to punitive awards.

In France several complaints have been filed by environmental protection associations, individual car owners and shareholders against VW. In addition we expect that one of the licensed consumer associations may bring a consumer class action.

In Hong Kong manufacturers may face civil claims from consumers under the Trade Descriptions Ordinance, by which it is a criminal offence to supply goods with a false trade description, false or misleading information in the course of trade or business.

In India there is no specific statute governing product liability claims and the term product liability is not specifically defined. The underlying principle is that the manufacturers should not sell a vehicle that suffers from any major defect (of design, manufacture or marketing), and...

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