The High Court has today handed down judgment in the VW NOx Emissions Group Litigation – the class action arising out of what is often described as the ‘emissions scandal’. Following a two-week trial of two preliminary issues, Mr Justice Waksman has found that the controversial engine software function amounts to a ‘defeat device’ for the purpose of EU law, and that previous findings of the relevant German authorities were binding on the High Court in that respect.
The proceedings arise out of the ‘emissions scandal’, which broke in the US in September 2015. The allegations giving rise to it concern a disputed software function, which is said to enable the affected vehicles’ engines effectively to recognise when they are being tested for compliance, including in respect of emissions.
The underlying proceedings are brought by disaffected vehicle-owners against the manufacturers of their cars. By their claims, they allege various causes of action, including fraudulent misrepresentation in respect of the sale of the affected vehicles. A number of those causes of action proceed on the basis that the disputed software amounts to a “defeat device” for the purpose of the vehicle type-approval regime under EU legislation.
The High Court was asked to determine two preliminary issues:
1. Whether it was bound by earlier findings made against the manufacturers that the vehicles contained ‘defeat device’ software and, if so, whether the Defendants’ collateral attack on those findings amounted to an abuse of process; and
2. Whether a vehicle will contain a defeat device, where its engine control unit is capable of identifying the emissions test and responds by operating in a different mode to alter the rate of exhaust gas recirculation to reduce the emission of nitrogen oxides (or ‘NOx’).
Addressing those issues in reverse order, Mr Justice Waksman found that the disputed software did amount to a defeat device for the purpose of the relevant EU legislation. In doing so, he rejected the Defendants’ arguments, amongst others, (1) that the defeat device definition required a comparison between the emissions produced in the real world, with and without the relevant software (i.e. a ‘real world v real world’ comparison, as opposed to a comparison with test results) and (2) that emissions testing was concerned with the overall reduction of emissions, as opposed to the reduction of any single pollutant (thereby rejecting the alleged requirement for a ‘holistic’ comparison).
Mr Justice Waksman also largely resolved the first preliminary issue in the Claimants’ favour. The judge did not consider himself bound by earlier correspondence with the UK-type approval authority (the VCA). But existing findings of its German counterpart, the KBA, as to the existence of a defeat device were found to be binding as a matter of EU law. The Defendants’ challenge was therefore held to amount to a collateral attack on the decision of a competent authority, and therefore an abuse of process.
Thomas de la Mare QC and Ben Jaffey QC acted for the Claimants; Brian Kennelly QC, Celia Rooney and Warren Fitt acted for the Defendants.
The full judgment is available here.
The High Court’s summary is available here.