VW Dieselgate -

A perspective from the UK

AIDA – Paris, 2 December 2015

Stephen Turner, DAC Beachcroft LLP

VW emissions – claims activity in the UK

Some key points:

(1) Who may claim? customers, dealers

(2) How will UK courts deal with mass consumer claims?

(3) Claimant lawyers advertising…

VW emissions – claims activity in the UK

UK consumer claims - overview

Claimant lawyers advertising – VW “have stayed silent on the issue of the resale value of the cars and how it will affect

the performance of the car… We have already received detailed information from a number of members confirming that before this scandal broke they were in dispute over the mpg performance of their vehicles with VW. This is, we believe a potentially wider issue of miss-selling and something that may still be linked to their manipulation of vehicle emissions…we propose to act for you under a Conditional Fee Agreement (CFA) commonly known as “no win, no fee”. We will send you full details of our terms of business, but essentially the agreement will not require you to pay any money upfront and there will be nothing to pay if the case is lost, but we will seek a contribution from your damages if the case is successful.”

Emissions data – part of sales contract?

Vehicle excise duty? MOT emissions test? Resale value?

UK consumer claims – class actions?

No “class action” as such

Group Litigation Order (GLO) in England and Wales Civil Procedure Rules Part 19.10 - "common or related issues“ Court has discretion Claimants must opt in

New Collective Redress reforms under Consumer Rights Act 2015 Opt-out claim by representative Claimant in Competition Appeal

Tribunal

Unlike US, no direct equivalent to US punitive damages – Claimants must prove loss

Costs – still “loser pays”

UK Regulatory position

No full recall in UK – fix programme

Driver & Vehicle Standards Agency (DVSA) – UK automotive regulator -

“Our priority is to protect the public. We have clear processes for dealing with vehicle recalls. DVSA will regularly review the steps VW has taken to contact owners, and how many affected vehicles have been corrected.”

UK Government position

VW appeared before the House of Commons Select Committee

Secretary of State for Transport: VW have committed to cover any shortfall in VED Possible bases for prosecution being considered

Falsely obtaining type approval? Competition and Markets Authority/Trading Standards) –

prohibited commercial practices under the Consumer Protection from Unfair Trading Regulations 2008, e.g. unfair commercial practices and misleading actions and omissions

Fraud Act 2006 - knowingly makes a false representation or knowingly fails to disclose information that he is under a duty to disclose with the intention of making a gain or causing a loss

Expects remedial action to be completed by 2016

VW Dieselgate UK claims – insurance implications

English law: product liability polices typically triggered by

liability for injury or property damage

Financial loss?

Repair/replacement exclusion

Product Recall cover – risk of harm required

Product guarantee cover – effect on functionality required

Issues of fortuity, reasonable precautions…