Berlin On September 30, the prototype process starts against Volkswagen before the Higher Regional Court in Braunschweig with a public hearing. 438,000 claimants affected by the diesel scandal hope for damages for manipulated exhaust systems. The case has received worldwide attention. Because diesel vehicles are increasingly being rejected because of their higher environmental impact, the incentive for buyers to separate again is great.
"With the model claim against VW, we are committed to ensure that Volkswagen has to take responsibility for his actions and consumers do not remain sitting on the damage," said the board of the Consumer Federation Federation (vzbv), Klaus Müller. But it is debatable whether a damaged vehicle buyer on a model declaration suit comes to its best.
What is a model declaration action for?
With the model declaration action, the legislator has introduced a new type of claim. They exist since 1.1.2018. The legislature has drawn consequences from the fact that the balance of power between the company that harmed consumers and the individual consumer is unequal: the consumer has a bad chance of prevailing against the legal departments of financially strong companies.
The designation claim can bundle claims that occur with a large number of consumers and have the same cause. The then Federal Consumer Minister Katarina Barley has called the pattern-finding suit "one-for-all lawsuit". It offers the chance that consumer demands can be enforced cost-effectively and unbureaucratically.
Who sues for the consumers?
The designation claim can only be brought by consumer protection associations that meet certain conditions. In this case, the vzbv, in cooperation with the ADAC, filed the first model declaration action against VW at the Oberlandesgericht Braunschweig.
How can consumers participate?
A claiming association must register the claim, which in turn must be approved by the competent higher regional court. If that is the case, the complaint will be published in the suit register of the Federal Office of Justice. The registration is free of charge for each person concerned and has the advantage that the statute of limitations of the claims is inhibited.
The legal and attorney fees are borne by the relevant association. In the case of VW, 438,000 consumers have already joined the lawsuit. Registrations in the complaint register can be made up to the last day before the start of negotiations.
What is the lawsuit against VW?
Consumer advocates have filed a claim with the Higher Regional Court that VW is in principle liable for damages. Specifically, it is about vehicles of the brands VW, Audi, Seat and Skoda, in which diesel engines of type EA 189 were installed and which were purchased after November 1, 2008. Affected are four-cylinder vehicles, which have a displacement of 1.2 l to 2 l. Further condition: In these vehicles an illegal defeat device must have been used.
This also means that they have received a legal engine control at the behest of a European approval authority such as the Federal Motor Transport Authority. Customers wishing to complain should check that their vehicles meet the appropriate criteria. You could later have a look if their vehicles do not meet the necessary conditions.
What can claimants hope for?
The lawsuit does not have to end with a verdict, it can also come to a settlement. In the US and in Australia, VW has already agreed in this way. With a comparison, no admission of guilt is connected. In the upcoming process, it is not yet clear whether the counterparties will agree in this way or not. That should also depend on the course of the process. An important point, however: If the Higher Regional Court should make a sample verdict judgment in favor of the consumer advocates, still no money flows yet.
What does the consumer have to do then?
An assessment judgment is only a basis for the consumer to individually claim damages. After that, a second procedure is needed. Individual claims for damages are not clarified by the model approval procedure. But then the competent court is bound by the fundamental findings of the OLG Braunschweig or the Federal Court of Justice.
What is the weak point of the concept?
The lack of an individual claim is a central criticism. "No one has an enforcement title, with which he can assert a claim for damages against VW," complains the Halle law professor Caroline Meller-Hannich. "The model declaration action is not a performance claim," vzbv board member Müller confirms.
A declaratory judgment has improved the starting position of the consumer, but after that companies can still play for time and possibly delay or even prevent an agreement. Observers believe it is likely that the defeated side will call the last instance, the Federal Court of Justice.
The vzbv assumes that a company that has been convicted in a designation suit could, with regard to its public reputation, signal readiness to pay for the damages without a second claim. But that is nothing more than a hope.
Are there alternatives?
Those who have legal expenses insurance are well advised to settle the lawsuit through their lawyers. Consumer advocates acknowledge that the designation suit is more appropriate for people who have no alternative legal protection. And for people who do not want to take the financial risks of an individual claim.
What is still without legal protection?
Various law firms have offered special services that may be of interest to consumers without legal expenses insurance. Law firms such as Gansel Rechtsanwälte or Baum, Reiter & Kollegen as well as legal-tech companies like Myright or the litigation financiers and profitees advertise with a view to various judgments in the past that individual procedures can lead faster to success.
The financial risk they bear can be compensated with a profit share of 20 to 35 percent of the legal fees. If consumers choose this route, they must be removed from the complaints register of the Federal Office of Justice. Vzbv board member Müller sees in the alternative offers of law firms and litigation financiers "no competition". It does not surprise him that law firms aggressively advertise for clients shortly before the hearing. Their legitimate commercial interest, however, is obvious.
Is a quick success to be expected?
Consumers should not rely on being able to simply return their vehicle at the end of the pattern-approval process in return for a refund of the purchase price. The law firms assume that the buyer of a diesel vehicle has to deduct a compensation for use, which is measured on the kilometers driven. The longer the process drags on, the greater the compensation for use could be.
In the final analysis, the compensation for use could be higher than the claim for damages. According to this logic, the faster the procedure is terminated, the higher the financial compensation for the affected diesel driver. Conversely, there could be some evidence that VW will delay the pattern-approval process as long as possible to save money. On the other hand, it speaks in turn that every single legal dispute costs money and the costs are difficult to estimate.
How does the VW Group see the lawsuit?
VW denies having committed a breach of law and therefore rejects any liability. From the point of view of the Group, all vehicles are safe and roadworthy. You have the necessary permits and approvals. Even after the diesel problem became known, the residual values of the affected vehicles remained stable. In doing so, Volkswagen relies on valuation companies such as Schwacke and DAT. According to this, no effects on the market price of the affected diesel vehicles could be discerned until the summer of 2017.
What does VW say about the high number of plaintiffs?
VW assumes that the plaintiffs can not be scolded and therefore a comparison is difficult to imagine. After initial analyzes, every fifth plaintiff bought his diesel vehicle after 22.9.2015. VW finds this remarkable insofar as the Group admitted in an ad-hoc release on this day that there had been manipulation of diesel vehicles.
In other words, the accusation of immoral deception can hardly be reconstructed, at least since then. Naturally, consumer advocates see this differently. VW would have to prove that customers have acquired the vehicles in the knowledge of the manipulation, they argue. This proof would be hard to come by.
Can the costs be estimated for VW?
No. It is too early for that. Similar to various law firms and litigation financiers, VW assumes that courts will deduct the compensation for use from any possible damages. This is by no means certain from the point of view of consumer lawyers. Because if it is determined that VW has intentionally and immorally harmed the customer, a court could refrain from a compensation for use. That would drastically increase the cost of VW. Since the legal terrain here is uncertain, speaks for the vzbv much for a comparison.
More: Was there any manipulation in the engines of new diesel vehicles from Volkswagen? Group and authorities have a report back.
(t) Volkswagen (t) diesel (t) class actions (t) designation suit (t) emissions scandal (t) area of law (t) damages (t) product policy (t) product liability (t) consumer and consumer protection (t) Crime (t) Fraud (t) Process (t) ADAC (t) Federation of Consumer Advocates (t) financialright (t) SEAT (t) KBA (t) Audi (t) Skoda (t) Klaus Müller (t) Automotive