Dieselgate: Who’s holding Volkswagen to account in the UK?

Three years after it came to light that Volkswagen was cheating emissions tests to make its cars appear more environmentally friendly, thousands of UK vehicle owners are taking action through the courts. Sue Phillips asks whether civil litigation is the way forward, or if government should hold polluting corporations to account.

Dieselgate Volkswagen emissions
Dieselgate Volkswagen emissions
Sue Phillips

It’s been three years since car manufacturer Volkswagen admitted manipulating tests designed to ensure that toxic diesel emissions meet statutory limits. The company installed ‘defeat devices’ – software algorithms – in 11 million vehicles sold worldwide between mid-2007 and 2015.

The defeat devices reduce polluting NOx emissions but – crucially – only under test conditions, resulting in a significant difference between reported data and real-world performance. Because the device adversely affects overall performance, the software switches itself off as cars roll off the testing line.

UK drivers certainly have cause for concern. Over 1.2 million Volkswagen vehicles fitted with defeat devices were sold in England and Wales.

To date the UK Government hasn’t opened an investigation into the emissions scandal, nor imposed sanctions on the Volkswagen Group. It’s an approach very different from that in the US, where Volkswagen was convicted for conspiracy, obstruction of justice and importing merchandise with false statements, and entered into a settlement with owners to the value of some $15 billion.

As a consequence, Gareth Pope, Head of Group Litigation at law firm Slater & Gordon, believes that “UK consumers may feel they are unable to rely on the government to hold large corporations to account”.

But owners of affected vehicles are taking matters into their own hands. Thousands are signing up to sue Volkswagen in the civil courts. Slater & Gordon (which is co-leading the action) estimates the final tally could amount to around 150,000 claimants.

‘Three years on, it's shameful that the UK Government has let Volkswagen walk away scot-free, leaving drivers to fend for themselves in seeking justice’

Some claimants will be worried about potential devaluation of their vehicles. Others will be more motivated to join by the fact that their trust in Volkswagen has been betrayed. “Many of our clients told us that the environmental credentials of their car were an important factor in deciding to purchase it,” Pope says.

Thumbnail

Slater & Gordon has encouraged people to join the Volkswagen NOx emissions group litigation as a way of protecting the environment by challenging false claims about eco performance. Civil action, according to the law firm, offers a mechanism for car owners to ‘take a stand’; to demonstrate that deceitful corporate behaviour is not acceptable to customers.

Rosie Rogers, Head of Greenpeace UK's Clean Air Campaign, agrees that Volkswagen should be held accountable: "Three years on, it's shameful that the UK Government has let Volkswagen walk away scot-free, leaving drivers to fend for themselves in seeking justice. Billions of dollars were given out in the US as compensation but not a penny here, which is why this case is so important. It's high time Volkswagen was held to account for cheating emissions tests, misleading customers and exacerbating the major air pollution health crisis we found ourselves in."

Not all owners of affected vehicles will benefit from the case. Due to the opt-in rather than opt-out nature of class action legislation in the UK, owners of affected vehicles who missed the 26 October 2018 deadline will derive no financial benefit, whatever the eventual outcome in the courts.

However, Dieselgate has more wide-ranging consequences than the devaluation potentially suffered by individual car owners, or hits to Volkswagen’s balance sheet, or wobbles in share value – though it’s much harder to assign value to so-called externalities: the environmental and public health impacts.

‘We need a new Clean Air Act to protect people from harmful emissions and ensure that pollution is controlled’

Civil litigation focuses on past events and on individuals; it’s all about specific persons being compensated for something that’s already happened. By its very nature civil litigation cannot directly benefit the wider public interest through challenging current or future toxic emission overload. Citizens are better protected through the devising and enforcement of robust regulations at both national and international level.

Transport policy veteran, Stephen Joseph OBE, extends a cautious welcome to the group litigation, emphasising: “Volkswagen and other car makers who have used defeat devices need to be held to account, but this needs to be done by the government and the European Union, not just by consumers.

“Proper real world emissions tests, backed by independent scrutiny and enforcement, are needed. More broadly, we need a new Clean Air Act to protect people from harmful emissions and ensure that pollution is controlled.”

Volkswagen CEO Herbert Diess is reported in Automotive News Europe this week as saying: "The situation in America was, by far, the most critical one worldwide. And it has to do with the emission regulation here in the United States, which is much tougher than in the rest of the world.”

In fact, NOx levels are so high in some parts of the UK that the European Commission recently referred the government to the EU Court of Justice for their prolonged failure to keep pollution within legal limits.

It seems preferable that Volkswagen is held to account in the UK by consumers than not at all. The Volkswagen NOx emissions group litigation provides a means for owners of affected vehicles to collectively exercise agency in a way that simply wouldn’t be possible on an individual basis. Ultimately, however, it should surely be down to the UK Government to hold polluting industries to account.

Sue Phillips is a finance professional (ACCA) and freelance writer. Her clients include Green Party MEPs Jean Lambert and Keith Taylor.

Twitter: @wscfSue Blog: www.wherestuffcomesfrom.org

Recommended