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Feann Torr8 Sept 2017
NEWS

Volkswagen Australia to fight 'dieselgate'

First blood drawn in class action against VW Australia, but importer says its business as usual

An Australian Federal Court judge has ordered Volkswagen, Audi and Skoda to provide clarity on the effects their respective voluntary ‘dieselgate’ recall fixes will have on customer vehicles.

Justice Lindsay Foster, who is presiding over the legal action, said the companies would be required to outline changes to vehicle performance on their respective websites, social media (including Facebook pages) and in newspapers over the coming weeks.

Law firm Maurice Blackburn, which is representing thousands of affected Volkswagen Group vehicle owners in Australia in a class action over claims the car maker used a “defeat device” to cheat emissions regulations, says the judge's ruling is an important first step.

"These notices will help ensure that affected motorists are better informed about the issues being decided by the Court through our class actions arising out of the diesel emissions scandal, including the controversies surrounding the voluntary recall," said Jason Geisker, a Maurice Blackburn lawyer.

The ACCC has also introduced legal proceedings in the Federal Court against Audi and parent company Volkswagen AG.

The issue, according to the Maurice Blackburn firm, is that Volkswagen falsely claimed "the Department of Infrastructure and Regional Development (DIRD) had said the voluntary recall work would have no impact on performance, fuel economy or service intervals of affected vehicles".

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In Australia, about 90,000 Volkswagen, Audi and Skoda vehicles are understood to have been affected by the scandal, of which Maurice Blackburn says it is representing "thousands" of owners in the class action.

Volkswagen Australia says the class action is baseless.

Paul Pottinger, Volkswagen Australia’s general manager of corporate communications, told motoring.com.au "We don't think there's any basis for it [class action]".

The reason, he says, is because harmful NOx (nitrogen oxide) emissions regulations are different in Australia than in the USA, where the scandal has arguably proved most damaging to Volkswagen.

"Publicly we've pointed out that the [NOx] regulations are unique in the US. We're an EU [emissions] country as are more than 70 other countries in the world. But the US regulations are different."

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The company has previously stated it will not compensate Australian owners, which has spurred on the class action here.

Asked what Volkswagen would say to Aussie owners who have bought cars that are not functioning as advertised, Pottinger said the court case precluded him from elaborating.

"It's before the courts. At this point I think the most practical benefit is to have the update [voluntary fix] done, hundreds of people are doing it per week, the cars are safe to drive, it's not a safety issue," he said.

"The publication of an opt out notice gives group members an opportunity to decide whether they wish to participate in the class actions. Volkswagen Group Australia has from the beginning consistently said that the class actions are unnecessary, given the availability of a free software update pursuant to its voluntary recall," said Pottinger.

Of the roughly 90,000 vehicles affected by the dieselgate scandal in Australia, about 35,000 have already been voluntarily handed over by owners and "fixed", according to Pottinger. Globally, 5.7 million of the 11 million vehicles affected have been rectified to date.

Pottinger refused to be drawn over whether the admission that a "fix" was required for vehicles in Australia was an admission that there is an issue.

"That will be thrashed out in courts," he stated.

What is dieselgate?

The dieselgate scandal broke in September 2015, when the Volkswagen Group – which owns VW, Audi, Skoda, Porsche, Bugatti, Bentley, Lamborghini – was found to have used a cheat device inside its engines to beat laboratory emissions tests.

Globally, around 11 million vehicles are affected, which output up to 40 times the NOx (nitrogen oxides) allowed by US law. NOx are harmful to humans. The scandal has already claimed the heads of several executives in Germany and recently led to a jail sentence for one engineer.

The Volkswagen Group has been fined by several countries and has been forced to pay around $14 billion in compensation in the USA alone, after it was fined and forced to buy back around half a million vehicles. US prosecutors have stated that investigations will continue.

Audi customers livid over car maker's "contempt"

The Volkswagen, Skoda and Audi brands have been relatively silent on the scandal, but the court cases will provoke responses in due course.

The class action from VW owners and legal proceedings introduced by the ACCC, also being held in the Federal Court, will be closely watched by other car makers here, such as Mitsubishi and even Mercedes-Benz.

Robyn Richardson, one of the plaintiffs involved in the Volkswagen dieselgate case in Australia, said the Federal Court judge's actions were promising.

"This type of corporate misconduct has been executed on a massive scale and the continuing contempt that has been shown towards resolving this fairly with Australian motorists is nothing short of repugnant from one of the world's largest companies.

"Anyone who has been sold a dud on a false promise by this company should be interested in holding them to account by being a part of this action," said Richardson.

The Federal Court ruling will force VW Group brands to clarify the following in the public domain, via websites and social media:

  • Changes fuel injection settings, the number, timing and fuel quantity of injections used
  • Increases the production of particulate matter (soot), which likely will lead to more frequent regeneration of the diesel particulate filter
  • Increase the fuel injection pressure;
  • Increase the extent of exhaust gas recirculation into the engine; and
  • In the case of Audi Q5 vehicles equipped with an SCR system, change its operation resulting in the use of a larger amount of AdBlue.

The Federal Court ruling will also force VW Group brands to clarify how the voluntary fix affects customers' rights.

  • Having the recall work done is not compulsory. Your consent is required before any recall work is done. Contrary to what we know some VW customers have been told, people are still entitled to access servicing, repairs or spare parts for their vehicle whether or not they’ve chosen to have the recall work done.
  • In addition, there is no impact on existing warranties for those that have decided not to have the recall work performed on their vehicles and not getting the recall work is not a waiver of any of your rights in our class action or otherwise.

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