Purchasers of manipulated Volkswagen vehicles can take the German car manufacturer to court in the State where they purchased those vehicles, Advocate General Campos Sánchez-Bordona said in a Opinion delivered on Thursday 2 April (Case C-343/19).
The Dieselgate scandal, which erupted in September 2015, revealed that Volkswagen vehicles contained software that masked their actual exhaust emission values during testing, in violation of the Regulation (715/2007) on the type-approval of motor vehicles.
In September 2018, the Austrian consumer organisation VKI took legal action at the Klagenfurt Regional Court on behalf of 514 buyers who had purchased their Volkswagen vehicles in Austria before September 2015 from professionals or private individuals. It claims compensation for the damage suffered (the difference between the price of a manipulated vehicle and that actually paid) and that Volkswagen be held liable for other damage to be quantified (such as a greater reduction in the market value of the vehicles concerned or a driving ban).
The Austrian court asks the Court to clarify its case law on the Regulation on jurisdiction.
In accordance with the Regulation on jurisdiction, the plaintiff must bring an action before the courts of the State where the defendant is domiciled. Nevertheless, in disputes relating to tort, the plaintiff may bring an action before the court of the place where the harmful event occurred.
The determination of the forum must respect the principles of predictability of the rules for the parties and proximity. There must be a particularly close link between the competent court and the dispute in order to ensure legal certainty and to avoid a person being sued before a court of a Member State which he could not reasonably foresee.
Where the unlawful conduct and its consequences take place in different Member States, the plaintiff may choose the jurisdiction of the place where the damage materialised or that of the event giving rise to the damage. The two locations may indeed have a significant connection with the dispute.
In the present case, the Advocate General considers that the event giving rise to the damage consists in the installation of the manipulating software during the manufacture of the vehicle. The place where the event causing the damage occurred is therefore Germany, the country of manufacture of the manipulated vehicles. Consequently, Volkswagen could in principle be sued in German courts.
However, since the claim arises from a wrongful act in tort, it is also possible that the company may be sued in the courts of the place where the damage materialised. In order to specify this place, the case law requires that only the initial damage and not the consequential damage or the damage suffered by the direct victim should be taken into account.
According to Mr Campos Sánchez-Bordona, in the present case, the difference between the price paid and the value of the manipulated vehicle generates a financial disadvantage at the time of acquisition of the vehicle, a disadvantage which, however, would not be discovered until later. This financial loss is initial and not consequential, since it derives directly from the generating event (the manipulation of the engine) and not from a previous damage.
On the other hand, the Advocate General considers that the persons who bought the cars are direct victims, since the financial loss they allege is not the consequence of prior damage suffered by other persons. Indeed, the decrease in the value of the vehicles did not materialise until the engine manipulation was made public. Therefore, persons who acquired the vehicle from a previous purchaser are also direct victims.
Given that the location of the vehicle is unforeseeable, the Advocate General considers that the place where the damage materialises is that where the transaction by which the property became part of the assets of the person concerned was carried out.
The courts of that place will have jurisdiction (internationally) if the other specific circumstances of the case also coincide in attributing such jurisdiction, taking into account the criteria of proximity and predictability. In the present case, Volkswagen could easily foresee that its vehicles would be marketed in Austria and, therefore, that a civil liability action could be brought against it there.
See the opinion: https://bit.ly/3bOMgla (Original version in French by Mathieu Bion)