The compensation paid by a car manufacturer for installing unlawful software on a vehicle that reduces exhaust gas recirculation may be limited provided that it adequately compensates the damage suffered by the vehicle’s purchaser, ruled the Court of Justice of the European Union (CJEU) in a judgment handed down on Friday 1 August (Case C-666/23).
Two purchasers of Volkswagen diesel vehicles are claiming damages from the German carmaker in a German court of law for fitting vehicles with an illegal defeat device. Their vehicle is equipped with software that reduces the rate of exhaust gas recirculation at temperatures of 10°C and above, thereby increasing nitrogen oxide emissions.
In response to a question referred for a preliminary ruling, the CJEU first notes that a car manufacturer cannot exempt itself from liability for an unlawful defeat device by virtue of the fact that the national competent authority has approved the type of vehicle or defeat device in accordance with EU law (Regulation 715/2007). In its view, EC type-approval does not necessarily mean that the authority has confirmed the car manufacturer’s assessment of the allegedly lawful nature of the device.
Under existing case law (Case C-100/21 - see EUROPE 13146/33), the purchaser of a motor vehicle fitted with an unlawful defeat device has an individual right to compensation from the vehicle manufacturer where the defeat device has caused him damage.
Nevertheless, while the German Federal Court did not rule out certain cases of exemption of the car manufacturer’s liability in June 2023, the European Court is of the opinion that EU law does not, in principle, prevent an amount corresponding to the benefit derived from the use of the vehicle from being deducted from the amount of compensation due to the vehicle’s purchaser. In addition, this compensation could be limited to 15% of the vehicle’s purchase price.
It is for the German court hearing the case to ascertain whether the allocation of the benefit derived from the use of the vehicle and the capping of the compensation still provide adequate compensation for the loss suffered.
See the judgment of the Court of Justice: https://aeur.eu/f/i3h (Original version in French by Mathieu Bion)