Volkswagen Risks Diesel Claims Across EU After Top Court Ruling

Volkswagen AG owners can sue the carmaker over diesel-emission manipulation anywhere in the European Union, the bloc’s top court in its first ruling on the scandal.

The ruling from the EU Court of Justice Thursday opens the company up to lawsuits anywhere that a car owner lives. The case stems from a dispute in Austria, where a consumer organization is seeking at least 3.6 million euros ($4.1 million) on behalf of nearly 600 VW car owners.

VW is facing a wave of litigation by drivers who want money back for the loss in value of their diesel cars because of the manipulation exposed by U.S. regulator in September 2015. The scandal has cost the world’s largest automaker more than 30 billion euros so far.

A ruling by Germany’s federal top court in May, ordering VW to compensate one affected client, could trigger payouts in most of the 60,000 similar cases still pending on the car maker’s home turf.

“The ruling of the ECJ does not change much for claimants, defendants and courts in the diesel proceedings,” VW said in an emailed statement. “The question of jurisdiction has hardly been addressed outside of Austria,” it said.

The Austrian court in 2019 asked the Luxembourg-based judges for clarity on where such claims can be brought, specifically the meaning in EU law of “the place where the harmful event occurred.”

The local Austrian court questioned whether compensation claims can be brought in an EU country if the harm to the victims is exclusively financial, but is a direct result from an illegal act done in another of the bloc’s nations.

The case is: C-343/19 Verein fuer Konsumenteninformation.

©2020 Bloomberg L.P.

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