Tuesday, September 22, 2015

Volkswagen owners want payback as emissions-cheating scandal explodes

How liable is VW? Well returning a car you have driven for several years just is not the law in Canada. There has been a value to the vehicle even if it is not what it was represented to be.

So assuming there was a representation that was intentionally false - a fraud - and that's a big IF the real question is damages.

And here too there is an issue.

What did VW owners actually lose? Perhaps they thought they were getting a Green Car and in fact it was a stinky old diesel but even if that is true what financial harm did they suffer? Likely none.

So damages would be notional at best.

All that said, regulatory action may be severe and VW isn't out of the woods but i don't see a significant consumer claim approaching.



Claude Gohier said...

Could lost resell value be considered a damage?

rww said...

Would not purchasing a car under false pretenses be grounds for a full refund especially when the false pretenses included the car being engineered to break the law. If a case cannot be made for that then truly "the law is an ass."

The Mound of Sound said...

Well, James, it was intentional. Code was written to manipulate the pollution controls in the vehicle. The vehicle was sold as having three amazing qualities - it was powerful, it was amazingly clean (low emissions) and it got incredible fuel mileage.

They are indeed powerful and they do get incredible mileage but only by disabling the pollution control systems. With those systems activated the performance is sluggish and the fuel economy plummets.

Buyers were absolutely defrauded. I still have the old brochures from VW. The same falsehoods are repeated in the owner's manuals. VW was caught out, red-handed. They're not even denying the fraud, merely seeking fall guys who will presumably wind up standing trial on criminal charges in the US.

As for the resale value of those 11-million vehicles, it's literally evaporated. That, too, is the sole responsibility of Volkswagen.

Damages might be limited if this was negligent misrepresentation. It wasn't. The manufacturer wrote code specifically so that its engines would meet emissions standards but only when testing equipment was in use. That enabled VW to supposedly meet its performance promises when in actual operation.

It doesn't get a lot more fraudulent than that, Jim. I don't know if you've done any fraud work, Jim, but this seems pretty straightforward to me. They hoodwinked 11-million customers, made willfully false claims to induce those customers, and did this over a span of several years.

You don't perpetrate a fraud this massive without some paper trail. There'll be plenty of blood on the floor before this is over.

BTW - interested in a cherry, "clean diesel" Golf?

Kirby Evans said...

Since it is clear that there was fraud (something that they have essentially admitted to the EPA) you could surely sue them not only for the lost resale value. If the vehicles don't actually pass emissions test then they have no resale value since they could not legally be sold. (In Ontario, for example, you simply can't sell a vehicle that doesn't pass the emissions test.) Therefore, unless the governments who enforce emissions controls are going to make a special exception for diesel Volkswagons, you could seek the entire value of the vehicle. The EPA reported that when the software was turned off the vehicles emitted 400 times the allowable particulates. This means either a) the governments are going to have to bend their own rules or Volkswagon is going to have to reimburse the existing value of all those vehicles (which would clearly send them into chapter 11.) And this doesn't even touch on potential non-monetary damages. Surely there is a significant emotional cost to being defrauded of a potential "life-style" choice.

James C Morton said...

Well lost value is a damage. Also I am NOT justifying the actions - just saying it's unlikely returning the car for full refund will work.

rww said...

"Well lost value is a damage. Also I am NOT justifying the actions - just saying it's unlikely returning the car for full refund will work."

Does misrepresentation and fraud not make this a special case ?