Dear readers,
as many of us prepare to enjoy some well-deserved holidays, we should not neglect to pay attention to a judgment by the Court of Justice from this week which can have important consequences on Dieselgate litigation.
Since the scandal known as Dieselgate emerged a few years ago, several individuals, consumer organisations and law firms have started actions against Volkswagen to claim damages or other remedies in connection with the company's emissions fraud. While national courts are gradually also starting to render important decisions on the subject, this week the Court of Justice had to answer an important question: which national courts have jurisdiction to adjudicate on actions for damages brought by disappointed consumers?
 |
| image: pikist.com |
Under article 7.2 of the so-called Brussels I regulation (n 1215/2012), a person domiciled in a Member State can be sued in a different member state, in tort cases, when this is the place where the "harmful event" has occurred or may occurred.
In the case of Dieselgate claims, the referring Austrian court doubted what would have to be considered as the harmful event: is it the installation of a "defeat device" making the car's tracking of emissions unreliable, or is it, as claimed by the plaintiffs, the place where the defective vehicle has been purchased?
Recalling its earlier case-law, the CJEU (para 23) asserted that the concept of the "place where the harmful even occurred" covers both the place where the damage has occurred and the place where the damage-generating event took place.
The damage suffered by the buyers emerged immediately with the purchase of a vehicle whose value was lower than the price paid due to its defect and was not purely financial loss exactly because the vehicle was defective (para 35). For this reason, the damage emerging at the moment of purchasing the vehicle is suitable for establishing jurisdiction in the MS where the contract was concluded - in this case, Austria.
According to the Court, this outcome does not undermine legal certainty as a manufacturer who sells in several Member States can expect to be sued in these MS and because, given the nature of the damage, courts of the state in which the contract has been concluded will be best placed to investigate the loss. Indeed, the CJEU observes, the possible loss of market price of the defeat vehicles depends very much on local market conditions, which means that courts of the MS where the original sale has been made can assess whether the consumer has suffered a loss of value.
By taking away exceptions of jurisdiction, the CJEU has thus cleared one of the stumbling stones standing between consumers and effective remedies in this interesting saga.
