Volkswagen’s defense questioned in landmark case over diesel damages

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Stephan Seiters, a German federal court judge, has questioned Volkswagen’s reasoning after the automaker urged the court to dismiss a claim for damages brought by an owner of a diesel powered VW Sharan family van.

Tuesday’s proceedings were the first time that Federal Court of Justice, or Bundesgerichtshof, in Germany heard arguments from a plaintiff seeking damages from the automaker as it had sold vehicles with manipulated diesel engines.

Any ruling in this landmark case will serve as a precedent for other cases.

In the United States, officials banned Volkswagen’s cars from roads after the Environmental Protection Agency found that engine management software had been installed to hide excessive levels of pollution, triggering claims for compensation.

Volkswagen has argued that because European officials stopped short of taking VW cars off the road, compensation claims from consumers lacked any merit.

European officials insisted that Volkswagen update its engine management software to make sure that anti-pollution filters are activated and fined the automaker for fraud and administrative lapses.

On Tuesday, presiding judge Seiters stated several arguments brought forward by the automaker were not applicable and accepted that the sale of a vehicle with a manipulated diesel engine does provide enough grounds for a damages claim.

The Volkswagen customer who took legal action against the company had already been awarded 26,000 euros ($28,175) in damages by a lower court. He sought even higher damages since he spent 31,500 euros ($34,135) on the car.

The court held that the vehicle had lost in value since the customer was using it. VW has asked the court to reject the claim altogether.

“Unlike the preliminary views of the Federal Court, we do not share the view that the purchase of a vehicle gives grounds for damages,” Volkswagen said.

As the cars in Europe never lost their road worthiness certification, the automaker asked for the damages claims to be dismissed.

Even before setting up new engine management software, Volkswagen’s cars had emitted lower levels of pollution compared to many competing products, VW said.

“Where the damages are supposed to have occurred is not apparent to Volkswagen,” the automaker said.

A ruling will be made at a later point in time, the judge added.

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