Court says Mercedes car owners could claim refund after dieselgate emissions ruling

Mercedes-Benz plans to appeal after a German court ruled against it in a class action case over alleged use of diesel emissions defeat devices in its cars.

In the latest episode of ongoing 'dieselgate' claims against certain vehicle manufacturers, the Stuttgart court found that some of Mercedes' Euro 6 diesel models built between 2012 and 2016 were equipped with emissions cheat devices.

Mercedes' Euro 5 level diesels were found to not be affected.

The court said owners of affected Euro 6 cars may be eligible for a refund, minus wear and tear, if the violation is confirmed, reports Reuters.

The Federal Association of Consumer Organisations (VZBV), which brought the case on behalf of around 2,800 consumers, sees this ruling as a significant step for damages claims.

However, Mercedes-Benz maintains the claims are unfounded and intends to defend against them.

“We continue to believe that the claims asserted against our company are unfounded and will defend ourselves against them,” said a spokesperson.

Voluntary recall

In July 2017, Daimler instituted a voluntary recall of three million of its diesel vehicles manufactured to Euro 5 and Euro 6 emissions standards.

The following year Germany’s motor authority Kraftfahrt-Bundesamt found that some 280,000 Mercedes-Benz vehicles had been outfitted with illegal defeat devices, leading to a wider recall of affected vehicles across Europe.

As part of a settlement with German prosecutors over its diesel emissions scandal, Daimler AG was fined €870m (£761.8m) in 2019.

In a similar case in the UK, Volkswagen Group settled out of court for £193 million with claimants in a class action lawsuit related to the dieselgate emissions scandal. Each owner who joined the claim received an average payout of £2,120, although no admissions of liability were made by the defendants.

In 2021, BMW and the Volkswagen Group were fined €875.2 million (£751.4m) by the European Commission after forming a cartel with Mercedes-Benz owner Daimler to limit the potential of emissions reducing technology.

Collusion

The German car makers were found to have conducted regular technical talks over a period of five years in which they colluded on their application of Nitrogen Dioxide-cutting AdBlue systems in their vehicles.

The Commission said they “colluded to avoid competition on cleaning better than what is required by law despite the relevant technology being available”.

It added: “More specifically, Daimler, BMW and Volkswagen Group reached an agreement on AdBlue tank sizes and ranges and a common understanding on the average estimated AdBlue-consumption.

“They also exchanged commercially sensitive information on these elements.

“They thereby removed the uncertainty about their future market conduct concerning NOx-emissions cleaning beyond and above the legal requirements (so called “over-fulfilment”) and AdBlue-refill ranges.”

As whistle-blower in the case, Daimler avoided a potential fine of €727m, a statement issued by the commission revealed.

It said that an additional reduction was applied for all parties given that this is the first cartel prohibition decision based solely on a restriction of technical development and not on price fixing, market sharing or customer allocation.

The amount of the reduction of 20% takes into account that this type of conduct is expressly prohibited by Article 101(1)(b) of the Treaty, it said.

At the time the executive vice-president of the commission, Margrethe Vestager, who was in charge of competition policy, said: “The five car manufacturers Daimler, BMW, Volkswagen, Audi and Porsche possessed the technology to reduce harmful emissions beyond what was legally required under EU emission standards. But they avoided to compete on using this technology's full potential to clean better than what is required by law."

Vestager said the decision was about how legitimate technical cooperation went wrong, and the EU's action when companies collude and break EU Antitrust rules.

“Competition and innovation on managing car pollution are essential for Europe to meet our ambitious Green Deal objectives. And this decision shows that we will not hesitate to take action against all forms of cartel conduct putting in jeopardy this goal.”

BMW, Daimler and the Volkswagen Group may have opened the door to damages claims with the resolution of the cartel case.

The official statement issued by the European Commission said that “any person or company affected by anti-competitive conduct as described in this case may bring the matter before the courts of the Member States and seek damages”.

Damage to consumer trust in the brands could have a far larger impact, however.

Commenting on the case Julia Poliscanova, senior director for vehicles and emobility at T&E, said: “Carmakers cannot be trusted to clean up cars. First they cheated on emissions tests, then they colluded to delay cleaner vehicles even though they had the technology.

“Only an EU target to switch to 100% emissions-free cars by 2035 will be enough to decarbonise by mid-century and avoid climate catastrophe.”