Commission's statement of objections in truck cartel case

The European Commission has been investigating a cartel in the truck industry since at least 2011, when it carried out a series of dawn raids. It has indicated before that the cartel was a very old one. Now the Financial Times has come into possession of leaked documents (reported here) which tell us rather more about the investigation. Apparently the cartelists made agreements about the introduction of emissions technology, dating back to 1997. It involved DAF, Daimler, Iveco, Scania, Volvo (which also owns Renault Trucks) and MAN. It was the last-named of these which blew the whistle in the case.

No point in repeating what the FT reported, and anyway hard to do without risking an infringement of copyright. More in the next Motor Law newsletter, if I find more!

Common European Sales Law to be watered down

My old friend from long ago, Anthea McIntyre MEP, reports (on Facebook, as is the modern way) that the widely-disliked CESL, which many think rather unnecessary, is being watered down. Unsurprisingly, she attributes this to "Conservative pressure". Here's what she said (though for all I know it might just have come from a Conservative party press release):

The European Commission has agreed to scale down and refocus plans for a Common European Sales Law (CESL).

In publishing its legislative schedule for 2015 yesterday, the Commission said plans for a CESL would be replaced by a "modified proposal in order to fully unleash the potential of the digital single market."

...

Conservative MEPs gave the re-think a cautious welcome as a vindication of their determined campaign against the plans.

Ashley Fox, leader of Britain's Conservative and a consistent opponent of the proposed law, said: "This is good news and an encouraging approach from the new commission to weeding out meddlesome and unnecessary legislation so we can concentrate on what really matters.

"The CESL as originally proposed would have duplicated many existing national laws or undermined legislation which actually does a better job for both customers and vendors.

"Now we must be careful that any replacement proposal cannot simply echo what has been withdrawn. Instead we should have much deeper analysis of what actually hinders cross-border trade and online commerce.

Sajjad Karim, Conservative spokesman on legal affairs, said: "The CESL would have achieved nothing but confusion...a classic example of the EU's obsession with legislation making things worse instead of better.

"We have been warning against this for months and I am encouraged that the Commission is coming round to our way of thinking. Now it must move on from this failed project to modern and flexible proposal that will actually help businesses and consumers buy and sell across the EU."

Truck design rules: reform delayed

The Council and the European Parliament reached agreement on a proposal from the Commission for a directive amending Council Directive 96/53/EC of 25 July 1996 on vehicle weights and dimensions. Readers will recall that the Parliament approved the proposal some time ago, but now national interests have become involved and the changes will not come into force for some time – and even then they will not be mandatory.

The most significant change will be to allow vehicles to be 80 to 90 cm longer – which doesn't sound much, but which would enable manufacturers to move away from the brick-like aerodynamics that the present rules (in conjunction with the need to maximise carrying capacity) make necessary, and also to improve the driver's view of cyclists, pedestrians and everything else going on around them. Unfortunately, truck designs have a very long life cycle and a couple of major manufacturers (Volvo and Renault) are committed to new bricks, so Sweden and France have led Member States in delaying the introduction of the new dimensions and making them optional.

Weights and Dimensions page on the Commission website (the link to the proposal is broken).

Article on the Euractive website.

Independent Garage Association welcomes report on repair and maintenance information

Press releases

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Study on the operation of the system of access to vehicle repair and maintenance information - Means of transport - EU Bookshop

Study on the operation of the system of access to vehicle repair and maintenance information - Means of transport - EU Bookshop

11/03/2014: United States Reaches Settlement with Hyundai and Kia in Historic Greenhouse Gas Enforcement Case

11/03/2014: United States Reaches Settlement with Hyundai and Kia in Historic Greenhouse Gas Enforcement Case

Connected car data require stronger protection, consumer choice

Car owners are at the mercy of vehicle manufacturers when it comes to what is done with their vehicle diagnostic, geolocation and mileage data, and even biometric data about the driver and information about driving behaviour. It goes directly to the VMs who then decide which third parties should receive it. However, on 12 November in the US the Alliance of Automobile Manufacturers and the Association of Global Automakers released a document entitled ‘Consumer Privacy Protection Principles’ which will give owners protection through a set of principles about data sharing over vehicle telematics systems.

The principles will require VMs to get permission for certain uses of data by model year 2017 at the latest (although there will be a one-year extension available if engineering changes are needed). VMs will tell owners what types of data they collect, and how those data are used and shared. The information will be included in owners’ manuals, on displays inside vehicles and on Internet registration portals maintained by the manufacturers, so consumers will be able to inform themselves before deciding to buy. The promoters recognise that there is no one-size-fits-all solution.

Car makers will also have to get permission from customers to use any personal information for marketing, and will be forbidden from providing insurance companies with driver behaviour data which identify an individual without the customer’s consent. It is hoped that replacing the current terms on which such data are collected and used, which vary between manufacturers, with a single set of principles, the industry might head off calls for legislation which it fears might stifle innovation. The new principles use guidance from the FTC, the White House Consumer Privacy Bill of Rights and the Fair Information Practice Guidelines.

The data may still be used in ‘scrubbed’ or anonymised form for other purposes, common practice in the new world of Big Data, although there are doubts about whether even using data in this form could be a breach of privacy.

So much for the position in the USA. European data protection laws are much more rigorous. How would the new guidelines play in the EU? Not well: while they are a step in the right direction, they fall well short of what the current EU directive requires. Collecting data for ‘reasonable business purposes’ might be acceptable in the US but is far too vague for the EU: and the idea that just by using a vehicle data subjects are giving implicit consent to their personal data being processed would never wash.

Automotive News, 13 November 2015

Risk from Counterfeiters to Increase as China's Auto-Parts Market to Double in Size by 2019 | Ipsos

Risk from Counterfeiters to Increase as China's Auto-Parts Market to Double in Size by 2019 | Ipsos

EU will allow car emissions into carbon trading market

Reuters reports that the EU will allow car emissions into carbon trading market. Critics say the move could empower carmakers to push back against more effective curbs on greenhouse gases.

CMA report on private motor insurance

The Competition and Markets Authority's report is available on the private motor insurance case page.

The Consumer Credit (Information Requirements and Duration of Licences and Charges) (Amendment) Regulations 2014

The Consumer Credit (Information Requirements and Duration of Licences and Charges) (Amendment) Regulations 2014 concern only 'green deal' schemes where energy-efficiency improvements are made to a property and the occupier pays in instalments, so this note is to let you know that you don't need to be familiar with them.

The Vehicle Excise and Registration (Consequential Amendments) Regulations 2014

The Vehicle Excise and Registration (Consequential Amendments) Regulations 2014

From the Explanatory Note:

Schedule 19 to the Finance Act 2014 amends the Vehicle Excise and Registration Act 1994 so that it no longer provides for the issue and display of paper licences, whether they be vehicle, nil or trade licences. These Regulations make consequential amendments to various regulations having effect under the 1994 Act relating to the registration and licensing of mechanically propelled vehicles so as to reflect the changes to that Act.

Regulation 1 provides for the Regulations to come into force on 1st October 2014, which is the date on which Schedule 19 to the Finance Act 2014 will also come into force. Regulation 2 introduces Schedule 1 which contains amendments to the Road Vehicles and Licensing Regulations 2002; regulation 3 introduces Schedule 2 which amends the Vehicle Excise Duty (Immobilisation, Removal and Disposal of Vehicles) Regulations 1997 and regulation 4 introduces Schedule 3, of which Part 1 amends the Sale of Registration Marks Regulations 1995 and Part 2 the Retention of Registration Marks Regulations 1993.

Dealer Protection Code - Dead in the Water?

The much-vaunted code of conduct to which the Commission encouraged the two sides of the industry to agree after removing the dealer protection measures from the 2010 block exemption, has finally been knocked on the head by ACEA. Auto Retail Network reports the Association’s Legal Director Marc Greven, stating at CECRA’s European Car Dealer Conference in Brussels in late September that the organisation did not plan to agree to a code.

That is not to say that there will never be a code, just that ACEA does not consider that its job includes agreeing one. Mr Greven said it was a contractual matter between manufacturers and their dealers. But if that is the case, what was the draft (at least I had always thought of it as a draft, but it seems I was wrong) code promulgated by ACEA and JAMA supposed to be for? CECRA never liked that much, and of course the manufacturers never liked the dealers’ proposals either. Has the ACEA/JAMA code also been dropped? Apparently not: it is here on ACEA's website (though JAMA don't seem to be mentioned). So ACEA's position appears to be that they don't see it as their job to agree a code with the dealers, but they are happy to produce their own. That sounds like a fundamental difference of opinion between the two sides about what a code of practice is.

The Commission announced last December that if the two sides did not agree, it would impose a solution, and it set the end of this year as a deadline – coinciding with the conclusion of work on the CARS 2020 Project (see Motor Law, volume 13 number 12 and this posting). That looked encouraging, for those who like the idea of a code, but it appears that it failed to take into account that the Commission was up for a replacement in the interim, and as we are seeing now new Commissioners are being appointed as the old ones make their exits. Commissioner Almumia’s parting speech is reported elsewhere in this issue. So along the line, the Commission’s commitment went from a statement of intent to see this through, to reserving the right to introduce legislation on unfair trading practices. Since when, incidentally, did the Commission have to reserve the right to do something within its powers?

Carlo Pettinelli, currently Director of Industrial Innovation and Mobility Industries in DG Enterprise & Industry, did however assure the CECRA Conference that the subject was still firmly in the minds of the people responsible. So action before the year end can still be expected.

Tax discs go, but not smoothly

The BBC reports that the abolition of tax discs has led to a certain amount of confusion - occasioned by having many more people than usual trying to renew online. That was probably inevitable.


The government is also getting some stick for the "double taxation" that is an inevitable consequence of the change in the vehicle excise duty rules: when a car is sold with VED remaining on it, the buyer has to pay VED from the beginning of the month but the seller gets no refund for the month in which the sale takes place. Will car sales become concentrated at the end of the month - claim a refund on the last day, retax on the first of the next month, keep it off the road in the interim (if that is even possible for the seller)? With everything being done online these days it might be possible to do the business each side of midnight so it is almost seamless.


The government argues that the extra revenue is very small, and that 65 per cent of cars are not sold with VED on them at present anyway, but the impression that they are squeezing a few more pounds out of the milchcow cannot be ignored.

Bryan Cave EU & Competition Law

Bryan Cave EU & Competition Law: "On 1 October 2014, the Belgium Court of Appeal held that requirements that spare parts providers also had to be authorised dealers infringed Article 102 of the TFEU, the abuse of a dominant position."



'via Blog this'

Profile of China's antitrust enforcer

'Mr. Confession' and his boss drive China's antitrust crusade  is Reuters' profile of Xu Kunlin, the head of China's National Development and Reform Commission, known as 'Mr Confession'. It seems like a remarkably personal analysis of the enforcement of competition rules in the People's Republic, but from the article it certainly sounds as if a handful of individuals are making a significant difference - to the automotive industry as much as anyone.

Fern Computer Consultancy Ltd v Intergraph Cadworx & Analysis Solutions Inc [2014] EWHC 2908 (Ch) (29 August 2014)

Fern Computer Consultancy Ltd v Intergraph Cadworx & Analysis Solutions Inc [2014] EWHC 2908 (Ch) (29 August 2014): Mandatory rules governing the relationship between commercial agents and
their principals concerning the agent's UK activities cannot
override a valid jurisdiction and choice of law clause.

USA: calculation of damages for replica Lamborghini kits

In AUTOMOBILI LAMBORGHINI SPA v. Johnson, Dist. Court, ND Alabama 2014 the court calculated the damages in a case involving glass-fibre kits to convert (according to the defendant's advertising) 'your old wrecked Fiero' into a Lamborghini lookalike on the unsurprising basis that purchasers of the kits were not potential customers for the real thing.

Thanks to my old friend Marty Schwimmer for the information.
 

The Consumer Credit (Information Requirements and Duration of Licences and Charges) (Amendment) Regulations 2014

The Consumer Credit (Information Requirements and Duration of Licences and Charges) (Amendment) Regulations 2014

Criminal provisions in design law coming

A commencement order has been made to bring into operation the provisions of the Intellectual Property Act that create new criminal offences for design rights infringements. The new law will take effect from 1 October.

Recalled Harleys: What if I could make my own fix? | DuetsBlog

Recalled Harleys: What if I could make my own fix?  is an interesting speculation by my friends at Duets Blog. 3-D printing is here to stay, and it could be revolutionary for the production of some automotive parts. Imagine if, instead of having to scour eBay for MGF parts (as I spend a lot of my time doing) I could download a piece of software and print myself a new one. Pieces of trim and so on, perhaps: probably not a head gasket.

China levies first fines in auto industry pricing probe - FT.com

FT.com reports that the Chinese authorities have levied the first fines on automotive industry companies - component makers NSK and NTN, which have been fined Rmb174.9m (£17m) and Rmb119.2m (£11.7m) respectively.

US: Santander Consumer receives subpoena over subprime auto loans

Automotive News for 7 August

BMW cuts spare-part prices in China amid antitrust investigation

The title tells you all you need to know about this report in Automotive News, from 7 August.

European companies slam Chinese antitrust probes - FT.com

This report on FT.com  explains how European businesses - not only car  makers, but they are probably the worst affected - are unhappy about the treatment they are receiving at the hands of China's antitrust authorities. They (the manufacturers) argue that there is more to high car and spare parts prices than monopolistic behaviour. All that practice that they got in the eighties and nineties in the UK, explaining car prices, must be coming in useful. Whether the Chinese authorities will believe them any more than the UK press and public remains to be seen.

Postscript: Automotove News reports that Audi will accept their punishment. Bowing to the inevitable, I suppose. The same source also tells us that GM have been brought into the investigation too, including this paragraph which is of much wider interest:

For Buick, Chevrolet and Cadillac vehicles, the average sum of replacing all the parts relative to the price of a new vehicle is close to 300 percent, the average level in the U.S. and European markets, GM said.

Manufacturers warned over leasing ‘discrimination’ - Fleet News

Manufacturers warned over leasing ‘discrimination’: "13/08/2014"



'via Blog this'

Changing dealer margins does not breach EU competition rules

Our friends at Van Bael and Bellis in Brussels report in their newsletter, VBB on Competition Law (2014 no 6) that the Commission has rejected a rather optimistic-looking complaint from the Italian dealer association, Federauto, alleging that Volkswagen Group Italia's SEAT dealer agreements violated EU competition rules by reducing dealers' margins from 15.85 to 12.85 per cent, and converting part of the margin from fixed to variable. Typically the wholesale price is calculated by subtracting the dealer margin from the recommended retail price.

Federauto argued that this violated the rationale behind the dealer protection provisions of Regulation 1400 and of Regulation 330. It seems that they did not say that the letter of the regulation had been violated, but its spirit: and invoking dealer protection measures in Regulation 330 looks like a triumph of hope over experience. The Commission rejected the complaint, not apparently by reference to the block exemption but by reference to Article 101, which it thought had not been infringed - there was no evidence that competition was restricted, the clauses in the agreements complained of were not hardcore restrictions, and the application of the new margins was not resale price maintenance.

Perhaps more interesting is the complaint that the manufacturer did not have a code of conduct for relations with dealers. Of course, the Supplemental Guidelines say that having a code of conduct is a relevant factor in assessing a supplier's conduct in individual cases concerning pressure on dealers to achieve anti-competitive outcomes, and the lack of an agreed code of conduct remains a highly contentious issue. Here, though, it cut no ice, because there was no suggestion that the manufacturer had been applying pressure for such outcomes on the dealers - just because there is no code of conduct does not mean that there is a breach of the rules.

VBB opine that this is an important case, showing that dealer protection, eliminated with the expiry of Regulation 1400, is dead and buried. Indeed it is, as far as the block exemption is concerned: it remains possible that a dealer protection issue could have effects prohibited by the competition rules and not exempted by Regulation 330, and it also remains possible that some other legislation will fill the gap one day, even if the block exemption continues to maintain its laissez-faire approach.

Automotive News

Freeze! It's the Honda ad police

 

US: Szakaly: CAFE Targets Will Curb US Auto Sales Beyond 2018

The Truth About Cars  website reports NADA economist Steven Szakaly as saying that after 2018, as the focus moves to the post-2025 CAFE rules, consumers will become disinclined to buy new cars -

Unless gasoline prices rise significantly, or we see consumers
becoming irrational and everyone buying an electric car, it’s tough to
think of consumers willing to pay $3,000 to $7,000 more for the exact
same car, just because someone in Washington, D.C., or California says
they need to buy it.

So he told Automotive News's  2014 Management Briefing. There's a lot could change between now and then ... For one thing, US petrol prices could become aligned with Europe's.

Suzuki goes public with Motor Codes

Our friends at Auto Retail Network reveal that Suzuki, having come out top in this year’s Motor Codes
report on aftersales customer service, will make customer
feedback on its retailer network public through the Motor Codes web site.

USDOJ: G.S. Electech Inc. Executive Pleads Guilty to Bid Rigging and Price Fixing on Automobile Parts Installed in U.S. Cars

The US Department of Justice (press release) reports that an executive of Japanese parts-maker G.S. Electech Inc. has pleaded guilty to bid-rigging and price-fixing charges relating to parts installed in the anti-lock braking systems in US cars. Shingo Okuda, the company's former Engineering and Sales Division Manager, pleaded guilty on 31 July in the U.S. District Court for the
Eastern District of Kentucky in Covington. He will serve 13 months in a
U.S. prison and pay a $20,000 criminal
fine.

US: Owners of 8 N.J. dealerships settle claims of deceptive practices for $1.8 million

Automotive News reports  that eight dealerships in New Jersey have reached a settlement with the state's Division of Consumer Affairs over 45 consumer complaints of deceptive sales tactics, including
failing to inform customers of previous damage or defects, adding
after-sale costs without prior customer approval and failing to
implement advertised or negotiated prices.

Chinese antitrust probe prompts more price reductions

The price of parts for Audi and Mercedes cars has already been cut, after antitrust authorities in China criticised them. Now Bloomberg  reports that Toyota and Honda have followed suit. Moreover, the authorities say that they are going to punish Chrysler and Audi for monopolistic practices, they claim. No more details at present: it will be interesting to see what this means.

US: GM fail to have revived claim struck out

I just wrote in the latest Motor Law that GM faced revived claims that they thought were history, arising from the infamous ignition problem. Settlements could be overturned if it were shown that GM had concealed the problem. Now Automotive News reports that GM has failed to convince a Georgia judge to dismiss a revived lawsuit over the death of a 29-year-old woman that helped trigger the automaker's ignition-switch recall crisis. Cobb County State Court Judge Kathryn Tanksley set a trial date for April 2016, making the pace of English litigation look positively frantic.See the complaint here if you are interested.

SMMT plans to cut government red tape to save bodybuilders millions

The SMMT is working with the DfT to develop a streamlined type approval process for bodybuilding, known as the National Small Series Type Approval process. The press release is here.

Russia bans state purchase of foreign-made cars

There's a joke going the rounds in Russia that the West has thought for months about the best way to use sanctions to hurt the Russian middle classes. Then President Putin banned imports of food from the West, and did it for them. There's also the Russian man who smashed his Apple iPad and iPhone, and poured away a bottle of Coca Cola, to demonstrate his feelings about the United States (does he realise it isn't necessary to be Russian to feel that way, sometimes?). And the leading Russian watchmaker has stopped exporting its products to the West, too.


In a protectionist move unrelated to (and predating) the current sanctions the Russian government has also cut off its nose to spite its face and banned state purchase of foreign-made cars,  according to Automotive News. The avowed aim is to help local manufacturers. That includes locally-produced foreign brands. What is the likely effect of this? Only a drop in sales of the big cars that the nomenklatura like to be seen in. Oligarchs are unlikely to change their preferences. Given that Mr Putin is reported to be unhappy with the latest Zil limousine (and who wouldn't be, if it looks like that?), he too might be reluctant to give up the Man and the Merc, as Irish politicians' transport used to be referred to. Does Mr Putin have a Merc? Who knows? But last time I was in Moscow, crossing Balotnaya Square, a huge convoy of assorted dark-coloured limos and SUVs shot past from the direction of the Kremlin. My Russian companion observed that someone important was on the move. 'Mr Putin?' I enquired. No, it seemed that the convoy wasn't nearly big enough for him. Perhaps as the effects of this rule are felt he'll content himself with a less ostentatious presence on the roads. Or flag down a Lada gypsy cab.

BMW open to sharing battery technology with rivals

Automotive News Europe reports that BMW is open to sharing battery technology with rivals. Following Tesla's strangely-worded and qualified (though the qualification is hard to spot) announcement that it was giving up the exclusive rights that patents confer in the interest of increasing the electric vehicle parc, BMW are hoping that sharing battery cell technology will bring down the unit costs of making the things. The story doesn't mention dropping its exclusive arrangement with Samsung, though: and depending on which way the exclusivity runs, that means either that BMW won't be able to shop around or that other carmakers won't be able to buy from Samsung, so sacrificing economies of scale; or perhaps both. Either way, it all seems just a bit odd.

US: Dealer sues JLR and dealership group over failed acquisition

Automotive News reports a lawsuit  over a failed acquisition of five Long Island dealerships (three of them Jaguar Land Rover ones). The plaintiff, Napleton Dealership Group, claims that it had an agreement to buy them before JLR announced that it was going to exercise its right of first refusal. The agreement was not made conditional on the manufacturers' approval, and the seller did not disclose that JLR had the right to block it.


There are also allegations that some sort of impropriety was involved, as Napleton had spent six months on due diligence investigations and the eventual buyer completed in a single month. No-one in Europe would be surprised at a manufacturer having a favoured buyer in mind, but as we know they do things differently in the States. Whether that allegation holds water or not depends on the evidence, and is surely not the interesting aspect for Motor Law readers.


Of course, dealer agreements here commonly preserve the manufacturer's right to decide who is admitted to the network, at least to the extent permitted by the block exemption. Napleton's lawyer is quoted as saying that some manufacturers do the same in the US, and he describes it as having a 'chilling effect' on the dealer's ability to attract a buyer. Exactly! But whether such restrictions are universal or just common, it's surprising that six months of due diligence didn't pick it up. Would a dealer here be expected to disclose the existence of such a provision? Unlikely: the general rule is 'caveat emptor', which is why we do due diligence investigations.

US: Hyundai Agrees to Pay $17.35 Million Fine in Brake Defect Case

It might seem insignificant beside the GM ignition problem, but a fine of $17.35 million on Hyundai announced by NHTSA on 7 August would, other things being equal, be big news. According to the press release (first para):

The U.S. Department of Transportation's National Highway Traffic SafetyAdministration (NHTSA) today announced that Hyundai has agreed to pay a $17.35 million civil penalty and comply with NHTSA oversight requirements outlined in a Consent Order as a result of the manufacturer failing to report in a timely manner a safety-related defect affecting 2009-2012 Hyundai Genesis vehicles. The defect involves corrosion in critical brake system components that can result in reduced braking effectiveness and increase the risk of a crash.

An arbitration clause means arbitrate

Warwick Rothnie's blog, ipwars.com, although it might seem to state the obvious, provides a cautionary tale for everyone involved in commercial contracts, not limited to Australia which is the jurisdiction in which the case arose.

The Road Vehicles (Construction and Use) (Amendment No. 2) Regulations 2014

The Road Vehicles (Construction and Use) (Amendment No. 2) Regulations 2014  amend the definition of “the emissions publication” in Schedule 7B by referring to the most recent (eighteenth) edition of the Department for Transport publication entitled “In Service Exhaust Emission Standards for Road Vehicles” (ISBN 978-0-9549352-8-3). The publication contains in-use emissions limits that petrol-engined cars and light vans are required to meet for the purpose of MoT and roadside emissions tests. The publication updates information on new models of such vehicles which have come onto the market since the previous amending Regulations (S.I. 2012/1404) came into force on 25th June 2012. It also revises a small amount of data on existing models. (From the Explanatory Note attached to the Regulations.)

Tesla settles trade mark squatting problem in China

World Intellectual Property Review reports Tesla settles row with Zhan Baosheng over trademark in China (but at what cost?).
The case reinforces what we probably all know - leaving your trade mark unprotected, enabling an opportunist to get in first and register it, can be an expensive mistake. Unfortunately, registering all the trade marks you might need is also expensive. Interesting, however, to note that the squatting problem has moved from the field of domain names (a few pence each) to trade marks (several hundreds of pounds each, at least). And while trade mark laws commonly contain use and good faith requirements, they are not cheap and easy to invoke.

Mercedes-Benz questioned in China pricing probe - FT.com

Mercedes-Benz questioned in China pricing probe - FT.com

GM unit gets subpoena over subprime auto loans | Reuters

GM unit gets subpoena over subprime auto loans | Reuters

EU: Tighter control of anti-competitive agreements

The European Commission has tightened up on small agreements that restrict competition. For years various iterations of its Notice on agreements of minor importance (referred to by recalcitrant legal Latin-speakers as the de minimis exception) condoned agreements between parties so small as to have, effectively, no market power. Their activities would rarely have an appreciable effect on competition, although the exception never allowed the cardinal sins of price fixing and market sharing, the effect of which is always deemed to be appreciable.

The Notice has to be renewed from time to time, like much competition legislation, because markets evolve over time. The latest Notice (25 June), or more precisely the Guidance that comes with it, gives a free pass to agreements between competitors (actual or potential) whose market share does not exceed 10 per cent, and between non-competitors whose share does not exceed 15 per cent. Nothing new there. How to measure market share remains a bit of a mystery, explained in further guidance from the Commission: franchised dealers will always be considered to have a high market share, because broadly speaking (and of course it is not quite what the block exemption says) they enjoy fairly exclusive rights in their locality.

Importantly, though, the new Notice (and the Guidance) extend the non-exception for hardcore restrictions to cover all restrictions which have the object of restricting competition. It will still avail agreements which have that effect but which were not created with a view to achieving it, a distinction which might be difficult to draw in practice.

This change makes good sense, as focusing only on price fixing and market sharing was always a rather narrow approach. It will still be possible to gain exemption from the prohibition (a different matter from exception), but the Commission does make clear in its guidance that it is very unlikely that an agreement aimed at restricting competition (as opposed to that merely being an ancilliary effect) will qualify for exemption – it is unlikely to produce a benefit for consumers, and will inevitably impose restrictions which are not indispensable to the achievement of its objectives. Businesses which might previously have thought they were safe might have to think again.

The Notice applies only to the application of EU competition rules: but national competition laws form a seamless part of the EU-wide regulation of anticompetitive conduct, and the Guidance is expressly aimed at national competition authorities and courts as well. We have our own, slightly different, de minimis rule in the UK, but it should no longer be relied upon for “restrictions by object”.

US: Legal action over warranty reimbursement law dropped

The Alliance of Automobile Manufacturers has dropped a legal action in Florida in which it challenged a dealer-friendly law which required them to pay the same rates for warranty work as retail customers. The suit, filed six years ago, was in the discovery phase when the court ordered the Alliance to disclose what it insisted was confidential business information. It was withdrawn on 2 July, according to Automotive News.

The trade association promised to continue to oppose state legislation “that is anti-consumer … [and] anti-competitive and could result in higher process for vehicles and repairs” - words the meaning of which, as we know, can differ greatly from one person to the next. In any event, the Alliance went on, after it filed the suit the legislature had made a couple of important changes to the law (unspecified in the reports I have read) so when they were removed from the legal claim what remained was narrow and confined to interstate commerce – the Alliance’s implication being that withdrawing the whole suit really isn’t a big deal. Perhaps the big deal in the story is that any lawmakers anywhere could pass legislation so generous to dealers!

This earlier story is also of interest: http://politics.heraldtribune.com/2014/04/19/suit-car-repairs-move-bill-public/

 

ASA Adjudication on Tesco's Hobgoblin beer offer

The Advertising Standards Authority has upheld a complaint about an offer on Hobgoblin beer (an excellent product from the Wychwood brewery). It indicated that the normal price was £4.99 for four cans, and the reduced price was £4.50: in fact it had been offered for more time at £4.00, making the special offer far from special. The £4.50 price also remained after the offer was supposed to have closed: it was not in fact an extension of the offer period but a repricing, but the ASA still didn't like it - consumers would have bought by the advertised date in the expectation that the price would go up again thereafter.


Not a case with specific motor industry connotations - but an interesting indication of the ASA's approach to the problem of dodgy bargain offers, on which the law has been very much relaxed since the days of the Bargain Offers Order.

UK to allow driverless cars on the road

The Financial Times reports that the government has announced a review of road traffic regulations to permit driverless cars on our roads by January 2015, and that a competition is being held to find three cities where trials can be carried out. London seems to be out of the running, though even Birmingham is mentioned on the basis that it is not too congested. Really? Perhaps they will avoid the M6.

For the full story: UK gives green light to driverless cars - FT.com.

For the press release from BIS (via Dod's Politics Home website) http://www.politicshome.com/uk/article/102482/bis_release_uk_government_fast_tracks_driverless_cars.html

Fresh legal challenge will delay decision on Uber

Whether the Uber smartphone app constitutes a taximeter (the use of which is restricted to licensed cabs in London) is not a question to which we will have an answer soon. The London Evening Standard reports that proceedings brought by Transport for London for a declaration have been placed on hold because the Licensed Taxi Drivers' Association has started private prosecutions in the magistrates' court. Given that an appeal from the magistrates' court would go to the High Court anyway, this might just be a circuitous route to the same place - an unfortunate analogy, in the circumstances, but I wrote it without realising that and should let it stand: but I can make the metaphor a little more complicated by speculating that taxi drivers often know less direct but faster routes to their destination. However, here it seems to be a matter of who is in the driving seat: the LTDA understandably wonder whether TfL are sufficiently impartial, given that their legal action seeks a declaration that their decision (that Uber is not a taximeter) was correct.

US: GM moved faster to fix larger cars

GM moved faster to fix larger cars, reports Automotive News, suggesting that ignition switch problems in lower-value Chevrolet Cobalt and Saturn Ion models received lower priority than faults in cars from the higher end of the range. Documents given to Federal regulators in the States show that a similar approach of replacing parts on the quiet was adopted in these earlier cases too, the report says.

US: New GM seeks immunity from Old GM claims

Bloomberg reports that GM is going to ask U.S. Bankruptcy Judge Robert Gerber to dismiss accident and economic-loss claims arising from flaws unrelated to ignition switches in cars sold by old GM (the pre-bankruptcy company). The car maker, which is fighting more than 120 claims, has already asked the judge to affirm 2009 rulings that would free it from responsibility for reduced vehicle values.

The company, unsurprisingly, does not want to start work on settling other claims until it knows whether the claims it seeks to dismiss can be made to go away or not.

US: Selling vehicles for export angers car makers, but is it illegal?

Automotive World reveals the increasing problem of parallel imports, bought from US dealers and destined for markets such as China - where local consumers don't want to pay local prices for luxury cars (which, as reported in another posting today, have come under scrutiny from Chinese competition authorities). While the manufacturers like it no more than they did the European parallel trade of the eighties and nineties, and have imposed contractual financial penalties on dealers amounting to millions of dollars, there's nothing clearly unlawful about the trade, which is usually effected through the medium of 'straw buyers'.

Diesel cars face £10 charge for driving into central London

BBC News reports that an extra charge for diesel vehicles to drive into central London is being considered, as a way to meet EU pollution rules. Only those that comply with Euro 6 standards will be exempt. Pre-2006 petrol-engined cars will also have to pay.

The Mayor is also reported to be lobbying the government to increase excise duties on diesel cars. Favoured as a way to limit harmful CO₂ emissions, diesels have however boosted NO₂ levels in London and other cities, because the legislation has focussed on the first gas and left the second uncontrolled.

Luxury carmakers slash prices in China

FT.com reports that luxury car makers including jaguar Land Rover, Audi and Daimler are going to cut car and spares prices after competition authorities investigated possible (unspecified) anti-competitive conduct. It seems that the authorities' main concern is related to the increasing market share taken by the European companies, which domestic Chinese manufacturers cannot readily compete with. Local manufacturers were being asked a few weeks ago to provide information on the challenges they face from the European manufacturers.

More - specifically on the price of Audi spares in China - from Automotive News here.

Daimler chief warns on potential for cyber attacks on cars

Connected and autonomous cars pose myriad legal problems, but what about the potential for mischief they offer at the hands of hackers? Here is a link to the story on FT.com.

US: Ford and General Motors Sued Over 'CD Ripping Cars'

TorrentFreak reports that copyright owners in the USA are suing Ford and GM on the basis that they are selling cars on which they should be paying a levy - because the cars contain equipment which can 'rip' recordings from CDs and store them internally. Under the Audio Home Recording Act 1992, originally introduced to deal with the problem of cassette recorders, manufacturers and importers have to pay a levy, and the car makers aren't. But the law contains (as you'd expect) exceptions to cover personal use and recording devices that form part of a larger piece of kit, which should be helpful to the car makers.

In the UK, the government has historically sets its face firmly against imposing such a levy, so it isn't a problem that car makers here are ever likely to face. Some continental European countries have levy systems, though. How they will deal with cars remains to be seen.

CMA's open letter to the motor industry

The Mercedes CV price-fixing case continues to exercise a weird sort of fascination over the industry, and the powers that be are not going to allow anyone to forget it in a hurry: part of their job is, naturally, to keep people worried enough that they will make sure they don't put a foot wrong. That's what deterrence is all about. To keep us all on our toes, the Competition and Markets Authority - successor to the Office of Fair Trading - has recently written a billet doux to the motor industry.

The letter tells us a little more about the case than perhaps we knew already, and offers some very sensible guidance to avoid getting into similar trouble. It also encourages us all to report cartel activity if we ever encounter it: making sure the playing field is level is not a purely altruistic thing, it can also be beneficial at a selfish level.

In the CV case (let's stop mentioning names), the letter tells us, among the breaches of competition rules was an agreement between two dealers that they would add a substantial margin if a customer dared to seek a quotation from the one in whose territory he was not established. Another pair of dealers agreed not to prospect for customers in each other's territories. It would be laughable if it didn't show a frightening level of ignorance about competition rules (or a reckless disregard for their effect).

The letter makes the important point that the boundary between legitimate contacts with competitors and illegitimate ones can be hard to discern. Informal relationships between staff members in competing businesses can be rife with problems, which can be recognised by considering whether competing businesses are indeed free to set their trading strategies independently. And members of a franchise must remember that, while they might look as if they are all on the same side, they are in fact competing with other members of the network (and perhaps the manufacturer too - but that's another story).

The law on cartels covers even minor involvement. Attending a single meeting can lead to problems. Organising a meeting is, of course, likely to be worse. And small businesses are not exempt from the rules: the only concession to them is that financial penalties are based on turnover. When we are talking abut cartels, the general rule on agreements of minor importance - the so-called de minimis rule (de minimis non curat lex, if we were still allowed to use Latin) - doesn't apply: cartels are never minor. Individual offenders can even be imprisoned, for up to five years, and fined without limit: directors can be disqualified for 15 years.

Because cartels are by definition secretive, the authorities find it hard to learn about their existence. They depend in part on members 'whistle-blowing', and offer leniency for those who do. But even a cartel member who doesn't blow the whistle can be treated leniently if they provide important information. Individuals who provide information can be rewarded, and handsomely: up to £100,000. Almost worth forming a cartel for ...  but please note: that was written tongue-in-cheek, and wouldn't work.

The CMA's closing piece of advice is particularly striking: if you think your employer is involved in a cartel, tell them (the CMA) - before someone else does. Only the first whistle-blower is treated leniently - later imitators have nothing new to offer to the CMA.

Dealer fined for selling unroadworthy Mercedes car

The Trading Standards Institute reports that a Bournemouth dealer, Simon Bentley, has been fined for two offences (though not the £7,000 reported by Automotive Management - more like £500) and ordered to pay compensation. He sold a Mercedes Benz C180 which was unroadworthy (an offence under the Road Traffic Act) and which he described as having had only one owner when in fact it had had three (an offence under the Consumer Protection from Unfair Trading Regulations). The purchaser had taken it to a garage to have the oil changed and been told that it was missing an anti-roll bar, which it turned out had been removed on the instructions of the dealer. It also transpired that the car had been in an accident and Trading Standards found that it had been a Category D write-off.

CNPA claim against Chevrolet due in court in Paris on 26 September

The tribunal de commerce, Paris, will hear oral argument on 26 September in the claim brought by the CNPA as a result of the termination of Chevrolet's dealer agreements. The manufacturer has decided to resist the claim and demand indemnities from CNPA.
The delay is accounted for by the need to put together a tribunal of three judges and a rapporteur for the case, rather than having it heard by only one judge. CNPA considered it important not to have one judge only.

As we previously reported, CNPA base their claim on:

• The brutality of the announcement of the withdrawal of the brand, reported in the media without any prior information to professionals and no notice period to allow them time to prepare for this event with respect to their customers.
• Disloyalty Chevrolet who knowingly concealed its network for several months the decision of General Motors.
• Non-compliance with the contractual notice period of two years, since the NFPC can prove that Chevrolet no longer fulfills many of its contractual obligations with respect to its network.

The hearing which took place on 30 May has allowed this procedure to enter a new stage but also for the CNPA to obtain the reaction of Chevrolet. Of course, the brand responds point by point to those complaints. But we also learn that compensation would be required to compensate the NFPC Chevrolet of "denigrating campaign by the trade union organization" and would also bring to an earlier halt sales in the franchise.

For the CNPA, the period of nearly four months for argument promotes a more balanced verdict (for 3 judges will have to decide instead of one), but it can also turn against him. "This late date may favor Chevrolet intimidating practices vis-à-vis dealers who still refuse to settle for decreasing financial protocol proposed by the brand," says the NFPC.

In order to avoid lengthy procedures, nearly 70% of the network has already signed an agreement with the brand. "Nobody has an interest in feeding trials with chronic issues that are crucial for distributors. In the interest of the profession, we must find solutions for everyone, "says Jean-Pierre Rinaudo, head of Vulcan group. In particular the amount of compensation has reportedly been revised upwards in many cases to facilitate the signing of agreements.

(Largely translated from an article in L'Argus, 5 June 2014 (http://www.largus.fr/actualite-automobile/affaire-chevrolet-le-constructeur-se-defend-4227379.html) - further material to be added in due course). Additional coverage available at http://news.autoplus.fr/news/1482925/Justice-Tribunal-France-Chevrolet-Concessionnaires, http://www.autoactu.com/chevrolet-contre-le-cnpa---les-plaidoiries-fixees-a-fin-septembre.shtml (subscription required), http://www.autoactu.com/chevrolet-contre-le-cnpa---les-plaidoiries-fixees-a-fin-septembre.shtml.

GM to rework or replace 3.4 million keys

The scale of the problem facing the car manufacturer becomes apparent from its recent (June 2014) announcement that it will be recalling 3.4 million cars to deal with the ignition switch problems that caused the current recall crisis. Bumpy roads and weights attached to the keyring can cause the switch to turn itself off. Congressional investigators in the United States have announced that General Motors has fixed 154,731 out of 2.59 million cars involved in the recall.

US: settling the GM recall case

The settlement agreement between Toyota Motor Corporation and federal prosecutors in March has been mooted as a model for dealing with the current GM case. In Toyota's case, the Department of Justice agreed to drop a single criminal charge of wire fraud in exchange for a $1.2 billion penalty. Wire fraud was appropriate in the Toyota case because there had been a cover-up, but the GM case is rather about negligence and incompetence, as revealed in the report prepared (at GM’s initiative) by former US Attorney Anton Valukas. So there’s no crime, and nothing to plea-bargain over. Even being slow to mount a recall is not enough: the Transport Secretary has imposed a financial penalty (the maximum permitted, $35 million). But still no crime.

One remaining possibility is for the Securities and Exchange Commission to take action. GM has already revealed that it is under investigation: failing to disclose a material risk, or to have employees follow proper reporting procedures, has caused a loss to investor. GM took a first-quarter charge of $1.3 billion to cover recall costs, which represents a loss to shareholders, and failed to tell shareholders about the problem even when it was clear that there was a potential safety crisis. Instead the company’s annual report blandly told the SEC: ‘From time to time we recall our products in order to address performance, compliance or safety-related issues … The cost and effect on our reputation of product recalls could materially affect our business.’ That statement, carefully crafted as it clearly was by the company’s lawyers to hide the reality of the ignition switch crisis, might yet provide the authorities with what they need.

NHTSA underride proposal - welcome but overdue » Automotive World

Automotive World  comments on proposals from NHTSA about rear underride protection for trucks, reminding me of the Hope Safe T Bar. I can't locate the proposals on the Internet, but looking for them does reveal that underride protection has been a big issue in the US for many years (to the extent that there's as 'underride network' with a website at http://www.underridenetwork.org/), hence AW's use of the word 'overdue'.

Grants for home recharge points for electric vehicles reduced from 1 September

New funding to encourage plug-in car use  says the Government's press release, but the situation appears to be rather that the old scheme is coming to an end, petering out during a transitional period from June to the end of August, and being replaced by a less generous arrangement. Grants up to 75 per cent of the cost of a charging point will be available - up to a maximum of £900, instead of £1,000. The Government's argument is that the cost of installations has come down as more people have put charging points in.

Commercial agency has a value, even if no-one wants to buy it

The Court of Appeal has upheld a High Court judgment in which a former commercial agent (within the meaning of the directive) was awarded compensation when, shortly after he retired, large orders had come in on which he would have been entitled to substantial commission. The rules about compensation and indemnity in the directive are rather tricky to work out, so the Court of Appeal's ruling that the lack of a willing buyer does not mean that the agency has no value is helpful: the Court referred to the fact that there is no tradition (as there is on the continent) of buying and selling agencies. The right measure of compensation was what a reasonable hypothetical purchaser would pay, even if no such person existed.

Warren v Drukkerij Flach B.V. [2014] EWCA Civ 993 (18 July 2014)

Volvo Group ordered by US Court to pay penalties in engine emission case » Automotive World

Volvo Group ordered by US Court to pay penalties in engine emission case » Automotive World

Tesla and the Car Dealers’ Lobby

This is the title of an article by Daniel A Crane of the University of Michigan Law School, available via the Antitrust & Competition Policy Blog.  It should be of interest to anyone with an unhealthy fascination for distribution law.

Borrower wins court reprieve over £13,000 debt due to 'illegible documents' - Telegraph

A Mr Moore has succeeded at Oxford County Court against MBNA and its recovery agents and had its claim for a £13,000 debt struck out because it failed to produce a legible copy of the credit agreement. Here is a link to the story in the Telegraph, but see also the story by Paul Tilley, the legal exec who represented Mr Moore in the case, on his interesting blog here.

Nader calls for GM 'ombudsman'

Nader calls for GM 'ombudsman'  reports Just Auto. This seems to be his statement:

The simplest
solution to avert the culture of avoidance or coverup inside GM
regarding their discovery of product defects is for the CEO to establish
an independent Ombudsman office, authorized to receive, in total
confidence, the assertions of conscientious engineers and other
employees about safety defects without fear of retaliation or losing
their jobs. The Ombudsman, outside the GM chain of hierarchical command,
would report directly to the CEO. The CEO would then have the
responsibility to follow up on the report and decide whether it is at a
level of gravity to warrant triggering the federal regulation on
reporting the discovery to the Department of Transportation. The company
may want to introduce a monetary reward for reports by its engineers
and other employees to the Ombudsman that could prevent death and
injuries and save the company a ton of headaches and expenditures.
Giving assembly line workers rewards for proposing more efficient ways
to manufacture products has been a long time incentive program by many
companies.

It's reproduced by Reuters, here: http://uk.reuters.com/article/2014/07/17/nader-gm-ombudsman-idUKnPn4ZVsSq+9a+PRN20140717.

COMMENT: Looming CV tyre rules promise EU market shake-up » Automotive World

Automotive World reports on new CV tyre rules, being introduced in two stages in 2016 and 2018.

Volvo Group ordered by US Court to pay penalties in engine emission case

Automotive World  reproduces the press release, which says:

The U.S. Court of Appeals for the District of Columbia Circuit has ruled that the Volvo Group should pay penalties and interest of approximately SEK 508 million following a dispute between the Volvo Group and the U.S.
Environmental Protection Agency (EPA) regarding emission compliance of diesel engines. The Court of Appeals affirmed a District Court’s ruling that model year 2005 Volvo Penta engines violated the provisions of a Consent Decree. This is expected to have a negative impact on the Group’s operating income of approximately SEK 440 million in the third quarter of 2014 in the
segment Group functions and other.
The Volvo Group had previously accounted for approximately SEK 68 million as a provision and approximately SEK 422 million as a contingent liability.
In 2012 the District Court issued a judgment ordering the Volvo Group to pay penalties and interest for engines which Volvo claims were not part of the decree.
Volvo filed an appeal on several grounds. The Court of Appeals’ ruling was rendered on July 18, 2014. Volvo will now review the ruling in detail, and consider whether to appeal or not.

For more stories from the Volvo Group, please visit http://www.volvogroup.com/globalnews.

Senator accuses GM of ‘stunning’ failure over ignition issues - FT.com

Who would be a motor industry lawyer? FT.com  reports highly critical comments from a Senator about the failure of GM's inhouse lawyers to make the right people aware of the company's potential liability stemming from the ignition switch problem. Autmotive News reports chief executive Mary Barra's defence of the company's general counsel - arguing that it was more junior lawyers who made the mistakes. Surely that won't wash? It didn't seem to impress the senators.

Farmer jailed over red diesel fraud in Lincolnshire: UK taken to court by EU over red diesel for yachts

BBC News  reports (12 July) that a Lincolnshire farmer has been jailed for a rather large red diesel fraud, and at about the same time (15 July) the Commission started proceedings against the UK for its rules that permit red diesel to be used in pleasure craft (reported here on the Tax News website and bizarrely on the Voice of Russia website here: if that is too much for you, try the Commission's website, where you can find the press release here).

RAC urges government crackdown on untaxed foreign vehicles

Untaxed foreign vehicles are costing the UK Treasury some £15 million in unpaid tax, the RAC says (according to this story from BBC News). Vehicles brought into the UK have to be registered with DVLA after six months, taxed and insured, and if of the right age tested too. They are recorded at border controls but it seems that DVLA has no mechanism for following up when their allotted time expires.

Korea: Hyundai in more trouble over mileage claims

The Financial Times reports that Hyundai, which was hammered not long ago in the US and Canada for inaccurate mileage claims, is in trouble at home too for the same thing. It seems that domestic consumers were 'grumpy' about North American consumers being given compensation, hence the latest action.

US: Tesla gets five stores in Pennsylvania

Tesla is clearly nothing if not determined. To have to fight tooth and nail to open "stores" (a misnomer: they store no cars, but just provide somewhere for customers to learn about the product and place their orders) they frequently have to persuade state legislators and executives to allow them in, against well-established dealer protection laws of the sort that are anathema to the European Union. Bloomberg reports that the latest state to let them in is Pennsylvania, where legislation has been passed to allow them to open up to five stores.

Competition Law Challenges in the Motor Vehicle Sector 2014

This well-established annual event takes place on 24 June 2014, at the Sheraton Brussels Hotel, Brussels, Belgium.

Join IBC’s cutting-edge forum Competition Law Challenges in the Motor Vehicle Sector to analyse recent cases such as KIA, Jaguar Land Rover and BMW. Debate the wide-ranging consequences of recent policy developments for the motor vehicle sector, such as the Commission’s upcoming new Damages Actions Directive.

Key reasons to attend:

• Gain updates and insights into the most crucial competition law developments in the motor vehicle sector
• Examine practical challenges of recent cases in a unique collaborative atmosphere
• Review the impact of the changing rules and how best to master their implementation
• Discuss the current legal framework (or lack of it)

This high-level, must-attend forum will provide in-depth, but practical legal analysis of the main issues that confront vehicle manufacturers, dealers and repairers, parts manufacturers, parts distributors and the independent after-sales market.

Learn more, see the latest agenda and register with a 20% discount courtesy of Motor Law today at http://www.ibclegal.com/FKW82462MLAWB

Conseil d'Etat upholds Mercedes refrigerant injunction

Last summer's great story of France's ban on sales of Mercedes cars containing an air-conditioning chemical that had been banned because of its harmful effects on the environment has been wrapped up (at one level, anyay) by the Conseil d'Etat, which upheld an injunction issued last year. Meanwhile the matter continues to rumble on at the European level, with the Commission reportedly commencing action against Germany and other Member States which seem to have adopted a Nelson approach to the problem, allowing new models to be marketed under old approvals so they could take advantage of transitional provisions. And the Commission is also reported to have delivered statements of objections to Honeywell and Du Pont relating to their joint venture agreement to produice the new chemical, HFO-1234yf.

Case spanning 13 years is 'longest case' in history, judge says

According to the Telegraph,  Mr Justice Moylan has described a case in which he recently made an order as the longest-running case in history, at over 13 years.  Although it is a family case, it's something that every observer of the legal scene will find interesting: and many observers will, perhaps, find unsurprising. The facts of the case, which involve parental access, do explain how a matter can have gone on for so long, as the unfortunate child has grown from a baby to a teenager whose wishes must be taken into account, even determine the outcome of the matter.

GM Will Rework or Replace Keys on 3.16 Million U.S. Cars

According to a press release from the company (16 June), GM Will Rework or Replace Keys on 3.16 Million U.S. Cars.  It says that about 3.16 million 2000 to 2014 model year cars in the U.S. are affected, and provides a helpful and very brief summary of the cause of the company's present woes:

... the ignition switch may inadvertently move out of the “run” position if
the key is carrying extra weight and experiences some jarring event.

The solution?

The use of a key with a hole, rather than a slotted key, addresses
the concern of unintended key rotation due to a jarring road event, such
as striking a pothole or crossing railroad tracks.

France: CNPA takes Chevrolet to court

The Conseil National des Professions de l'Automobile states on its website (and the story is also in L'Argus) that it has responded to the 'brutal' termination of Chevrolet dealers' contracts by instituting proceedings before the Tribunal de Commerce de Paris (having originally sued in the Tribunal de Grande Instance de Pontoise but found that it would take too long to come to court). A hearing took place on 2 May, and a second hearing was fixed for 30 May, but there's no news that I can find about that.

The grounds for the complaint (translated from the French using Google Translate, with a little editing thereafter) are:

• The brutality of the announcement of the withdrawal.

- The last contract was entered into in June 2013. This is obviously accompanied by investment requirements, a few weeks before the announcement of the withdrawal.

- Contractual loyalty would demand that the network be informed earlier (and at least before the press)!

- This is especially true since the registrations were continuously growing in France. Nobody expected this to happen!

• Chevrolet's disloyalty.

The CNPA will provide the Tribunal with evidence that GM's decision is the outcome of a long reflection, intended to favour its other brand OPEL.

• The notice was mortgaged before its notification [or might we say in English that it was a fait accompli?].

- Advertising campaigns about destocking until the exhaustion of stocks showed it to be true.

- Moreover, the delivery time for customers is at least 5 months (and the price of vehicles has increased, officially "among others due to the increase in VAT").

• Breach of contract by Chevrolet, comprising:

- Lack of stock.
- The removal of demonstration vehicles.
- The removal of the budget estimate tool.
- The reduction and disappearance of the communication plan.
- The elimination of sales targets and action plans.

Another case to watch. 

All Our Patent Are Belong To You (Tesla Motors)

I'm not sure about the precise meaning of that strange phrase, but this statement makes clear that what the American electric-car maker is doing is making its technology fairly freely available. Fairly freely? Well, probably on the advice of a cautious lawyer, Mr Musk has announced that anyone can use the patented technology without restriction, in good faith. Those three words could provide an awful lot of escape routes.

The blog post in which Mr Musk made the announcement speaks about 'open-source', though to be fair only as a metaphor for what the company is doing. I don't think the concept of open-source works literally except in the software licensing field, where the source code is usually (in the sort of licensing models with which we are most familiar, at any rate) as closed as can possibly be. The general idea reads over quite well, though, and one has to applaud Tesla's openness. At least, I do.

Why do this? Because it's an emerging technology that requires a huge infrastructure - in particular, charging points. The greater the parc of electric vehicles, and the more manufacturers there are involved to share the costs, the more likely the infrastructure is to be built and the more viable electric cars will be. 

USA: Chrysler-Jeep dealer hopes to reopen

Rimrock Auto Group in Billings, Montana, lost its Chrysler-Jeep franchise (along with 700 ohter outlets) five years ago. It won an arbitration ruling against Chrysler in 2010, and the manufacturer issued a letter of intent to reopen, but Lithia Motors, which had been awarded the Chrysler and Jeep franchises after the original termination, challenged that under the state's dealer franchise law. Under that law, Rimrock was a new dealership. Although both Rimrock and the manufacturer opposed that challenge, arguing that the local market would benefit from having another dealer, the state attorney general decided in favour of Lithia and Chrysler and Rimrock appealed again, this time to the Motor Vehicle Division of the Montana Department of Justice. At the time of writing, they are still waiting for the outcome.



It seems extraordinary to anyone accustomed to the way things are done in Europe that a matter like this should offer so many opportunities for review. Here it would be a simple matter of freedom of contract, and no Department of Justice with a Motor Vehicle Division in it. The European Commission has never been set up to act as a regulator.



Even more extraordinary, as if it were not enough to be able to take so many legal actions, Stephen A Zabawa, co-owner of Rimrock, is working with fellow former Billings Chrysler dealer Bill Underriner (vice-chairman of the NADA) to argue before the state legislature for changes in the law to give dealers even more protection. The idea of it!



'via Blog this'

Plaintiffs' Lawyers Take Aim at GM for Recall - WSJ

Plaintiffs' Lawyers Take Aim at GM for Recall - WSJ - too much ammunition for claimants in the GM report on the defective ignition switch scandal? http://www.autonews.com/article/20140607/OEM11/140609838/lawyers-scan-gm-report-for-details-to-bolster-negligence-suits.

Euro NCAP's Spotlight Falls on Heavy Quadricycles

Although they are not subject to the same safety legislation, EuroNCAP (New Car Assessment Programme) has subjected four heavy quadricycles to crash tests: the results are here and they might make some people feel rather uncomfortable. They do note that these vehicles, which are an increasingly popular alternative to scooters, offer better protection than something that you just sit on. The big problem might be that buyers don't appreciate that a machine can be street legal but untested.

Drug dealer injured in crash entitled to payment under MIB agreement

Although the judge admitted that the public would feel revulsion at the outcome, Delaney v Secretary of State for Transport [2014] EWHC 1785 (QB) (03 June 2014)
shows that there is no over-riding public policy rule against
compensating a drug dealer who suffered major injuries in a car accident
while engaged in a criminal venture. The law is based on EU directives
which allow no scope for such a rule. 

The language of product liability

Reuters reports  that US government officials have released to the public internal General Motors documents dating from 2008 in which engineers were told to mind their language when discussing safety matters - with a view to how internal documents would look to outside observers. They are instructed not to use expressions like "safety" and "defect" when identifying product risks, and "explicitly told them not to use inflammatory terms including 'widow-maker' and 'Hindenburg'." And whoever used "inflammatory" and "Hindenberg" in the same sentence should have known better, too.

Did anyone really have to be told this? Or am I just reading this from a cautious lawyer's viewpoint? Seriously, though, there are important points here - first, that what engineers write in their reports could be prejudicial, but second (as the Reuters article points out, quoting a NHTSA official) that the instructions rob the engineers of some of the vocabulary that they might need in order to communicate to others in the organisation the seriousness of a problem. "Defect" is hard to do without: "Hindenberg" will never have a place in such a document.

Information about alleged vehicle defect does not have to be disclosed

In a decision of the Information Commissioner [2014] UKICO FS50527543 the complainant had requested information held by VOSA regarding the Porsche Cayman vehicle, and in particular the VOSA safety evaluation of the vehicle throttle malfunction. The Driver and Vehicle Standards Agency stated that the information was exempt from disclosure under section 44 of the FOIA (prohibitions on disclosure), by virtue of the Enterprise Act 2002. Section 44(1)(a) of the FOIA says that information is exempt if its
disclosure is prohibited by, or under, any enactment.

Section 237 of the 2002 Act makes it an offence to disclose 'specified information' which relates to the affairs of an individual, or business of an  undertaking, during the lifetime of the individual or while the undertaking continues to exist. Section 238 clarifies that information is specified information if it comes to a public authority in connection with the exercise of its functions. The Information Tribunal has previously been asked to consider the use of section 237 as a statutory prohibition on disclosure and it has concluded it can be used in this way (Dey v ICO and OFT (EA/2006/0057)).

The Commissioner considers that the requested information is ‘specified information’ as defined under EA2002, section 238 (1) (c). This is because it has come to the DVSA in connection with the exercise of a function it has under, or by virtue of, 'such subordinate legislation as the Secretary of State may by order specify for the purposes of this subsection.' As the enforcement authority responsible for vehicle safety, the DVSA was exercising its function under the General Product Safety Regulations 2005. Those regulations (which implement the General Product Safety Directive 2001/95/EC) are subordinate legislation specified by the Secretary of State, and so fall within category (c) of section 238 (1) of the EA2002.

The Commissioner's decision is that the DVSA has correctly applied this exemption and does not need to take any further action.

Mercedes' 'Agility' HP contract not a supply of goods

The Upper Tax Tribunal has ruled that hire purchase agreements are not necessarily to be considered as supplies of goods at the moment they are made. The economic purpose of Mercedes-Benz’s ‘Agility’ programme was not to result in a transfer of ownership, although that might happen. Output tax on the hire of goods under an HP agreement was due over the lifetime of the contract, rather than right away. The tax treatment of the transaction would therefore depend on whether the hirer would normally take ownership of the goods at the end of that particular type of contract, or whether this was merely one possible eventuality.

Mercedes-Benz Financial Services UK Ltd v Revenue And Customs [2014] UKUT 200 (TCC) (02 May 2014)

Never agree to agree

In  Dany Lions Ltd v Bristol Cars Ltd [2014] EWHC 1924 (QB) (01 May 2014)  the court had to consider matters arising from an earlier case (no report available as far as I can see although the story is here in the Telegraph), in which the judge found against Bristol, who had entered into a contract to carry out work on a 405D which went so far as to make it into a convertible and to install an automatic transmission - described by one enthusiast as 'the two worst things you could do to that car' (see the comments on http://jalopnik.com/bristol-cars-still-pissing-off-everybody-as-is-traditi-1470234731). A price was - er - mentioned but Bristol, which had been bought out of administration a few years ago, later insisted it was only an estimate, and anyway they found themselves unable to carry out the work because of a lack of skilled labour and the fact that the car was never designed to take a 'slushbox'. The owner, a solicitor (of course! although that statement involves piercing a corporate veil and working out a simple anagram) had the work carried out elsewhere, pursuant to a settlement agreement, and sued for the extra cost.

The settlement agreement itself illustrates an important principle. It provided for the owner to use reasonable endeavours to find another restorer willing to do the work, by a specified date. At trial, one issue was whether this was enough to create a legal obligation, because the owner narrowly missed the date. It was central to the question of whether damages could be recovered. The High Court held that as long as the object of the endeavours could be ascertained with enough certainty and there were sufficient objective criteria by which the court could evaluate whether performance of the obligation should be fulfilled, an obligation to use reasonable endeavours could be enforced: but certainty could not be established if the object was a future agreement - if matters had been left open for future negotiation - the necessary certainty was lacking, because the parties may have had differing views of what was to be performed when the time came to negotiate. The High Court decided that, as parts of the agreement had been left open for future negotiation, it had no objective criteria against which to judge whether enforcement or refusal to comply with the term was reasonable in the circumstances. Because it was too uncertain to give rise to enforceable obligations the owner was entitled to damages for breach of contract.

The High Court claim was settled by a consent order on terms under which execution was stayed pending Bristol trying to get the Court of Appeal to entertain an appeal, for which the judge had refused to give leave.If the claimant wanted to enforce the judgment it had obtained, it had to give at least seven days' notice. There was a bit of an argument about whether this had in fact been done, but in the end the judge ordered the defendants' solicitors to hand over the money which was in their client account, but stayed pending the Court of Appeal's decision on whether to allow the appeal to proceed.

GM owners claim bankruptcy fraud to keep recall suits alive

In the latest of many twists in the American ignition switch scandal, Automotive News reports (subscription required to read more than the headline) that 'GM's request for court protection from 50 car-owner lawsuits seeking compensation for millions of recalled autos with defective ignition switches [has been] attacked as legally “unsupportable.”' Reuters explains in greater detail, if you feel the need to know more.

The short version is that GM has filed a motion in the Bankruptcy Court for the Southern District of New York (where it seems plaintiffs have also filed a class action claim to forestall this tactic: I am not sure which came first, and it doesn't seem to matter very much for the purpose of this posting), seeking protection against claims that date from before its 2009 bankruptcy and eventual re-emergence as 'new GM'. In other words, they argue that the plaintiffs' claims are against the defunct old company not the new one. That certainly has logic to it, but it doesn't strike me as an attractive argument. Still, when did lawyers ever worry about the aesthetics of the cases they plead?

Honda Motor Europe Ltd & Anor v Powell & Anor [2014] EWCA Civ 437 (11 April 2014)

Honda Motor Europe Ltd & Anor v Powell & Anor [2014] EWCA Civ 437 (11 April 2014) is noteworthy because it has a pretty obvious motor industry angle. Apart from the obvious, though, it's about Honda's group pension scheme, which until
Honda of the UK Manufacturing Ltd ("HUM")
 appeared on the scene had only one company member. The case concerned the interpretation of the manufacturing company's  Deed of Adherence dated 6 October 1986 by which it became a participating employer in the scheme and membership of the scheme was opened to its employees. The question for the Court was whether the Deed of Adherence conferred scale benefits on the HUM members which differed from (and were much less generous than) those in the existing scheme, or whether further documentation was required to produce that result. This turned on the meaning of the provision in clause 1 of the Deed of Adherence which stated that:

"[HME] … hereby extends the benefits of the Scheme to all eligible employees and directors of [HUM] with effect from [1 August 1986]"

The judge at first instance held that it did not confer those scale benefits, and on appeal the Court of Appeal agreed, dismissing the appeal. Important, certainly (£47 million at stake) and interesting if pension schemes are your thing - but not really the sort of subject we need to cover in depth here.

GM puts two engineers in recall probe on paid leave

I have deliberately not been posting about the GM recall affair in the US. Only so much news of what is going on over there is really of interest to British and other European readers, and we don't have Chevrolet Cobalts over here (although we do have Astras and Zafiras, built on the same platform - but presumably with different ignition switches - and soon we won't have more than a handful of Chevrolet cars anyway, which is another story altogether). That affair, though, is probably worth coming back to one day. For now, I just want to comment on the story that GM has sent two of its engineers on paid leave.

According to Just Auto, GM sent the two home after an interim report from the former US attorney who is conducting an independent investigation into the matter. The allegation is that GM knew about the problem with the switches, which can fail in use and deprive the car of braking and steering systems among other things: 13 fatalities are attributed to the problem. What GM did, or didn't do, about it is what everyone wants to try to work out. The two engineers are presumably involved in what happened back in the early 2000s: their identities have been mentioned in the media, but it adds nothing to this story to speculate on who they are.


The reason I considered this interesting enough to write up is this: if you wish to be able to deal with an employee in this way, and there are many reasons why you might so wish, you have to rely on the contract of employment. You have a duty to provide your employees with work, not just to pay them, and however generous it might seem to pay an employee for not working - in the classic case, paying them to tend their garden instead - you can only do this with their agreement, and that agreement is best obtained in advance, when they sign their contract. Most contracts of employment I have seen in recent years address this point, but there might be some 'legacy' contracts floating around, as old as if not older than a Chevrolet Cobalt, which don't have it.

SMMT warns Type Approval could hamper heavy CV market

According to my former, long-time-ago, employers, new Type Approval rules could hamper the heavy CV market.  The new rules come into operation in October, and the bodybuilding industry will have to get its skittles in a row by then otherwise many heavy vehicles will be forced through the individual approval process, which will cause delays in registering them: so say the SMMT, anyway.