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.