VW confident it can reach deal with U.S. on diesel car buy-backs and fines, says Reuters. The Justice Department was suing the manufacturer for up to $46 billion, and five months after the Dieselgate scandal broke no fix for 600,000 cars was in sight. The story, however, appears to have little of substance to it - no details of what the deal might comprise.
Monday, 29 February 2016
Legg & Ors v Sterte Garage Ltd & Anor [2016] EWCA Civ 97 (23 February 2016)
Legg & Ors v Sterte Garage Ltd & Anor [2016] EWCA Civ 97 (23 February 2016) isn't a case of general interest to the motor industry, being concerned with an insurer's liability for costs in an action brought against a garage, later insolvent, for Rylands v Fletcher damages arising from a diesel spill, but as a case involving a garage it merits a mention here.
Thursday, 25 February 2016
Tesla blocks GM's challenge to direct sales in Indiana
Tesla, which is licensed to sell direct to consumers in Indiana, has successfully resisted a bill which would have required it to appoint dealers, according to Automotive News.
Monday, 22 February 2016
Suits target price-fixing parts makers
Automotive News reports that numerous U.S. dealers and consumers are suing parts makers, claiming that price-fixing by the parts-makers meant that they paid more than they should have for their vehicles. The federal government has already brought a number of criminal antitrust cases, resulting (as we've been reporting for a long time) in corporate fines and prison sentences. Now these new civil claims could introduce the cartelists to a whole new world of pain.
Many of the plaintiffs have consolidated their separate cases into two actions, one each for dealerships and consumers, particularly targeting Japan's largest parts supplier, Denso Corp. There are 23 defendants in total, but Denso is seen as the ringleader. Its size, and the number of vehicle manufacturers it serves, also make it the most significant target. It is big enough to have been able to force reluctant competitors into the cartel, as plaintiffs' lawyers say happened.
Many of the plaintiffs have consolidated their separate cases into two actions, one each for dealerships and consumers, particularly targeting Japan's largest parts supplier, Denso Corp. There are 23 defendants in total, but Denso is seen as the ringleader. Its size, and the number of vehicle manufacturers it serves, also make it the most significant target. It is big enough to have been able to force reluctant competitors into the cartel, as plaintiffs' lawyers say happened.
As is the way in the American courts, the defendants could face triple damages if a jury finds against them. Plaintiff lawyers also stress that defendants could be held liable for damage caused by co-conspirators as well as themselves.
More than 40 dealerships are named as plaintiffs in the other action. For a full listing of dealership plaintiffs and supplier defendants, go to autonews.com/pricefix.
More than 40 dealerships are named as plaintiffs in the other action. For a full listing of dealership plaintiffs and supplier defendants, go to autonews.com/pricefix.
Friday, 19 February 2016
FLA comments on FCA’s review of retained provisions of the Consumer Credit Act | FLA – The Finance & Leasing Association
The Financial Conduct Authority’s is carrying out a review of the retained provisions of the Consumer Credit Act. The Finance and Leasing Association's views on the matter were expressed by Fiona Hoyle, Head of Consumer and Mortgage Finance:
“We welcome this long-awaited review of the remaining provisions of the Consumer Credit Act (CCA), and have already suggested to the FCA a list of out-dated provisions where changes are needed.
“For instance, the wording of statutory notices required to be sent to customers in financial difficulties is abrupt and not in keeping with modern customer service – and a long history of overly complex provisions have, on occasion, left customers and firms with no choice but to seek clarity through litigation.
“We welcome this long-awaited review of the remaining provisions of the Consumer Credit Act (CCA), and have already suggested to the FCA a list of out-dated provisions where changes are needed.
“For instance, the wording of statutory notices required to be sent to customers in financial difficulties is abrupt and not in keeping with modern customer service – and a long history of overly complex provisions have, on occasion, left customers and firms with no choice but to seek clarity through litigation.
Daimler says U.S. lawsuit over Mercedes diesel emissions is unfounded
Automotive News reports that Daimler has described as 'unfounded' a class action brought in the U.S. over Mercedes diesel emissions. The revelations about differences between test results and on-the-road performance seem to have encouraged claimants to seek damages.
VW office raided by S. Korean prosecutors in emissions probe
Automotive News reports that prosecutors in South Korea have raided the local offices of Volkswagen in the course of an investigation into emissions verification and vehicle certification.
Thursday, 18 February 2016
Man arrested over sale of 'dangerous' fake car airbags - BBC News
BBC News reports that City of London Police (who run the national IP crime unit) have arrested a man in Dorset for dealing on eBay in counterfeit airbags. Although the main part of the story concerns counterfeit Honda parts, it seems that other makes may also be involved.
Small diesel cars seen vulnerable to post VW scandal reforms | Reuters
Reuters reports that ACEA points out that new emissions controls, including in particular on the road testing, will have a disproportionate impact on small diesel cars. The expense and added bulk and weight of the extra kit needed to comply with new requirements will be difficult to build in to smaller vehicles (although there always seems to be room for more gadgets ...).
Sunday, 14 February 2016
Germany wants to introduce random emissions tests on cars | Reuters
Reuters reports that Germany wants to introduce random emissions tests on cars. The minister of transport says that the government envisages something like the anti-doping tests administered on athletes (though they are hardly a conspicuous success at present). The aim, of course, is to restore public confidence which has been so battered by the revelations about VW - and who knows which other manufacturers.
Thursday, 11 February 2016
NFDA accuses FCA of being too expensive and complicated | Motor Trader
Motor Trader reports that the National Franchised Dealers Association has told the Chancellor of the Exchequer in its budget submission that the
Financial Conduct Authority is “financially burdensome and
complicated” for dealers. It says that the new Authority charges dealers five times as much as the OFT used to charge, and in addition it is not as helpful either in person or in its published guidance, so dealers are also obliged to incur costs seeking professional assistance.
Wednesday, 10 February 2016
Damages for non-delivery where there is no available market: Hughes v Porsche Centre Bolton
In Hughes v Pendragon Sabre Ltd (t/a Porsche Centre Bolton) [2016] EWCA Civ 18 (20 January 2016) Mr Hughes appealed against the judgment of District Judge Knifton in Preston County Court on 22 November 2013. The judge had held that there was no contract between Mr Hughes, who had paid a £10,000 deposit to secure one of a very few Porsche 911 GT3 RS4 motor cars that would be available in the UK: there was nothing more than an agreement to agree. The dealer's salesman had assured him that he would be first in the queue for one if Bolton received an allocation, but when one did arrive it was delivered to another customer - apparently because Mr Hughes dealt in classic cars and it was feared that he would resell it.
His appeal against that judgment was upheld by the Court of Appeal, Mr Justice Cranston saying that it was "as plain as a pikestaff" that there was a binding contract between Mr Hughes and the dealership, subject only to a condition that a vehicle be allocated to the dealer. Paying the deposit was a lot more than just an "expression of interest".
Although Mr Hughes had signed (although he had also forgotten) a standard-form contract which reserved to the dealer the right to allocate cars in a different order to that in which orders were received, and also said that the terms could only be varied in writing by a director of the company, that did not help the dealer. The salesman told Mr Hughes in an email "you will get the first one from Porsche Centre Bolton if we get one, which I am very confident that we will", but weeks after paying his deposit the salesman emailed him again with the bad news that Porsche had not allocated any of the cars to Bolton. In fact this was untrue: the dealer had been allocated a 911 GT3 RS4 model, but it had been supplied to another customer.
The next problem for the Court of Appeal was how to measure the damages Mr Hughes should receive for breach of the contract. Section 51(3) of the Sale of Goods Act 1979 says that the measure of damages is to be ascertained by the difference between the contract price and the market or current price at the time the goods ought to have been delivered or, as in this case, if no time was fixed for delivery, at the time of the refusal to deliver. But the breach date rules in section 51(3) apply only when there is an available market in the goods - the price being settled by the laws of supply and demand. Market forces could not work in the case of the 911 GT3 RS4: fewer than 30 had been supplied to the UK, and the parties' expert witnesses had been unable to find one for sale when they prepared their reports. The fact that Mr Hughes had particular requirements (he wanted the car in black, rather than the standard white) appear to have complicated the matter.
In that situation, section 51(2) of the Sale of Goods Act 1979 tells us that what lawyers know and love as the rule in Hadley v. Baxendale (1854) 9 Ex 341 applies. The first leg of that rule says that the measure of damages is the loss directly and naturally resulting, in the ordinary course of events, from the seller's breach of contract, based on the value of the contract goods at the time and place of the breach. That can be assessed by any relevant evidence: it does not require any evidence about an actual resale, but can turn on other evidence such as the cost of the nearest equivalent vehicle. Although there was no active market in the precise model, there were equivalent cars being bought and sold, and the evidence was that the going rate was about £170,000. The parties agreed that Mr Hughes would have paid about £135,000 had the car been delivered to him. The difference was his entitlement in damages.
His appeal against that judgment was upheld by the Court of Appeal, Mr Justice Cranston saying that it was "as plain as a pikestaff" that there was a binding contract between Mr Hughes and the dealership, subject only to a condition that a vehicle be allocated to the dealer. Paying the deposit was a lot more than just an "expression of interest".
Although Mr Hughes had signed (although he had also forgotten) a standard-form contract which reserved to the dealer the right to allocate cars in a different order to that in which orders were received, and also said that the terms could only be varied in writing by a director of the company, that did not help the dealer. The salesman told Mr Hughes in an email "you will get the first one from Porsche Centre Bolton if we get one, which I am very confident that we will", but weeks after paying his deposit the salesman emailed him again with the bad news that Porsche had not allocated any of the cars to Bolton. In fact this was untrue: the dealer had been allocated a 911 GT3 RS4 model, but it had been supplied to another customer.
Having won the race to pay his deposit, Mr Hughes was assured that he
would be first in line and the dealership was in breach of contract, Mr Justice Cranston
ruled. If there was an agreement for the sale of a vehicle to the
claimant, and if there had been a collateral contract that the claimant
would be first in the queue if Porsche supplied one to the defendant,
the defendant had been in breach of contract when it had sold the one
vehicle it had been allocated to someone else.
The next problem for the Court of Appeal was how to measure the damages Mr Hughes should receive for breach of the contract. Section 51(3) of the Sale of Goods Act 1979 says that the measure of damages is to be ascertained by the difference between the contract price and the market or current price at the time the goods ought to have been delivered or, as in this case, if no time was fixed for delivery, at the time of the refusal to deliver. But the breach date rules in section 51(3) apply only when there is an available market in the goods - the price being settled by the laws of supply and demand. Market forces could not work in the case of the 911 GT3 RS4: fewer than 30 had been supplied to the UK, and the parties' expert witnesses had been unable to find one for sale when they prepared their reports. The fact that Mr Hughes had particular requirements (he wanted the car in black, rather than the standard white) appear to have complicated the matter.
In that situation, section 51(2) of the Sale of Goods Act 1979 tells us that what lawyers know and love as the rule in Hadley v. Baxendale (1854) 9 Ex 341 applies. The first leg of that rule says that the measure of damages is the loss directly and naturally resulting, in the ordinary course of events, from the seller's breach of contract, based on the value of the contract goods at the time and place of the breach. That can be assessed by any relevant evidence: it does not require any evidence about an actual resale, but can turn on other evidence such as the cost of the nearest equivalent vehicle. Although there was no active market in the precise model, there were equivalent cars being bought and sold, and the evidence was that the going rate was about £170,000. The parties agreed that Mr Hughes would have paid about £135,000 had the car been delivered to him. The difference was his entitlement in damages.
IAAF calls guilty verdict against Kia a 'major victory' for IAM | Professional Motor Mechanic
Professional Motor Mechanic reports an appeal decision in Sweden which IAAF has hailed as a major victory for the independent sector. In December 2012, the Market Court in Sweden had ruled (MD 2012:13) that exclusivity clauses in Kia's 7-year warranty contracts breached competition rules. If the customer breached the terms, the warranty was not void - it was reduced to three years (although whether the terms remained the same is not clear). The company was ordered to allow its customers to choose independent repairers as well as authorised ones, and was fined SEK 5 million. Three years later the Supreme Court in Stockholm dismissed Kia's application for leave to appeal and for a retrial.
Manufacturers are generally prohibited from refusing to honour a vehicle's warranty on grounds only that it has been serviced by a non-authorised repairer or non-original parts have been fitted. Kia's warranty required servicing to be carried out by an authorised workshop. The Association of Swedish Car Parts Wholesalers (SBF), the Swedish member of FIGIEFA, reported the matter to the Competition Authority, which declined to take action. The SBF then took legal action against the manufacturer in the Market Court, which granted an injunction against Kia under Chapter 3, section 2 of the Competition Act - a provision which enables a party to obtain an injunction to bring an infringement to an end, when the Competition Authority has decided not to proceed. (Of course, that's a different matter from the Competition Authority deciding that no infringement has been committed: it might well decide not to proceed for other reasons, perhaps - I'm guessing here - because there is insufficient public interest, although this shouldn't have been a case where that was a good reason for not devoting resources to it.) In essence, it allows a private interest to take action where the public body hasn't.
Section 2 does not enable the party bringing the action to claim damages, but it does deal directly with the problem - and there remains the possibility of a follow-on action for damages anyway. The Market Court has decided a number of cases - 14, according to the CELEC report, which is now three years old: and the petitioner has been successful in "several" of them.
The Market Court took the view - unsurprisingly, I think - that the relevant market for servicing and repairs was a brand-specific one. It decided that the condition in the warranty had serious foreclosing effects because independents were excluded from competing: one of the objects of the condition was to restrict competition. It would be prohibited under Article 101 TFEU and the equivalent provision in the Swedish competition law.
Prof Henriksson of the Center [sic] for European Law and Economics (CELEC) questions whether it is correct to view the agreement between Kia and its authorised repairers as restricting competition because of the condition imposed on customers. It's an interesting point, although it might be answered by scrutinising the authorised repairer agreement. If Kia have been clever, though, I guess the agreement will be silent on the matter and the restriction will be imposed through the back door, by deterring consumers from going elsewhere. Perhaps the AR agreement says that dealers will not honour warranties in the prescribed circumstances - or in practice they will be prevented from doing so, within the framework of the AR agreement, by the fact that they won't get paid for their work.
Prof Henriksson also asks whether this is indicative of a difference of opinion between the competition authority and the court about what amounts to a breach of the prohibition. That seems unlikely: Christer Liljenberg, Chairman of SBF, is quoted by FIGIEFA as saying that the competition authority had indicated that it did seem to be a breach.
Manufacturers are generally prohibited from refusing to honour a vehicle's warranty on grounds only that it has been serviced by a non-authorised repairer or non-original parts have been fitted. Kia's warranty required servicing to be carried out by an authorised workshop. The Association of Swedish Car Parts Wholesalers (SBF), the Swedish member of FIGIEFA, reported the matter to the Competition Authority, which declined to take action. The SBF then took legal action against the manufacturer in the Market Court, which granted an injunction against Kia under Chapter 3, section 2 of the Competition Act - a provision which enables a party to obtain an injunction to bring an infringement to an end, when the Competition Authority has decided not to proceed. (Of course, that's a different matter from the Competition Authority deciding that no infringement has been committed: it might well decide not to proceed for other reasons, perhaps - I'm guessing here - because there is insufficient public interest, although this shouldn't have been a case where that was a good reason for not devoting resources to it.) In essence, it allows a private interest to take action where the public body hasn't.
Section 2 does not enable the party bringing the action to claim damages, but it does deal directly with the problem - and there remains the possibility of a follow-on action for damages anyway. The Market Court has decided a number of cases - 14, according to the CELEC report, which is now three years old: and the petitioner has been successful in "several" of them.
The Market Court took the view - unsurprisingly, I think - that the relevant market for servicing and repairs was a brand-specific one. It decided that the condition in the warranty had serious foreclosing effects because independents were excluded from competing: one of the objects of the condition was to restrict competition. It would be prohibited under Article 101 TFEU and the equivalent provision in the Swedish competition law.
Prof Henriksson of the Center [sic] for European Law and Economics (CELEC) questions whether it is correct to view the agreement between Kia and its authorised repairers as restricting competition because of the condition imposed on customers. It's an interesting point, although it might be answered by scrutinising the authorised repairer agreement. If Kia have been clever, though, I guess the agreement will be silent on the matter and the restriction will be imposed through the back door, by deterring consumers from going elsewhere. Perhaps the AR agreement says that dealers will not honour warranties in the prescribed circumstances - or in practice they will be prevented from doing so, within the framework of the AR agreement, by the fact that they won't get paid for their work.
Prof Henriksson also asks whether this is indicative of a difference of opinion between the competition authority and the court about what amounts to a breach of the prohibition. That seems unlikely: Christer Liljenberg, Chairman of SBF, is quoted by FIGIEFA as saying that the competition authority had indicated that it did seem to be a breach.
NHTSA on driverless cars
The (United States) National Highway Transport Safety Administration has indicated to Google that autonomous cars can be regarded as drivers in their own right, overcoming the rather important legal objection that a car without a driver is not roadworthy. See Google -- compiled response to 12 Nov 15 interp request -- 4 Feb 16 final.
Thursday, 4 February 2016
Google Self Driving Cars Now Considered "Drivers" by NHTSA
CleanTechnica and The Guardian report NHTSA's decision that Google’s Self-Driving
Car Artificial Intelligence is considered to be the “driver” of some
of the first autonomous vehicles on the roads.
The agency's interpretation of the definition of a “driver” came in the form of a letter from the NHTSA in response to an inquiry made by Google.
The agency's interpretation of the definition of a “driver” came in the form of a letter from the NHTSA in response to an inquiry made by Google.
Motor Law Conference 2016
This year's conference will take place on 25 February, at the RAC in Pall Mall as usual. This year it includes a lecture in memory of Anthea Worsdall, and I'm only sorry that it has taken me so long to get round to organising it. The memorial lecturer is Prof Geoffrey Woodroffe, author of the leading textbook on consumer law, Woodroffe and Lowe's Consumer Law and Practice and formerly of Brunel University - it will be very interesting to hear what he has to say about the new Act.
As well as Geoffrey there's a great roster of speakers and subjects, including aspects of the topical emissions scandal, how software copyright law might affect maintaining vehicles, and lots more about the Consumer Rights Act.
The early booking discount has been extended to 10 February, so please book your place now! Booking forms can be downloaded from here, and the conference programme (which is still a work in progress) can also be found there.
As well as Geoffrey there's a great roster of speakers and subjects, including aspects of the topical emissions scandal, how software copyright law might affect maintaining vehicles, and lots more about the Consumer Rights Act.
The early booking discount has been extended to 10 February, so please book your place now! Booking forms can be downloaded from here, and the conference programme (which is still a work in progress) can also be found there.
Tuesday, 2 February 2016
Luxury car 'ringing' gang jailed - Telegraph
The Daily Telegraph tells of a gang of "ringers" who targeted luxury cars, posing as prospective purchasers and stealing the cars on test drives then changing the vehicles' identities and providing them with false documents. They used the identities of cars that had been exported, and obtained replacement logbooks from DVLA to complete the deception.
Police recovered some 40 cars worth £1.5 million, along with a lot of cash and blank keys. Three of the gang members were sentenced to between six and eight years (the longest sentence being imposed on the mastermind of the operation, who was already in prison and using an illicit mobile phone to run the ringing scam) and seven more members to a total of 20 years between them.
Police recovered some 40 cars worth £1.5 million, along with a lot of cash and blank keys. Three of the gang members were sentenced to between six and eight years (the longest sentence being imposed on the mastermind of the operation, who was already in prison and using an illicit mobile phone to run the ringing scam) and seven more members to a total of 20 years between them.
Automobile industry reiterates call for urgent clarity on RDE | ACEA - European Automobile Manufacturers' Association
Ahead of the vote on real driving emissions (RDE)
in the European Parliament on 3 February, the European Automobile
Manufacturers’ Association (ACEA) reiterated its call for urgent
clarity so manufacturers can plan the development and design of
vehicles in line with the new RDE requirements.
RDE will introduce a completely new testing method
for vehicles on the road. Europe is the first and only region in the
world to introduce such a system, which will lead to major progress
in improving air quality.
While the current proposal takes into account
error margins in the new measuring equipment, vehicle manufacturers
will have to aim well below the legal limit to ensure compliance.
Moreover, the error margin will be reviewed and, as the equipment
improves in precision, the conformity factor will be tightened.
“Looking at the timescale for RDE, the proposal
represents a tremendous challenge for Europe’s car manufacturers in
terms of timing and investments, but the industry is absolutely ready
to take it up,” stated ACEA Secretary General, Erik Jonnaert.
A rejection of the member states’ decision by
the European Parliament would increase uncertainty for the industry
and leave little time to make the necessary changes to vehicles and
assembly lines. “Ultimately, it would delay improvements to air
quality, particularly in cities,” said Jonnaert.
A final word on the matter from the Financial
Times: "Some lawmakers say blueprint for new system is so
lenient that its provisions are illegal."
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