CMA update on Volkswagen - Publications - GOV.UK

The CMA has announced that it is not going to be taking action under its consumer protection powers over the Dieselgate affair. You might be excused for thinking that this tells us more about the limits to its powers than anything else: but as the statement makes clear, much of the relevant law has changed since.



You can read the whole (one side of A4) statement via the link above, but the interesting bit is this:

A number of considerations have been taken into account in reaching this
conclusion, including the fact that the Consumer Rights Act 2015, which gives the
CMA new powers enabling it to secure compensation for consumers, only came into
effect on 1 October 2015, which is after the affected vehicles were sold, and that VW
has committed to fixing the affected vehicles. This means that in this case, the
CMA’s civil enforcement powers have limited application to the alleged wrongdoing
that took place.

 Regarding a criminal investigation, an important consideration was that the alleged
misconduct at the root of this issue appears to have taken place outside the UK,
notably in Germany, and is the subject of a criminal investigation by the German
authorities. In view of this, the CMA has had regard to the general presumption that
a prosecution should take place in the jurisdiction where the majority of the more
serious criminality occurred. 

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Rogue dealer

Car Dealer Magazine reports that a dealer admitted seven offences under the Unfair Trading Regulations and was sentenced to four months in prison - but the sentence was suspended for two years. The individual, Peter Coulton, ran a company called Lloyds Motor Centre Limited in Warrington, but the business had become insolvent and had been voluntarily wound up. The dealer's conviction therefore was little help to the customers who had complained of being left with defective cars: there was no money with which they could be compensated for the £9,000 which they had reportedly lost.

The case illustrates the sort of activities that can lead to prosecution. One customer had told him that the car had to be safe because it was for her 18 year old daughter, but when examined by a mechanic it turned to to have several serious faults. She was told by the dealer to take the matter up with the warranty company, which would have been little help anyway, but there was in fact no warranty anyway.

Car Dealer Magazine also reports another customer whose car broke down a week after being bought, and one the MoT on which had expired the day before being sold.



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US: California jury clears FCA of price discrimination between dealers

Law360 reports that a jury in a federal court in California has found that Chrysler (as was) did not violate federal antitrust laws by offering better incentives to some dealers. The case, in which it claimed $1.7 million, had been brought by a dealer in San Jose, and some three years of litigation was disposed of by the jury in just a day.

The remarkable thing about this, to my mind, isn't so much the outcome as the fact that a dealer would even bring a claim in the first place. It's not something you see very often in Europe. Also interesting to note that it was a federal antitrust law case, not a claim under the often very protective laws governing dealer-manufacturer relations at state level.

Trading standards under pressure: was Liverpool right to impose cuts?

Local Government Lawyer reports a legal challenge initiated by a former trading standards officer, supported by the CTSI, against Liverpool City Council which had cut its trading standards department from 19 to four people.

CTSI say it is the second time that Liverpool have faced pressure to reduce the trading standards function. Local Government Lawyer reports that contempt of court proceedings were being brought in Manchester, and the question before the court concerned the adequacy of the Liverpool review. According to CTSI, the Council agreed to carry out a second review so, without admitting wrongdoing, it seems to have dealt with the contempt action.

The argument is based on the extensive range of statutory duties imposed on local authorities, and whether Liverpool's TSD was equipped to discharge them.

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Coventry dealer gives undertakings to trade fairly

Car Dealer Magazine reports how a dealer from Coventry gave undertakings to Trading Standards (for himself and his companies) that he will trade fairly in future. The undertakings could be seen on his website, where he agreed to publish them to satisfy the authorities who had received many complaints about the businesses: but it seems that the business has now stopped trading.

The undertakings say that the dealer and the companies will not:

• deny consumers their statutory rights under the Consumer Rights Act 2015;
• sell vehicles in an unroadworthy condition;
• falsely describe vehicles as having full service histories when they do not;
• make false statements as to the specification of a motor vehicle; and 
• fail to respond in a timely fashion to telephone calls, emails or other correspondence from consumers regarding faulty vehicles.

A breaach of the undertakings would amount to a contempt of court, and could result in imprisonment.
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VW's $1.2billion settlement with US dealers - Car Dealer Magazine

Car Dealer Magazine reports that VW has finalised a settlement, agreed in principle on 25 August, with 652 US dealers over claims arising from the emissions scandal involving TDI vehicles, and other matters. The setlement must now be approved by Judge Charles R. Breyer in the US District Court for the Northern District of California, who is presiding over the federal multi-district litigation.

Dealers are set to receive an average of $1.8 million over 18 months and in addition to the cash payments will also get additional benefits to resolved alleged past, current and future claims of losses in the value of the franchise.

The manufacturer stresses that the agreement is not intended to affect any of its obligations outside the US. It maintains that obligations relating to diesel cars in other jurisdictions are different.