Dieselgate: $4.3 billion in U.S. fines and penalties

Several sources report that a Federal judge has imposed the criminal penalty mooted in January for VW importing 590,000 illegally polluting diesel vehicles into the US from 2009. A plea agreement, whereby VW admitted conspiracy, obstruction of justice, and introducing important merchanidise into the US by means of false statements, required the car maker to pay $2.8 billion (£2.2 billion) in fines and $1.5 billion (£1.2  billion) in civil penalties: it also demanded that VW continue to co-operate with Federal and state investigators. An independent monitor would be appointed for three years, and other conditions were to be imposed to ensure compliance in the future. Without the plea agreement, the US government said that the manufacturer faced potential fines of between $17 billion and $34 billion.

US District Judge Sean Cox, in the District Court for the Eastern District of Michigan, has now confirmed the settlement, while expressing the hope that continuing investigations will turn up more information about where responsibility lay, leading to the prosecution of the individuals concerned. He expressed the view that it was not the management of VW who would suffer but those who labour to make the car, who would be denied bonuses because of the cost to the company of dealing with the fraud.

The Department of Justice has appointed former US Deputy Attorney General Larry Thompson as the independent monitor.

VW continues to buy back affected models, and faces civil litigation in the US and criminal investigations and claims elsewhere. Seven executives also face charges in the US.

Automotive News

Car Dealer Magazine

Reuters

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EU to propose linking CO2 emissions for trucks, cars to road toll charges

Automotive News Europe reports that the Commission will shortly publish proposals to make vehicles pay higher road toll charges according to the amount of carbon dioxide they emit. It will be the first time that the EU has intervened in the road tolls field except for trucks, and is expected to set out EU-wide principles such as the idea that drivers should pay a toll related to the distance travelled, and including buses and coaches. Time-based charges, such as those in Germany, will not be permitted, and tolls will have to avoid discriminating against foreign drivers - another issue which Germany has faced. It aims to be revenue-neutral, so more-polluting vehicles will be charged more while cleaner ones will face lower tolls.

ACEA has indicated that it supports differential road charging provided it promotes low emissions in real conditions of use, and fair competition between types of vehicles. To achieve an optimal result, ACEA argues that the real emissions of the complete vehicle combination - including tyres, weight and aerodynamics - must be taken into account. But the proposals will not be universally welcomed - hauliers will oppose the phasing out of time-based vignette systems which are cheaper to operate than distance-based charges, which will require new onboard equipment.

The proposals will not mandate the hypothecation of revenues from tolls, but will include disclosure requirements to it will be clear where the money raised is spent.

The proposals are expected to be published on 31 May.

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One in six drivers believe running a red light is legal

A survey for Admiral, the insurer, reported by Fleet News, reveals alarmingly that one in six drivers believes that it is legal to run a red light. Admiral's spokesperson says they were shocked at this, "when in fact it could land you points on your licence." I'd have thought an insurer would be thinking about other consequences.

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Scrappage scheme for diesels mooted by government

The Financial Times reports that the government is considering a state subsidy of £1,000-£2,000 to encourage motorists to trade-in older, more polluting diesel vehicles for newer, cleaner models. The scrappage scheme is expected to form part of the government’s forthcoming clean air strategy, due to be published on 24th April - but that's another story.
[Editor's note: the day after this news became public the general election was called and the potentially disastrously unpopular idea of taking action against diesel cars was shelved until after the election - or so the government thought.]

FCA investigates 'irresponsible' car loans

The Financial Conduct Authority is investigating the car loans market, concerned that borrowers do not have to show that they can afford repayments. Basic credit checks may be supplemented by the sort of tests usually associated with mortgages, if the FCA considers it necessary. The amount being borrowed to finance new cars has trebled over the past eight years. The FCA's statement is in its business plan for 2017-18 - on page 74, if you are interested enough.

The Telegraph reports that the Bank of England is concerned that the trend could precipitate a financial crash if not brought under control. The paper also reports that an investigation performed by its journalists revealed that sales people were encouraging customers to spend their entire disposable income on 'pay monthly' deals for cars worth more than they earned in a year. Experia also warn that their data suggest that households with 'stressed' incomes account for a large part of the growth in 'pay monthly' car purchases.

In 2014 the FCA made affordability checks for mortgages more stringent, requiring more information about spending, amid fears that borrowers were over-stretching themselves to get on the housing ladder, and the same sort of checks might now be extended to car loans. The FCA notes that there may be 'a lack of transparency, potential conflicts of interest and irresponsible lending in the motor finance industry.'

See also Motor Trader's report, which in turn refers to an interesting posting on the Bank of England's "Bank Underground" blog (who'd have thought?) about the motor finance scene.

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The Brexit White Paper

The grandly-named Great Repeal Bill White Paper (officially entitled "Legislating for the United Kingdom's withdrawal from the European Union") was published by the government on 30 March. It sets out "the government’s proposals for ensuring a functioning statute book once we have left the EU". Which is just as well, because without the EU the statute book could have some big holes in it. Commercial and consumer law, company law, intellectual property law, construction and use of motor vehicles - the list goes on.
It covers plans for converting existing EU law - the acquis, as EU lawyers call it - into UK law, making any idea that Brexit is about regaining sovereignty illusory, at least in the medium term, and explains how "corrections" will be made to the statute book. It also deals with the repeal of the European Communities Act 1972, which is probably much the easiest part of the process.
The upshot is that business will find the legal landscape much the same after Brexit as before. The Great Repeal Bill will convert all EU laws that apply to the UK into domestic laws - the only practicable approach to the problem. It won't make substantive changes, except where some amendment is necessary to ensure that the law functions properly.
So, sovereignty consists of accepting the acquis and reserving the right to change once the UK has regained its "independence". What about the vexed question of the supremacy of the Court of Justice? The White Paper promises that historic decisions of the Court of Justice will be given the same status as decisions of the Supreme Court. That much is consistent with adopting the acquis into UK law, as any other approach would be to change the law. Lower courts could not overrule Court of Justice decisions, and the White Paper says that the government "expects" the Supreme Court to take a "sparing approach" to departing from existing case law - in much the same way as the Supremes deal with their own (and the House of Lords') existing case law. But to have the government tell us what it expects the judges to do feels very uncomfortable, especially when the judiciary has already been denounced as "enemies of the people" by the pro-Brexit press.
The necessary primary legislation will be introduced in the next Parliamentary session, and will take full effect the day the UK leaves the EU. The power to "correct" legislation by statutory instrument will have to come into operation before then. The government estimates that between 800 and 1,000 statutory instruments will be needed, and expresses its intention to strike the right balance between parliamentary scrutiny and speed. Notwithstanding that the whole purpose of Brexit was to restore Parliament's sovereignty and ensure that legislation be properly scrutinised in future, it is paradoxical that a compromise should be necessary - a compromise in which speed will almost certainly have to take precedence over scrutiny. At least the government promises that the power to make corrective secondary legislation will be limited in time.

Welsh car dealer fined £12,000 for offering to supply a dangerous vehicle - Car Dealer Magazine

Car Dealer Magazine reports that a dealer in Wales has been fined £12,000 (reduced from £18,000 to recognise that the dealer had pleaded guilty) under the General Product Safety Regulations 2006 for supplying a Renault Clio in dangerous condition. The handbrake did not work. More to the point, perhaps, is that the company had previously been cautioned for similar offences and had been given advice (at another site) about the importance of all vehicles it offered being safe.

The Court was told that safety checks were carried out by staff members who had no formal mechanical training or qualifications.



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The Road Vehicles (Registration and Licensing) (Amendment) Regulations 2017

The Road Vehicles (Registration and Licensing) (Amendment) Regulations 2017 deal with the important matter of sharing vehicle registration information with other countries, specifically other EU Member States. It empowers the Secretary of State, through DVLA, to provide information to the authorities of another Member State about the registered keeper of a vehicle registered in the UK, along with certain other information on the register. The information must be requested to facilitate the investigation in the other Member State of an alleged traffic offence relate to road safety which took place after the Regulations came into effect.

The Secretary of State is also designated for the purpose of requesting the same information from other Member States where offences are committed in the UK.

The offences to which the Regulations apply are drink driving, driving while under the influence of drugs, failing to stop at a red traffic light, failing to use a seat belt of child restraint, failing to wear a crash helmet, using a hand-held communication device while driving, speeding, and using what is ominously called a "forbidden lane".

The Regulations implement (or "transpose") EU Directive 2015/413 of the European Parliament and of
the Council of 11th March 2015 facilitating cross-border exchange of information on
road safety related traffic offences. This directive replaced  Directive 2011/82/EU which the Court of Justice found had been made under the wrong Treaty power (justice and home affairs), which allowed the UK (and Ireland and Denmark) to opt out of it.

The Regulations were made on 6 April and come into effect on 6 May 2017.



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