UPDATED: Volkswagen Settles Australian ‘Dieselgate’ Class Actions, ACCC Civil Suit

UPDATE (23 September 2019): Volkswagen issued a press release saying that it has now resolved, “in-principle”, the civil suit by the Australian Competition and Consumer Commission (ACCC) against the company. Volkswagen says the terms of settlement must receive judicial confirmation at a hearing to be held in the near future, with the company not issuing any further details until that hearing. The German marque expects the proceedings to be concluded by the end of 2019.
ORIGINAL STORY (16 September 2019): Volkswagen Group says it has reached a comprehensive, in-principle settlement with plaintiffs of five class action lawsuits, subject to approval by the Federal Court of Australia. Volkswagen views the in-principle settlements as a significant step towards fully resolving the diesel lawsuits in Australia, as well as a further step towards overcoming the issue itself.

The class action lawsuits filed on behalf of Australian customers relate to approximately 100,000 Australian vehicles equipped with EA189 diesel engines. If all affected vehicles participate, each customer can expect a payment per vehicle of approximately $1400 on average.

The settlement – on a no-admissions basis – concerns five class-action lawsuits launched by law firms Maurice Blackburn and Bannister Law covering all affected vehicles in Australia. The settlement has to be confirmed by the Federal Court of Australia and a timetable has been set by the court for the necessary steps to occur. Volkswagen expects the proceedings will be concluded in 2020.

In the meantime, Volkswagen says discussions regarding an in-principle settlement of the civil suit against the company by the Australian Competition and Consumer Commission (ACCC) are close to finalisation, with a resolution between the parties expected shortly. The details are currently confidential.

UPDATED: Associations Express Mixed Views Over Government Mandatory Repair Information Paper

(UPDATE 13 Feb: This article has been updated with the MTA NSW’s response.)
Three automotive industry associations have expressed mixed reaction to the release of the federal government’s consultation paper on the introduction of a mandatory scheme for the sharing of vehicle service and repair information between car companies and independent repairers.

The AAAA said it welcomed the document’s release but warned that some aspects of the paper are inconsistent with the ACCC’s findings. VACC gave it a “lukewarm” reception and labelled it “weak”, while the Motor Traders’ Association of NSW “strongly welcomed” the Government’s commitment to guarantee independent repairers access to car manufacturers’ data.

“We strongly encourage the government to take onboard the full ACCC findings and recommendations relating to the attributes of a mandatory scheme, as the overriding objective of this scheme is to provide fair and open competition to promote choice and affordability for all Australian car owners,” said AAAA Chief Executive Officer, Stuart Charity.

“We are concerned about the language used throughout the consultation paper that relate to “exclusions” and “restrictions” that may be included in a mandatory code.  Of course, there will need to be safeguards in place to protect the security and integrity of vehicle related data, however vehicle security should not be used as an excuse by car companies to withhold critical information required to complete a vehicle repair or service.

“These terms were not used in the ACCC Final Report and if they are included in the final code, we have no doubt that car companies will fully exploit this by linking all required information to either security, safety or emissions, and in reality, nothing will have changed for consumers,” said Charity.

“In order for Australian consumers to be treated fairly when it comes to the scheduled servicing, maintenance and repair of their vehicles, car companies should not be able to decide who receives information based on their own definitions relating to safety, security and emissions. The ACCC’s Final Report recommended that all required technical information ‘be shared with independent repairers on commercially fair and reasonable terms, subject to appropriate safeguards to enable the sharing of environmental, safety and security-related technical information,’ and we fully support this recommendation,” he added.

The association is also concerned by the potential for manufacturers to determine the appropriate level of investment by independent workshops in order to access service and repair data. The AAAA believes this will allow vehicle manufacturers to charge exorbitant fees for information, special tools, training and equipment and is unworkable in a market of more than 70 car brands.

“We believe that after two separate government inquiries on this matter and over eight years of consultation, it is now time for the government to build on the ACCC’s findings and recommendations and implement a mandatory code as a matter of urgency,” said Charity.

VACC expressed disappointment over the paper’s lack of penalties for manufacturers that fail to comply with the directive.

“Frankly, this document is not worth the paper it’s printed on,” said VACC Chief Executive Officer, Geoff Gwilym. “If a ‘mandated code’ has no penalties for non-compliance it will not work in the real world.”

VACC wants the government to revise its paper to include significant penalties in a bid to garner largescale compliance.

“VACC has been calling for a mandated code for a long time now. We will not be satisfied until it is a genuine mandated code – this means that there are explicit penalties if manufacturers fail in their obligations to share the information for which they are obliged.”

Gwilym said the time for consultation has long since expired and that all sides of government need to get on with the job of making a mandated code a reality.

“All stakeholders know what’s expected. But relying on goodwill has simply not worked in the past. The industry needs the next federal government to mandate a code of conduct where expectations are fully explained, along with the ramifications for those OEMs who will not play fair.”

VACC said the Labor Party is on record as supporting a mandated code for the sharing of motor vehicle service and repair information, something Gwilym believes will become an election issue.

“In the lead-up to the next federal election, Australian motorists – all 15 million of them – will consider this significant consumer issue as they enter polling booths and decide on this country’s next federal government,” said Gwilym.

MTA NSW said the release of a consultation paper was a step in the right direction, and welcomed the intended creation of an advisory group which will include the association working alongside the national body, the MTAA.

“As the only NSW employer association to represent dealers, independent service providers, repairers, dismantlers/recyclers and other automotive industries, MTA NSW has worked closely over the last 24 months with MTAA to advocate to ensure any regulatory solution takes into account the needs of all automotive businesses and consumers,” said MTA NSW CEO, Stavros Yallouridis.

“We have proactively participated with the MTAA member states and territories to develop a draft code of conduct as a potential solution which has involved extensive analysis of both European and US practical experiences to ensure a pragmatic approach is achieved.

“The code of conduct must not advantage or disadvantage any service provider over another and ensure consumer choice and a level playing field for all automotive sector industry participants. If done correctly then there should be benefits for dealers, independent mechanical repairers and other repair providers,” added Yallouridis.

Compass To Change Advertising Of Its Replacement Vehicles For Accidents

CompassCorp Pty Ltd trading as Compass Claims (Compass) will amend its advertising and sales practices following an investigation by the ACCC.

Compass is a credit hire business which provides hire cars to consumers who are not at fault in car accidents. Compass is one of the largest providers of these services in Australia.

The ACCC considered Compass was misrepresenting in brochures, its website and in phone calls that consumers who engaged Compass would not be liable for hire car charges or associated costs. Although Compass waived those charges, its contract only required Compass to do so if it was able to recover the charges from the at-fault party or their insurer.

The ACCC also considered Compass represented that consumers would not have to take any further steps to recover costs arising from their car hire. Instead, a consumer was required to assist Compass, which could include authorising court action in the consumer’s name, providing witness statements and attending court.
Compass cooperated with the ACCC’s investigation and has made several changes to its advertising, call centre procedures and sales practices to inform consumers of hire charges and their obligation to provide assistance.

“The ACCC will review the marketing and sales practices of other credit hire businesses and will pursue businesses that mislead consumers,” ACCC Deputy Chair Delia Rickard said.