Volkswagen slapped by German court despite effort to dodge blow

An employee uses a power tool to secure the suspension system near the exhaust on the rear of a Volkswagen (VW) Golf GTI automobile at the VW factory in Wolfsburg, Germany. (Reuters pic)

BERLIN: Germany’s top court took a rare swipe at Volkswagen (VW) after the carmaker looked to sidestep a blow to its defence strategy in thousands of complaints stemming from the diesel-cheating scandal by settling a case at the last minute.

While the Federal Court of Justice had to cancel a planned hearing for Feb 27 after the plaintiff withdrew the complaint, it unusually laid out its opinion on Friday, batting down VW’s arguments that its cheating software was legal under European Union law and therefore the company isn’t required to compensate affected customers.

VW had sought to reach a settlement in the case to avoid a ruling against it by Germany’s top court that could weaken its defence strategy amid a barrage of claims.

Some 400,000 customers have signed up for a mass suit against the world’s largest automaker.

VW wasn’t immediately available for comment.

The development could deepen Volkswagen’s legal woes stemming from the three-year-old scandal.

In 2015, the carmaker admitted to rigging diesel cars to detect test conditions and lower emissions levels to legal limits, while polluting more on the road.

The crisis involved as many as 11 million diesel cars worldwide and cost VW about 28 billion euros (US$32 billion) so far.

Probes by German prosecutors into the root of the engine rigging are ongoing.

The customer in the case had demanded a new car from VW because the Tiguan diesel SUV he bought in July 2015 – two months before US authorities uncovered the engine manipulations – was rigged.

VW has claimed it can’t deliver a new car because it’s not produced any more.

The current Tiguan SUV, which starts at 27,775 euros, is the successor model and the customer bought the previous version.

In its statement, the court said VW had the obligation to provide a vehicle free from defect and that the model change doesn’t rule out a replacement.

The court didn’t indicate what affect software updates would have on VW’s position.