Monday 26 September 2016

Nurse takes on car giant over sins of emission

A Roscommon nurse is challenging Volkswagen over its dodgy tests of car emissions in a court case that will have huge implications for the corporation.

Published 11/09/2016 | 02:30

Castlebar District Court is hearing a case against Volkswagen
Castlebar District Court is hearing a case against Volkswagen

It is being billed in international headlines as a David-and-Goliath battle between a nurse from Roscommon and Volkswagen, one of the biggest corporations in the world.

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Castlebar District Court normally handles the run-of-the-mill local prosecutions such as drink-driving cases and petty crime. This week it found itself at the centre of the global scandal over emissions from VW cars, and there are billions of euro at stake.

The leading German financial newspaper Handelsblatt is among the news outlets covering the case in depth. It reported: "An Irish court may force the company to reveal internal documents for the first time relating to the emissions scandal. The implications are huge for the carmaker and future class-action suits in Europe and abroad."

The case against Volkswagen is being taken by Eithne Higgins from Croghan, Boyle, Co Roscommon. The nurse is looking for compensation after Volkswagen admitted cheating on emissions tests.

The company conceded a year ago that it fitted "defeat devices" which recognised when the cars were being tested for pollution and switched on systems which cut emissions so they could pass the test.

The complex Castlebar case is dealing with whether there was an issue with carbon dioxide (CO2) and/or oxides of nitrogen (NOx) emissions on the nurse's car.

Her claim states that there may be implications for the payment of Vehicle Registration Tax or road tax as a result of incorrect emissions data.

The court heard that after the emission revelations emerged, she tried to trade in her 2010 Seat Leon at three different garages, but each time she was unsuccessful. The Seat brand is part of the global Volkswagen empire.

In court, Ms Higgins was represented by Evan O'Dwyer, a Mayo solicitor who is also representing a number of other clients who plan to take cases against Volkswagen. He has been working with the US-based legal firm Hausfeld, which handled compensation claims in the United States.

In court this week, O'Dwyer criticised the respondents and their legal representation, stating that he and his client had been "bullied". He also claimed Ms Higgins had received three letters stating the company would pursue her for costs if she proceeded with the case.

A statement from Volkswagen Ireland's technical services manager Stephen McDonnell was read into the record, stressing that CO2 emissions were not linked to the NOx emissions.

However, this was dismissed by emissions-expert Horace Calvert Stinson, who said it didn't stack up with theory, practice or experience.

The case took a bizarre turn on Tuesday when barrister Paul Fogarty and two instructing solicitors from A&L Goodbody, who were representing the car company, left the court, labelling the proceedings as "entirely inappropriate and unfair".

Judge Mary Devins referred to the actions of the legal team as "a spectacular walk-out", and on the following day she said it was "the most unusual thing" she had seen in her court.

Volkswagen has already agreed to pay a total of $14.7bn (€13bn) in the US to settle claims that it deceived customers and cheated pollution tests with its diesel engines.

The German carmaker is spending up to $10bn (€9bn) compensating customers who bought a total of almost 500,000 affected 2.0 litre diesel engine cars.

Their cars are being modified to meet standards, bought back by VW, or leases on them are being terminated after the company admitted to fitting the "defeat devices". Customers can look forward to payments of up to €9,000 on each car, depending on the vehicle's age.

The cars affected gave low readings when they were undergoing tests.

However, under normal driving conditions, when emissions control systems were switched off, they pumped out up to 40 times the permitted amount of pollution. When this was revealed, VW was plunged into crisis.

It later emerged that as many as 11 million VW cars worldwide were affected by the so-called "dieselgate" scandal.

Sally Yates, US deputy attorney general, said: "By duping the regulators, VW turned nearly half a million American drivers into unwitting accomplices in an unprecedented assault on our atmosphere."

While the deal began to bring closure to VW's troubles in the US, there have been demands for similar compensation deals for customers around the world, something the company has so far refused to countenance.

Emissions from cars have become hugely important for consumers in Ireland, not only because they can affect the results of the National Car Test. They are also used to determine rates of motor tax.

Conor Faughnan, director of consumer affairs at AA Ireland, says the direct implications of the Castlebar case are uncertain. However, he said the Volkswagen scandal has had a profound impact on the car industry.

"In the longer run, the consumer is going to want much more scrutiny into claims made by car manufacturers.

"The move to base taxation on emissions from cars was a sensible move and has been enormously successful.

"But the Volkswagen story shows that you have to be able to verify it. The consumer has become a lot more sceptical about the claims of carmakers, and it has fuelled a lot of public cynicism."

Sales of Volkswagen cars in Ireland have taken a dent since the emergence of the emissions scandal.

Sales were down 9pc in July over the same month last year. Sales in the United States are believed to be down 8pc.

But the effects of the company's financial health may not be as calamitous as some might have expected.

According to the Fortune 500 survey, Volkswagen remains the seventh-largest company in the world with annual revenues of €210bn.

Although it has found itself under a barrage of bad publicity, it reported recently that the hit to its profits may not be as bad as first thought.

Faughnan says: "It will affect VW as a company, but if you look at sales of the brand and its market share, the consumer still seems to like them.

"They will continue to be robust, not just in Ireland but elsewhere.

"They will survive this, but it is a chapter in their history that they will not be able to look back on with any pride."

Much attention has focused on Ireland's supposed cosy deals with Apple over the past few weeks, but the relationship between VW and the German government has also come under close scrutiny recently.

In the past, the German authorities have been accused of treating the country's car companies with kid gloves over emissions, and in the present scandal there has been no rush to punish VW.

The EU authorities have also been accused of dragging their feet in acting against VW, in contrast to the response in the United States.

Volkswagen is already committed to retrofitting millions of European cars and argues that paying out even a fraction of what has been agreed in compensation for US drivers would quickly bankrupt the company.

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