VW emissions scandal – OGH grants buyers rescission of purchase

The Supreme Court ruled that the later installed software to correct the problem again contained a “thermal window” and did not repair the damage to the buyer (10 Ob 2/23a). “This decision is the ‘solver’ for all proceedings that are being conducted because of the original scandal engine (EA189). The claims are not yet time-barred,” says lawyer Michael Poduschka, who represents the plaintiff’s car buyer in this case, about the verdict. The effects are also enormous for all other car brands affected by the emissions scandal.

VW, on the other hand, criticizes that the Supreme Court based its decision on incorrect facts about the thermal window in the new software. Otherwise, the Supreme Court would have had to recognize that the original defect had been remedied with the software update, says the German car manufacturer.

Based on a ruling by the European Court of Justice (ECJ), the Supreme Court has ruled that switching off the exhaust gas cleaning system outside a certain temperature range (thermo window) represents damage to the buyer, as the further use of the vehicle is uncertain.

In the judgment just served, the OGH also ruled that VW would have to prove that it had not even acted negligently in connection with the shut-off device for the exhaust gas cleaning system. Since the emission standards represent a protective standard, a reversal of the burden of proof applies here. “The vehicle manufacturers have to prove that they did not know that the thermal windows violate the applicable law – no one will be able to do that,” Poduschka expects.

VW has admitted to committing emissions control fraud
The background to the current verdict is the VW emissions scandal that became known in 2015. The company has admitted that, at least for one widespread engine type (EA189), exhaust purging only worked fully on the test bench, but often shut down in real-world operation, especially when cold and hot. Since then, numerous lawsuits for damages have been pending, not only in Austria. VW had tried to rehabilitate the engine with a software update. However, because the new software also includes a thermal window, the damage was not repaired, the OGH now found.

VW objects that the court of first instance, whose judgment has now been largely upheld by the Supreme Court, has accepted the thermal window as too narrow. In reality, the thermal window is wider, so the exhaust gas cleaning also works at higher and lower temperatures than assumed in the assessment. VW therefore assumes that the defect in the exhaust gas cleaning has been remedied by the new software.

The Supreme Court made its decision on the basis of false facts, says VW. However, these could not be corrected in this procedure. The judgment therefore only affects “a double-digit number of proceedings” at first instance with similar “inaccurate and irremediable factual findings”, according to VW. The company believes that the current OGH ruling will not affect the remaining cases – nearly 1500 -.

Lawyer Poduschka sees it differently. According to him, VW would now have to prove exactly where the thermal window is located for each vehicle, which would be cumbersome and expensive. In this judgment, the OGH also explicitly stated that the vehicle manufacturer is also liable for damage without a direct contractual relationship with the buyer, so also if the purchase was made through a dealer.