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Watchdog rules out action against VW over emissions tests scandal

Car's exhaust pipe

The UK regulator – the Competition and Markets Authority (CMA) – has ruled out launching a formal investigation into the Volkswagen Group over the emissions scandal.

The Department for Transport (DfT) revealed earlier this year that it had submitted technical information to the CMA as it considered legal action.

However, the DfT has now revealed the CMA has decided against pursuing the matter. Key to its decision was the fact that new powers enabling the CMA to secure compensation for consumers only came into effect on October 1, 2015, which was after the affected vehicles were sold in the UK.

In addition, the DfT said: “We have been advised that an important consideration was that the alleged misconduct at the root of this issue appears to have taken place outside the UK, notably in Germany, and is the subject of a criminal investigation by the German authorities.

“In view of this, the CMA has had regard to the general presumption that a prosecution should take place in the jurisdiction where the majority of the more (alleged) serious criminality occurred.

“The CMA has told us that it will continue to monitor developments. Should new information be brought to its attention, or if Volkswagen Group’s future conduct leads to consumer detriment, it will re-assess the options available.”

The DfT and Vehicle Certification Agency’s (VCA) failure to push for legal proceedings against Volkswagen Group following the emissions scandal has been labelled “frighteningly complacent” by MPs on the Transport Committee.

However, in its official response to the committee’s report Volkswagen emissions scandal and vehicle type approval the DfT said: “We have not ruled out opening our own investigation.”

Prosecuting authorities from across Europe have met to discuss and coordinate their investigations and the DfT said its officials have been part of coordinating efforts.

“This is a complex area as the (alleged) wrongdoing by the multinational Volkswagen Group is likely to have taken place in various jurisdictions,” it said. “We understand that investigations in Germany (where the Volkswagen Group is based and the relevant engines were developed) require the review and assessment of vast amounts of material.

“The Government wants to ensure that the Volkswagen Group faces appropriate legal consequences for its manipulation of emissions tests and is continuing to consider how best to do this.”

The emissions scandal has resulted in 508,276 Volkswagens, 393,450 Audis, 131,569 Škodas and 76,773 Seats being recalled in the UK.

The cars contained software to meet the emissions levels of harmful nitrogen oxides while being tested in a laboratory.

Some customers are seeking independent legal advice with a view to pursuing the manufacturer for compensation. The Transport Committee had suggested this might be possible under the Sale of Goods Act.

The DfT agrees that owners may have recourse under the Act and said it “stands ready to provide any reasonable assistance” to those seeking financial compensation directly from the Volkswagen Group.

The manufacturer has pledged to fix the vehicles by the middle of next year, but has ruled out offering compensation to UK drivers. That’s in contrast to the US, where it has put aside $15 billion to cover driver compensation and fixes.

The DfT said: “The treatment of UK consumers has not been acceptable and vehicle owners should be compensated for the inconvenience, uncertainty and worry caused by Volkswagen’s cheating as well as for any loss in the value of affected vehicles which may become apparent.”

A Volkswagen spokesman previously told Fleet News that customers will not incur costs for the remedial work required.

“We emphasised this right from the start and it continues to apply,” he said. “There is no buy-back deal or compensation for drivers outside the US. That is because the relevant facts and complex legal issues that have played a role in coming to these agreements are materially different from those in Europe and other parts of the world.”

Transport Committee chairman Louise Ellman concluded: “We will be keeping a close eye on this matter to ensure that the Government is held to account on its promises to support customers.”

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