Dieselgate: European Court of Justice deems VW 'defeat devices' illegal

The European Court of Justice has ruled the software used by Volkswagen to control emissions testing 'defeat devices' is illegal under European law.

In a decision predicted to have wide-ranging ramifications for the ongoing class action lawsuits brought against Volkswagen, as well as other European car makers such as Audi and Mercedes-Benz parent company Daimler, Europe’s highest court sided with purchasers of Volkswagen diesel vehicles who claimed they were deceived into believing their vehicles produced significantly fewer emissions than they actually do in real-world driving conditions.

Following up on an initial ruling handed down in April 2020, Europe’s highest court said diesel emission defeat devices cannot be justified by the argument that they “contribute to preventing the ageing or clogging-up of the engine”.

Volkswagen had argued in favour of a restrictive interpretation of the law, which would have limited the definition of a defeat device to any technologies and strategies operating 'downstream' of the engine (namely, after the production of exhaust gases).

However, the European Court of Justice ruled that the law should also apply to 'upstream' technology, which by definition also includes software used to manipulate diesel exhaust emissions under test conditions.

Such software “must allow the engine to be protected against sudden and exception damage” and “only those immediate risks of damage which give rise to a specific hazard when the vehicle is driven” should justify its use, the court’s ruling said.  

The ruling is expected to result in industry-wide changes to how diesel exhaust emissions are controlled. Software functions known as thermal windows, where the filtering of exhaust gas is lowered or shut down completely to protect engine components at a certain ambient temperature, are used widely by many European car makers.

The ruling also opens the door to the spectre of record recalls and a widening of lawsuits.

Owners of certain diesel Volkswagen models have already brought multiple lawsuits against the German car maker, claiming a loss of value after diesel emission manipulation was exposed by US regulators in September 2015 in a scandal that has so far cost Volkswagen more than 30 billion euros (Rs 2,48,010 crore).