Volkswagen has failed in its appeal to have dismissed the record $125 million ‘Dieselgate’ fine handed down by Australia’s Federal Court in December 2019.
The fine was issued by Justice Lindsay Foster, who described an earlier settlement of $75 million – approved by the Australian Competition and Consumer Commission (ACCC) – as a “manifestly inadequate” penalty for the “false representations” Volkswagen was deemed to have made on more than 57,000 cars sold in Australia.
CATCH UP: In 2015, Volkswagen began an investigation into its diesel models after independent research revealed excessive emissions volumes in several of its models sold in the US. It was later confirmed the company had devised a plan to cheat emissions tests, ensuring that its diesel models met requirements during testing – but significantly exceeded legal limits and claimed numbers in daily operation.
The $125 million penalty – and the earlier agreed settlement – is significantly greater than the previous record of a $26.5 million fine issued only months earlier, in September 2019, to training college Empower Institute.
In the automotive space, the highest previous fine went to Ford, which was hit with a comparatively paltry $10 million penalty for its dealings with owners of vehicles fitted with faulty automatic transmissions.
In justifying the increased $125 million fine, Justice Foster described Volkswagen’s dealings as an "egregious breach of Australian consumer law of the worst kind imaginable".
Supporting the decision, ACCC chair Rod Sims said in a statement at the time: "Volkswagen's conduct was blatant and deliberate. This penalty reflects a trend of ever-higher penalties for breaches of Australian consumer law."
The company ultimately lodged an appeal insisting that the $75 million settlement it had agreed to in September 2019 – was "fair".
On Friday, the Federal Court confirmed it would uphold Justice Foster’s decision.
Volkswagen’s loss in the courtroom follows its agreement to a $127 million payout to Australian owners who participated in five lawsuits against the company, although that settlement was reached on a ‘no-admission’ basis.
The class actions represented around 100,000 owners of vehicles across the Volkswagen, Skoda and Audi brands.
Australia is just one battleground for the German car maker in the ongoing ‘Dieselgate’ saga, with the company’s costs – in fines, compensation and buybacks – understood to have topped AU$47 billion dollars.
In the years since the scandal first broke, Volkswagen has worked to redeem itself by investing heavily in an electrified future.
Although, while more and more rival brands begin their electric rollout in Australia – some, like the Nissan Leaf, now into their second generation – Volkswagen’s local arm is yet to confirm when any of its revealed ‘ID’ electric models will reach our shores.
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