Judge imposes record $125 million fine on Volkswagen over Dieselgate
A Federal Court judge has hit Volkswagen with a record fine for installing a “defeat device” in its vehicles to cheat on laboratory emissions tests.
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A Federal Court judge has hit Volkswagen with a record $125 million fine over the Dieselgate scandal.
The order by Justice Lindsay Foster is $50 million more than the $75 million fine agreed between the corporate watchdog ACCC and Volkswagen in October. VW will also be required to pay $4 million in court costs.
At the time of the earlier settlement Justice Foster had accused the ACCC of going soft on Volkswagen, telling the court he was “really outraged” by the settlement.
In his judgement he again criticised the penalty agreed between the ACCC and Volkswagen.
“Taking all of the above matters into account, I have come to the view that the $75 million agreed penalty is not sufficient to meet the overriding objects of specific deterrence and general deterrence required in matters such as this and is manifestly inadequate,” he wrote.
He described the consumer fraud perpetrated by Volkswagen as “egregious”, “calculated” and “entirely actuated by greed”.
He criticised Volkswagen for showing “no contrition” and rejected claims there was no evidence the company’s actions had harmed either the environment or individuals.
He estimated that Volkswagen had committed 473 separate contraventions of Australian consumer law and that the maximum penalty he could have imposed was $520.3 million.
The penalty order is the highest ever made by the Court for contraventions of the Australian Consumer Law. It is almost five times the previous highest fine.
Justice Foster found the Volkswagen Group has misled consumers and the Australian Government when it submitted fuel economy and emissions figures for a range of diesel-powered vehicles sold from 2007 to 2015.
The vehicles were found by the US Environmental Protection Agency (EPA) to contain a “defeat device” that could recognise whether a vehicle was being operated in a test laboratory or on the road.
As a result the vehicles emitted significantly higher levels of nitrogen oxides (NOx) when driven on the road than when tested in the laboratory.
In a statement released after the ruling, Volkswagen said it believed the original $75 million settlement with the ACCC was a fair amount.
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The company said it was “carefully reviewing the Court’s reasons for deviating from that amount”.
“VWAG will determine in coming weeks whether it will appeal the decision of the Court,” it said.
The case involved about 57,000 Volkswagen vehicles with diesel engines.
“Most of these have subsequently had an update to the engine control software under the ongoing voluntary recall. The relevant authorities have confirmed that this update satisfies European and Australian emission standards,” it said.
Justice Foster imposed the penalty on the global Volkswagen AG group and dismissed the case against Volkswagen Australia and Volkswagen subsidiary Audi.
ACCC chairman Rod Sims said Volkswagen’s conduct had been “blatant and deliberate” and it had made false representations to the Australian Government.
“If the affected Volkswagen vehicles had been tested while operating in the mode Australians were driving in, they would have exceeded the NOx emissions limits allowed in Australia.
“Volkswagen’s conduct undermined the integrity and functioning of Australia’s vehicle import regulations which are designed to protect consumers,” Mr Sims said.
Earlier this year Volkswagen and Audi Australia reached a settlement in two class actions, agreeing to pay customers between $87 million and $127 million.
Globally, the group has paid out billions of dollars in fines, including a landmark penalty of 1 billion euros (about $A1.61 billion) in Germany in 2018.
Originally published as Judge imposes record $125 million fine on Volkswagen over Dieselgate
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