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PostPosted: Thu May 28, 2020 7:11 pm 
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Covid-19 Protocol: This judgment was delivered orally by the judge at a remote hearing on Friday 1 May 2020
THE VW NOx EMISSIONS GROUP LITIGATION IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BETWEEN:
ANTHONY JOSEPH CHAMPION CROSSLEY & ORS -and-
Claimants
Case No: QB-2016-000011
(1) VOLKSWAGEN AKTIENGESELLSCHAFT
(2) AUDI AKTIENGESELLSCHAFT
(3) SKODA AUTO a.s.
(4) SEAT S.A.
(5) VOLKSWAGEN GROUP UNITED KINGDOM LIMITED (6) VOLKSWAGEN FINANCIAL SERVICES (UK) LIMITED (7) AUTHORISED DEALERSHIPS
Defendants
Before:
MR JUSTICE WAKSMAN
Oliver Campbell QC, Alex Hutton QC, Tom de la Mare QC, Rachel Tandy and Gareth Shires (instructed by SPG Law, Leigh Day, Slater & Gordon Lawyers) for the Claimant Charles Gibson QC, Prashant Popat QC, Brian Kennelly QC, Shaheed Fatima QC, Nicholas Bacon QC, Geraint Webb QC, Kathleen Donnelly and Tom Evans (instructed by Freshfields Bruckhaus Deringer LLP) for the Defendant
Hearing date: 1st May 2020 ---------------------
APPROVED JUDGMENT ON PERMISSION TO APPEAL

1. All of the Defendants seek permission to appeal on both Preliminary Issue 1 (“the KBA Issue”) and Preliminary Issue 2 (“the Defeat Device Issue”). As with my substantive judgment, I intend to deal with the permission application for the Defeat Device Issue first, and then turn to the KBA Issue. I am very grateful to Ms Fatima QC and Mr Kennelly QC who have succinctly addressed me today orally on those issues, respectively, as a supplement to their comprehensive skeleton argument of some 19 pages, provided on Wednesday 29 April. I am also grateful to Mr De La Mare QC for his brief comments in response on both issues.
2. In each case, I will deal with some of the particular points that have been made to support grounds of appeal as well as make some more general observations. In each case, it is said that there is a real prospect of a successful appeal and/or compelling reasons for an appeal.
The Defeat Device Issue
3. First of all, as to the True Comparator argument, I do not think there is anything in the point about the correctness of my reference to the scheme centring on the passing or failure of the test which is required before type approval; nor is there anything in the points concerning my judgment as to the underlying purpose of Article 3(10). All of that, of course, is in a context where it was common ground that is no explicit comparator stated in the provision. A reference was then made in paragraph 178 to my use of the language "offending modulation"; it is perfectly clear from the context that this was simply referring to the change of mode which was the subject of discussion. It could equally have said "allegedly offending modulation" or "the modulation in question". It is all the same thing.
4. A point was made about whether I had said that it was impossible to conduct an on-the-road test of Mode 1 without any evidential basis. That is taken out of context. The impossibility that I addressed in paragraph 184 was on the basis that that was not how Mode 1 was intended to operate. I did, in fact, address the question of physical possibility of on-the-road testing at paragraphs 231 and 244. I also accepted in paragraph 179 that there might be an ability to change the software.
5. As for the Landscape Argument, I gave detailed consideration to it in paragraphs 196 to 230, and one must not overlook the overarching points of serious difficulty with that argument, which I

highlighted in paragraph 199. In my judgment it plainly correct to reject it. I also agree with Mr de la Mare QC that it is nothing to the point that an argument is novel, even if in some respects the product of ingenious thinking, if in fact it is hopeless. That is not a reason that gives it a real prospect of success, nor does it amount to a compelling reason for an appeal.
6. So far as the Holistic Argument is concerned, a point was made about my judgment as to the difficulty of making an overall assessment of emissions if taken globally. That point remains good, even if, as I recognised, there were certain very limited instances where a wider approach to the question of emissions could arise; none of those limited circumstances actually determined the question of how one would measure the reduction in effectiveness of the ECS, which is what Article 3(10) prescribes.
7. As for the Locational and Functional arguments are concerned, there is nothing in the DPF point. I said “almost” certainly it would fall within one of the exceptions, if not catered for in the test itself, and that remains my view; but, in any event, as the rest of the paragraphs made clear, this was explicitly recognised to be a subsidiary point.
8. I do not see any material misdirection or misconception in my judgment as to the nature of EGR. My paragraph 171 (1) referred to reduction at an earlier stage, the ATD referred to the reduction of the amount of NOx created and, in any event, it was a secondary point. This was recognised by my subsequent paragraphs 171 (2) to (4), as to which there is no appeal challenge.
9. There is nothing in the point about my reference to a VW internal document. That was specifically said to be relevant on the simple question of fact as to whether it would make common sense to see EGR as part of the ECS; that is not impermissible comment.
10. Let me make some broader observations now. So far as this ground of appeal is concerned, I do
consider that it is well and truly hopeless. I am in good company in terms of my decision here,
not merely as a result of the most recent development adverted to in the supplemental documents
1
filed yesterday , but in the thousands of other court determinations to the same effect as well as
1 See the Opinion of the Advocate-General dated 30 April 2020 in the reference involving Manufacturer X, and the Confidential Annexe to this judgment.

regulatory bodies. All of that is set out at paragraph 49 of the Claimants' Skeleton Argument for this consequential hearing, and it is not necessary for me to rehearse the detail of that.
11. Even more unusually, in this particular case there have been instances where VW has itself accepted that this was a defeat device, for example, its communication with the VCA being the UK Type-Approval Authority, which can only be in the context of the Regulation, not any US provision.
12. The other wider point is that while certain points (actually, limited in number) have been taken, the fact is that I determined the Defeat Device Issue on the basis that case against the Defendants was simply overwhelming for a very large number of reasons, as set out in my judgment. The fact that this is a very large claim and the fact that it will have importance going forwards (which of course it does, because that is why it was chosen as a preliminary issue) is irrelevant on the question of compelling reasons. So are the implications for the motor industry. I doubt whether there are such implications anyway because I consider that the very fact of having to deal with the question of defeat device is a unique feature of what has happened here stemming from the approach taken by VW.
13. Ms Fatima QC emphasised that it is a pure question of law, That is perfectly true, but if there is nothing in it, does not get it to an appeal. Nor does the fact that no English Court has decided the question, especially where so may other EU bodies have. They have all taken the same view as me apart from two very junior courts in Germany, whose findings were very limited for the reasons I set out in my judgment.
14. For all of those reasons, I refuse permission to appeal the Defeat Device Issue. There is no real prospect of a successful appeal and there are no compelling reasons for an appeal.
The KBA Issue
15. I therefore turn to the KBA Issue. As a first and important point, it is correct to state that, either completely, or to a very large extent, any appeal here is pointless because of what I have just decided on the Defeat Device Issue. Having now refused permission to appeal there, the KBA Issue is academic, save, perhaps, on the question of costs. Even here, the extent of any impact is

unclear because earlier today, the parties reached an overall costs solution subject only to any
contrary order which the Court of Appeal (if it hears an appeal), might make.
16. Indeed, in suggesting that there would still be utility in appeal here, Mr Kennelly QC did not focus on costs but rather that it would be of utility in a broad sense because of the very extensive and serious implications, he says, of my finding that the KBA decision underlying its Article 30 measures here would bind as a matter of EU law as to whether the software function here was a
defeat device irrespective of my own view of the matter.
17. I do accept that the particular question I had to deal with was somewhat novel and I accept it is a matter of law, but I do not accept for one moment that it has the great significance which has been claimed by the Defendants. The whole circumstances in which this argument has arisen are highly exceptional and rare, if not unique, in my view. They stem in very large part from VW's decision to try and have its cake and eat it, as it were, by (a) disputing the defeat device allegation for the purposes of the KBA’s power to make a decision, yet (b) not challenging the KBA's decision that it was a defeat device, which was a necessary jurisdictional prerequisite before it could, in fact, approve the course of action which (c) VW itself had been offering as the price of avoiding a withdrawal of type-approval and the catastrophic consequences commercially which that would engender. That is how all this has come about. It is, in my judgment, a very particular set of circumstances which at the moment I cannot see would be repeated.
18. As to the specific permission points themselves, most are repeats of the argument on the construction of Article 30 and related issues, which I considered, and held to be wrong for the reasons that I have given, and plainly so. I do not accept there is any disproportionality in my finding that the binding nature of a type-approval authority decision concerned with Article 30 measures, which binds as a matter of local law and which could have been appealed but was not, is in any way inconsistent with the particular EU regime on type-approval. That regime is itself highly unusual because of the exclusive jurisdiction, as it were, effectively given to only one type- approval authority in one Member State, but which binds the rest, but which also involves the local courts because they would deal with any appeal. A point was made that it is not just the TAA because there is a role for the Commission. That is true, but it is a very limited one. It is to act as a mediator only in a residual way if there is some argument about adoption of measures between the type-approval authorities.

19. The Defendants say that all of this must be restricted to decisions only on the grant of type- approval, but it was common ground that already there is an implied extension to where a type- approval has been revoked. I consider that the line plainly lies somewhat north of that, but on any view there has to be an implication.
20. Nor do I accept that my judgment is an incursion into the fundamental rights of manufacturers. Take this case: why is it against the fundamental rights of VW to not permit the re-litigation of a point which has already been decided by the relevant type-approval authority which is legally binding in a Member State in which it is located? And which was not appealed? That is particularly true here, where the question of a prohibition of re-litigation is specifically confined, as I made clear in my judgment, to the question of the existence of defeat device pure and simple. It does not stray into the quite separate area of the private law consequences of the fact that there was a defeat device in the context of litigation here or anywhere else.
21. I do not see any misconception in my reference to Member States as opposed to manufacturers; the point is, the relevant institution of a Member State, where the manufacturer seeks to reopen that question. Nor do I see there is any reason for saying that there has been some illegitimate conflation between the Article 30 Measures and the reasons stated for them. This is in the context where, as has been accepted today, there is no appeal on my finding as a matter of German law that tenor of the KBA decision included the finding on defeat device which in turn is binding in Germany.
22. As for my reference to the undesirability of VW being able to arguing in private proceedings that the KBA got it wrong so that there was in fact no basis for the Article 30 measures granted that is not just a matter of leaving it to the relevant TAA. VW does indeed say here that nothing should be drawn from the KBA-approved scheme to effect the fix because it was really only voluntary, VW did not really have a right of appeal and, yes, the KBA did get it wrong. All of which I felt to be very curious, as I have said in my judgment. It is precisely this sort of debate that should be avoided, which is what I decided.
23. There was nothing in any of the other grounds. My analysis of the Crehan and the Hedley Lomas cases was clearly right, nor was there anything that could be raised as a real issue over the import of Astellas or the duty of sincere cooperation or the analogy with competition law.

24. So there is nothing at all in the grounds of appeal in relation to the question of the KBA decision as being binding as a matter of EU law.
25. I turn finally, specifically, to the question of abuse of process. It is said that this is a pointless finding. I accept that it does not have any impact on the substantive orders I make. However, it does serve a purpose, because I was invited to decide it. The argument any reliance on the Hunter case had been disavowed by the Claimants is not correct. Their reliance on Hunter had been disavowed in relation to other potential abuse arguments, for example about how VW conducted itself in other litigation. It was not disavowed insofar as was relevant to the question of the re-litigation of the Defeat Device Issue and, in fact, Mr De La Mare QC made a passing reference to Hunter in his arguments in that context.
26. Nor do I accept that there is some impermissible extension of Hunter in the very unusual circumstances we have here concerning the whole regime for type-approval and the important role of the TAA.
27. I did not say in my judgment that the Defendants could not dispute whether the KBA decision was binding; that is precisely what the KBA Issue was all about. What was impermissible, in my judgment, was to seek to re-litigate the Defeat Device Issue – see paragraph 421 of my judgment.
28. So far as the Seventh Defendant (VW authorised dealers) is concerned, I was somewhat surprised to receive the submission that it had a further point on abuse of process because unlike the first to Sixth Defendants, the dealers were not the addressee of the KBA Decision. This is because paragraph 388 of my judgment said that:
"The principle must apply, at least, where the party asking the court elsewhere to go behind the decision of the relevant ... authority was itself the addressee ... There is a slight wrinkle in this case because, for example, the dealers sued here were not the addressee of the decision in Germany, but no point was taken before me about that."
29. It is not suggested that this that statement was inaccurate: it could not be because, in fact, the dealers did nothing in this trial apart from serve a short skeleton argument endorsing the

arguments of the First to Sixth defendants, and saying nothing by way of oral submissions at all. I is far too late to seek to come along now and try to argue that they are in a different position.
30. So that deals with the specific points on the KBA Issue.
31. So far as any residual compelling reason arguments are concerned, I have already dealt with the point about express or implied binding nature, and while the point may be said to be novel, for the reasons I have already given, it is probably a complete one-off. So arguments about implications going forwards I am afraid do not persuade me at all, and equally so for my adoption of the "sincere cooperation" principle.
32. Finally (and this applies to both the Defeat Device Issue and the KBA Issue) there is no “case management” basis for an appeal. First that is not a ground of appeal nor can it constitute a compelling reason for an appeal that there may be a delay in the Court of Appeal deciding the question of permission and how this may affect the rest of the proceedings going forward. First, I do not believe there will be any delay, second, there are no evidential consequences for the main trial whichever way an appeal might go and third, there is plenty of time. The main trial is not until early 2022.
Conclusion
33. For all of those reasons I refuse permission to appeal.


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PostPosted: Thu May 28, 2020 7:40 pm 
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Dealing with the application for appeal regarding Preliminary Issue 2 first (namely, was the software a ‘defeat device’) the Judge took the grounds in turn and rejected them out of hand. The Judge held in his judgement that a lot of the points VW was making were taken out of context and so were not proper reasons to allow an appeal. One of the points VW made was that various arguments they made in the trial were ‘novel’ and which had not been determined in any previous court. The Judge’s response is there’s nothing to this point if the argument was hopeless in the first place.

Overall the Judge concluded that the grounds raised by VW in appealing Preliminary Issue 2 were ‘well and truly hopeless’. The Judge drew upon thousands of court decisions in Germany and VW’s own admission to the UK regulators that the software was a ‘defeat device’.

In relation to Preliminary Issue 1 (whether the KBA’s decision was binding on the High Court), the Judge recognised that any appeal here would be pointless because of his findings in Preliminary Issue 2. This is because even if VW wins on appeal for Preliminary Issue 1, and the Court is not bound by the KBA’s decision, it has in any event decided the issue for itself in Preliminary Issue 2. The Judge then recognised that the grounds of appeal VW were relying on were essentially a re-argument of the issues decided in the trial.

For those reasons he rejected VW’s application for permission to appeal both Preliminary Issues.


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