Volkswagen AG challenged the right of an Irish court to hear a case over cheating on diesel emissions tests as it fought to keep an employee from testifying for the first time in the scandal.
Paul Fogarty, a lawyer for VW, walked out of the courtroom to demonstrate that he didn’t accept its jurisdiction, exiting as the first witness was called by plaintiffs’ lawyers suing the company.
“The court has no jurisdiction to hear these matters,” Fogarty said Tuesday at the hearing in Castlebar, Mayo, in western Ireland.
The case in the tiny courtroom, a three-hour drive from Dublin, has bigger significance in litigation throughout Europe where lawyers are seeking evidence that will support lawsuits against the carmaker. Law firm Hausfeld, which was involved in an American class-action lawsuit against Volkswagen, is working with Irish lawyers to gather material for cases in Germany, which has limited discovery rules compared with Ireland or the U.S.
A VW manager from Ireland had been scheduled to testify about an affidavit submitted to the court in July. Judge Mary Devins resumed the hearing after Fogarty walked out and the document was instead read out in court.
Nicolai Laude, a spokesman for Volkswagen, said he couldn’t immediately comment. Fogarty said he may ask a higher Irish court to review the decision of the district court to hear the case.
European politicians and consumer groups remain unhappy about the limited compensation being offered to VW customers in the region compared with the U.S., where car owners are getting as much as $10,000 after their car is repaired or repurchased.
On Monday, European Union Justice and Consumer Affairs Commissioner Vera Jourova said almost all national consumer-protection organizations and authorities asked by the EU for feedback over the summer cited “a lack of information provided by Volkswagen to consumers.” She said she’ll meet this month national consumer-protection organizations, authorities and VW officials to collect more information.
The Irish case is being closely watched by plaintiffs and defense lawyers alike.
Michael Kremer, an attorney at Clifford Chance’s Dusseldorf office, said a group of corporate trial lawyers that meet regularly to talk about litigation trends discussed the Irish VW case last week.
Undermine German Rules
“If the attempt to get more information via Ireland succeeds, it would be quite a boost for plaintiff lawyers,” Kremer said. “That would practically undermine the very restrictive German rules.”
Volkswagen’s cheating on tests of smog-causing emissions has reverberated across the globe since it erupted at the group’s car operations a year ago. Jourova announced plans in July to work with European consumer groups and regulators to pressure the company to give payouts to customers caught in the scandal. But despite Jourova’s pressure, potential compensation or punishment of VW is out of her hands, instead coming under the remit of national authorities and courts.
In a report submitted to the court on behalf of the plaintiffs, Joseph Stiglitz, a Nobel Prize-winning economist, said consumers were “injured in a number of ways. Unless the owners of the affected vehicles receive adequate direct compensation from Volkswagen, there is no economically sensible argument that these vehicles will not have reduced value,” he wrote in the report.