Pressure builds on Mercedes-Benz over £10bn diesel emissions scandal

Pressure is building on Mercedes-Benz over a diesel emissions scandal that could cost it billions, as thousands of British drivers join a legal claim against the automotive giant.

Law firm PGMBM filed a group litigation claim in the Liverpool High Court against Daimler AG, the parent company of Mercedes-Benz UK, over a diesel emissions scandal that could be worth up to £10bn.

Mercedes-Benz has allegedly misled customers, the public and authorities concerning the amount of toxic emissions produced by certain models of their diesel cars and vans produced between 2007 and 2018, the legal papers filed with the Liverpool High Court in May state.

The case is now adding thousands of claimants per week, as revelations of the scandal become public.

The German company is suspected of installing ‘defeat devices’ in hundreds of thousands of vehicles, allowing vehicles to pass emissions testing. The claim filed by PGMBM alleges that Mercedes committed a fraud by manufacturing cars and vans whose real world diesel emissions exceed the limits imposed by EU and UK laws by up to 10 times.

A defeat device detects when the engine is being tested and limits the amount of nitrogen oxide (NO_x) emissions produced to comply with regulatory standards, which would not be in effect in the course of normal road use by vehicle drivers. Nitrogen oxide is a significant factor in air pollution and respiratory conditions, particularly in young and vulnerable people.

In July 2017, Daimler instituted a voluntary recall of three million of its diesel vehicles manufactured to Euro 5 and Euro 6 emissions standards. Then in 2018, Germany’s motor authority Kraftfahrt-Bundesamt found that some 280,000 Mercedes-Benz vehicles had been outfitted with illegal defeat devices. This led to a wider recall of 670,000 affected vehicles across Europe. As part of a settlement with German prosecutors over its diesel emissions scandal, Daimler AG was fined €870m in 2019.

There are currently tens of thousands of cases involving Mercedes-Benz’s actions pending in courts around the world, including claims for damages and the right to return the vehicle without any financial losses by the owner. Damages awarded have typically been over £10,000 per vehicle.

PGMBM estimate that up to half a million vehicles in the UK could be affected, with an average of two owners each. This means that the case may impact one million consumers and, based on potential damages of £10,000 in each case, Mercedes-Benz may face £10bn in compensation claims if they are found liable.

“This case highlights how Mercedes has abused the trust of its customers by egregiously misleading them in the pursuit of profit,” said PGMBM Managing Partner Tom Goodhead.

“We believe that Mercedes must be held to account for its unlawful and deceitful actions, and this case will give consumers the opportunity to do so, and be compensated for being misled by a supposedly trustworthy company.”

Industry reaction

Aman Johal, lawyer and director of Your Lawyers, a consumer action law firm

Under CPUT (Consumer Protection from Unfair Trading Regulations 2008), Mercedes drivers across the UK could be eligible to receive up to 100% of the purchase price of their vehicle in cases where a vehicle manufacturer has engaged in ‘very serious’ prohibitive practices. This can fall to 75%, 50% or 25% if the practice is considered less severe. This could mean that claimants eligible for a 100% CPUT claim could be entitled to receive between £23,775 and £96,220 in compensation depending on the model of their vehicle, according to recent ‘on the road’ price data from Mercedes-Benz.

In a similar case in 2015 in which Your Lawyers previously represented over 10,000 claimants, the High Court found that over 1.2 million Volkswagen vehicles across England and Wales contain “defeat device” technology, despite robust denials from Volkswagen. Using a sample dataset of over 18,000 cases included on the Group Register by July 2019, almost a third (28%) were eligible for a CPUT compensation claim. We believe a similar proportion, if not more, of Mercedes drivers could also be eligible for a CPUT claim.

We urge Mercedes owners to come forward as soon as possible to claim compensation. Carmakers such as Mercedes and VW must be held to account where vehicles are found to be producing dangerous levels of emissions that could lead to a greater number of deaths and cause irreparable damage to the environment.

If Mercedes is found to have used defeat devices to cheat emissions regulations, owners deserve to be compensated, especially where residual values have been affected. Much like the Volkswagen case from 2015, we may be looking at another example of a big corporation putting profits before people.