7719 results in Intersentia
Case 7: Unfair Competition and Unfair Commercial Practises
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Summary
CASE
Companies B, C and D signed an agreement to co-ordinate the pricing of their products. The general public was not informed of this. The European Commission decided that the cartel violated EU competition law and fined company B, C and D. The European Court of Justice upheld this decision.
Direct consumers of these companies want to recover their losses incurred as a result of the higher price they paid for the products sold by company B. The consumers did not resell the product to third parties, so company B cannot put forward a passing-on defence. They all demand compensation from company B. Will they receive compensation? The competitors of companies B, C and D who were not part of this cartel also demand compensation for their foregone profits as a result of this pricing policy from company B. Will they receive compensation and, if so, for what losses? And is it possible to start a collective proceeding? If so, please indicate the most important bottlenecks in this particular case.
Joint and several liability is not needed in your answer, unless it is the main obstacle to a claim; if so, please mention that briefly.
DISCUSSIONS
AUSTRIA
Matthias Dangl and Georg E Kodek
Operative Rules
The consumers will receive compensation under general tort law (§ § 1311 in conjunction with 1293 ff ACC). The action is based on the violation of Article 101 of the Treaty on the Functioning of the European Union.
The competitors could also demand damages they suffered as a result of a cartel. Based on the facts of the case, it is not clear to us what kind of losses they could have in mind. A more realistic scenario would be that the cartel members fixed prices at a very low level to squeeze their competitors from the market. In that case, the competitors would be entitled to damages. However, it is hard to imagine a case where both consumers and competitors suffer a loss.
A collective action (as described in the Austrian section in the procedural rules chapter) would be possible.
Legal Formants
By ‘passing on’ the loss to the consumers, the losses become infinitesimal (atomised).
Summary And Conclusions
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Summary
INTRODUCTION
The overarching aim of this Common Core project on mass harm is to understand how tort law responds in mass harm situations. As this response is also largely determined by procedural options for bringing a case, procedural law was also discussed in detail. Because we know that in some mass harm cases, compensation is not or cannot be offered through tort law, and because we realise that civil law is sometimes de facto inaccessible due to the large-scale nature of the damage, we chose to also reflect on the shift in compensation options beyond tort law. In essence, this approach allows us to analyse what factual and legal (im)possibilities exist in terms of receiving compensation for mass harm through tort law, and what triggers exist to seek an alternative compensation option. Therefore, this Common Core project on mass harm in European private law offers a broad study into the common core of substantive tort law and civil procedural law in mass harm cases and into compensation within or outside tort law. This project involves not only private law, but also its context, history and political choices. That ecosystem is sometimes discussed implicitly and sometimes very explicitly by the rapporteurs and the general contributors in order to also better understand the reasons for these differences and similarities, and reflect on its justifications.
This last chapter aims to reflect – in a broad sense – of the differences and similarities between jurisdictions and types of mass harm cases. It will do so by using two perspectives. The first perspective concerns that of legal solutions: substantive tort law outcomes or options, procedural choices made in a jurisdiction and systemic solutions to compensation beyond tort law (section 2). The second perspective concerns the type of loss cases (personal injury, property damage or pure economic loss) (section 3). To finalise this project, the concluding section will draw some general conclusions about how tort law responds in mass harm situations (section 4).
Case 4: Damage To Property Caused By a Natural Disaster
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Summary
CASE
Earthquakes occur historically in a specific region. They are not life-threatening; however, the earthquakes damage the foundations of houses and cause cracks in the walls.
A group of owners of private houses demand compensation from the state. Will they receive compensation and, if so, for what losses? And is it possible to start a collective proceeding? If so, please indicate the most important bottlenecks in this particular case. Would it make a difference if the earthquakes did not occur historically, but are the result of mining activities in the region?
DISCUSSIONS
AUSTRIA
Matthias Dangl and Georg E Kodek
Operative Rules
To assert official liability it is necessary to prove that the local authority acted negligently by designating the plots as building land in the zoning plan or by granting building permits for the houses.
Apart from a potential official liability, the homeowner’s policy will usually cover the loss (partially). However, homeowners are not obliged to conclude such a policy. Furthermore, the Austrian legislator created a special fund (Katastrophenfonds) to provide compensation for damages caused by natural disasters. However, according to the federal states’ guidelines, there is no legal entitlement to receive money from this fund.
If the earthquake was caused by a mining company, claims for damages could be brought under the general tort provision of § 1295 para 1 ACC.
A collective action (as described in the Austrian section in the procedural rules chapter) would be possible.
Legal Formants
The Austrian Supreme Court confirmed official liability in the context of flood damages. It was ruled that the municipality was obliged to make flood run-off areas visible in the zoning plan. In another case official liability was confirmed because of culpable non-clarification of the flood hazard in the building permission process.
If the earthquake was caused by a mining company, claims for damages could be brought under the general tort provision of § 1295 para 1 ACC. In this case there would also be detailed conditions imposed by the administrative authorities as to what safety precautions have to be taken by the mining company. In the event that these precautions imposed by the authorities are inadequate, official liability could also be established if the authorities acted negligently.
Mass Harm From a Law And Economics Perspective: The Case for Collective Action
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Summary
INTRODUCTION
In situations involving mass harm, victims may not bring a suit because the costs and risks outweigh the expected benefits, so that they stay ‘rationally apathetic’. Or they wait for others to start a procedure on which they can free-ride, with the possible result that no one actually brings a suit. This is a problem from the perspective of compensation, but also from the perspective of confronting tortfeasors with the losses they have caused to incentivise them to change their behaviour.
Here we analyse collective actions as a possible remedy for these problems. We do not distinguish between various forms of collective actions, but focus on the common general principle of collective actions, namely that one collective claim instead of a series of individual claims is brought.
We discuss the possible advantages (section 2) and disadvantages (section 3) of collective actions. We then focus on the issue of the financing of collective actions (section 4). By way of an example, we briefly comment on the recent EU Directive (section 5), before concluding (section 6).
ADVANTAGES OF COLLECTIVE ACTION
INTRODUCTION: THE CHALLENGES OF PRIVATE ENFORCEMENT
Law and economics studies law in its capacity to provide incentives to legal subjects. In the context of this book, the topic of negative externalities is especially important. These are costs that are not borne by the actor who causes them. The actor may therefore undertake the activity too oft en and/or take too few precautions which could limit or avoid the loss.
Law can address this issue via regulation, tax law, criminal law and tort law. In order for law to provide the desirable incentives, it must be enforced. This can be done via public and private enforcement. This chapter focuses on the latter.
There are several challenges for private enforcement. Bringing a claim is costly. In addition, it may be difficult to correctly assess the costs, benefits, and chances of success, so that uncertainty plays a role. If the assessed costs outweigh the compensation that a successful plaintiff receives, they may remain rationally apathetic and not bring a claim. This problem is most pressing in situations of scattered losses. A subsequent challenge is that victims may not bring a claim in the hope that others do.
PART II - Methodology, Procedural Rules and Case Studies
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Case 2: Occupational Disease
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Summary
CASE
A group of painters, who all worked for the same employer, suffer from nasal cancer probably caused by working with harmful substances in paint. These harmful substances were present in paint between 1970 and 1989. Although the employer knew about the detrimental health effects, he did not take adequate preventive measures. The health effect of this exposure took many years to develop into an illness. After 30 years, the first painter was diagnosed with this type of cancer.
A group of workers suffering from that particular type of cancer demand compensation from their former employer. Will they receive compensation and, if so, for what losses? Is it possible to start a collective proceeding? If so, please indicate the most important bottlenecks in this particular case.
DISCUSSIONS
AUSTRIA
Matthias Dangl and Georg E Kodek
Operative Rules
Under Austrian tort law, the employer’s liability faces two difficulties in this case. First, the employer is only obliged to compensate an insured person for damage caused by a bodily injury as a result of an occupational disease if he intentionally caused the occupational disease (§ 333 para 1 of the General Social Security Code). In our opinion it is highly questionable whether intention can be affirmed in this case. Second, claims for compensation are subject to a limitation period of 30 years (§ 1489 ACC).
In any case, the employees are entitled to receive non-pecuniary benefits (such as curative treatment and rehabilitation) as well as payments (such as a disability pension) from the social security system in the event of an occupational disease.
A collective action (as described in the Austrian section in the procedural rules chapter) would be possible.
Legal Formants
The rationale behind the rule on intentionally causing the occupational disease (§ 333 para 1 of the General Social Security Code) is that employers pay the premiums for their employees’ accident insurance. In return, they are privileged in terms of liability vis-à-vis the employees. Although the employer knew that the substances had detrimental health effects, it is by no means certain that he acted intentionally as to the injury.
List of Abbreviations
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Indix
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Case 12: Climate Change
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Summary
CASE
A government meets the EU target of 20% reduction of greenhouse gases before the end of 2025 compared to the emission level in 1990. However, it has been stated in scientific research that the minimum reduction should be 25% compared to the 1990 level in order to have a 50–66% chance of staying below a 2°C increase in global temperatures by 2100 compared to the average temperature in 1800. Scientific research showed that this 2°C maximum increase is necessary to prevent a climate crisis; however, more recent scientific research shows that the preventions of a climate crisis requires a maximum temperature rise of only 1.5°C, which thus reduces the carbon budget that remains in order to prevent a climate crisis in the future.
A group of inhabitants go to court and ask for an injunction or court order requiring the government to reduce its emission of greenhouse gases by 25% at the end of 2025 compared to its emission level in 1990. The motivation behind this court order is the real threat of the violation of positive obligations by the state/government under Article 2 and/or 8 of the European Convention on Human Rights and/or that the due standard of care will be breached. Would the application succeed ?
DISCUSSIONS
AUSTRIA
Matthias Dangl and Georg E Kodek
I. Operative Rules
Under Austrian law, no injunctive relief would be available. The most important reason is that the relevant international conventions and EU goals are not selfexecuting and/or do not provide sufficiently identifiable enforceable standards. There is a Climate Protection Law (Klimaschutzgesetz), but this in essence only programmatically refers to future negotiations.
Legal Formants
The connection between climate change and human rights is too slim to warrant enforceable rights to specific measures. In the absence of sufficiently identifiable standards, the question of which measures have to be taken to stop the climate change is not justiciable. Certainly, it is not justiciable in private law, otherwise, extreme consequences would result. As such, tourists could be sued for causing pollution by ‘unnecessary travels’
Case 9: Terrorism
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Summary
CASE
Terrorist Z used an explosive device at the Christmas market in a large city. He and 24 other people died. In addition, over 600 people were injured and others, including firefighters, emergency care personnel and policemen (professionals), suffered psychiatric harm due to the trauma of seeing dead and severely injured bodies. Family members of the deceased – some of them not present at the Christmas market – saw pictures in the newspapers and online of the horrific attack.
The victims, professionals, bystanders and family members demand compensation from the government. Will they receive compensation and, if so, for what losses? Would your answer be different when the terrorist survives the attack and the victims, bystanders and family members demand compensation from the terrorist? And is it possible to start a collective proceeding? If so, please indicate the most important bottlenecks in this particular case.
DISCUSSIONS
AUSTRIA
Matthias Dangl and Georg E Kodek
Operative Rules
Generally, there is no claim against the government unless government authorities acted negligently (Official Liability Act (Amtshaft ungsgesetz)). The facts of the case do not contain any indications of any misconduct on the part of the authorities.
A claim can also be brought against the terrorist (or their heirs) under general tort law (§ § 1293 ff ACC). The direct victims of a crime can claim compensation for costs of treatment and a lump sum for pain and suffering (Verbrechensopfergesetz).
A fund for a specific terrorist attack in Austria has been set up by the Austrian government in the past.
A collective action against the government or the terrorist (as described in the Austrian section in the procedural rules chapter) would be possible.
Legal Formants
Currently there are several cases pending in Austria in the aftermath of the terrorist shooting in Vienna on 2 November 2020 alleging that the authorities neglected relevant information about the terrorist (including, inter alia, that he tried to buy ammunition in Bratislava) in advance (§ § 1 ff of the Public Liability Act). Official liability requires an unlawful and culpable action of an authority in the execution of the law. The claim can also be based on an omission if the authority was obliged to take action and dutiful action would have prevented the damage.
Preliminary Remarks on the Methodology
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Summary
THE AIMS AND METHOD OF THE STUDY
The aim of this Common Core project on mass harm is to understand how substantive tort law – and sometimes contract law – responds in mass harm situations. As this response is also largely determined by procedural options for bringing a case, procedural law is also discussed in detail. Because we know that in some mass harm cases, compensation is not or cannot be offered through tort law, and because we realise that civil law is sometimes de facto inaccessible due to the large-scale nature of the damage, we chose to also reflect on the shift in compensation options beyond tort law. In essence, this approach allows us to analyse the factual and legal possibilities and impossibilities that exist to receive compensation for mass harm through tort law, and what triggers are present to seek an alternative compensation option. In doing so, we distinguish between different types of harms (e.g. personal injury, property damage and pure economic loss) and between different types of claimants (e.g. consumers, shareholders and foundations) and addressed parties (e.g. public authorities, companies and individuals). This approach allows for a detailed analysis on a possible common core regarding the settlement of mass harm through tort law in European private law. This analysis also makes it possible to evaluate whether the settlement of mass harm claims in European private law de facto leads to the outcomes intended, or whether there are more structural shortcomings in the protection of plaintiffs.
This project was carried out within the Tort Law group of the Common Core of European Private Law. The Common Core has an established methodology. Based on a questionnaire containing 12 actual mass harm cases, rapporteurs from 12 European jurisdictions provided insight into how the case in question is taken up in their jurisdiction in the context of tort (and sometimes contract) law. In doing so, we asked them to answer these cases in the light of legislation, case law and trends within their own jurisdictions, on the one hand, and to consider litigation options for collective actions or proceedings and a possible shift of compensation outside tort law, on the other hand. The jurisdictions covered are: Austria, Belgium, England and Wales, France, Germany, Greece, Ireland, Italy, Poland, Slovenia, Spain and the Netherlands.
Financing Mass Litigation in the US
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Summary
INTRODUCTION
This chapter reviews the financing of mass litigation in the US. It defines the problem as a subset of the problem of the financing of legal claims in the American private law system. After describing the history and economic logic of the contingent fee in the US, it examines how the adoption of the contingent fee affects the financing of class actions and multidistrict litigation in the US.
THE FUNDAMENTALS OF FINANCING LITIGATION IN THE US
Private law in the US is, in theory, grounded in an architecture of rights and remedies which reflect certain democratic and liberal values. There is a guarantee that the courts be open to all parties with standing in both state and federal constitutional law. Any person who genuinely believes that they have suffered a wrong at the hands of another may demand compensation from the responsible party without even filing a lawsuit. Of course, the putative wrongdoer is under no legal obligation to pay compensation until and unless there is an authoritative judgment from a court imposing that legal obligation. It is therefore well understood among those who study private law in the US that, in reality, legal claims sit on a ‘dispute pyramid’ in which volume stands in an inverse relationship with formality.
At the very base of the pyramid are claims made informally between potential plaintiffs and potential defendants before any formal lawsuit is filed (or even researched). Next up the pyramid are claims formally made by the filing of a lawsuit. There are far fewer of these than in the previous group, but they are accompanied by formal pleadings and, as a matter of law, if filed by a lawyer (as opposed to the party acting on their own behalf), reflect the lawyer’s genuine belief that the claim is well grounded in law and fact. Next up the pyramid are those claims which are abandoned or dismissed by a judicial ruling for procedural reasons. There are far fewer of these claims than in the previous group, obviously, and reflect judgment based on yet even more legal analysis than at the point of filing the lawsuit.
Frontmatter
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Alternative Compensation Systems
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- By Kim Watts
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Summary
INTRODUCTION
Standing alongside tort, liability and insurance for the resolution of mass harm are alternative compensation systems. Alternative compensation systems can be broadly described as a redress structure that provides compensation to victims of accidents and other misfortune where tort law, insurance law or social security law provide no or insufficient compensation. They stand on the margins of tort law and its corrective justice goals, and come in all shapes and sizes. Alternative compensation systems are well suited to managing instances of mass harms because large-scale loss generally matches the common purposes and motivations for creating such alternative frameworks.
A number of alternative compensation systems will be touched upon in the individual country case study entries in this volume, where such frameworks have been selected by legislatures as the relevant system or framework in that jurisdiction for the resolution of specific types of mass harm. However, in this chapter we consider the nature of alternative compensation systems in general, and how they are relevant to the regulation and compensation of mass harm events within Europe. There are now so many examples of these alternative frameworks throughout Europe (and globally) that it not appropriate to consider them as an anomaly or only relevant at the fringes of tort law. It is important to distil their common characteristics, advantages and disadvantages. This enables alternative compensation systems, as a social and legal tool of mass harm management and resolution, to be used thoughtfully, appropriately and fairly, and in a way that is legally coherent with the wider context of an individual legal system.
In this chapter, there will be a brief description of the common features of an alternative compensation system. These frameworks can be found worldwide, but the European experience will be the focus of this chapter. There will be consideration of the category of loss that is typically covered by such frameworks, and consideration of the factual theme or function of loss covered by these systems. There will then be discussion of the important issues relating to alternative compensation systems that are relevant to a general analysis of mass harm in a European context.
General Editors’ Preface
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Summary
It is a special pleasure to welcome the 22nd book in the series The Common Core of European Private Law. This book is edited by two Dutch scholars. Their works are already renowned and appreciated well beyond the ‘Common Core’ circles.
The Common Core project was launched in 1993 at the University of Trento under the auspices of the late Professor Rudolf B. Schlesinger. The methodology used in the Common Core project, then novel, is now a classic. By making use of case studies, it goes beyond mere description to detailed inquiry into how most European Union legal systems resolve specific legal questions in practice, and to thorough comparisons between those systems. It is our hope that these volumes will provide scholars with a valuable tool for research in comparative law and in their own national legal systems. The collection of materials that the Common Core project is off ering to the scholarly community is already quite extensive and will become even more so as more volumes are published. The availability of materials attempting a genuine analysis of how things seem to be is, in our opinion, a prerequisite for an intelligent and critical discussion on how they should be. Perhaps in the future European private law will be authoritatively restated or even codified. As of today, the Common Core project is the longestrunning scholarly enterprise in the field. The analytical work carried out by the more than 300 scholars that have so far joined us in the Common Core project is also a precious asset of knowledge and legitimisation for any such a normative enterprise.
We must thank the editors and contributors for their work. With a sense of deep gratitude, we also wish to recall our late Honorary Editors, Professors Rudolf B. Schlesinger and Rodolfo Sacco.
No scholarly project can survive without committed sponsors. The International University College of Turin allows us to organise the General Meetings together with the Centro Studi di Diritto Comparato of Trieste. The European Commission has partially sponsored some of our past General Meetings, having included them in their High Level Conferences Program.
Case 5: Product Liability
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Summary
CASE
In 2020, a producer of an electric bike recalls the units of its product made between 2012 and 2015. After the bike was placed on the market by the producer, it became apparent that the battery could explode when it was not being used. Upon closer examination by the producer, it became clear that there was a safety defect due to battery design failures. No consumers suffered personal injury, but explosions caused damage to other private property of theirs. Research showed that the battery was already unsafe in 2012, when it was placed onto the market by the producer. The producer knew or could have known about this defect. Therefore, the producer cannot put forward the (European) state of the art defence.
A group of consumers whose batteries exploded and consequently lost other possessions such as garden chairs demand compensation from the producer. Will they receive compensation and, if so, for what losses? And is it possible to start a collective proceeding? If so, please indicate the most important bottlenecks in this particular case.
DISCUSSIONS
AUSTRIA
Matthias Dangl and Georg E Kodek
Operative Rules
Austria has implemented the Product Liability Directive into domestic law by way of the Produkthaft ungsgesetz (PHG). In this case, claims could be based on this statute. However, there is a €500 deductible for harm to things (as opposed to personal injury).
In order to avoid this deductible, the claim could be based on general tort law (§ § 1293 ff Allgemeines Bürgerliches Gesetzbuch (Austrian Civil Code) – ACC). The argument would then be that the contract between the producer and the retailer also entails duties of care vis-a-vis the customers. As opposed to claims based on the PHG, fault of the producer has to be proven. As the producer knew or could have known about the defect, it seems possible to prove the producer’s fault in this case. Also, all claimants, of course, have to prove that they suffered a loss because of an explosion of the battery.
A collective action (as described in the Austrian section in the procedural rules chapter) would be possible.
Case 1: An Epidemic
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Summary
CASE
In a particular period of time, a disease, query fever, spread through the population. Query fever is known to spread from goats to humans by direct contact, or by contact with contaminated dust in the air. Farmers were under a statutory duty to vaccine their goats, but some of them did not. Many people fell ill, and a large group (> 1,000) developed chronic query fever and lost the capacity to work full time and therefore suffered loss of income. It is uncertain whether the government is liable because although ample evidence exists that it did not take preventive measures by adequate vaccine enforcement, it is uncertain whether those measures would have prevented the epidemic.
A group of plaintiffs suffering from chronic query fever demand compensation from both the government and the goat farmers. Will they receive compensation and, if so, for what losses? And is it possible to start a collective proceeding? If so, please indicate the most important bottlenecks in this particular case.
Please also indicate briefly in the ‘meta-legal formants’ if one or more compensation schemes have been developed that fully or partly compensate the victims of COVID-19.
DISCUSSIONS
AUSTRIA
Matthias Dangl and Georg E Kodek
Operative Rules
It would be possible to bring an action against the government based on the Public Liability Act (Amtshaftungsgesetz) as well as against the farmers based on general tort law (§ § 1293 ff Austrian Civil Code (ACC)). It would also be possible to start a collective proceeding, such as the ‘Austrian model of group litigation’ (as described in the Austrian section in the procedural rules chapter).
However, the case poses two difficulties from a substantive law perspective. The first difficulty for claimants is to prove causation. It is not clear whether a particular farmer’s failure to have his goats vaccinated caused a particular plaintiff to contract the disease, nor is it clear that stricter vaccine enforcement had prevented the epidemic. The second difficulty for plaintiffs, both for their case against the government and against the farmers, is the purpose of the statute requiring all goats to be vaccinated.
PART I - Introductory Matters
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PART III - General Conclusions
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Case 11: Diesel Dupe
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Summary
CASE
A car producer put a device or soft ware in its engines that could detect when the engine was being tested and improve its greenhouse gas emissions only during the test. Outside these laboratory test conditions, the level of emissions was much higher, exceeding the maximum level allowed by law.
A group of car owners demand compensation from the producer. Will they receive compensation and, if so, for what losses? And is it possible to start a collective proceeding? If so, please indicate the most important bottlenecks in this particular case.
DISCUSSIONS
AUSTRIA
Matthias Dangl and Georg E Kodek
Operative Rules
Car owners will receive compensation under Austrian tort law (§ § 874 and 1295 para 2 ACC). They will receive compensation for the difference between the price they actually paid for the car and the price they would have paid if they had known about the soft ware. Alternatively, they could rescind the contract. Then they have to return the car and can reclaim the purchase price (subject to a deduction for the use of the car in the meantime).
A collective action against the manufacturer (as described in the Austrian section in the procedural rules chapter) would be possible.
Legal Formants
The liability of the manufacturer under § 874 ACC presupposes that it acted intentionally (i.e. caused the conclusion of the contract through deliberate deception). In the case of vehicles with a switch-off device, it seems obvious that someone who ‘works for’ to the manufacturer must have committed the manipulation intentionally.
BELGIUM
Artuur Keukeleire, Larissa Vanhooff and Britt Weyts
Operative Rules
There are a number of grounds on which the consumers could base their claim; however, their chances of success are inversely proportional. First, they claim nullity of the contract based on defects of will to conclude a contract and, more specifically, on error or deceit (Article 1108 of the old BCC).
Second, they can claim the nullity of the contract for an illicit object. Third, the buyers can invoke the indemnity for hidden defects (see Case 5 above for further details). Fourth, they can claim annulment of the contract based on non-conformity (a consumer purchase agreement).
Both consumers and SMEs may institute an action for collective redress under Belgian law (see Case 6 above).