Procedural (also civil) law is an important part of the traditional division of law. We highlight some concerns and legal dilemmas related to exercising customer rights due to the defect or fraud on the basis of voidability, or even nullity, or on the basis of guarantee against material errors by sellers and guarantee for faultless operation by the manufacturer or on the basis of damage liability of (all) legal entities involved.
All legal rights of customers and consumers under the current legislation, particularly the Obligations Code and the Consumer Protection Act, can be (in an individual) concrete case nothing but dead letter if they are not – before the competent authorities (courts), in appropriate (civil) procedure, and in accordance with the rules of the latter – properly procedurally represented and implemented. This is all the more true for the specific affair, its scale and the significantly (economically and legally) weaker consumers vis-à-vis the Volkswagen conglomerate, general importers and their agents, as well as the direct sellers of Group’s vehicles. As legal practitioners, we present specific and, in our opinion, legally important aspects of civil procedure law (especially contentious civil procedure), and their (non)applicability to Dieselgate affair.
(NON)APPLICABILITY OF CIVIL PROCEDURE LAW TO DIESELGATE
A court can not initiate civil proceedings ex officio, but only on the initiative (adding: lawsuit) of a party. A lawsuit is a plaintiff’s request for legal protection. With a lawsuit, a plaintiff requests that the court provides legal protection of a certain content against a certain defendant. Based on the content of the legal protection requested by the plaintiff, we distinguish between an action for performance, an action for declaration, and an action in rem. The action must include a specific claim in respect of the main matter and incidental claims, the facts on which the plaintiff bases their claim, the evidence by which those facts are established, and other information that each application must include.
The concept of contentious civil procedure, which is largely individualistic and intended to protect property and other civil rights (adding: of the individual), is the reason that collective claims (initially) did not occur in civil procedural law, but in specific areas (e.g. environmental and consumer law).
Each party in a civil procedure shall state the facts and adduce the evidence, upon which their claims are based, and by means of which they contest the facts stated and evidence adduced by the opposing party. What evidence and facts a party must state is usually determined by material (substantive) regulations. Insufficient basis of an individual lawsuits and claims, in terms of claimed facts and presented evidence, has negative consequences for the party that bears the burden of adducing evidence and the burden of proof.
Thus, for example, Article 131 of the Obligations Code stipulates that the injured party – plaintiff – is the party who must claim and prove the harmful illegal conduct of the perpetrator, the damage and the causal link between the above, and the injuring party – defendant – is the party who must prove that they are not responsible or guilty. Thus, for example, the buyer – plaintiff – must claim and prove the existence of assumptions for guarantee against material errors by the seller – defendant (existence of material error, timely notification, guarantee period and appropriate guarantee claim) in accordance with the provisions of Article 458 and subsequent articles of the Obligations Code. Last but not least, the plaintiff – buyer – must also prove the existence of assumptions (timeliness and legality of substantive assumptions) for challenging the contract, e.g. due to a substantive error or fraud under the provisions of Articles 46 and 49 and the remaining articles of the Obligations Code. The predominant burden of adducing evidence and the burden of proof are thus borne by the buyer, except when the law imposes legal presumptions or reversed burden of proof (such as the existence and non-existence of the fault of the perpetrator, who must exculpate themselves, Article 131 of the Obligations Code), or, for example, on the existence – presumption – of a causal link in the case of objective liability (e.g. on the basis of Article 155 of the Obligations Code).
The court shall assess evidence with an expert, if it is necessary to establish or clarify a fact with expertise that the court does not have at its disposal. The burden of adducing evidence and the burden of proof in civil procedures (mostly of buyers) also means proposing the assessment of evidence with experts of the relevant profession. Due to the possibility and consistency of allegations in individual lawsuits, e.g. specific damages, material errors, etc., we consider that such evidence should (and probably must) be submitted with the action itself when the lawsuit is brought. This is supported by the fact that the affair in question involves specific expertise on the operation of the disputed engines, mechanical engineering technology, etc., all of which, of course, the court does not have (neither can nor is obligated to have).
Arguments and, even more so, the burden of proof and the tools of (court) expertise certainly entail significant costs (in practice, advances) in individual litigation, which are first paid by the buyer – consumer, and are at the end of the litigation allocated relatively to the outcome of the litigation.
Publicly, sellers deny the existence of a material error on vehicles as a result of the affair. The Volkswagen Group publicly acknowledges the illegality of its actions, on the basis of which the presumption from the fifth paragraph of Article 214 of the Contentious Civil Procedure Act may be preliminary expressed/used, in terms of the illegality of conduct. The damage itself (before and after the elimination of errors, which the Group publicly undertakes – regardless of the law and guarantee against material errors), especially ordinary damage because of a reduction (of value) of property, is not easy to concretise and prove (without appropriate experts), let alone any damage if the vehicles will have increased fuel consumption and reduced engine capacity, considering the additional component that the damage to an individual owner – injured party – is not and can not be high (from the point of view of global conglomerate, the damage per unit – injured party – may be insignificant). Considering the above, we wonder whether the instruments of contentious civil procedure – from the point of view of the affiar as such – are in favour of individual plaintiffs injured, or whether (which we believe) are more in favour of an economically and legally powerful global conglomerate. At the same time, we leave aside the fact that some damages (especially non-material damages) are not even enforceable because they are not legally defined or recognised due to their limited number and rigid case law.
Based on the above, the (urgent) question arises on so-called collective claims, particularly known from American case law as class action lawsuits, in which on individual, associated with as many other injured parties who have suffered a similar ‘injustice’, brings to its knees a multinational company, which in the end pays a very high compensation.
Approaches to resolving mass disputes (especially mass damages, such as the scandal in question, are a challenge to any judicial system) are very different. Below, we briefly summarise the latter in general, with particular focus on the regulation in Slovenian law and procedure.
The oldest and best known is the American class action lawsuit, which is a procedure between two parties, in which the group (class) is represented by its representative, and the members have the option to opt out of (so-called opt-out system). European countries that have legalised class action lawsuits (e.g. Scandinavian countries) lean towards the co-called opt-in system, in which the condition for membership in the group is a statement by the party that they wishes to join the lawsuit. Some legal systems, including the Slovenian one, provide for a class action lawsuit, for which the organisation representing the interests of the group (e.g. consumer organisations) has locus standi. A less radical option is the management of mass disputes with the institute of a test case, which was introduced in Slovenia with the amendment to the Contentious Civil Procedure Act (ZPP-D – see Contentious Civil Procedure Act). The term collective claims refers to all procedures that enable plaintiffs to bring a class action against one or more defendants, or request that a case be decided in a test case, to ensure the exercise of rights that they would not otherwise be able to exercise individually for economic or other reasons. The placement of the institute in procedural law, where it belongs according to the nature of legal rules, is related to the shift from public law to private law protection (e.g. in consumer, environmental and competition law), which means another step from the classical, individualistic action to its more social function.
Below, we try to determine the nature of the legal order of the Republic of Slovenia in relation to the current regulation of the Consumer Protection Act (see Articles 74–76 of the Consumer Protection Act) and the Contentious Civil Procedure Act (see Article 279.b of the Contentious Civil Procedure Act), and whether it produces (or can produce) any results regarding the affair in question and its essential civil law consequences.
Article 74 and subsequent articles of the Consumer Protection Act stipulate that an action can be brought against a company that, in concluding transactions with consumers, uses general terms and conditions or methods of doing business or advertises in ways that are in conflict with this Act and with the laws governing consumer protection against unfair commercial practices, consumer credit, medicines, media and services in the internal market, and such general terms and conditions, business methods or advertising harm the common interests of consumers, to prevent such conduct. Regarding the affair in question and its consequences (in addition to the fact that it concerns past conduct of the Group, advertising and sale of 11 million disputed vehicles of the Group’s brand, and the fact that, according to publicly known data, new vehicles now comply with emission regulations – Euro 6 standard), this legal option, in our opinion, is useless (claims can not be monetary or for enforcement of guarantee in the sense of the Obligations Code and the Consumer Protection Act).
The Contentious Civil Procedure Act, in its (only) Article 279.b stipulates that if a large number of lawsuits are filed with a court, whereby the claims are based on the same or similar factual and the same legal basis, the court may, after receiving responses to lawsuits based on one lawsuit, carry out a test case and discontinue the remaining procedures. In terms of the affair in question and its civil law consequences, we find and believe that the provision in question will not (can not) significantly contribute to making court proceedings (any) more successful. It should be noted that the test case, which we otherwise welcome and is a step forward in the collective claims, where this is required by mass violations and caused damage, begins only when (if) individual injured parties have (already) filed lawsuits with “the same or similar factual and the same legal basis”, and the court “may” act under this article of the law. In our opinion, the essential problem is that the filing of a lawsuit means its concretisation (assertion) and proving (concrete evidence, usually pre-trial substantiated analysis, e.g. material error and/or damage to the plaintiff, i.e. potential pre-trial expert opinion), whereby (individual) plaintiffs already (justifiably) incur considerable costs, while court fees are prescribed for filing individual lawsuits, etc. Each (careful) plaintiff will, of course, overestimate this financial contribution in relation to the asserted claim from the opposing party (which does not have these concerns or are negligible compared to an individual economically small consumer), as well as the basic legal possibilities in terms of success of the claim (where, in fact, no legal aspect or factual and legal issue covered by the affair is black or white, or given in favour of the plaintiff as such, and with any genuine expectation of success in advance – in other words, there is no guarantee for the success of the lawsuit). Leaving aside what has been said in the last two compound sentences, the test case is procedurally a good solution. However, because as legal practitioners we must take into consideration all the above, we believe that the test case, as permitted and regulated by law, will not contribute to a more efficient and faster resolution of the presented civil law issues and problems related to Dieselgate affair.
Considering the above, we have to agree at this point that the Slovenian legal order does not have an appropriate broader system or procedural institute with regard to the affair in question and its particularly civil law dimension, and that it would also (not only) be prudent (universally beneficial) to think outside the current legislative option regarding the affair in question.
Source: Pravni vidiki afere Dieselgate [Legal Aspects of Dieselgate] (master’s thesis), 2016, Damjan Merhar