Case C‑100/21
QB
v
Mercedes-Benz Group AG, formerly Daimler AG
(Request for a preliminary ruling from the Landgericht Ravensburg)
Judgment of the Court (Grand Chamber), 21 March 2023
(Reference for a preliminary ruling – Approximation of laws – Approval of motor vehicles – Directive 2007/46/EC – Article 18(1) – Article 26(1) – Article 46 – Regulation (EC) No 715/2007 – Article 5(2) – Motor vehicles – Diesel engine – Pollutant emissions – Exhaust gas recirculation valve (EGR valve) – Reduction in nitrogen oxide (NOx) emissions limited by a ‘temperature window’ – Defeat device – Protection of the interests of an individual purchaser of a vehicle equipped with an unlawful defeat device – Right to compensation from the vehicle manufacturer on the basis of tortious liability – Method of calculating compensation – Principle of effectiveness – Article 267 TFEU – Admissibility – Reference to the Court from a single judge)
1. Approximation of laws – Motor vehicles – Emissions from light passenger and commercial vehicles – Regulation No 715/2007 – Defeat device – Concept – Device reducing, depending on the outside temperature and the altitude, the effectiveness of the pollutant gases recirculation system of vehicles concerned in normal vehicle operation and use – Included
(European Parliament and Council Regulation No 715/2007, Arts 3(10), 4(2) and 5(1))
(see paragraph 58)
2. Approximation of laws – Motor vehicles – Emissions from light passenger and commercial vehicles – Directive 2007/46 – Regulation No 715/2007 – Manufacturers’ type-approval obligations – Prohibition on the use of defeat devices that reduce the effectiveness of emission control systems – Exceptions – Protection of the engine against damage or accident and safe operation of the vehicle – Scope – Device reducing, depending on the outside temperature and the altitude, the effectiveness of the pollutant gases recirculation system of vehicles concerned in normal vehicle operation and use – Not included
(European Parliament and Council Regulation No 715/2007, Art. 5(2)(a))
(see paragraphs 60-66)
3. Approximation of laws – Motor vehicles – Emissions from light passenger and commercial vehicles – Directive 2007/46 – Regulation No 715/2007 – Protected interests – Concept – Specific interests of the purchaser – Included – Infringement of the obligation of manufacturers to place on the market compliant vehicles – Right to compensation for damage caused to the purchaser – Rules for obtaining compensation – Compliance with the principles of effectiveness and adequacy of compensation for damage and the prohibition of unjust enrichment
(European Parliament and Council Regulation No 715/2007, Arts 5(2) and 13(1))
(see paragraphs 78-85, 88-96, operative part)
Résumé
In 2014, QB purchased a used Mercedes-Benz motor vehicle – model C 220 CDI, equipped with a Euro 5 generation diesel engine – from a dealer. That vehicle, placed on the market by the car manufacturer Mercedes-Benz Group AG (formerly Daimler AG), was first registered in 2013. The vehicle was equipped with engine programming software that reduced the exhaust gas recirculation rate when outside temperatures were below a certain threshold, which resulted in an increase in nitrogen oxide (NOx) emissions. Accordingly, that recirculation was fully effective only if the outside temperature did not fall below that threshold.
QB brought an action before the Landgericht Ravensburg (Regional Court, Ravensburg, Germany), the referring court, seeking compensation for the damage allegedly caused to him by Mercedes-Benz Group by equipping the vehicle in question with defeat devices, prohibited under the regulation on type approval of motor vehicles. (1)
The objective pursued by that regulation is to ensure a high level of environmental protection and, more specifically, to considerably reduce the NOx emissions from diesel vehicles in order to improve air quality and comply with limit values for pollution. (2) That provision defines a ‘defeat device’ as being ‘any element of design which senses temperature, vehicle speed, engine speed (RPM), transmission gear, manifold vacuum or any other parameter for the purpose of activating, modulating, delaying or deactivating the operation of any part of the emission control system, that reduces the effectiveness of the emission control system under conditions which may reasonably be expected to be encountered in normal vehicle operation and use’. (3) In addition, the directive establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles, as applicable to the dispute in the main proceedings, (4) contains the administrative provisions and general technical requirements for approval of all new vehicles within its scope and of the systems, components and separate technical units intended for those vehicles, with a view to facilitating their registration, sale and entry into service within the European Union. (5)
Under German law, the exercise, by the individual purchaser of a motor vehicle which does not comply with EU law, of the right to compensation presupposes the infringement of a law intended to protect others. (6) The referring court therefore decided to ask the Court whether the relevant provisions, in the present case, of the Framework Directive (7) and the regulation on type approval of motor vehicles, (8) protect, in addition to public interests, the specific interests of the individual purchaser of a motor vehicle vis-à-vis the manufacturer of that vehicle where that vehicle is equipped with a defeat device prohibited by that regulation. Furthermore, it raised the question whether, in the context of compensation for damage caused to the purchaser of a vehicle equipped with a prohibited defeat device, EU law precludes the offsetting of the benefit derived from the actual use of that vehicle against the reimbursement of the purchase price of that vehicle and, if that is not the case, the calculation of that benefit on the basis of the total purchase price of that vehicle.
Sitting as the Grand Chamber, the Court provides significant clarification on the question of the right to compensation of purchasers of vehicles the engines of which have been equipped with an unlawful defeat device intended to reduce the effectiveness of the NOx emissions control systems.
Findings of the Court
As a preliminary point, the Court points out that it is for the referring court to decide, where appropriate, whether, in the light of the Court’s case-law, the software with which the vehicle purchased by QB is equipped constitutes a ‘defeat device’ within the meaning of the regulation on type approval of motor vehicles.
Next, it notes that there are three exceptions to the prohibition on the use of defeat devices that reduce the effectiveness of emission control systems. The only one of those exceptions which is relevant in the present case concerns the situation where ‘the need for the device is justified in terms of protecting the engine against damage or accident and for safe operation of the vehicle’. (9) In order to be justified, that defeat device must strictly meet the need to avoid immediate risks of damage to the engine of such a serious nature as to give rise to a specific hazard when a vehicle fitted with that device is driven. Furthermore, a defeat device which, under normal driving conditions, operated during most of the year in order to protect the engine from damage or accident and ensure the safe operation of the vehicle, would clearly run counter to the objective of environmental protection pursued by that regulation and cannot therefore be justified. Here also it is for the referring court to carry out the factual assessments necessary for the purposes of applying those conditions.
Primarily, in the first place, the Court rules that the relevant provisions of the Framework Directive and the regulation on type approval of motor vehicles, considered together, protect, in addition to public interests, the specific interests of the individual purchaser of a motor vehicle vis-à-vis the manufacturer of that vehicle where that vehicle is equipped with a defeat device prohibited under that regulation.
The Court notes that the prohibition on the use of defeat devices that reduce the effectiveness of emission control systems pursues a general objective of ensuring a high level of environmental protection and that the obligation on manufacturers to ensure that customers and users are supplied with objective and precise information as to the extent to which vehicles are polluting when making their purchasing decisions forms part of that general objective. In addition, vehicles falling within the scope of the Framework Directive must be type approved and such type-approval may be granted only if the type of vehicle in question satisfies the provisions of the regulation on type approval of vehicles, in particular those relating to emissions.
The Court adds that, in accordance with the Framework Directive, in addition to those requirements relating to EC type-approval, manufacturers are also required to issue a certificate of conformity to the individual purchaser of a vehicle. Under that Framework Directive, that certificate is required for the purposes of registration and sale or entry into service of a vehicle. Furthermore, the penalties provided for in the Framework Directive must ensure that the purchaser of a vehicle has a certificate of conformity enabling him to register that vehicle in any Member State without having to provide additional technical documents. That purchaser can therefore reasonably expect that the regulation on type approval of motor vehicles has been complied with. The Court concludes that the Framework Directive, considered in conjunction with the regulation on type approval of motor vehicles, establishes a direct link between the motor vehicle manufacturer and the individual purchaser of a motor vehicle intended to guarantee to the latter that the vehicle complies with the relevant EU legislation.
In that regard, the Court states that it cannot be ruled out that a vehicle type covered by an EC type-approval allowing that vehicle to be driven on the road may, initially, be approved by the approval authority without the presence of the software, such as that at issue in the main proceedings, having been disclosed to it. The Framework Directive envisages the situation in which the unlawfulness of an element of design of a vehicle, for example in the light of the requirements of the regulation on type approval of vehicles, is discovered only after that approval has been granted. Consequently, the unlawfulness of a defeat device equipped in a motor vehicle, discovered after the grant of EC type-approval for that vehicle, is capable of calling into question the validity of that type-approval and, by extension, the validity of the certificate of conformity intended to certify that that vehicle, belonging to the series of the type approved, complied with all regulatory acts at the time of its production. That unlawfulness is thus liable, inter alia, to create uncertainty as to the possibility of registering or selling that vehicle or entering it into service and, ultimately, to harm the purchaser of a vehicle equipped with an unlawful defeat device.
In the second place, in answer to the question, in essence, whether EU law must be interpreted as precluding – in the context of compensation for damage caused to the purchaser of a vehicle equipped with a prohibited defeat device – the offsetting of the benefit derived from the actual use of that vehicle against the reimbursement of the purchase price of that vehicle and, if that is not the case, the calculation of that benefit on the basis of the total purchase price of that vehicle, the Court holds that, in the absence of provisions of EU law governing the matter, it is for the law of the Member State concerned to determine the rules concerning compensation for damage actually caused to the purchaser of a vehicle equipped with a prohibited defeat device, provided that that compensation is adequate with respect to the damage suffered.
First, the Court notes the conclusion it reached, according to which the Framework Directive protects the specific interests of the individual purchaser of a motor vehicle vis-à-vis the manufacturer of that vehicle where that vehicle is equipped with a prohibited defeat device, with the result that the purchaser has the right that that vehicle not be fitted with a prohibited defeat device. Secondly, it points out that the Framework Directive and the regulation on type approval of motor vehicles provide that it is for the Member States to establish penalties, which must be effective, proportionate and dissuasive, applicable in the event of infringements of the provisions of that legislation. Consequently, the Member States are required to provide that the purchaser of a vehicle equipped with a prohibited defeat device has a right to compensation from the manufacturer of that vehicle. It is indeed for each Member State to lay down the detailed rules for obtaining such compensation. Nevertheless, the Court states that national legislation which makes it, in practice, impossible or excessively difficult for the purchaser of a motor vehicle to obtain adequate compensation for the damage caused to him or her by the infringement, by the manufacturer of that vehicle, of the prohibition on the use of defeat devices would not be compatible with the principle of effectiveness. Subject to that proviso, the Court notes that national courts are entitled to ensure that the protection of rights guaranteed by the legal order of the European Union does not result in unjust enrichment. Thus, it is for the referring court to determine whether the offsetting of the benefit derived from the actual use of the vehicle in question ensures adequate compensation for the purchaser concerned, if it is established that that purchaser suffered damage connected with the installation in that vehicle of a prohibited defeat device.