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Dispute Resolution Update: Volkswagen – One Size Fits All?

07 February 2018

An interesting decision of the High Court followed an application by Volkswagen (Ireland) for judicial review of the conduct of civil proceedings in the Castlebar District Court. The judgment raises the question whether Volkswagen emission cases in Ireland should be centralised and heard in Dublin. 

The proceedings involve a claim by a customer seeking damages for breach of contract in connection with her purchase of a car affected by an emissions issue. The lady purchased a second hand Seat from a car dealership in Mayo. Nearly a year later, Volkswagen disclosed irregularities concerning particular software used in some of its vehicle engines resulting in worldwide litigation and controversy.

The District Court proceedings were issued in Castlebar in November 2015. They were issued in Mayo on the basis the contract to purchase the vehicle was entered into between Ms Higgins and Volkswagen in a car dealership located in Ballyhaunis, Co. Mayo. In its defence, Volkswagen raised a preliminary objection to Castlebar District Court having the jurisdiction to hear the case on the basis that no contract existed. Volkswagen asserted, however, that the case should be heard in Dublin as it is incorporated there.

Discovery  

The proceedings first came before the Court in May 2016. Judge Mary Devins fixed a date for Ms Higgins’ application for discovery and the discovery motion hearing was heard on 6 September 2016. On that date, rather unusually, Judge Devins heard evidence from witnesses in the absence of Volkswagen’s lawyers, who had walked out contending Castlebar District Court had no jurisdiction. Volkswagen’s lawyers argued that the issue of jurisdiction should be dealt with before any motion for discovery was heard. Ultimately, Judge Devins found that her discovery order was not complied with by Volkswagen. She made further orders requiring Volkswagen to provide more information.

Judicial review

On 15 September 2016, Volkswagen obtained leave to bring judicial review proceedings in the High Court. Volkswagen claimed that Judge Devins’ handling of the case breached its right to fair procedures. It insisted it was not trying to stop the litigation but that Dublin District Court was the appropriate venue for the case and other similar cases initiated against it in Ireland. It objected to Judge Devins dealing any further with the case.

Judge Nί Raifeartaigh remitted the matter to the District Court and directed that the remainder of any proceedings should be heard by a judge other than Judge Devins. The Court noted the calling of witnesses for a discovery motion was “to put it mildly, a substantial departure from the normal procedures in respect of discovery” and described the motion as a “mini-trial”. Judge Nί Raifeartaigh also directed that the question of jurisdiction should be dealt with prior to matters such as discovery.

Comment

It will be interesting to see if Volkswagen is successful in its attempts to have all proceedings issued against it heard in Dublin District Court. This would seem logical given the thousands of Irish motorists impacted by the emissions scandal. Recently, it was reported that Volkswagen is facing its biggest legal challenge in the UK with a class action involving thousands of claimants. It does not seem logical to hear similar claims against Volkswagen in various and disparate District Court venues across Ireland. In addition, it may prove to be an unnecessary burden on an already stretched court system.

A sensible approach would be to centralise these claims and have them heard in Dublin, the location of Volkswagen Ireland’s registered office.

For more information, please contact a member of our Commercial Disputes team.


The content of this article is provided for information purposes only and does not constitute legal or other advice.

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