10 September 2021

Volkswagen Group Australia awarded costs in successful class action defence

Volkswagen Group Australia (VGA) has been awarded costs in its successful defence of a class action brought against it in the New South Wales Supreme Court

The matter arose from the global recall of Takata airbags that began in 2018 and has now concluded in Australia.

In June, the Court found that the lead plaintiff, Professor Phillip Dwyer, did not establish any link between the propensity of PSAN (phase-stabilised ammonium nitrate - the chemical used as a propellant in the relevant airbags supplied by Takata) to degrade so as to cause it to explode or malfunction in the inflators installed in Volkswagen vehicles.

Justice Stevenson ruled that Professor Dwyer did not establish that his vehicle was not of acceptable quality when he purchased it.

Nor did the plaintiff establish that he suffered any loss or damage by reason of the installation of a Takata airbag in his vehicle (even if the court had found a defect as claimed), "not least because Volkswagen has, without charge, replaced the Takata airbag with an airbag that is undoubtedly sound".

VGA, which maintained that the case brought against it was without merit, showed that there have been no incidents reported of a Takata airbag rupture in any relevant Volkswagen vehicles in the field globally. 

Beginning in February 2016, 20,000 airbag inflators retrieved from Volkswagen vehicles manufactured from 2005 onwards and from various geographical areas around the world with a range of climactic conditions had been tested.

In his June judegment, Justice Stevenson said:  "VW AG's Product Safety Committee determined that there was no systemic risk associated with airbag inflators installed in Volkswagen vehicles that would warrant their recall. Indeed, I was informed that no European regulator has required a recall of Volkswagens fitted with Takata airbags. The results of the Empirical Analysis Program suggest that the airbags are safe."

This week the court determined that the proceedings be formally dismissed, with the plaintiff and the litigation funder funding the class action to be jointly and severally liable for Volkswagen’s costs; on a full indemnity basis in relation to the structural break analysis component of the loss and damage evidence (which was found to be manifestly deficient), and on a party/party basis for the balance of costs.


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