1st ICAI 2020

International Conference on Automotive Industry 2020

Mladá Boleslav, Czech Republic

EU member states that have so far not adopted the collective compensatory litigation legislation.The present text is reflecting the current stage of legislative activity embodied in the draft of the Act on Collective Proceedings, the main aspects of legislative debate and public discourse shaping the upcoming legislation. Regarding the fact that recent consumers’ protection cases in automotive industry considerably affected both the EU and Czech legislative initiatives, the upcoming legislation is significantly targeted at this sector. The present article is providing for the considerations concerning the specifics of automotive industry, making this segment vulnerable to the future collective compensatory litigations impact. Analysing the present legislative proposals the text reflects alternatives of the particular forms of the future normative regulation and provides for considerations in regard to the potential impact on the automotive segment. 2. The Nightmare of Dieselgate The automotive industry is traditionally vulnerable to potentially significant group litigation, especially in the US. However, it has also most recently been subject to different forms of representative actions in some European countries adopting national legislation providing instruments of compensatory collective redress. The automotive industry recently stimulated implementation of national collective compensatory legislation in Europe largely in connection with Dieselgate. With regards to the size and scope of the present article, the following text will focus on the procedural aspects of the case in the Czech context. While Dieselgate was subject to standard collective proceedings in the US and other countries with a tradition of class action, the litigation system in some other countries was not ready to accommodate and address a case of this size and importance without appropriate legislative changes (Bälz, 2019, Piszcz, 2016). Unsurprisingly, the first representative action based on the reformed collective action law in Germany was filed by the Federation of German Consumer Organisations and Germany’s largest motoring club ADAC on behalf of approx. 450,000 claimants in the Dieselgate case in November 2018. The pendingCzechDieselgate case is divided into a number of cases, with themain claim brought to the courts by an ad-hoc established private company. The representation of approx. 6,000 car owners is based on individual undisclosed mandate contracts. Previous negative litigation experience where the court of first instance rejected the case by not recognising the representation of the state-owned Czech Post through the undisclosed mandate contract as sufficient has made this form of representation problematic. The risk of failure merely on procedural grounds reasonably exists. Despite several stages of adjudication in the Dieselgate cases, Czech Courts still have not ruled on the merit, dealing entirely with the procedural issues. The lack of an appropriate procedural instrument for group representation in the Czech Republic is frequently circumvented by the assignment of claims. The largest pending case of this kind in the automotive industry is the compensatory follow-on litigation in the price-fixing truck cartel of MAN, Volvo/Renault, Daimler Mercedes, Scania, Iveco and DAF in 1997–2011, where a penalty of €3.8 billion was imposed by

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