Volkswagen AG appeal against $125 million Dieselgate fine fails

Original story April 9, update November 12: The High Court dismissed Volkswagen AG’s application for special leave to appeal the Federal Court-imposed penalty.

Volkswagen’s appeal against a record $125 million fine for diesel emissions cheating has failed.

The fine was handed down by the Federal Court in December 2019 for “false representations” about the emissions of more than 57,000 diesel cars imported to Australia between 2011 and 2015.

The penalty remains the largest-ever fine for a breach of Australian Consumer Law, eclipsing the previous record by almost $99 million.

It’s also $50 million more than the punishment originally agreed by Volkswagen and the Australian Consumer and Competition Commission (ACCC), before the case was handed to the Federal Court in 2016.

Volkswagen’s appeal centred on the argument the original $75 million fine was a “fair amount”.

Its claim was this week rejected by the Federal Court, which said $75 million “was not an appropriate penalty in all the circumstances of the case”.

The fine applies to Volkswagen head office in Germany, or Volkswagen AG.

It this week said in a statement:

“Volkswagen AG remains firmly of the opinion that the penalty of $75 million agreed in principle with the Australian Competition and Consumer Commission to resolve the regulatory proceedings in the Federal Court was a fair amount.

Volkswagen AG will review the decision of the Full Federal Court and consider its options further.“

The fine relates to the Dieselgate saga, where Volkswagen Group diesel engines were fitted with two-mode ‘defeat devices’ to cheat their way through emissions tests.

Vehicles fitted with a defeat device were capable of detecting when they were being emissions tested, and adjusting their performance to meet tough standards for NOx emissions.

In the real world, they would revert to a mode with higher NOx emissions.

“Volkswagen’s conduct was blatant and deliberate,” ACCC chair Rod Sims said when the $125 million fine was handed down in 2019.

“This penalty reflects a trend of ever-higher penalties for breaches of Australian consumer law.”

The full Federal Court ruling about the appeal is available here