No compensation for the buyer due to the installation of manipulation software in a diesel engine if he would have purchased the vehicle even if he had been aware of this fact.

In summer 2018, the Supreme Court ruled on a claim for damages against a car manufacturer due to the use of emissions manipulation software. In 2013, the plaintiff had purchased a manipulated diesel car from a domestic dealer, which was manufactured by a company based in Germany. The defendant is the majority shareholder of this company based in Germany. The manufacture related to the entire vehicle, including the engine and software. The manipulation software meant that the nitrogen oxide (NOx) values did not correspond to the specifications in the type certificate.

The plaintiff demanded payment of € 31,008.00 sA from the defendant step by step (by way of in rem restitution pursuant to Section 1323 ABGB) in exchange for the return of the vehicle. This was justified by the fact that it could not be ruled out that the vehicle would suffer a loss in value in the future due to the software or the software update.
The Supreme Court ruled that the plaintiff could not base his claim for damages on a contract, as there was no contract between the manufacturer and the end customer. Therefore, only a tortious connection was possible. Internationally, the Supreme Court applied Austrian law here because the damage to his assets was caused by the purchase of the car in Austria (Art. 4 para. 1 Rome II Regulation).

§ Section 874 ABGB (= cunning) is not only to be applied in the two-person relationship between buyer and seller, but also obliges any third party to pay compensation if they have brought about the contract through cunning. According to § 874 ABGB, the damage caused by the unlawful influence on the will of the deceived party must be compensated. This damage consists, for example, in the fact that the defrauded party has concluded a contract to his disadvantage as a result of the fraud or in the fact that he has failed to conclude a contract to his advantage as a result of the contract he entered into under the influence of the error (RIS-Justiz RS0025334).

As a rule, the causal link between the conduct of the tortfeasor and the occurrence of the damage must be proven for compensation. This means that the conduct of the tortfeasor (in this case, the failure to disclose that the exhaust system had been tampered with) must be the cause of the damage that occurred (reduction in value due to software tampering). However, this was not the case here because, according to the findings, although the plaintiff was not aware of the existence of the exhaust manipulation software at the time of purchase, he would still have purchased the vehicle if he had been aware of it. Therefore, the plaintiff would not have been in a different position if he had been informed about the deceptive act. He would have purchased the vehicle in any case, which in his opinion would have caused the damage to his assets anyway.

In our opinion, this case cannot be generalized for all buyers, as a car buyer would normally refrain from buying the car (at the price) if they were aware of illegal manipulation software. Only in this case was the opposite found to be the case.

_{Source: Supreme Court, 18.07.2018 5 Ob 62/18f}