STUTTGART (dpa-AFX) – In September 2015 it became known that Volkswagen (Volkswagen (VW) vz) had cheated on the emissions values of its diesel cars. A little later there were also the first allegations against Mercedes-Benz (Mercedes-Benz Group (ex Daimler)). A new chapter in the affair is now beginning for the Stuttgart car manufacturer: Numerous investors are accusing the listed company of not informing them about the scandal in a timely manner – and are therefore demanding compensation totaling around 900 million euros for losses incurred. Since Wednesday, the Stuttgart Higher Regional Court has been hearing a model lawsuit against the car manufacturer.
The first day of negotiations was mainly about formalities and organization – questions of content were only discussed in passing. The procedure is too complex and too dynamic for that, said presiding judge Stefan Vatter. The 20th Civil Senate had scheduled the meeting on Wednesday in advance to discuss, among other things, the structure of the procedure with the parties.
The model plaintiff in the process – a private investor – is represented by the Tilp law firm. According to the Tübingen lawyers, a large number of private and more than 200 institutional investors have joined the process. These include banks, insurance companies and pension funds from Germany, other countries in the European Union, North America, Asia and Australia.
The procedure based on the Capital Investor Model Procedure Act brings together many individual investor lawsuits that have been received by the Stuttgart Regional Court. The model lawsuit can now be heard on behalf of everyone and the result can be transferred to them later.
The plaintiff investors accuse Mercedes-Benz Group AG of violating its obligations under capital market law. The company concealed the use of illegal defeat devices in its diesel vehicles as well as the associated risks and costs from the capital market and deceived investors about the true circumstances. Between July 10, 2012 and June 20, 2018, the share price of the former Daimler AG fell from more than 90 euros to less than 60 euros. The damages caused by exchange rate losses are therefore the subject of the lawsuits.
Companies listed on the stock exchange are obliged to immediately publish facts that could significantly influence the price of their shares – whether upwards or downwards. This is intended to provide investors with the greatest possible transparency about developments within the company and to prevent insider trading.
Mercedes-Benz took a clear stance against the allegations: “We consider the claims to be unfounded,” said a spokesman. The company properly fulfilled its disclosure obligations under capital market law. “Our communication on the subject of diesel always corresponded to our current state of knowledge,” he said.
The oral hearing in the test case should not continue until after Easter at the earliest – and could drag on for years. This is also shown by an example from Lower Saxony: In a similar lawsuit against the VW (Volkswagen (VW) vz) Group and the umbrella holding company Porsche SE (Porsche Automobil vz), there is currently a dispute over compensation for investors after the diesel affair was exposed VW suffered share price losses amounting to billions. The process has been progressing slowly since 2018. Before a possible decision is made, the Braunschweig Higher Regional Court wants to hear from dozens of witnesses and review a large number of documents.
Mercedes has had to deal with emissions allegations for years. In 2018 and 2019, the Federal Motor Transport Authority (KBA) issued recall notices against a total of several hundred thousand of the manufacturer’s vehicles due to inadmissible emissions technology. Specifically, it concerns technical devices that restrict exhaust gas purification.
What is relevant at Mercedes in this context are so-called thermal windows and the coolant target temperature control (KSR). The former technology, which has also been used as standard by other manufacturers, ensures that the vehicles emit fewer toxic nitrogen oxides. To do this, some of the exhaust gases are burned directly in the engine. If it is cold outside, this mechanism is automatically throttled. The manufacturers say this is necessary to protect the engine. With KSR, however, the delayed heating of the engine oil leads to lower emissions of pollutants. The accusation here is that the technology works almost exclusively on the test bench.
The Stuttgart car manufacturer has had to go to court again and again since the scandal and the KBA recalls became known. In 2019, the group was fined 870 million euros because of the diesel complications. There were also multi-million dollar settlements abroad and several criminal orders against Mercedes employees.
Numerous consumers also went to court in this context. There have been more than 30,000 lawsuits in Germany so far. There are also class action lawsuits in other countries. According to fundamental rulings by the European Court of Justice and the Federal Court of Justice, consumers in this country can have reasonable hope of receiving compensation. In Stuttgart, the decision in the proceedings surrounding a model declaratory action brought by more than 2,800 car owners is expected to be made in March./jwe/DP/men
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