Volkswagen’s $125m fine appeal dismissed

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VW’s appeal to reduce Australia’s largest-ever fine has been dismissed by the High Court.

Volkswagen has been told by the High Court of Australia that it must pay the country’s highest penalty ever for making false representations about compliance with Australia’s diesel emissions standards and there will be no discount on the original fine.

Volkswagen had appealed to reduce the original penalty of $125 million to half as much – $75 million – which was handed out in December 2019. But on Friday November 12 the High Court dismissed VW’s application for special leave which it saught in May this year.

“The High Court’s decision today means the record $125 million penalty imposed by the Federal Court stands,” said ACCC Chair Rod Sims. “This penalty reflects the seriousness of Volkswagen’s conduct and is a massive reminder for all businesses to take their obligations under the Australian Consumer Law seriously, and not mislead in pursuit of profit.”

The fine is the largest penalty ever given in Australia and two and half times larger than the previous ‘record holder’. The fine was issued as a penalty for Volkswagen fitting devices and/or software to its vehicles which effectively made them appear on paper to be more environmentally friendly than they are. The mechanism gave the vehicle two modes – one which was tailored to pass emissions testing and another which was for driving on the road, but which had worse emissions, to the point the vehicle would not pass the standards at the time.

In 2019 Volkswagen admitted it imported more than 57,000 such vehicles to Australia for sale between 2011 and 2015.

Volkswagen is not the only manufacturer caught in such scandals, although Sims warned manufacturers that huge fines for doing so would not stop: “This case signals to large companies that penalties for egregious conduct which breaches the Australian Consumer Law can now reach very significant sums, and potentially make a big impact on their bottom line,” he said.

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