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Wednesday, 16 December 2015

European Parliament set to hold inquiry into car industry regulation

European Parliament set to hold inquiry into car industry regulation,  reports Autmotive News Europe. The Parliament will set up a committee of some 45 MEPs to consider whether the regulation of the industry has been too lax. The inquiry is, unsurprisingly, prompted by the VW emissions affair.

Car dealer sued after traded-in pickup ends up in hands of jihadists - Car Dealer Magazine

Car Dealer Magazine tells the story of a Texan plumber who traded in his pick-up without taking the elementary precaution (you'd think) of removing his business's name and phone number, printed of course on nice big and highly visible decals, from it. Bad enough that it might then have been seen in places in Texas where he'd prefer his name not to be bandied about, but the dealer disposed of it at auction and it went to Turkey before ending up being used by jihadists, having acquired a rear-mounted machine gun along the way. (And it wasn't even a Toyota!)

Unfortunately for the plumber, a photo of the truck in its new existence appeared on the Internet and went viral, resulting in a lot of grief for him and his business in the form of nasty phone calls and the like - as if he would have actually endorsed what had happened. So what did he do? Sued the dealer who took it in part-exchange, on the basis that they should have peeled the decals off. Only in America ...

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VW gets approval for diesel fixes in Europe

VW gets approval for diesel fixes in Europe

VW investigated by EU over loans amid diesel scandal

VW investigated by EU over loans amid diesel scandal

Tuesday, 24 November 2015

VW investigated for tax evasion on false CO2 levels

From Automotive News Europe: 

VW investigated for tax evasion on false CO2 levels

U.S. delays 'quiet car' rules for hybrids, electric cars | Reuters

Reuters report that the intriguing idea that electric and hybrid cars should be required to make more noise, to protect cyclists and people with impaired sight, is being delayed. First mooted in 2013, the proposal would require “quiet cars” and other vehicles to give out audible alerts at low speeds (under 18 mph), at which they operate without a noisy internal combustion engine running. In particular, the proposed rules are designed to prevent crashes at junctions and reversing accidents.

According to the National Highway Traffic Safety Administration, the chances of a quiet vehicle being involved in a pedestrian crash are 19 percent higher than a conventional vehicle using an internal combustion engine. The proposal would mean 2,800 fewer pedestrian and cyclist injuries annually, NHTSA reckons. But vehicle manufacturers say the alerts are too loud and complicated, and that they should be required only at lower speeds. NHTSA said in 2013 that it expected the rules to cost the industry some $23 million in the first year, because of the need to add an external waterproof speaker.

Congress passed a law in 2010 requiring NHTSA to finalise the regulations by January 2014. In July NHTSA said they would be ready by November, but now the agency says it will not be able to meet that deadline though it has not elaborated on the reasons for this. The Transportation Department said in a document posted on its website that "additional coordination is necessary."

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Wednesday, 11 November 2015

Licence checking companies report surge in business

Fleet News reports that the abolition of the paper counterpart driving licence has led to a surge in business for members of the Association for Driving Licence Verification - to an estimated two million a year. It is naturally a very important part of fleet management, and the paper counterpart used to make it rather simpler.

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Monday, 19 October 2015

Less than half of countries apply minimum UN car safety standards - Global Ncap

Global Ncap, the road safety charity, reports the publication of the WHO's 2015 Global Status Report on Road Safety:
The World Health Organisation (WHO) is calling on governments around the world to apply the UN’s most important vehicle safety regulations. In its 2015 Global Status Report on Road Safety (published 19 October) the WHO reveals “worrying data showing that less than half of countries implement minimum standards” and warns that “Governments have a responsibility to take the steps needed to ensure their citizens have access to safe vehicles”.
Using seven priority vehicle safety standards recommended by Global NCAP, the WHO has carried out a unique survey on how they are currently being applied by governments around the world. The seven standards are from the UN’s World Forum for Harmonisation of Vehicle Regulations and cover seat belts, seat belt anchorages, front and side impact, electronic stability control, pedestrian protection and child seats. The results show that they are being fully applied by only 40 out of a total of 193 UN Member States and overwhelmingly by high-income countries. The Report argues that “there is an urgent need for these minimum vehicle standards to be implemented by every country”.
The WHO is worried that “these standards are notably absent in many of the large middle income countries that are major car manufacturers” now responsible for almost 50% of world passenger car production which reached a record level of 67 million units last year.
For example the WHO shows that the most important crash-worthiness regulations helping to protect occupants withstand front and side impact crashes “are poorly implemented globally”.
According to the report just 49 countries (27%) apply the UN frontal impact test regulation and 47 (26%) apply the side impact test regulation. Again these are predominantly high-income countries. The WHO is concerned that “in the absence of appropriate standards automobile companies are able to sell old designs no longer legal in well-regulated countries. Alternatively, they may “de-specify” life-saving technologies in newer models sold in countries where regulations are weak or non-existent”.
Citing the example of Electronic Stability Control (ESC) the WHO is concerned that global car manufacturers who are required to fit the system in high-income countries “can sell the same model to markets without this life saving technology if the country does not apply the ESC regulation”. To avoid such de-specification of safety technologies the WHO says ESC “should be mandatory in all vehicles”. Noting that the system is also effective in commercial vehicles (such as trucks, coaches and mini-buses) the WHO comments that “there is enormous life-saving potential for this technology across the world’s entire vehicle fleet that has yet to be tapped globally.”
The Status Report also highlights the role of New Car Assessment Programmes (NCAPs) in driving demand for safer cars. WHO says that NCAPs “are highly successful in promoting supply and demand for safer vehicles” and describes the work of the nine different organisations active in safety rating activities around the world. The WHO also spotlights Global NCAP’s support for new programmes in the rapidly motorising regions of Asia and Latin America.
The Status Report confirms that each year 1.25 million people die as a result of road traffic crashes. The WHO notes that the level of fatalities is stabilising but their Director General Dr Margaret Chan is concerned that “the pace of change is too slow”. In a foreword to the report Dr Chan warns “that across many measures, countries have not done enough to implement what we know works. As an example of inadequate policies, Dr Chan includes “vehicles sold in the majority of the world’s countries do not meet minimum safety standards”.
Commenting on the WHO’s Report, David Ward, the Secretary General of Global NCAP said:
“Global NCAP warmly welcomes the WHO’s call for action by governments to apply the most important vehicle safety standards. This is needed to democratise car safety so that car buyers everywhere have access to the same minimum levels of safety.
We also strongly endorse the WHO’s recognition of the life-saving potential of electronic stability control and support their call for its mandatory fitment. This vital crash avoidance system is a key focus of our new #STOPTHECRASH Partnership.
We are also pleased that the WHO recognises the contribution of NCAP’s as catalysts for action to improve vehicle safety supporting the UN’s Global Goals and the target to halve road deaths by 2020”.

Friday, 16 October 2015

Uber is legal in London

The HIgh Court judgment in Transport for London v Uber London Ltd [2015] EWHC 2918 (Admin) (16 October 2015) has been handed down today and can be read here.

Wednesday, 7 October 2015

DVSA fails to check MOT mileage accuracy | Auto Retail Network

DVSA fails to check MOT mileage accuracy | Auto Retail Network: "The DVSA does nothing to check the accuracy of mileage capture when a vehicle is subject to an MOT, a Freedom of Information Request by Auto Retail Agenda has discovered.

The lack of checks on data capture accuracy at MOT test stations makes it difficult to identify which cars have been clocked. "

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VW SCANDAL: UK owners won't be hit with tax rise - Car Dealer Magazine

VW SCANDAL: UK owners won't be hit with tax rise - Car Dealer Magazine: my old friend Patrick McLoughlin, secretary of state for transport, has announced that the government won't be hitting owners of VWs with the notorious "defeat device" for higher levels of vehicle tax. Because tax levels are so dependent on emissions, there is certainly an argument for charging them more, but the government is showing solidarity with the rather battered owners - while saying it expects VW to support its customers.

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Tuesday, 6 October 2015

US: Supreme court won’t hear dispute over Chrysler dealerships

High court won’t hear dispute over Chrysler dealerships, reports the Detroit News, although by "high" it seems to mean "Supreme". The would-be appeal arose from arbitrations which took place under state motor vehicle dealership laws, following the termination of a load of Chrysler dealers when the manufacturer went into bankruptcy a few years ago. In the case in question, a dealer took action to prevent an ex-dealer which had prevailed in arbitration being allowed to re-open.

The Supremes had previously declined to hear Fiat Chrysler's appeal against a ruling reinstating four former dealers. Both cases involve the important question (in the US system) of whether Federal law pre-empts state laws. Bankruptcy law is Federal while dealership laws are state laws.

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Friday, 2 October 2015

Litigation funder backs VW shareholder action | News | Law Society Gazette

Litigation funder backs VW shareholder action | News | Law Society Gazette: "Litigation funder Bentham Europe has announced it will coordinate and back a shareholder action against Volkswagen in connection with the motor giant's emissions scandal"

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Monday, 21 September 2015

USA: 'Defeat device' recall ordered

On 18 September, the Environmental Protection Agency ordered the recall of 482,000 diesel-powered vehicles (five different models) sold over the past five years in the USA. The EPA's statement, with a link to more information on the Notice of Violation, is here). It alleges that they contain software to detect when the vehicle was being subjected to an emissions test. This so-called 'defeat device' software is said to switch on emissions controls, which would remain inactive in normal use allowing NO2 emissions up to 40 times the permitted level.
Reports (such as the Financial Times's) say that campaign groups have long suspected that defeat devices were being used, but only now has the California Air Resources Board (CARB) detected the volation. It declined to say how it had done so.
In Europe, the testing regime is considered to be outdated and reform is taking place. In the UK, the Committee on Climate Change reported this month that average on-the-road emissions in Europe were about 35 per cent higher than the lab results advertised by manufacturers.
VW, which was said to have been given an ultimatum - explain yourself, or lose EPA certification for all your 2016 diesel models - have apologised and ordered an external investigation (Financial Times).

SOUTH KOREA: Hyundai designs leaked

A report in just-auto (reflecting a story in the Korea Herald) tells us that South Korean prosecutors have indicted 10 people for allegedly passing on design blueprints for a future car being developed by Hyundai Motor for Chinese manufacturer, BAIC Motor.

One man has been reportedly been charged with leaking 71 bumper designs, though to whom is not clear. The other people accused were working for subcontractors.

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Sunday, 20 September 2015

Director sentenced to 6 months for criminal cartel - News stories - GOV.UK

Director sentenced to 6 months for criminal cartel - News stories - GOV.UK: "Nigel Snee was today [14 September] sentenced to 6 months' imprisonment, suspended for 12 months, and ordered to do 120 hours community service within 12 months.

The sentencing hearing at Southwark Crown Court followed a criminal cartel investigation by the Competition and Markets Authority (CMA).

Mr Snee, the former Managing Director of Franklin Hodge Industries, had previously pleaded guilty to dishonestly agreeing with others to fix prices, divide up customers and rig bids between 2005 and 2012 in respect of the supply in the UK of galvanised steel tanks for water storage.

The tanks are used to store water for sprinkler systems in buildings.

Mr Snee was arrested in 2012 at the start of an investigation begun by the CMA’s predecessor, the Office of Fair Trading.

Mr Snee cooperated with the investigation and, after pleading guilty to the cartel offence in January 2014, was a witness for the CMA at the subsequent trial of two further individuals, who were acquitted in June. As is usual in such cases, the extent of Mr Snee’s cooperation was reported to the trial judge in order that it could be taken into account in his sentencing decision.

In explaining the approach to sentencing, His Honour Judge Goymer remarked that “the economic damage done by cartels is such that those involved must expect prison sentences”.

The judge indicated that his starting point in this case was that a prison sentence of 2 years was appropriate. Taking into account Mr Snee’s early guilty plea, his personal mitigation and the extent of his voluntary cooperation as a witness, the Judge reduced his sentence by the “higher end” discount of 75%, and concluded that it was appropriate in the circumstances of this case for the resulting 6 month sentence to be suspended."

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Thursday, 3 September 2015

Volkswagen must sell shares in Suzuki, court decides

Volkswagen must sell shares in Suzuki, court decides: "Volkswagen must sell its shares in estranged partner Suzuki, an international court has decided, ending a nearly four-year battle over a dysfunctional alliance between the two carmakers.

The decision, by the International Court of Arbitration of the International Chamber of Commerce in London, was announced by Suzuki [on 30 August] in a filing to the Tokyo Stock Exchange."

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Calif. dealers call Tesla referral deal illegal

Calif. dealers call Tesla referral deal illegal: "A new referral program from Tesla Motors Inc. that offers discounts to buyers referred by a Tesla owner is drawing complaints from dealers in the electric-car manufacturer’s home state of California."

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Suit against major car manufacturers alleging that keyless ignitions are deadly carbon monoxide hazards (CL&P Blog)

Suit against major car manufacturers alleging that keyless ignitions are deadly carbon monoxide hazards (CL&P Blog): "A 135-page class-action-complaint filed yesterday in federal court in Los Angeles alleges that the major car manufacturers are liable because their keyless ignition systems create a carbon monoxide hazard."

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Sunday, 23 August 2015

Dealers facing 'imminent HMRC crackdown' over demonstrators - Car Dealer Magazine

Dealers facing 'imminent HMRC crackdown' over demonstrators - Car Dealer Magazine: "POOR record keeping on employees’ use of demonstrators and courtesy vehicles could see dealers facing stiff fines from the HM Revenue & Customs."

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Aftermarket unites to fight government's four-year MOT proposal - Car Dealer Magazine

Aftermarket unites to fight government's four-year MOT proposal - Car Dealer Magazine: "AN aftermarket steering group is united in fighting the Chancellor’s plans to increasing from three years to four the period before a car receives its first MOT test.

The Automotive Aftermarket Liaison Group (AALG) discussed how to best fight the proposition and defend the UK’s impeccable safety record."

28 July

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‘Urgent’ structural review of English civil courts commissioned

‘Urgent’ structural review of English civil courts commissioned: "An “urgent” review of the structure of the civil courts in England and Wales has been commissioned by two of its highest ranked judges.10 Aug 2015"

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Stefan Quandt seeks to avoid forced BMW takeover bid

Stefan Quandt seeks to avoid forced BMW takeover bid: "Stefan Quandt has asked German regulator BaFin to be excused from takeover rules that otherwise could force him to make an offer to buy the whole of BMW, a spokesman for the Quandt family told Reuters on 11 August."

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Leaving the EU—impact on case law and legislation

Halsburys Law Exchange has an interesting article by Tim Eicke QC on the legal implications of a Brexit, which is something we have to start thinking about. No doubt to would mean a mad rush of legislation to replace what we were leaving behind - often in identical terms. Where, for example, would we be without a block exemption? A domestic version might turn out to be different from the EU one, though.

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German prosecutors drop case against Porsche board

German prosecutors drop case against Porsche board: "German prosecutors in Stuttgart have dropped a case against members of Porsche Automobil Holding SE's supervisory board including Ferdinand Piech and Wolfgang Porsche for suspected market manipulation, they said on Friday." Automotive News Europe, Reuters

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VW faces NHTSA probe after Takata airbag incident

VW faces NHTSA probe after Takata airbag incident: "The National Highway Traffic Safety Administration is widening its Takata airbag probe after a Takata side airbag in a Volkswagen SUV ruptured in June."

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Trade union GMB takes on taxi app provider Uber over driver rights and terms

Trade union GMB takes on taxi app provider Uber over driver rights and terms: "Trade union GMB is launching a legal case against Uber in an effort to ensure its members working for the taxi app provider have the same rights as other employees."

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Have you been affected by MOT meltdown? Have your say in our forum - Car Dealer Magazine

Have you been affected by MOT meltdown? Have your say in our forum - Car Dealer Magazine: "THOUSANDS of garages across the UK have been left unable to issue valid MOT certificates because of glitches in a new multi-million-pound Government computer system."

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Sunday, 16 August 2015

Interim injunction granted in abuse of dominant position case

Packet Media Ltd v Telefonica UK Ltd [2015] EWHC 2235 (Ch) (20 July 2015) is not a motor industry case, but it is an important competition law case demonstrating how changes in the law have made remedies more accessible for smaller businesses (though whether the courts are accessible at all, in practical terms, to small businesses is debatable).

The Enterprise and Regulatory Reform Act 2013 amended section 35 of the Competition Act 1998, lowering the standard of proof for the granting of an interim injunction from “significant damage” to “serious, irreparable harm”.

Packet Media accused Telefonica (which operates the O2 network in the UK) of abusing their dominant position in the wholesale provision of access to call and SMS text origination. Packet Media relied on O2 providing and supporting their SIM cards, which enabled Packet Media to offer customers a low cost GSM gateway for calls and text messages. When O2 threatened to suspend this service, Packet Media sought an interim injunction in the High Court. They succeeded on the basis that Telefonica had a case to answer for a possible abuse of dominance, in breach of Part II of the Competition Act 1998.

Unusually, this is a ‘stand-alone’ case: there has been no earlier finding (for example, by the CMA or European Commission) that an abuse had been committed. Packet Media will have a harder job securing a permanent injunction, which will require it to prove fault. But at least it has shown that the amended law on interim injunctions can be helpful to smaller players who depend on large suppliers.

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Thursday, 13 August 2015

USA: TrueCar says it considers U.S. antitrust probe to be closed | Reuters

Reuters reports: "U.S. antitrust enforcers have closed an investigation into whether auto dealers ganged up against shopping website TrueCar Inc in 2011 and 2012 in order to raise prices, TrueCar said in a securities filing on Wednesday."

Read the report here.

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Wednesday, 12 August 2015

New consumer ombudsman to handle car complaints | Auto Express

Auto Express reports on a new free online service to help consumers complain about buying cars, repairs and servicing. The story is here. The service is run by Ombudsman Services Ltd, a company limited by guarantee (therefore by definition not-for-profit) which has been around since 2002 offering services in a number of sectors. In fact it isn't just aiming at the motor trade, but opening up its service for all sectors, according to Auto Express: there isn't a mention of it that I can find on the company's own website.

Clearly, to be credible, an organisation like this needs good links with the sectors where the complaints come from. It has sound-looking credentials in utilities areas, and also in copyright licensing, and the website suggests (without as far as I can see stating it expressly) that they have the approval or regulatory bodies. It will be interesting to see who in the motor sector has given approval to the new service.

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USA: TrueCar hit with another dealer lawsuit

Automotive News reports that a group of 100 dealerships that are part of TrueCar's network are suing the online car-buying service for not disclosing to consumers the nature of the fees that dealers pay the company for each sale. Read more here.

Dealers facing 'imminent HMRC crackdown' over demonstrators - Car Dealer Magazine

Car Dealer Magazine reports: "POOR record keeping on employees’ use of demonstrators and courtesy vehicles could see dealers facing stiff fines from the HM Revenue & Customs."

Read more here.

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Tuesday, 11 August 2015

Law firm calls for Calais fines to be waived as hauliers face £4m bill

Law firm calls for Calais fines to be waived as hauliers face £4m bill: "Law firm Moore Blatch is calling on the Government to waive fines for haulage companies and drivers who unwittingly transport migrants in their vehicles until the escalating border control situation in Calais has been rectified."

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Stefan Quandt seeks exemption from BMW takeover offer

Stefan Quandt seeks exemption from BMW takeover offer: "FRANKFURT (Reuters) -- Stefan Quandt has asked regulator BaFin to be exempted from making a mandatory takeover offer for BMW after he inherited a 16.7 percent voting stake in the automaker from his recently deceased mother, Johanna Quandt, a spokesman for the family said."

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Motoring law: Hundreds of drivers lose licence following increased police powers for roadside eye tests - Find Laws, Legal Information, News & Solicitors - Findlaw UK

Motoring law: Hundreds of drivers lose licence following increased police powers for roadside eye tests - Find Laws, Legal Information, News & Solicitors - Findlaw UK: "Information obtained from a Freedom of Information Act request has shown that 609 people have had their driving licences revoked since the introduction of new powers authorising the police to suspend a driving licence following a failed roadside eye test, The Guardian reports."

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Monday, 10 August 2015

So.. is jailed car dealer planning The Great Escape? - Car Dealer Magazine

So.. is jailed car dealer planning The Great Escape? - Car Dealer Magazine: "A CAR Dealer being sent to jail for selling a dangerous vehicle caused a moment of unintentional humour in court – his mobile phone went off and played the theme to The Great Escape."

More importantly, the dealer in question had sold a Nissan Terrano for £1,400. The Birmingham Mail reports. It was badly corroded and potentially dangerous (aren't all vehicles potentially dangerous, depending on what the driver does with them?). He was sent down for 5 months.

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Thursday, 6 August 2015

UK car dealers back EU proposals to ban mileage correction firms

Fleet News reports: UK car dealers back EU proposals to ban mileage correction firms.

UK car dealers are backing EU proposals to introduce legislation outlawing mileage correction firms by May 2018.

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Wednesday, 5 August 2015

Chrysler Hit with Class-Action Lawsuit in Wake of Jeep Hack

Thanks to my good friend Lisa Brownlee for this piece of (perhaps predictable) news: Chrysler Hit with Class-Action Lawsuit in Wake of Jeep Hack: "Fiat Chrysler and Harman International, the maker of the Uconnect dashboard computer, have been slammed with a class-action lawsuit after two security researchers successfully exploited a vulnerability in uConnect to hijack a 2014 Jeep."

There's more to read if you follow the link - what I have quoted should qualify as fair dealing ...

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Monday, 27 July 2015

Ford, IBM defeat appeal over apartheid abuses -U.S. court | Reuters

Reuters reports that Ford (and IBM) have escaped liability for wrongs done to black South African workers from the 1970s to 1990s - the argument being, that the companies had responsibility for killings, torture and other abuses of human rights. The claimants had not shown that the companies engaged in enough wrongdoing to make them liable. Basically, their actions were limited to supplying equipment to the apartheid government and sharing information. The claim was brought under the Alien Tort Statute of 1879, which enables non-US citizens to claim damages in the US courts for human rights abuses committed abroad. From the reports, it seems that Frod's activity was much less obviously supportive of the regime than IBM's.

The latest judgment was an appeal court decision, and an appeal to the Supreme Court is under consideration.

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Sunday, 26 July 2015

US: Fiat Chrysler to face $105m record fine over recall failure - reports that FCA is facing a huge financial penalty and on-going supervision, following what NHTSA sees as inadequate performance over recent recalls of Jeep products. Automotive News also covers the story here.

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The benefits of TTIP to the industry - from the US side

Industry goal in trade talks: Harmonized regs - is the title of a piece in Automotive News extolling the benefits to the motor industry of the Transatlantic Trade and Investment Partnership. It's a hugely controversial piece of legislation, of course, but the motor industry can be pretty sure that as far as it's concerned the agreement would be a Good Thing, and that harmonising technical legislation would bring benefits for all concerned.

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Friday, 24 July 2015

US: FCA recalls 1.4 million vehicles to install anti-hacking software

Automotive News reports that Fiat Chrysler has recalled 1.4 million cars in the US (and the report does not exclude the possibility of it extending to other territories) to have anti-hacking software installed. It comes shortly after reports of a Jeep vehicle having been "hacked" (from Wired, here). The prospect has clearly got FCA worried, and no doubt other manufacturers are no less uneasy. The Wired article demonstrates the possible extent of the problem, and now that car hacking is a recognised issue the manufacturers are going to have to work as hard as the software industry to keep on top of it. The most recent posting on this blog reposts an article from Automotive News that reports a legislative response to the problem, placing responsibility squarely on the vehicle manufacturers.

Many times I have looked at computer contracts with slight amusement where they obediently (as required by the Unfair Contract Terms Act) exclude from any limitations on liability defects attributable to their negligence that cause death or personal injury. Nowadays, software is perfectly capable of producing those results.

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Monday, 20 July 2015

Citizens Advice impact truly remarkable | Citizens Advice blog

Citizens Advice blog informs us of the publication of an "impact report" by Citizens Advice, the charity which has shouldered a hugely increased proportion of the burden of providing advice to consumers since the Global Financial Crisis. Follow the link to read the report.

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BMW settles suit over demo vehicle warranties

Automotive News reports: "BMW of North America has settled a class-action suit on behalf of buyers of more than 104,000 dealership demo vehicles that were sold as new although the vehicles' four-year warranty periods had already begun." The manufacturer admitted no wrongdoing. The cars involved were sold between September 2006 and October 2014, and the warranties started running when they were sold to dealers as demonstrators.

The case was settled by mediation, with BMW agreeing to extend the warranty for three months and to reimburse customers who had to pay for repair costs which would have been covered.

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Sunday, 19 July 2015

Volvo Cars North American Introduces "Pay Once and Never Pay Again" Lifetime Parts & Labor Warranty

An interesting idea which, unless I am mistake, hasn't yet been used here or over in the USA before by any other manufacturers, though whenever I see the expression "lifetime warranty" I ask myself exactly what does that mean - that the goods will last for as long as they last? But in truth what this is more concerned with is making sure owners repair (as you might say) to the manufacturer's network when they need anything doing to their car, rather than actually guaranteeing the parts and labour, which increasingly should last for the lifetime of the whole car.

The closest I have found to this new idea is Vauxhall's lifetime warranty, which was on the car rather than parts (though obviously they got covered too) - but that has apparently been discontinued, and in any case only protected the first owner (so, a very narrow definition of "lifetime"). Volvo Cars of North America Media Newsroom say in their press release:
Volvo Cars of North America will now offer a lifetime parts and labor warranty for all Volvo vehicles serviced after the factory warranty at any Volvo retailer. Volvo customers can expect to pay once and never pay again for replacement Volvo parts and labor, excluding accessories and wear items, for as long as they own their car.

This addition to the Volvo Service Advantage program is part of the company’s definition of premium service, a philosophy that is designed around the customer’s needs and lifetime love of Volvo Cars. All Volvo owners can expect to receive the premium service experience when servicing at their local Volvo retailer. In addition to the lifetime parts and labor warranty, customers will receive free software updates, complimentary diagnostics, personal service, alternative transportation and a complimentary car wash.

“We look forward to redefining the way manufacturers service and support their vehicles” says Scott Doering, Vice President of Customer Service, Volvo Cars of North America, “the lifetime parts and labor warranty is a best in class offer from a luxury automaker.”

All Volvo owners are invited to experience this new definition of luxury service at their local Volvo retailer. All Volvo models are eligible for the Volvo Service Advantage program and the new lifetime parts and labor warranty.

“The lifetime parts and labor warranty is a commitment to both quality vehicles and quality customer relationships,” says Lex Kerssemakers, President and CEO of Volvo Cars of North America, “everyone should feel confident that Volvo is here to support our customers throughout the ownership of their vehicle.”
A pretty obvious way to drive business to authorised workshops, but perhaps a rather expensive one. Let's see how long it lasts, and whether anyone else imitates it. Commentators in the US appear to think that it's what Volvo need to do to address some quality problems they have had in recent years ...

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New car-buying website - how will it affect dealers?

In an article rather sensationally entitled Website plans to leave car showrooms in the dust, the Financial Times* reports the launch of a new car-buying website, Carwow (slogan: "Let car dealers compete over you"), which it describes as doing for the new car market what Expedia has done for travel. It will farm out consumers' requirements to dealers, who will make a best and final offer, and the website will take a commission of £250 from the dealer. That doesn't sound to me as if it will leave showrooms in the dust.

Bemoaning the fact that the Internet has never taken off as a platform for selling new cars, while for second-hand cars it it suggests that the Internet is very widely-used, the FT mentions the deterrent effect of the 14-day cooling-off period for distance selling transactions. Given the enormous drop in value of a car the instant it is first registered, then driven away from the dealer's premises, this is more than a deterrent: it must be almost a complete block. Add to that the fact that people still, rather quaintly, like to look at cars, sit in them, and take test drives - none of these matters for which the Internet is well-adapted - and I think you have your reason. That's not to say that online sales will never take off, just that they will remain a small proportion, for the time being at least.

Anyway, even for second-hand cars it must be true to say that the Internet is used as an advertising medium rather than an e-commerce platform, and on that basis the new-car market isn't far behind. The FT article notes other changes in the market, citing "Apple-style" outlets where consumers can look at the cars and engage with non-sales staff to learn about them before buying online (thus creating the distance-selling problems that dealers are understandably worried about).

The dealer system as we know it might be a long way from perfect, and there are surely more efficient ways to get cars to buyers, but it still seems to be the best choice for a way to handle new car sales. Will Carwow make much difference? Actually, it looks as if it might help the present dealer network model, perhaps even giving it a boost which will help it to stave off a shift towards full e-commerce. So long, of course, as it doesn't get too carried away like TrueCar in the States.

* The FT is usually a model of sober reporting, but the headline-writer has got a bit carried away here, like his or her predecessor (it can't have been the same person, it's too long ago, 30 years to be precise) who headed an editorial comment on the block exemption "Feather beds on wheels". Obviously very memorable, if it has stuck this long in mine!

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Friday, 17 July 2015

Rescission or damages in a misrep case?

Salt v Stratstone Specialist Ltd (t/a Stratstone Cadillac Newcastle) [2015] EWCA Civ 745 (16 July 2015) concerned a car sold as "brand new" when in fact it had been manufactured a couple of years earlier, and in the interim although it had not been registered had suffered significant accident damage, which had been repaired. Suffice to say that the claimant said that if he had been aware of the history he would not have bought it.

The car suffered from a classic congeries of small defects, and a year after buying it the owner purported to reject it, later issuing proceedings and taking it off the road. In May 2011 - a couple of years after proceedings were issued, and nearly 4 years after the purchase - Stratstone disclosed documents that revealed that the car had not been new when sold, and the claimant amended his claim accordingly. The district judge decided that he could not order rescission under the Misrepresentation Act 1967, because the parties could not be restored to their original position: there had been too much use of the car, and too much time had elapsed. He also took into account that the car could not be restored to unregistered condition, which seems a rather unrealistic condition to apply: it would surely make rescission unavailable in any new car case. He awarded damages, based on the value of the car at the time of the sale and the sale price. HHJ Charles Harris, to whom the first appeal went, differed from this assessment and ordered rescission. (He also awarded the claimant his costs, later amending the award so costs were to be on a more generous indemnity basis because the claimant had offered to accept £4000 in settlement.)

On appeal to the Court of Appeal, it was noted that the question of whether section 2(1) of the 1967 Act was available at all if there were a bar to rescission was "open"  at the CA level - there were authorities both ways. The court concluded that the correct view was that if rescission were not available, damages could not be awarded because they were in lieu of rescission: and in lieu of nothing must mean nothing (my words, not the court's, but you see what I mean). The Court of Appeal held that restitution was indeed possible and therefore rescission was the appropriate remedy, that damages could not adequately compensate the claimant, and that the delay was not a problem especially as it was only on disclosure that the nature of the claim became clear. All of which seems to make good sense, unfortunately for Stratstone whose employee had made such an optimistic claim about the car in the first place. It points to a need for training and caution more than anything else.

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Wednesday, 15 July 2015

Honda's U.S. auto finance arm to pay $24 million over loan pricing problems | Reuters

Honda's U.S. auto finance arm to pay $24 million over loan pricing problems | Reuters: "A U.S. auto finance arm of Honda Motor Co (7267.T) will pay $24 million in restitution over allegations that its loan pricing practices caused minority customers to pay higher interest rates than white borrowers did, U.S. regulators said on Tuesday."

This has been a controversial matter for some time, and the size of the penalty surely indicates that the authorities consider this behaviour unacceptable.

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TVR Automotive v OHMI - TVR Italia (TVR ITALIA) (Judgment) [2015] EUECJ T-398/13 (15 July 2015)

In TVR Automotive v OHMI - TVR Italia (TVR ITALIA) (Judgment) [2015] EUECJ T-398/13 (15 July 2015) the General Court held that the OHIM Board of Appeal had been wrong to conclude that there was no genuine use of the TVR trade mark at the material time (February 2007) when the application in suit was filed by the applicant, an Italian company claiming somehow (and very optimisitically) to be the successor to the business of the then-defunct British sports car manufacturer. Its trade mark comprised a TVR logo (in familiar form) with the word "Italia" appended in smaller letters.

The true successor to TVR's business opposed the application, and the Italian company demanded evidence of use. The opposition was rejected in relation to the goods for which use had been shown - which was not all the goods in the application, but it was the important ones. The Italian company appealed, and then filed for revocation. The appeal was stayed while that was sorted out. The Cancellation Division rejected the application for revocation on the grounds that genuine use had been shown, and the Italian company appealed against that, but out of time so the opposition proceedings then went ahead: the appeal was upheld, on the basis that genuine use from 28 January 2003 to 27 January 2008 had not been proved.

The case was based on the non-use of the TVR trade mark, although there appears to be no allegation that such non-use had lasted for five years: and in any case one of the trade marks involved had not even been registered for five years at the time. It received short shrift from the Court, which took a rather different view of what constitutes "genuine use" in relation to specialised, low-volume motor cars, making me wonder how the case ever got to Luxembourg in the first place.

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BVRLA calls for emergency braking action as safety rises up fleet agenda

Fleet Leasing reports BVRLA calls for emergency braking action as safety rises up fleet agenda: "The Government is being urged to incentivise the uptake of autonomous emergency braking (AEB) systems, which have the potential to significantly reduce rear-end crashes and, ultimately, save lives."

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USA: contract dispute between Autonation and Truecar

Autonation, the largest dealer group in the USA, has fallen out with TrueCar, the car-shopping website that has already been involved in legal disputes about whether it is a dealer or not. It seems from reports that Truecar demanded data from Autonation relating to more transactions than just those introduced by Truecar, and to no great surprise Autonation dug its heels on - in fact, more than that, it treated the demand as a breach of contract and announced that from the end of July the 226 of its 240 outlets that use the service would stop. Truecar responded with allegations that Autonation has been underreporting sales resulting from introductions. This one could run and run ...

Tuesday, 14 July 2015

1954 Ferrari Racer Pits Lingerie Tycoon Against Bonhams - Bloomberg Business

1954 Ferrari Racer Pits Lingerie Tycoon Against Bonhams, Bloomberg Business reports. The story concerns an ownership dispute over a Ferrari 375 Plus, the star of Bonham's auction at last year's Goodwood Festival of Speed. It probably won't make exciting new law, but it is definitely a piece of litigation of interest to the motor industry with Bonham's the auctioneers being sued and in turn suing a dealer in Paraguay - it isn't clear where the legal actions are taking place, but perhaps we'll learn more about the matter in time.

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Bodyshop fined by HSE for failure to comply with improvement notices

Bodyshop fined by HSE for failure to comply with improvement notices: "[A bodyshop proprietor from] Chesterfield, has been prosecuted by the Health and Safety Executive (HSE) for failing to comply with two improvement notices.", reports Fleet News. He was fined a total of £4,000 and ordered to pay costs of £1,600 after pleading guilty of breaching Section 33(1)(g) of the Health and Safety at Work etc. Act 1974.

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CMA to review New Cars Order

I seems like only yesterday that I was writing about the New Cars Order as if it was an old friend that I had recently met again after an interval of several years - and now I find that the Competition and Markets Authority is consulting on whether it is still needed (along with a number of other remedies set up by the CMA's predecessors, which are of less interest to the motor industry). Judging by the number of reports (small but significant) in the trade press about breaches or alleged breaches of teh Order, it still serves a useful purpose - unless one feels that what appear to be breaches should not be, of course.

Responses should be received by 5pm on Friday 28 August 2015, by email or in writing to:

Review of monopoly remedies
Competition and Markets Authority
7 th Floor North Victoria House
37 Southampton Row
London WC1B 4AD


Let them know how you feel about it!

Thursday, 9 July 2015

Wednesday, 8 July 2015

AA welcomes move to simplify insurance legislation - Car Dealer Magazine

AA welcomes move to simplify insurance legislation - Car Dealer Magazine: "AA Cars has welcomed the final simplification and little-noticed change of legislation concerning motor insurance certificates, brought about by the Deregulation Act, which came into force yesterday"

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US: Michigan Chevy store wins dispute with customer over $10,000 down payment

Michigan Chevy store wins dispute with customer over $10,000 down payment: "A suburban Detroit Chevrolet dealership is entitled to the $10,000 down payment it failed to collect from a customer on a vehicle sale, but it can’t recoup attorney fees from him, the Michigan Court of Appeals has ruled."

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Budget 2015: Vehicle Excise Duty reform for new cars - BBC News

Budget 2015: Vehicle Excise Duty reform for new cars - BBC News: "New Vehicle Excise Duty (VED) bands are to be introduced, with revenues eventually going towards a new Roads Fund, the chancellor has announced."

Read the SMMT's take here. They express 'considerable concern' about the changes.

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France to unify electric vehicle-charging networks-paper | Reuters

France to unify electric vehicle-charging networks-paper | Reuters: "The French government plans to impose the interoperability of the country's various electric vehicle-charging networks by decree before the end of this year, financial daily Les Echos reported on Monday."

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NFDA's dispute and resolution service receives accreditation - Car Dealer Magazine

NFDA's dispute and resolution service receives accreditation - Car Dealer Magazine: "The National Franchised Dealers Association’s Alternative Disputes Resolution Service (ADR) has received approval from the Chartered Trading Standards Institute (TSI). The service is independently run by the National Conciliation Service (NCS)."

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More than 10 million illegal tyres on British roads

More than 10 million illegal tyres on British roads, Fleet News tells us:

"More than a quarter of drivers had an illegal tyre on their vehicle at the time they were replaced, according to results from a survey conducted by TyreSafe in partnership with Highways England."

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Transport Secretary signs new Uninsured Drivers’ Agreement

The Motor Insurers’ Bureau has announced the implementation of a new Uninsured Drivers’
Agreement which will come into force for accidents occurring on or after 1 August 2015.
The 1999 Uninsured Drivers’ Agreement and prior Agreements still continue to be in force for accidents
occurring before 1 August 2015. The new one simplifies the arrangement and aligns it with EU law. The press release goes on:

The Uninsured Drivers’ Agreement provides a framework within which the MIB provides compensation
to innocent victims of accidents with uninsured drivers in Great Britain. The Agreement is made with
the Secretary of State for Transport and is reviewed periodically to incorporate any necessary changes. 
The current Uninsured Drivers’ Agreement has been in operation for the past 16 years. A review was
carried out in partnership with the Department for Transport (DfT), which conducted a consultation in
2013 with a range of claimant and insurer stakeholders. The new Agreement now reflects: 
 Changes to domestic and EU law
 Developments in case law
 Changes in MIB working practices
 A simplification or deletion of some clauses 
Some of the principal changes are: 
 Simplified notice provisions, involving the mandatory joinder of MIB into proceedings as a
named party from the outset.
 The passenger knowledge exclusions have been amended in several ways: 
o The current wording “ought to have known” has been replaced by “had reason to
believe”. This better reflects the legal position following White v White and also follows
the wording in the Road Traffic Act 1988.
o The exclusion relating to passenger knowledge of use in furtherance of a crime is
deleted as a result of Delaney v Secretary of State 2015. In addition, the related clause dealing with knowledge of escaping from or avoiding lawful apprehension is also
 The formal incorporation of the £1m property damage limit from the Supplementary
Agreement, together with wording as to how to apply the limit, if claims are received from an
accident which total more than the limit.
 In the clause dealing with “other sources of recovery”, not only are true subrogated claims
excluded, but also claims where the claimant has other sources of redress available to him. If,
for example, the claimant has a comprehensive insurance policy available to cover the cost of
repair to his vehicle, then MIB will not be able to pay that cost.
 The Agreement has been extended to recognise the common practise of settlement of a
claimants claim using a form of assignment.
Ashton West, Chief Executive at MIB commentated: “Following on from the review various changes and
improvements were made and the new Agreement is now easier to understand and better reflects the
world we live in today. Obviously there have been a myriad of changes over the past 16 years, in
particular to domestic and EU law. What hasn’t changed though is our promise to deliver a prompt,
open and fair service to everyone we deal with.
“We are now turning our attention to completing the review of the Untraced Agreement and working
with the DfT to produce a new text. In the meantime, a Supplementary Agreement comes into force for
accidents on or after 1 August 2015. This harmonises the two Agreements in relation to the issues dealt
with by the Delaney case, and also in respect of ‘other sources of recovery’.”
The supplementary Untraced Agreement, the new Uninsured Agreement, Notes for Guidance and a
Correlation Table easily highlighting the differences between the 1999 and new Agreement can be
found on the MIB’s website at The Government’s response to the consultation can be
found at 

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Brazil watchdog names Takata, Autoliv in price-fixing probe | Reuters

Brazil watchdog names Takata, Autoliv in price-fixing probe | Reuters: "Brazil's antitrust watchdog has opened an investigation into a suspected cartel involving local units of Japanese auto parts maker Takata Corp and Swedish-American rival Autoliv Inc, citing potential price collusion in safety belts, airbags and steering wheels."

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Monday, 6 July 2015

Chinese copies: now it's Porsche Macan - Automotive World

Automotive World reports that Chinese car-maker Zotye has produced a new SUV that looks very like a Porsche Macan. (There are many images, and other reports in the motoring press, which you will find with a Google or other search.)

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Thursday, 2 July 2015

BMW v Deenik appears on BAILII after 16 years

Bayerische Motorenwerke AG v Deenik [1999] EUECJ C-63/97 (23 February 1999) EU:C:1999:82, [1999] ECR I-905, [1999] EUECJ C-63/97, ECLI:EU:C:1999:82, [1999] ETMR 339, which is perhaps more celebrated as a trade marks case than specifically a motor industry one, has just appeared on the free online resource BAILII, here. It is, however, concerned with the use of a car manufacturer's trade mark to announce that a garage is specialised in servicing the manufacturer's products. The Court's interpretation was that such use of the trade mark was OK provided it did not suggest that there is a commercial connection between manufacturer and garage, in particular that the garage is part of the manufacturer's network or that there is some special relationship between them. That, of course, was then, and this is now, and whether the sales-servicing schism imposed by the block exemption in the interim, and the emergence of authorised repairers who may be selected qualitatively but not quantitatively, makes any difference is an interesting question - though I suspect the answer is that it makes no difference.

Volume 14 number 10

The latest edition of Motor Law is now on its way to subscribers by post, and electronic subscribers have already received the download link. If you haven't, or if you would like to in future, please let me know.

Tuesday, 30 June 2015

Government considers targeting hands-free phone use

Government considers targeting hands-free phone use, reports Fleet News. It must be good news, and the argument that it will remove responsibility from fleet operators is a powerful one, but wouldn't it  be nice to make the ban on using hand-held devices (note: it is not only telephones) work before trying to extend it? Surely experience shows that sweeping bans are rarely effective, and among certain types of person serve only to justify ignoring the law.

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Saturday, 27 June 2015

Ford can pursue lawsuit after Explorers wound up in China

Automotive News reports that Ford has been allowed by a court in California to pursue a fleet customer which it alleges fraudulently purchased vehicles for use in the US, then exported them to China. Its fraud secured for it an $823,000 discount. The defendant's president apparently admitted exporting some or all the cars (Explorers) to China, but argues that the export prohibition in the sale agreement is an illegal restraint of trade. Good luck with that one, but Ford might be heading for problems with the Chinese authorities, which are already showing a lot of interest in the price of imported cars. Indeed, as we reported not long ago, parallel imports are being actively encouraged by the Chinese government.

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Thursday, 25 June 2015

German cartel office says fines automotive suppliers 75 mln eur | Reuters

German cartel office says fines automotive suppliers 75 mln eur | Reuters: "Germany's cartel office said on Wednesday it has imposed about 75 million euros ($84.12 million) of fines on automotive suppliers for price fixing."

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European Commission - PRESS RELEASES - Press release - Fighting cartels - Commission sanctions retail food packaging cartel and sends Statement of Objections in suspected car battery recycling cartel

European Commission - PRESS RELEASES - Press release - Fighting cartels - Commission sanctions retail food packaging cartel and sends Statement of Objections in suspected car battery recycling cartel: "Today we have sent statements of objections to five companies that we suspect of having operated a cartel in the market for recycling lead from used car batteries.
The statements of objections allege that, from 2009 to 2012, these five companies agreed on prices for scrap lead-acid batteries in Germany, France, the Netherlands, and Belgium.
Unlike in most cartels where companies usually conspire to increase their sales prices, the companies in this case appear to have colluded to reduce their purchase prices.
This may seem like desirable outcome, as the companies' purpose was to cut input prices and to reduce price volatility. However, the preliminary conclusion of our investigation is that the main goal of the cartel members was in fact simply to maintain higher profit margins. The cartel members may have lowered the prices paid to scrap dealers, many of which are small and medium-sized companies. This would then feed through in lower prices for used batteries sold for scrap, ultimately to the detriment of sellers.
The result, the Commission alleges, was the same as in any price-fixing cartel: disrupting the normal functioning of the market and preventing competition on price.
Artificially fixing the price of lead from recycled batteries, as the Commission suspects, is a very serious matter because it interferes with the effective functioning of the recycling market.
Around 80% of lead scrap comes from waste lead-acid car batteries and practically all car batteries undergo recycling at their end of life. Recycling companies process the batteries in various steps to produce pure lead or lead alloys, most of which is used for making new car batteries.
The concept of the ‘circular economy’ refers to re-using, repairing, refurbishing and recycling existing materials and products. Car battery recycling essentially functions in a closed-loop cycle but the behaviour of these companies would interfere with this loop and affect the circular economy.
If the existence of the cartel were to be confirmed, putting an end to such price fixing would make the market for recycling lead from car batteries more efficient.
The parties now have the opportunity to reply to the Commission's allegations in the statement of objections.""

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Ireland: FTA backs Supreme Court motor tax appeal

FTA backs Supreme Court motor tax appeal: "Freight Transport Association Ireland (FTAI) is backing an appeal in the Supreme Court today against prosecutions for motor tax offences by one Irish firm."

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CMA statement following completion of criminal cartel prosecution - News stories - GOV.UK

The CMA has published a statement on the conclusion of a criminal cartel prosecution - the goods invoved being galvanised steel water tanks. Two defendants were acquitted because the jury took the view that they did not enter into the arrangement dishonestly, a threshold requirement which has made the cartel offence difficult to prosecute (as, arguably, it should be), and which has therefore been removed for prosecutions after 1 April 2014.

One defendant had already pleaded guilty, so on the face of it there was a cartel with one member ... Actually the way the law works, the better view (nay, the correct view) is that there was a cartel with at least three members but only one of them was going about price-fixing, market-sharing and bid-rigging dishonestly. No, I don't understand either, and perhaps that change in the law is not as nonsensical as it looks. Or, at least, a one-person cartel is a bigger nonsense than an offence with no requirement for dishonesty, and perhaps price-fixing etc are simply not activities that can be undertaken honestly - though what about "crisis cartels" which have been permissible under general competition rules? The dishonesty requirement would have been a get-out for a crisis cartel, but now that helpful safety valve has been closed.

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Tuesday, 23 June 2015

Spain: CNMC penalises price-fixing cartel (with more still to come)

La CNMC multa con 41,1 millones de euros a 95 concesionarios de automóviles Audi, Volkswagen y Seat, dos empresas consultoras y dos asociaciones del sector, is the title of the press release announcing the imposition of substantial penalties following investigations that Motor Law reported in Spetember 2013. This forms part of a wider investigation into the car market, involving six sets of proceedings against distributors and one against a number of manufacturers.

In the present decision, the CNMC identified seven different geographical cartels involving the three marques. Their illegal conduct included  fixing maximum rebates and commercial conditions, and exchanging sensitive information. There were also enforcement mechanisms, imposing sanctions on dealers who failed to stick to the cartel rules: two firms of consultants who were involved in imposing sanctions and collecting 'fines' were also penalised.

SEAT and 11 dealers benefited from the authority's leniency programme and were not penalised. Four companies were investigated but not found to have broken the law.
The companies involved have two months in which to file an appeal.

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New online vehicle recall search tool to help motorists - SMMT

The SMMT has announced a new web portal to enable consumers to check whether a car in which they have an interest is subject to a recall. The system, which uses the VIN to identify the car unambiguously, can also put the consumer in touch with a dealer who can attend to the safety problem which gave rise to the recall in the first place.

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In California, Uber driver is employee, not contractor: agency | Reuters

Reuters reports that the California Labour Commissioner has decided that Uber drivers are employees, not contractors. That could do a lot of damage to their business model in the 10th largest economy in the world (2012 figures) let alone if it were repeated elsewhere.

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CMA acts to maintain trust in online reviews and endorsements

According to its press release the CMA has published its report into online reviews and endorsements, highlighting that some reviews are false, bad reviews are sometimes suppressed and businesses pay bloggers and other writers for websites for endorsements without this being made clear. (No-one has ever paid me for an endorsement - or even offered ...).

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First ever motorist convicted for 'lane hogging' - Crime - UK - The Independent

The Independent reports what is thought to be the first conviction for 'lane hogging' - though there is no new offence, rather it's a journalistic explanation of how a driver came to be convicted of careless driving (five penalty points and a fine of £500, which should give other careless drivers pause for thought) for cruising along at 60 mph in the middle lane when there was ample opportunity to move over to the left. Six other road users reportedly had to brake before overtaking his van.

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Friday, 19 June 2015

Another trip down memory lane: Richard Cound v BMW, Clover Leaf Cars v BMW

While I am on the topic of old law which we should not forget (a couple of weeks ago it was the Supply of New Cars Order), I thought it worth mentioning these two important Court of Appeal cases on the block exemption. The first one, that is, but potentially still relevant. The trouble is I don't have complete reports, but on the basis that something is better than nothing and I want to have a readily-accessible note of the cases I thought it worth writing as much as I could here.

Richard Cound Ltd v BMW (GB) Ltd [1997] Eu. L.R. 301 was decided on 10 May 1995. The judges in the Court of Appeal were Balcombe LJ, Pill LJ, and Sir Roger Parker. Clover Leaf Cars Ltd v BMW (GB) Ltd [1997] Eu LR 53 was decided in the Court of Appeal (Staughton LJ and Thorpe J) on 28 December 1995 (and at first instance in the Chancery Division, apparently on 20 December that year, by Rattee J). Given that the termination of the dealer agreement in the second case was to take effect on 31 December, one can see perhaps why the courts dealt with it so urgently. (I don't at present have information about the situation in the Cound case, but as I recall the same facts applied - BMW terminated the agreement from 31 December 1995 - but the case was brought a bit more promptly.) In the Clover Leaf case, and (subject to confirmation) in Cound too I think, the key fact was that the dealer had been taken over by a PLC and BMW did not want too many of them in its network, so it gave (as it was entitled to do) 12 months' notice.

In each case, the important matter was not really whether the restrictions in the agreement on ownership were prohibited by Article 85(1) (as was, and in my mind often still is) and, if so, exempted by Regulation 123/85: the manufacturer's freedom to terminate without having to state a cause (to terminate for convenience) on 12 months' notice was enough to make the termination lawful. What was really interesting was the contention by the plaintiffs that the allegedly prohibited and therefore void provisions of the contract could be severed and the rest of the contract enforced without them. The court held that the issue of severance was governed by English law, following Chemidus Wavin Ltd v Societe pour la Transformation et l'Exploitation des Resines Industrielles SA [1978] 3 C.M.L.R. 514. The judge in Cound had been right to conclude that the effect of severance would have been to alter the character of the agreement and that the agreement did not permit the excision of void terms such as to alter its scope and intention entirely: Hinton & Higgs (UK) Ltd v Murphy 1988 S.C. 353. In Clover Leaf, the court was able to follow the judgment in the earlier Cound case.

Also noteworthy, I think, is the court's holding (in both cases) that the termination was to be viewed as unilateral conduct by the manufacturer, not as something that constituted an agreement.

Consumer Prepayments on Retailer Insolvency - Law Commission

Consumer Prepayments on Retailer Insolvency - Law Commission:

"In a consultation paper published on 18 June 2015, the Law Commission considers whether prepaying consumers should be better protected in the event of company insolvency, either through improved voluntary mechanisms or required by law."

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Wednesday, 17 June 2015

London Taxi Maker Cries Foul Over Rival’s Green Cab Designs - Bloomberg Business

Bloomberg reports (15 June) that the manufacturers of classic black London taxis, now owned by Chinese manufacturer Geely, is taking exception to a new environmentally-friendly rival, Metrocab. One of the partners in the Metrocab company, which like The London Taxi Corporation is based, as any respectable British vehicle manufacturer should be, in Coventry (or Abingdon, of course, or Malvern), is Frazer-Nash research: so are the new cabs to be chain-driven?

So far there appears only to have been a preliminary hearing, The London Taxi Corporation Ltd. v. Frazer Nash Research Ltd. & Anr, High Court of Justice, Chancery Division, HC14B01502. (It turns out, now that the judgment is available - see below - that it was an application relating to survey evidence, which the judge Spearman J was not inclined to allow.) Bloomberg reports that London Taxi alleges that Metrocab "breaches its trademarks", which they would not have written had they paid attention. The verb is "infringe" not "breach" and trade mark is two words ... But London Taxi Corporation has several registered trade marks covering the shape and appearance of their product (for example this one), so potentially there is infringement. Are the trade marks vulnerable to attack on the grounds that the design is generic, I wonder? And is the Metrocab similar enough for there to be a likelihood of confusion? It certainly looks significantly different to me, but I might not be an average user of London cabs.

Update: The London Taxi Corporation Ltd (t/a the London Taxi Company) v Frazer-Nash Research Ltd & Anor [2015] EWHC 1840 (Ch) (03 July 2015)

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Trading Standards sting leaves Halfords Autocentre site with £32,000 fine

Fleet News reports (15 June) that a sting operation by South Gloucestershire Trading Standards has resulted in a £32,000 fine for offences under the Consumer Protection from Unfair Trading Practices Regulations, and nearly £15,000 costs for Halfords Autocentres (I'm not sure precisely which company was the defendant). Of 20 deliberate faults in the Astra they submitted for a £235 service, the technician missed 11.

Nothing new there: in fact, even the story is rather old because the sting took place in March last year and has taken this long to get to court - where Halfords unsurprisingly pleaded guilty. They also argued (though it doesn't help, except in the media I suppose) that their technician picked up a couple of faults (unspecified in the report) that Trading Standards hadn't been aware of, and that the faults that the technician missed were not "overtly dangerous". (Surely it's the "covertly dangerous" ones that are worst anyway?) The court was told that the missed faults (brake fluid level, missing or broken bulbs, faulty windscreen wipers, oil leaks, irregular tyre pressures) should all have been picked up during the "major service": and of course understanding what is and what is not included, and the garage's duty to go beyond what might be on the menu, is key to getting it right.

It does seem to me that there ought to be better ways to go about putting these things right. The defendant here was not a railway arch operation, although by the same token one might say that the consumer should be able to expect more of Halfords than the guy under the arch. Perhaps the most important lesson is the damage that one unreliable employee can cause to a respectable business.

Postscript: Auto Express adds to the story that two other garages hit in the same operation did significantly better, though quite properly we are not told their identities as they seem to have done well enough to avoid prosecution. The trading standards department identified three garages which seemed from their data and that of the old OFT to be disproportionately complained about.

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15 June 2015: Patents: Has Tesla Motors changed down a gear? - Reddie & Grose LLP

Reddie & Grose LLP, patent attorneys (not, whatever they say on their website, "attorneys"), more specifically Ben Palmer of that firm, asks Has Tesla Motors changed down a gear? The article provides interesting background information against which Tesla's dedication of its patent portfolio to the public domain can be assessed. The company's patent filings have tailed off significantly in the recent past, suggesting that perhaps they aren't being as generous as might at first seem to be the case - and of course there is always the suspicion that the rider, to the effect that others are free to use the patented technology in good faith - provides an escape route should the company wish to change its policy.

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USA: N.Y. targets dealerships' sale of credit-repair, identity-theft products

N.Y. targets dealerships' sale of credit-repair, identity-theft products:

"High-volume New York dealership Paragon Honda and its two sister stores have agreed to a $13.5 million settlement with the New York attorney general’s office over the alleged unlawful sale of credit-repair and identity-theft prevention products."
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Ford's Patent Announcement Not so Groundbreaking | DuetsBlog

DuetsBlog explains that Ford's much-vaunted policy of allowing others to use its electric vehicle technology is not as radical as it looked, and doesn't stand up to comparison with Tesla's making their patented technology freely available (often referred to as 'open-sourcing', which not only confuses different parts of speech but also misses the important point that there is no source code involved, and it is the publication of source code that is the defining feature of open source licensing strictu sensu). In fact, Ford are doing nothing more than offering commercial licences, which (while it might be a radical departure for Ford: remember the Competition Act investigation into the UK company's refusal to grant licences to make repair panels?) isn't at all unusual for patent owners. Indeed, for many, granting licences to people better-placed to exploit the technology is the only way to make a patent pay.

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Sunday, 14 June 2015

PCP clocking rise | Auto Retail Network

PCP clocking rise | Auto Retail Network: "Retailers and the wider automotive industry need to be aware that clocking by private individuals is expected to rise as more and more private buyers buy on PCPs and then exceed the contracted mileage, according to Rupert Pontin, head of valuations at Glass’s."

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Friday, 12 June 2015

Supreme Court holds against VAT scheme

In Commissioners for Her Majesty's Revenue and Customs (Appellant) v Pendragon plc and others (Respondents) - The Supreme Court (Lord Neuberger (President), Lord Sumption, Lord Reed, Lord Carnwath and Lord Hodge) held that a VAT scheme on demonstrators operated by Pendragon and devised by KPMG was an abuse of law - which, VAT law coming from the EU, is enough. EU tax law takes a very different approach from that of UK tax law.

As Lord Sumption remarked, it is a very technical matter, so I take that as reason enough not to do more than reproduce the Supreme Court's Press Summary here ...

Normally, when a car distributor buys a demonstrator car from the manufacturer, it pays VAT on the full wholesale price (“input tax”). Then, when it eventually sells the car to a customer, it collects VAT on the full retail price (“output tax”). It accounts to HMRC for the output tax it has collected less the input tax it has paid. The Pendragon Group, the largest car sales group in Europe, used a scheme devised by KPMG to reduce its VAT liability on two occasions in late 2000 and early 2001. The KPMG scheme exploited three exceptions to the normal incidence of VAT so that Pendragon would only have to account for VAT in respect of the difference between the wholesale purchase price and the retail sale price of its demonstrator cars. The scheme worked as follows.  
 Step 1: Pendragon bought cars from a wholesaler, then sold them to four captive leasing companies (“CLCs”). Pendragon paid input tax on the wholesale purchase price but recovered it by accounting for output tax received when the cars were sold to the CLCs.
 Step 2: The CLCs immediately leased the cars to Pendragon dealerships. The CLCs paid input tax on the purchase of the cars from Pendragon but recovered it by accounting for output tax paid by the Pendragon dealerships on their rental payments under the leases. 
 Step 3: The CLCs then assigned the leases and their title in the cars to the offshore bank Soc Gen Jersey (“SGJ”). They received approximately £20m (financed by SG London, which received a further assignment of the assets as security). The assignment to an offshore bank was not a supply for VAT purposes and so no VAT was payable. 
 Step 4: Some 30 to 45 days later, SGJ transferred as a going concern the lease agreements and title in the cars to Captive Co 5. It also sold as a business the hire of cars said to have been carried on by SGJ. The total consideration exceeded £18m, with £100,000 in respect of goodwill. The sale of the business as a going concern was not a supply for VAT purposes and so no VAT was payable. 
 Step 5: The demonstrator cars were sold to customers by the dealerships, acting as agents for Captive Co 5. Customers paid VAT only on Captive Co 5’s profit on the sale, rather than on the total sale price, under the “profit margin” scheme, which is available under domestic law where the goods were acquired as part of a business transferred as a going concern. 
It is common ground that the scheme technically worked, in that the transactions at steps 3 and 4 satisfied the conditions for exemption from VAT, and the transaction at step 5 satisfied the conditions for the application of the margin scheme. However, VAT is an EU tax (governed at the time by the Sixth Directive) and subject to the EU law principle of abuse of law. The First Tier Tribunal held that the scheme was not abusive. The Upper Tier Tribunal held that it was. The Court of Appeal restored the decision of the First Tier Tribunal. HMRC now appeals to the Supreme Court. It argues that the scheme was abusive and that Pendragon should have to pay to it the VAT avoided under the scheme.

The Supreme Court unanimously allows the appeal and holds that the scheme was abusive. Lord Sumption, with whom all members of the Court agree, gives the leading judgment. Lord Carnwath adds further comments on the role of the Upper Tribunal.

In Halifax plc v Customs and Excise Commissioners (Case C-255/02) [2006] STC 919, the Grand Chamber said that, in the sphere of VAT, an abusive practice can be found to exist only if two conditions are met. [7] 
The first condition is that it must be shown that the transactions concerned result in a tax advantage which would be contrary to the purpose of the conditions laid down in the relevant EU Directive and implementing national legislation. One must assume that it is the purpose of the VAT Directives to accommodate normal commercial transactions. [11] This condition is satisfied. The purpose of VAT is to tax consumption. The direct purpose of the margin scheme is to grant relief to traders who have acquired goods from a supplier who had no right to deduct input tax in respect of their own acquisition of them. The indirect purpose of the margin scheme is thereby to avoid double taxation, since second-hand goods may already have been the subject of a net VAT charge at some earlier stage in their history. [14-20] In this case, a system designed to prevent double taxation has been exploited so as to prevent any taxation at all. [30] 
The fact that the margin scheme will sometimes apply in cases where there was no earlier net VAT charge is simply the consequence of designing a workable scheme. [22-23] Even if the margin scheme is made available by domestic rather than EU law, the underlying purpose of the margin scheme remains the same, and general principles of EU law, including the abuse of law principle, still apply; in any event, it must have been intended that the abuse of law principle should apply even as a matter of English domestic law. [24-29] 
The second condition is that it must be objectively apparent that the essential aim of the transactions is to obtain a tax advantage. Even if a transaction has a legitimate commercial purpose, it is open to challenge if the accrual of a tax advantage constitutes its principal aim. [12] The scheme should be assessed as a whole. [13] This condition is also satisfied. It is not in itself objectionable that Pendragon chose to enter into a transaction with an offshore bank. However, it was essential to the scheme that Captive Co 5 acquire the cars as part of a business as a going concern, and for that to be possible, it was essential that the transferor of the business have acquired the cars by assignment. These steps were manifestly included for the sole purpose of reducing VAT liability. [31-34] 
Abusive transactions must be redefined so as to re-establish the situation which would have prevailed absent the abusive practice. [8] This transaction should be redefined by stripping out the five captive companies, so that the dealerships will be accountable for VAT on the full second-hand price. [41-42] 
The Court of Appeal held that the Upper Tribunal exceeded its proper appellate role by substituting its own decision for a decision of the First Tier Tribunal based on an evaluation of competing factors. In Lord Sumption’s opinion, the Upper Tribunal was entitled to intervene because the First Tier Tribunal erred in law. [35-40] Lord Carnwath adds that the Tribunals, Courts and Enforcement Act 2007 now provides that, where the Upper Tribunal finds that the First Tier Tribunal has erred in law, it may itself remake the decision, including by making further findings of fact. It was appropriate for the Upper Tribunal to do so in this case in order to give guidance on the abuse principle. It was their decision rather than that of the First Tier Tribunal which should have been the main focus of the Court of Appeal’s consideration. [44-51]
References in square brackets are to paragraphs in the judgments

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