In June 2021, the Supreme Court of NSW dismissed a civil class action against Volkswagen over potentially faulty Takata airbags, setting a precedent for cars fixed during recalls. Now the court has awarded legal costs to the car maker.
UPDATE: 10 September 2021
The owner of a Volkswagen Passat – a professor at Newcastle University – and the law firm that represented him have been handed a legal bill estimated to be in the “hundreds of thousands of dollars” after the Supreme Court of NSW dismissed a class action over potentially faulty Takata airbags and awarded costs to the car giant.
Professor Phillip Dwyer – the lead plaintiff in a class action action against Volkswagen Australia – and his legal representatives claimed his Passat was “not of acceptable quality for the purposes of … Australian Consumer Law” because it was one of approximately 100,000 vehicles fitted with a potentially deadly airbag.
However, Volkswagen replaced the airbag and, prior to and separate from this court case, the car giant voluntarily sourced and tested 20,000 Takata devices in older Volkswagens from around the world and found they deployed as intended and did not explode shrapnel (a trait of faulty Takata airbags).
A statement released by Volkswagen Australia on 10 September 2021 said the NSW Supreme Court in June 2021 noted the lead plaintiff, Professor Phillip Dwyer, “did not establish any link” between the propensity of the propellant in Volkswagen Takata airbags to degrade so as to cause it to explode or malfunction.
The Volkswagen Australia statement added Justice James Stevenson “ruled that Professor Dwyer did not establish that his vehicle was not of acceptable quality when he purchased it.”
“This week the court determined that the proceedings be formally dismissed, with the plaintiff and the litigation funder funding the class action to be jointly and severally liable for Volkswagen’s costs.”
The original story published on 23 June 2021 on the verdict from the court case appears below:
In a decision regarded by the car industry as a victory for common sense, the Supreme Court of NSW has dismissed a civil class action against Volkswagen over potentially faulty Takata airbags that had been replaced during a recall – and which had not been deemed responsible for any fatalities here or overseas.
The plaintiff claimed Volkswagen vehicles were “not of acceptable quality for the purposes of … Australian Consumer Law” because certain airbags “had propensity to degrade when exposed to moisture and temperature fluctuations.”
However, the court was told the plaintiff had no problem with the airbag in his vehicle and it had not been involved in an incident that would have caused the airbag to deploy.
In a decision handed down on 18 June 2021 in the NSW Supreme Court – Dwyer v Volkswagen Group Australia – Justice James Stevenson said: “For the reasons that follow, I am not able to accept any of the bases on which the plaintiff put his damages claim.”
The court heard Volkswagen Germany had tested some 20,000 potentially faulty Takata airbags fitted to vehicles built since 2005 – sourced from various climates and regions around the world – but all had deployed as the manufacturer intended.
Justice Stevenson said: “Had (the plaintiff) been involved in such an accident, whether before or after his original airbag was replaced, I see no basis to conclude that the airbag would have operated in anything other than in the way it was designed to operate.”
In summary, Justice Stevenson said: “There is thus no evidence that, in fact, the airbag in his car would not have deployed as intended.”
Further, Justice Stevenson said: “The plaintiff is only entitled to damages for the loss that he has actually suffered.”
Volkswagen Australia replaced the Takata airbag in the plaintiff’s car in 2019 – at no cost to the plaintiff – during the vehicle’s 60,000km service. “The plaintiff incurred no out of pocket expenses while the airbag in his car was being replaced,” said Justice Stevenson.
Even though there were no reports of Takata airbags deploying incorrectly in Australia or overseas – and no Volkswagen cars were recalled as part of the Takata safety campaign in Europe – Volkswagen Australia joined the Takata recall at the instruction of the Australian Competition and Consumer Commission (ACCC), and recalled some 101,759 Volkswagens, 38,978 Audis, and 17,595 Skoda cars.
The landmark ruling is likely to set a precedent for other vehicle manufacturers who have replaced, repaired, or rectified potentially faulty components that have been the subject of a recall.
A statement from Volkswagen Australia said in part: “As was shown in evidence, there have been no incidents reported of a Takata airbag rupture in any relevant Volkswagen vehicles in the field globally. In compliance with the mandatory recall notice issued by the Australian Government, Volkswagen Group Australia replaced the Takata airbags that were subject of the proceeding at no cost to the owner.”
Although the Takata airbag scandal involved two dozen brands and more than 100 million vehicles globally – including more than 3 million cars and more than 4 million airbag inflators in Australia, Drive understands five other other manufacturers – namely Toyota, Honda, Nissan, Mazda, Subaru and BMW – are facing similar action locally but their cases are yet to be determined.
Joshua Dowling has been a motoring journalist for more than 20 years, spending most of that time working for The Sydney Morning Herald (as motoring editor and one of the early members of the Drive team) and News Corp Australia. He joined CarAdvice / Drive in late 2018, and has been a World Car of the Year judge for 10 years.