Canadian Supreme Court allows class action for punitive damages alone to proceed against Volkswagen
The Supreme Court in Canada has rejected a move to dismiss a class action against Volkswagen and Audi on behalf of the citizens of Quebec for compensation resulting from the emissions scandal.
The scandal concerned the sale of over 100,000 Volkswagen and Audi vehicles in Canada between 2009 and 2015 that were fitted with devices to falsify emissions test results. The result was that these vehicles produced emissions that exceeded applicable Canadian standards.
An environmental advocacy group based in Quebec is bringing the class action on behalf of over 8 million residents that lived in Quebec during this period on the basis that everyone breathed the air contaminated by the cars. The group is relying on provisions under Quebec’s Charter of Human Rights and Freedoms, which guarantees the right to a “healthful environment”. The action is seeking $15 per person in ‘direct’ damages, and $35 per person for punitive damages.
In determining whether the class action should be certified, the Quebec Superior Court dismissed the claim for compensatory damages as it was not intended to prove that the residents of Quebec suffered direct harm as a result of the emissions. The court, however, allowed the claim for punitive damages to proceed despite it being unclear whether it could succeed on its own. The court felt this could only be determined through full hearing of the factual record.
Volkswagen attempted to appeal this decision to the Quebec Court of Appeal, which was unsuccessful as there was no obvious error in the decision. However, an appeal to the Supreme Court was allowed.
Volkswagen’s appeal was heard on November 13, 2019 but was dismissed in a 5-4 split decision on the basis that the Court of Appeal had not erred in its discretion to deny the appeal. Although no substantive decision was given, three of the dissenting judges would have allowed the appeal on the basis that the Court of Appeal judge should have granted leave to appeal on the punitive damages question.
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