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In a bind? Claimants seek to extend Member State authorities’ reach over the English Courts

High Court to determine whether decisions of foreign authorities under the EU vehicle type approval regime are binding on the English courts

The High Court, in Crossley and others v Volkswagen AG and others, will this week consider the extent to which it is bound by decisions of foreign administrative authorities, and whether defendants can dispute the validity of such decisions by way of defensive collateral challenge in separate proceedings.

These points arise in the context of the ongoing NOx emissions group litigation, and will constitute one half of a preliminary issues hearing commencing on 2 December.  Freshfields acts for the Defendants. 

Two administrative decisions are at issue: those of the German Kraftfahrt-Bundesamt (KBA) and of the UK Vehicle Certification Authority (VCA). Both authorities are responsible for type approving passenger vehicles for use within the EU in their respective countries.

The Claimants’ primary argument is that the decision of these authorities are binding on the English court as a matter of EU law, because of the harmonised EU regime in which the decisions were made. EU law (and particularly the duty of loyal cooperation pursuant to Article 4(3) TEU) requires, say the Claimants, that all decisions of a national authority in a harmonised regime of this sort are binding on all courts and authorities of all other Member States.

That argument - which is novel - is contested by the Defendants, who argue that the harmonised regime in question requires nothing more than the removal of barriers to trade in cars throughout the EU. That is, the EU type approval regime requires only that national bodies are able to approve cars for use within the EU, and that one national body’s approval decision cannot be questioned by another national body. It does not require that all decisions of national approval bodies, on whatever subject, be binding, let alone other Member State’s courts.

The Claimants’ argument, if correct, would have surprising and far-reaching consequences throughout the EU.  It would suggest that in all areas where EU law operates a harmonised regime involving national bodies making decisions to allow products or services into an EU market, decisions of those national bodies are binding on the courts of all Member States, including in contexts where there is no express legislative basis for such binding effect.  As a result, the case will inevitably be of interest to practitioners and companies operating throughout the EU, particularly those providing products or services in EU-wide harmonised markets. 

The Claimants also raise issues of collateral attack and abuse of process. They argue that if the decisions of these approval bodies do not bind the English courts, nonetheless the Defendants cannot question them in civil proceedings, as they did not appeal the decisions when they were made. Again, this argument, if accepted, could have very significant implications for businesses and individuals who receive an administrative decision which contains any element that the recipient thinks it might wish to contest in the future, in proceedings of any sort against anyone.

Freshfields is advising Volkswagen in a number of jurisdictions on civil and regulatory issues concerning its EA189 engines, and allegations as regards NOx emissions.