Written answers

Wednesday, 27 May 2020

Department of Jobs, Enterprise and Innovation

Consumer Protection

Photo of Cian O'CallaghanCian O'Callaghan (Dublin Bay North, Social Democrats)
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443. To ask the Minister for Jobs, Enterprise and Innovation if she has taken action to seek compensation from car manufacturers over the use of cheat devices; and if she will make a statement on the matter. [7848/20]

Photo of Heather HumphreysHeather Humphreys (Cavan-Monaghan, Fine Gael)
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The power to enforce consumer protection legislation is reserved for the Competition and Consumer Protection Commission, a body that is statutorily independent of the Minister for Business, Enterprise and Innovation. I understand that a number of claims by owners of diesel vehicles affected by cheat devices, or defeat devices as they are also known, are currently before the courts in Ireland. In some cases, actions are being taken on behalf of a number of car owners.

While car manufacturers have contested these claims, there have been important recent developments in response to claims for compensation in other European countries. In Germany, Volkswagen reached a settlement in late February 2020 with the Federal Association of Consumers following an action taken by the Association on behalf of 400,000 car owners. In the course of the proceedings, the State court hearing the case advised the parties to seek a settlement. Under the settlement, Volkswagen agreed to pay compensation totalling €830 million to the car owners concerned. The compensation to be paid to individual owners ranges from €1,350 to €6,250 depending on the age of the vehicle. On 25 May 2020, Germany’s highest civil court, the Federal Court of Justice, ruled in a landmark judgment that the owner of a Volkswagen diesel minivan purchased in 2014 was entitled to return the vehicle to the manufacturer and receive a refund of approximately 80 per cent of the payment price. The judgment held that the vehicle’s mileage should be taken into account in calculating the compensation payable to the owner. In a statement issued in response to the judgment, the company indicated that it would seek to bring compensation claims by a further 60,000 car owners in Germany to a prompt conclusion and would be making appropriate settlement proposals to these claimants. It is relevant to note that neither the German government nor the consumer protection authorities in Germany have had any direct involvement in either the compensation settlement with the Federal Association of Consumers or the compensation claims taken by individual car owners.

In a significant preliminary judgment in a group action taken by 90,000 car owners, the High Court of England and Wales ruled on 6 April 2020 that the software installed in diesel cars manufactured by the Volkswagen Group was a defeat device under the relevant EU regulations. In an Opinion of 30 April 2020 in a case referred to the European Court of Justice, the Advocate General noted that the use of defeat devices that reduce the effectiveness of emission controls systems is prohibited under EU law and may be authorised only in exceptional circumstances where, for example, their use is justified to protect the engine against damage or accident and for the safe operation of the vehicle. This exception must however be interpreted strictly and is limited to protecting the engine against the occurrence of immediate and sudden damage and not against more long-term effects such as wear and tear or depreciation. Though the Opinion of the Advocate General is not binding on the European Court of Justice, it is followed by the Court in the majority of cases.

I fully support the claims of car owners whose vehicles have been affected by cheat devices installed by car manufacturers to appropriate compensation for the detriment caused by these devices. In view in particular of the settlement reached with the Federal Association of Consumers in Germany and of the judgment of the Federal Court of Justice in Germany, it is now time for Volkswagen and other car manufacturers whose vehicles had cheat devices installed in them to come forward with fair proposals to compensate affected car owners in Ireland.

Photo of Robert TroyRobert Troy (Longford-Westmeath, Fianna Fail)
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444. To ask the Minister for Jobs, Enterprise and Innovation the measures that will be taken to ensure that consumer rights are protected and that no excessive charging for products such as handwash and sanitiser take place during the Covid-19 crisis period; and the recourse consumers have for the excessive charging for such products (details supplied). [7858/20]

Photo of Heather HumphreysHeather Humphreys (Cavan-Monaghan, Fine Gael)
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The power for Government under section 62 of the Consumer Protection Act 2007 to fix by order the maximum price at which a product can be supplied to consumers applies only where an emergency order is in force in relation to that product under section 61 of the Act. Section 61 provides that if the Government are of the opinion that abnormal circumstances prevail or are likely to prevail in relation to the supply of a product, the Government may by order declare that a state of emergency affecting the supply of that product exists.

The information available to me does not suggest that abnormal circumstances currently prevail in relation to the supply of hand washes and hand sanitisers. These products are relatively widely available in supermarkets and pharmacies and can also be purchased online. Therefore the requirement for abnormal circumstances in relation to the supply of hand washes and hand sanitisers, which is a prerequisite for the enactment of a maximum price order for these products, is not apparently met in present circumstances.

Though the details supplied by the Deputy may suggest that high prices are being charged for particular hand sanitiser products in some cases, more reasonable prices are being charged in other cases. Where high prices are being charged by retailers, these may reflect high wholesaler prices set by suppliers, many of whom may be based outside Ireland.

While there may well be cases of price hikes by individual traders, the Consumer Price Index (CPI) data compiled by the Central Statistics Office do not suggest that retailers generally have taken advantage of the exceptional circumstances resulting from Covid-19 to introduce unjustified price increases. As measured by the CPI, prices were on average 0.4 per cent lower in April 2020 than in March 2020 and 0.1 per cent lower than in April 2019. Though prices for hygiene products which include liquid soaps but not hand sanitisers were 1 per cent higher in April 2020 than in March 2020, they were 1.7 per cent lower than in April 2019. The price of these products had previously fallen by 1.8 per cent between February 2020 and March 2020. The Competition and Consumer Protection Commission have advised me that they have received a total of 13 complaints from consumers about the price of hand sanitisers since the start of the pandemic.

If consumers consider that retailers are charging excessive prices for hand sanitisers or other products, the most effective recourse available to them is to take their custom to retailers charging more reasonable prices.


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