The Supreme Court of NSW has dismissed a civil class action against Volkswagen over potentially faulty Takata airbags, setting a precedent for cars fixed during recalls.
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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 – and no Volkswagen cars were recalled as part of the Takata safety campaign in Europe – Volkswagen nevertheless joined the Takata recall locally, 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, CarAdvice 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.