Laywer

The debate on so called “certificates of conformity” and their legal significance plays a major role in determining the legal claims a buyer may have against a vehicle manufacturer. Regulatory acts of the European Union such as the Framework Directive 2007/46/EC on type approval of motor vehicles provide rules regarding the “certificates of conformity”. The certificates’ legal integration into domestic sales law comes with uncertainties. If national law is, however, interpreted consistently with Union law, these “certificates of conformity” give rise to direct rights held by the buyer. Arzt and Harke have commented in detail on this issue in their article on EU certificates of conformity and their

function       as       disclosure       and       warranty      contracts      („EU-

Übereinstimmungsbescheinigung als Auskunfts- und Garantievertrag“ in NJW 2017, pp. 3409 ff.). I agree with their assessment that a legal warranty is inherent in “certificates of conformity” as I have also argued on multiple occasions already (the last one being: Helmig, “Safety expectations for automated and autonomous vehicles: liability arising from basic technology vs. future technology”, online: www.rahelmig.de/publikationen.html; the German original was published in PhI 2016, pp. 186 ff.). I do not fully share Arzt’s and Harke’s reasoning. But what is more important at this point is to draw attention to the fact that the warranty declaration’s extent is more far-reaching than presented in their article. 

The European law governing type approval is complex in terms of procedure and protects all major interests, notably those covered by Article 269 TFEU. Let me elaborate on this in more detail:

Arzt and Harke conclude from the standard text for the “certificate of conformity” (hereinafter referred to as “CoC”) provided in Annex IX of Directive 2007/46/EC establishing a framework for the approval of motor vehicles (hereinafter referred to as “the Directive”) that vehicles with illegal “defeat devices” do not comply with European law. For the purposes of this article, illegal defeat device means any system or component capable of manipulating and intended to manipulate an engine’s actual emissions output so that legal requirements –falsely– appear to have been complied with. The CoC’s contents, the authors argue, are false in these cases, which renders the vehicle manufacturer liable to the buyer under delict and contract law. In principle, this reasoning cannot be contested but it also misses a crucial point because the CoC’s legal scope encompasses the entire protective purpose of the Directive. According to Recitals 3 and 14, the protective purpose is designed to encompass – including but not limited to – road safety, health protection, environmental protection, energy efficiency, and protection against unauthorized use. 

From a perspective that takes this context into account, the issues revolve around (I) the vehicle manufacturer’s certificate according to Article 18 of the Directive confirming that the vehicle in question complies with European provisions and, as a precondition for this, (II) the proof that the vehicle was manufactured under the conditions required by Article 12 of the Directive, i.e. under “conformity of production arrangements”. 

I

The vehicle manufacturer’s CoC provided for in Annex IX to Article 18 of the Directive serves two objectives:

a.) “The certificate of conformity is a statement delivered by the vehicle manufacturer to the buyer in order to assure him that the vehicle he has acquired complies with the legislation in force in the European Union at the time it was produced. 

b.) The certificate of conformity also serves the purpose to enable the competent authorities of the Member States to register vehicles without having to require the applicant to supply additional technical documentation.”

Therefore, the vehicle manufacturer’s CoC refers to the specific time at which the individual vehicle was manufactured and reads as follows:

“The undersigned: [manufacturer’s name] hereby certifies that the vehicle: [make (trade name of manufacturer), type etc.] conforms in all respects to the complete/completed type described in [EC type-approval number including extension number] dated: [date of EC type-approval issuance]. The vehicle can be permanently registered […] in Member States having right/left hand traffic.”

This determines the mandatory order of steps to be taken according to type approval law: First, the vehicle manufacturer applies for approval of a vehicle type he determined (representative reference vehicle of the type to be approved pursuant to Article 11(2) of the Directive) and is issued an approval number. An individual and exclusive vehicle identification number (VIN) which contains the reference approval number is allocated to every serial vehicle manufactured in correspondence to the representative reference vehicle. Through this method, the vehicle will henceforth be identified as belonging to a specific approved type.

It is only then, after the vehicle has already been produced, that the vehicle manufacturer may deliver the CoC which refers back to the time of production; by means of the CoC the manufacturer addresses the individual buyer and states that (i) the vehicle carrying a distinctive VIN conforms in all respects to the type approved (the representative reference vehicle) and (ii) the vehicle can, therefore, be permanently registered in accordance with the applicable domestic law of the Member State (§ 6 of the German EC Vehicle Type Approval Regulation – EGFGV). The national registration documents (in Germany “Fahrzeugbrief” and “Fahrzeugschein”) are based on the CoC and include the distinct link between approval number and VIN. Within this context, the CoC functions as a document “certifying that a vehicle belonging to the series of the type approved in accordance with this Directive complied with all regulatory acts at the time of its production” (legal definition laid down in Article 3 Number 36 of the Directive).

However, when it comes to the conformity framework’s wording, the European legislator chose to remain vague and ambiguous: Point 0 of Annex IX entitled “Objectives” requires the manufacturer provide a statement in order to assure the buyer “that the vehicle he has acquired complies with the legislation in force in the European Union at the time it was produced” (emphasis added). The sample text (Annex IX of the Directive, Part I, sample A1) required for the type approval procedure and addressed to the competent authority is limited to the manufacturer’s statement that the vehicle “conforms in all respects […] to the type” (emphasis added) approved. What the letter of the law requires in this section, i.e. conformity to an approved vehicle type, is considerably less than requiring compliance with all “the legislation in force in the European Union”. 

In order to understand the legal meaning of the CoC, an interpretation that requires compliance with all the legislation in force in the European Union must prevail as individual provisions regarding the type approval procedure constitute but a subset of EU rules. There is no indication or reason whatsoever to assume the European legislator intended to give the uniform rules in Annex IX any other meaning.

In Article 5 of Regulation (EC) No 715/2007, the European legislation in force prohibits defeat devices. According to Recital 2 of Regulation 715/2007, this Regulation is a separate regulatory act and lex specialis within the entire Community type approval law. The prohibition’s scope is determined by the legal definition of “defeat device” laid down in Article 3 Number 10 of Regulation 715/2007. This definition unambiguously prohibits the use of any technical means allowing for manipulation and intended by the manufacturer to alter the functioning of the emission control system so as to produce the desired results under conditions which do not correspond to the legislator’s intentions. The legal definition goes as follows (emphases added by the author):

“’defeat device’ means any element of design which senses temperature, vehicle speed, engine speed (RPM), transmission gear, manifold vacuum or any other parameter for the purpose of activating, modulating, delaying or deactivating the operation of any part of the emission control system, that reduces the effectiveness of the emission control system under conditions which may reasonably be expected to be encountered in normal vehicle operation and use”.

This definition was included into the Regulation in 2007 because the European legislator had been aware of the existence and use of prohibited defeat devices for six years, if not longer (Recital 4 of Regulation 715/2007). This definition leaves no room for any serious discussion on the legality of, for instance, “thermal windows” or arbitrarily disconnecting certain function parts such as the transmission gear. The complex functioning of and inseparable connection between all parts of the engine control are controlled by at least one meta-control-unit; this unit calibrates all electronic systems and their interdependencies with the emission control system so as to guarantee that what is prohibited according to the definition is in fact circumvented. 

In order to apply for type approval an information folder is required (Articles 6 and 9 of the Directive). Where the use of a prohibited defeat device or any other device or function to that end is not mentioned in the information folder and type approval is issued as a result thereof, type approval will be issued in a formally effective way and, consequently, the CoC will not provide false information – or this is how the argument ultimately goes in the interested circles. Whether the administrative act that provides the approval is void or voidable under the domestic law of the Member State which issued the approval is beyond the scope of this article. The same goes for the question of whether the national registration authority is entitled to revoke the vehicle’s registration after it gained knowledge of the prohibited defeat device.

However, there is at least one scenario in which the vehicle manufacturer cannot invoke that the CoC is “accurate” with respect to the issued type approval: If there is evidence or the manufacturer’s acknowledgement that the approval should never have been issued or would not have been issued, had the manufacturer disclosed to the approval authority or the designated technical service that he circumvented the prohibition of Article 5(2) of Regulation 715/2007:

Even if we assume that the Directive does not lay down any explicit “duty to voluntarily disclose” the manufacturer’s infringements of the law, Article 5 of Regulation 715/2007 still establishes a legal prohibition and, consequently, an obligation to tell the truth with respect to any information required according to the application procedure rules set out in the Directive. The manufacturer discloses the necessary information by using the information folder (Articles 6 and 9 of the Directive). The manufacturer must provide full and accurate information the integrity of which is the sole responsibility of the manufacturer. Moreover, the manufacturer may not select the information he provides according to his own judgment so as to cover up his intention to circumvent the legal requirements inherent in the legal definition of defeat device (“for the purpose of… that reduces…”). If there are conditions under which the prohibition shall not apply, as set out in Article 5(2)(a) of Regulation (EC) 715/2007, these conditions must be clearly identified as such in the information folder and the functions of the device have to be indicated as well. This requirement has to be seen in context with the “conformity of production arrangements” under Article 12 of the Directive:

Pursuant to Article 12(1) of the Directive, the Member State “which grants an EC type-approval shall take the necessary measures in accordance with Annex X to verify […] that adequate arrangements have been made to ensure that production vehicles, systems, components or separate technical units, as the case may be, conform to the approved type.”

Not only does Article 12(1) of the Directive apply to any vehicle already produced based on a type already approved, but also to the representative reference vehicle which is the subject of the type approval application. Article 12 sets out that this vehicle, too, must be developed and manufactured in accordance with Annex X and thus under conditions which conform to a qualified quality management system in accordance with DIN EN ISO 9001:2008 (Recital 13 of the Directive). It is only then that the coherence and conformity of production arrangements of all three, the type to be approved, the representative reference vehicle, and the serial vehicle are guaranteed. This is a consequence of the link between the EC type approval number and the VIN established by the CoC.

As Recital 13 of the Directive states, the quality management system in accordance with or corresponding application of DIN EN ISO 9001:2008 is “one of the cornerstones of the Community type-approval system”. 

As a consequence, Point 2.1 of Annex X sets out:

“Every vehicle […] approved pursuant to this Directive or a separate directive or regulation must be so manufactured as to conform to the type approved by meeting the requirements of this Directive or a separate directive or regulation contained in the complete list set out in Annex IV […].” Under Point 2A, Annex IV lists Regulation (EC) 715/2007 which contains the Article 5 prohibition. The conformity to applicable statutory and regulatory requirements (Chapter 1.1), i.e. primarily the compliance with statutory emissions provisions, is at the core of DIN EN ISO 9001:2008 (as of 15 September 2018, DIN EN ISO 9001:2015 will be effective).

DIN EN ISO 9001:2008 is a harmonized European standard which is part of the harmonized framework “containing the administrative provisions and general technical requirements for approval of all new vehicles within its scope […], with a view to facilitating their registration, sale and entry into service within the Community.” As DIN EN ISO 9001:2008 forms part of European law, the European Court of Justice has exclusive jurisdiction over its application (Case C-613/14).

Conclusion:

1.            The CoC is a warranty statement delivered by the vehicle manufacturer and has a twofold function: The CoC is addressed to any individual who buys a type approved vehicle. Due to the express reference that is made to the Member States’ approval authorities in Annex IX of the Directive, the CoC also assures these authorities that the manufacturer provided truthful and accurate information as required within the context of type approval and that the declaration therein regarding the conformity to statutory regulations was truthful as well. Where this twofold warranty statement is not true, the vehicle manufacturer is fully liable.

This of course begs the question as to how inaccurate information could have been provided and not been detected by the technical services in the first place? One possible explanation can be found in Recital 5 of Regulation (EC) 371/2010: The European Commission and the vehicle manufacturers agreed on “self-testing” and “virtual testing” conducted by the manufacturers themselves.

2.            The European legislation which the manufacturers allegedly comply with according to the CoC does not only encompass type approval provisions. Due to its function as a warranty statement, the CoC also suggests compliance with vehicle safety and consumer protection law. Recital 17 of the Directive emphasizes: “This Directive constitutes a set of specific safety requirements within the meaning of Article 1(2) of Directive 2001/95/EC [i.e. the legal basis of the German Product Liability Act, author’s note] of the European Parliament and of the Council of 3 December 2001 on general product safety, laying down specific requirements for protecting the health and safety of consumers.” Aspects of safety play an important role in multiple ways:

a.) Vehicles which do not conform to the type approval provisions are prima facie unsafe vehicles because the reference to Directive 2001/95/EC indicates that the European legislator also had safety aspects in mind when type approval law was adopted. The procedures of Article 29 and Article 30 of the Directive provide impressive arguments in favor of such a reading. Where the vehicle manufacturer infringes type approval law, the burden of proof lies on him.

b.) Prohibited defeat devices may influence a vehicle’s engine control. This goes especially for diesel particulate filters because they can only be cleaned through regeneration to a limited extent. They may cause the vehicle to switch to emergency mode unexpectedly and thus expose the driver to danger because he cannot accelerate the vehicle anymore. His legitimate safety expectations within the meaning of Section 3 of the German Product Liability Act are not met in this scenario (cf. Helmig, see above).

c.) Vehicles with increased emissions output harm the environment and the people in this environment. Both are protected by the Directive. This has become clear from current efforts to ban diesel cars from various cities and been backed by a German court.

d.) Drivers of vehicles with increased emissions output are themselves exposed to danger and become perpetrators of pollution at the same time.

3. The CoC creates a direct contractual relationship between the vehicle manufacturer and the buyer of a vehicle. While its legal classification as a contract of sale concluded between the buyer and the vehicle dealer still warrants clarification through court rulings, the legislator has imposed on the vehicle manufacturer the obligation to define the quality of the product for the purposes of the contract between the buyer and the brand dealer (German Federal Court of Justice, BGH, of 15 June 2012, VIII ZR 134/15, in NJW 2016, p. 2874). Only the CoC enables the dealer to sell a vehicle that can be registered. Therefore, the CoC may possibly also protect the dealer.

 

Translated from German into English by Charlotte P. Kieslich charlotte.kieslich@web.de