Background
The plaintiff purchased a BMW 520d Touring diesel vehicle equipped with a B47 diesel engine and sought damages based on allegations that the manufacturer’s emissions control system—specifically an emissions control mechanism calibrated to operate within the temperature range of 20°C to 30°C, the test conditions of the New European Driving Cycle (NEFZ)—constituted fraudulent or unlawful conduct. The plaintiff contended that the manufacturer deliberately programmed the exhaust gas recirculation system to function differently outside this temperature range, thereby violating legal emissions standards under real-world driving conditions.
The case progressed through three levels of German courts: the District Court of Munich I (LG München I) in January 2025, the Appeals Court of Munich (OLG München) in August 2025, and finally the Federal Court of Justice (Bundesgerichtshof) in May and July 2026. At each level, the courts rejected the plaintiff’s claims for full restitution of the purchase price, instead limiting damages to a percentage of the purchase price under European Union law and reducing those damages by the vehicle’s usage benefits and residual value.
The Court’s Holding
The Federal Court of Justice dismissed the plaintiff’s appeal entirely, upholding the lower court’s judgment. The court rejected the plaintiff’s factual claims, finding that the lower court’s findings—that the exhaust gas recirculation was reduced outside the NEFZ temperature range rather than completely shut down—were binding under the rules governing appellate revision. The plaintiff’s attempt to challenge these factual findings through a procedural objection failed because such corrections require a separate correction procedure, which the plaintiff never initiated.
More importantly, the court confirmed that thermal windows—emissions control systems calibrated to perform optimally within test conditions—are legally and factually distinct from deliberate manipulation software designed to detect test stands and activate emissions controls only during testing. The court stated: “A thermal window, in which lower emissions values are produced within the temperature range typical during testing (20°C to 30°C), is not comparable to manipulation software that detects the test stand and then activates emissions cleaning exclusively on the test stand, and accordingly lacks the test-stand detection that would indicate fraudulent deception of approval authorities.” This distinction is critical: thermal windows reflect design choices responsive to temperature conditions; test-stand detection software indicates intentional fraud against regulatory authorities.
The court also reaffirmed that European Union vehicle directive law (specifically § 6(1) and § 27(1) of the EU Framework Regulation on type-approval) does not protect a buyer’s interest in avoiding unwanted purchase obligations. Therefore, an incorrect certificate of conformity does not trigger a tort claim for full refund of the purchase price. Damages for such defects are capped at 5–15 percent of the purchase price and further reduced by usage benefits and residual vehicle value. The court applied an industry-standard mileage estimate of 250,000 kilometers to calculate these damages, finding no error in the lower court’s methodology.
Key Takeaways
- Thermal windows are permissible: Emissions control systems that vary performance based on ambient temperature conditions do not constitute fraud or unlawful conduct under German law, distinguishing them sharply from software designed to detect and deceive testing procedures.
- EU law limits damages: Under European vehicle directives, buyers cannot recover the full purchase price for emissions-related defects; recovery is capped at a percentage of purchase price and further reduced by usage and residual value.
- Factual findings are binding: Appellate courts’ factual findings can only be corrected through formal procedures; procedural objections cannot be used to challenge factual determinations that were not previously contested through proper channels.
- Consensus across senates: All German Federal Court senates dealing with diesel emissions cases agree that EU vehicle directive protections do not extend to general economic self-determination or freedom of action, restricting the scope of manufacturer liability.
Why It Matters
This decision provides crucial clarity in the aftermath of the diesel emissions scandal, distinguishing between permissible emissions control design and illegal manipulation. Thermal windows—where emissions systems are optimized for test conditions but continue to operate across real-world temperature ranges—are legitimate engineering responses to regulatory testing, not evidence of fraud. This ruling significantly narrows the potential liability exposure for vehicle manufacturers regarding temperature-dependent emissions control strategies, so long as those systems do not actively detect and respond to test procedures specifically.
For European vehicle manufacturers and the automotive supply chain, the decision confirms that EU law imposes meaningful limits on consumer damages claims. Full purchase-price refunds are unavailable for emissions defects; buyers are restricted to limited percentage-based recovery, offset by usage and residual value. This caps manufacturer liability and provides regulatory certainty for vehicle design and certification practices. The ruling also reflects a coordinated approach across Germany’s highest court senates, reducing uncertainty and potential for conflicting precedent in the remaining diesel-related disputes.