Israeli drivers to receive millions of shekels – court ruling

The Lod District Court ordered Volkswagen and Champion Motors to pay 5,583,400 shekels to drivers affected by a hidden gearbox defect in cars from 2015–2019. Each driver who paid for repairs will receive a full refund plus 100 shekels for moral damages. The court rejected claims for universal payments and compensation for reduced value.

The Central District Court in Lod issued a final ruling in a class action against Volkswagen and Israeli importer Champion Motors, ordering them to pay 5,583,400 shekels to drivers affected by a hidden gearbox defect. The defect affected Volkswagen, Seat, Skoda, and Audi vehicles produced between 2015 and 2019: due to silicate deposits on the switch contacts, the selector could erroneously register position P, allowing the key to be removed while a gear was engaged, creating a risk of unintended movement. About 65,000 such cars were on the Israeli market, approximately 7,924 vehicles underwent repairs, and at least 500 owners paid for them out of pocket. The court ruled that each driver who paid for repairs will receive full compensation upon presenting a receipt, plus 100 shekels for moral damages. The plaintiffs' organizers were awarded 30,000 shekels each, and the legal team 400,000 shekels. Claims for universal payments to all owners of potentially problematic models and for compensation for reduced market value were rejected. The defendants' attempt to challenge the verdict in the Supreme Court failed. The plaintiffs proved that the concern knew about the defect since 2016 but concealed information from Israeli consumers. The court emphasized that the duty to disclose defects and compensate for their repair does not depend on whether the defect is recognized as a safety threat or on warranty expiration.