Fraudulent misrepresentation: High Court considers the requirement for claimants' "awareness" of implied representations

In the context of an application to strike out or summarily dismiss a claim for fraudulent misrepresentation, the High Court has held that conscious awareness of the alleged implied representation was not necessary for the claim to have a real prospect of success at trial: Crossley & Ors v Volkswagen Aktiengesellschaft & Ors [2021] EWHC 3444 (QB).

This contrasts with recent authorities that have held that conscious awareness is a necessary part of a claimant’s case, in the context of claims brought against banks for alleged implied misrepresentations in respect of LIBOR setting (most recently Leeds City Council and others v Barclays Bank plc and another [2021] EWHC 363 (Comm) - see blog post here).

In the present case, which is the group litigation against Volkswagen (VW) arising from the “Dieselgate” emissions scandal, the judge considered those prior authorities and concluded that a single test for what amounts to the necessary awareness may not be possible.

In particular, he considered that VW’s conduct and the representations said to be implied from it (broadly to the effect that the vehicles complied with all relevant emissions regulations) were both relatively simple, whereas in the LIBOR cases the representations were found to be extremely complex and intricate and to have arisen "against the background of a web of prior communications."  He concluded that there was a real prospect that the claimants in this case could succeed even if they were not consciously aware of the alleged misrepresentations but merely assumed the content of them from VW’s conduct, or would not have entered into the contracts had they known the truth.

An appeal against the Leeds judgment has very recently been heard by the Court of Appeal, meaning that further judicial guidance on the issue is expected shortly.

For more information see this post on our Banking Litigation Notes blog.