Last week it emerged that Nokian Tyres had manipulated test results for years in an effort to improve the image of its products, and now Finnish customers are being asked to sign up for legal action against the firm to try and secure some compensation.
The general secretary of the Consumers’ Association, Juha Beurling, had urged the company to consider voluntarily compensating customers, but a statement to the stock exchange on Monday outlined the firm’s view that there was no case for compensation.
However Turre Legal reckons customers could win up to 30 percent of the cost of their tyres if they sign up for legal action. The firm is not planning a class action—only the Consumer Ombudsman can do that—but customers who sign up with the firm will do so on a no-win-no-fee basis. If they lose they could be liable for costs, but Turre lawyer Herkko Hietanen says that is unlikely.
"Law is clear"
"Nokian Tyres did this to raise the price of its tyres and to improve sales," said Hietanen. "The law is quite clear on this. If something like this happens, the customer has the right to either cancel the transaction or to get a discount. This case is about us helping tyre purchasers to get those price reductions."
According to Hietanen the firm began collecting details of interested customers on Wednesday. The firm will co-ordinate the cases, and they are planning to collect names for a further month, after which they will commence negotiations with Nokian Tyres.
"We’re targeting tens of thousands of tyre buyers," said Hietanen. "This practice went on for more than ten years. Price reductions could be available to everyone who has bought Nokian Tyres over the past ten years."
To join the legal action, customers should have a receipt that proves they bought the product in the last ten years. Companies can also bring legal action.
Not a class action
The case will not be a class action, as those cases can only be brought by the Consumer Ombudsman. The law changed to allow class action cases in 2007, but since then there has not been a single one. The option was considered in when electricity transmission firms raised their prices this year, but Caruna’s offer of price cuts was enough to see off the threat.
"The case is still under investigation so it’s really too early to say whether it meets the criteria for that," said Jari Suurla of the Finnish Consumer and Competition Authority. “First we should see if the marketing was misleading, and what kind of groups it affected, and so on. The cases are probably very different. I doubt we’ll bring some kind of class action covering everybody."
Turre Legal’s move is based on that in a forest industry cartel case in which just over a thousand forest owners are seeking compensation for forestry companies for losses they allegedly suffered in connection with timber sales.
Hietanen, however, says he’s aiming to get compensation from Nokian Tyres without legal action, by settling out of court. His firm will take a third of any compensation that might be paid.