BMW agree to settle $478 million (£382 million) in water-damage lawsuit

In the U.S., more than 300,000 BMW owners have been granted their portion from a $478 million (£382 million) settlement over allegations that a technical defect can cause water damage to components in some BMW vehicles.

The lawsuit claimed BMW knew about the issue for years but didn’t do anything to rectify the problem until vehicle owners reported concerns. The water damage allegedly interfered with the vehicle’s Micro Power Module which was placed under the spare tyre, and this allegedly had a knock-on effect on the lights, speedometer and windscreen wipers.

The fact that the module reportedly wasn’t isolated can make the electronic component vulnerable when in contact with liquids.

Settlement

According to settlement documents filed in the U.S. District Court in New York, BMW owners accused the automaker of knowing about the issue since 2004 when complaints were made. Examples of complaints involved vehicles having clogged sunroof drainage tubes amongst other issues that allowed water to seep into the boot of the vehicle.

BMW owners also argued that this is substantiated by the fact that warranty claims and technical bulletins were filed with the U.S. National Highway Traffic Safety Administration (NHTSA) in the same year.

Settlement agreement

The settlement compensates 318,000 owners of the 2004-10 model year BMW 5 Series vehicles. Luxury vehicle owners will reportedly receive $1,500 (£1,200) for repairs already made. Owners with vehicles that have less than 120,000 miles on the clock and are less than 10 years old are eligible for a free inspection and repairs if needed. Although BMW deny any wrongdoing, dealers are reportedly putting a warning label on when they go in for repairs to inform owners not to spill liquids in the boot.

BMW has also agreed to pay approximately $1.8 million (£1.4 million) in legal costs.

Terms of the deal

Under the terms of the deal, all vehicle owners will be able to take their vehicles to authorised BMW centres and/or dealerships for a free check of water damage and electrical failure. If there’s a faulty component, BMW will replace it for free. This is reported to follow a technical service bulletin released in 2010.

The settlement deal states owners who suffered the issue from “misuse” are not eligible for compensation. This could include putting the spare tyre above the module after driving with it in wet conditions. For those eligible for compensation, vehicle owners will have to submit a claim form detailing the repair, how many miles the vehicle has done and other details surrounding the defect.

Real urgency needed

Technical issues should be resolved with urgency as they could cause fatal accidents. An example of this is where one owner of a BMW 530i wagon, George Catalano, said that his vehicle unexpectedly shut down while he was driving on a four-lane highway. Mr Catalano complained that approximately 2 inches of standing water had accumulated underneath the boot as a result of the clogged sunroof drains. This could have led to a fatal collision.

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