Transport for London (TfL), the body that runs the city's public transport, is pursuing a legal claim worth up to £1 billion against four major car manufacturers. TfL says that diesel cars which should have been blocked from entering London's Ultra Low Emission Zone (Ulez) were allowed in because the manufacturers lied about how much pollution the cars actually produced. The High Court heard TfL accuse Stellantis, Jaguar Land Rover, BMW and Nissan of fraud and negligence over diesel emissions, in a procedural hearing first reported by the Financial Times (FT).

TfL's barrister, Laurence Page, told the court that the manufacturers "expressly or impliedly represented" certain diesel vehicles as Ulez-compliant and that those representations "were false, made dishonestly or recklessly, alternatively negligently, and caused TfL loss." TfL's lawyers argue that vehicles which should have paid the Ulez charge entered the zone without paying, costing the transport authority revenue and undermining efforts to improve air quality (The Guardian).

London's Ulez was launched in 2019 and expanded to cover every London borough in 2024. The Ulez is an area where owners of the most polluting cars, largely older diesels, must pay £12.50 a day to drive inside the zone. TfL says some vehicles passed the Ulez's pollution test only because their real-world emissions were hidden, meaning they should have been paying the charge but were not.

The legal action was launched in 2024 but has been paused while a separate but related case plays out. That case, known as the "dieselgate" litigation, was brought by law firms led by Leigh Day on behalf of 1.6 million drivers. It sought to prove that car manufacturers deliberately designed cars to disguise the true level of nitrogen oxide pollution they produced. TfL was part of that case as a vehicle owner.

The dieselgate claims suffered a major setback when the High Court rejected most of the allegation that car manufacturers had knowingly installed "defeat devices" — technology that can tell when a car is being tested for emissions and then reduce pollution only during the test, so the car appears cleaner than it actually is. Lawyers in the dieselgate case are considering an appeal. The court has now said it will pause TfL's Ulez claims while the vehicle owners' case against the manufacturers continues. TfL has been granted a pause until October 2026.

Lawyers for the carmakers pushed back strongly at the hearing. They said TfL was making serious allegations "with potentially far-reaching consequences" but had provided "no proper details or particulars whatsoever."

The broader context here is that the stakes are high for both sides. TfL's £1 billion claim, as reported by the FT, depends on proving that manufacturers knowingly or recklessly lied about whether their cars met Ulez emissions standards. But the dieselgate ruling that came before this case threw out most of the key allegation that manufacturers knowingly installed defeat devices. If that ruling stands on appeal, TfL's case, which relies partly on the same evidence, faces a harder road. TfL's argument goes beyond defeat devices, though. It also claims broader misrepresentation of compliance, which could give the claim a life of its own even if the dieselgate appeal fails.

The October 2026 pause gives both sides time to see how the dieselgate appeal unfolds. For TfL, the financial motive is clear: the authority says it lost substantial revenue from vehicles that should have been paying the £12.50 daily charge. For the manufacturers, the "far-reaching consequences" their lawyers warned about go well beyond London. If TfL wins and establishes that misrepresenting emissions compliance can create liability for a city, other cities with clean-air zones in the UK and possibly elsewhere could bring similar claims against the same manufacturers or others.

The case also tests where the line falls between following regulations and consumer-protection law. Ulez compliance is based on emissions standards, but TfL frames its claim as fraudulent misrepresentation, which is a different type of legal wrong with different requirements for proof and different possible remedies. The manufacturers' complaint that TfL has given no proper details suggests the early legal battles will focus on whether TfL has provided enough evidence before any full hearing happens.

What is still uncertain is whether the dieselgate appeal will expand or shrink the evidence available to TfL. The pause is designed to let that question develop first. If the dieselgate claimants win on appeal, TfL's case gains momentum. If they do not, TfL will need its misrepresentation argument to stand largely on its own.