Transport for London is pursuing a potential £1 billion legal action against four major car manufacturers, arguing that diesel vehicles which should have been barred from London's Ultra Low Emission Zone (Ulez) entered freely because the manufacturers misrepresented their emissions compliance. The High Court heard TfL level allegations of fraud and negligence against Stellantis, Jaguar Land Rover, BMW and Nissan over diesel emissions levels, in a procedural hearing first reported by the Financial Times (FT).

TfL's barrister, Laurence Page, told the court that 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 levy entered the zone without charge, depriving the transport authority of revenue and undermining air quality improvement efforts (The Guardian).

London's Ulez was launched in 2019 and expanded to cover every London borough in 2024. Owners of the most polluting cars, largely diesels manufactured more than 11 years ago, pay a £12.50 daily charge to enter the zone. TfL contends that some vehicles passed the compliance threshold only because their real-world NOx (nitrogen oxide) emissions were concealed, meaning they should have been subject to the charge but were not.

The legal action was launched in 2024 but has been paused pending the outcome of parallel "dieselgate" litigation. That separate case, brought by law firms led by Leigh Day on behalf of 1.6 million drivers, sought to establish that car manufacturers deliberately designed cars to mask the true level of nitrogen oxide pollution. TfL was a signatory to the dieselgate case as a vehicle owner.

The dieselgate claims suffered a significant setback when the High Court rejected most allegations that car manufacturers had knowingly installed defeat devices — software or hardware designed to detect when a car is undergoing an emissions test and then reduce pollution only during testing — to rig emissions results. Lawyers in the dieselgate case are considering an appeal. The court has now indicated it will pause TfL's Ulez claims while the separate claims by vehicle owners against the manufacturers proceed further. TfL has been granted a stay until October 2026.

Lawyers for the carmakers pushed back forcefully 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 one of considerable procedural stakes. TfL's £1 billion claim, as reported by the FT, hinges on establishing that manufacturers knowingly or recklessly misstated compliance with Ulez emissions standards. But the dieselgate ruling that preceded this case rejected the bulk of the central allegation — that manufacturers knowingly installed defeat devices. If that outcome holds on appeal, TfL's claim, which partly depends on the same evidentiary foundation, faces a narrower path. TfL's argument extends beyond defeat devices to broader misrepresentation of compliance, which may give the claim independent legs even if the dieselgate appeal fails.

The October 2026 stay gives both sides time to assess how the dieselgate appeal landscape evolves. For TfL, the financial imperative is clear: the authority alleges substantial lost revenue from vehicles that should have been paying the £12.50 daily charge. For the manufacturers, the "far-reaching consequences" their lawyers flagged extend well beyond London. If TfL succeeds in establishing that misrepresentation of emissions compliance created municipal liability, other cities with clean-air zones, both in the UK and potentially elsewhere, could explore similar claims against the same manufacturers or others.

What is also worth noting is how the case tests the boundary between regulatory compliance and consumer-protection law. Ulez compliance is determined by emissions standards, but TfL's claim frames the issue as one of fraudulent misrepresentation — a civil wrong (tort) that carries different evidentiary burdens and potential remedies than straightforward regulatory non-compliance. The manufacturers' complaint that TfL has provided no proper particulars suggests the early skirmishing will centre on disclosure and the sufficiency of TfL's pleadings before any substantive hearing on the merits.

What remains uncertain is whether the dieselgate appeal will broaden or narrow the evidentiary base available to TfL. The stay is structured to let that question mature first. If the dieselgate claimants succeed on appeal, TfL's parallel action gains momentum. If they do not, TfL will need its misrepresentation theory to stand largely on its own.