The EU's top court ruled on Tuesday that owners of cars that had been equipped with unlawful devices used to trick emissions tests can sue the manufacturers even when intent cannot be proven.
The ruling from the European Court of Justice (ECJ) came in a case regarding the owner of a Mercedes car that had been fitted with a so-called "thermal window."
"The purchaser of a vehicle equipped with an unlawful defeat device has a right to compensation from the car manufacturer," the court said.
The device is considered by environmental organizations as a tool for making emissions appear less under test conditions but not actually reducing emissions in real life.
Until now, vehicle owners could only seek compensation if the manufacturer had intentionally deceived customers, as was the case with the Volkswagen EA189 engine which was the center of the "Dieselgate" scandal.
Car manufacturers have argued that the technology is there to protect the engine.
What is the diesel emissions defeat device?
The defeat device works by reducing the rate at which exhaust from the car is recirculated when temperatures are low, thus lowering emissions controls outside of a testing scenario.
The issue came to prominence seven years ago when German car giant Volkswagen was found to have intentionally used the devices so that customers could apply for low-emissions credits, making their cars more attractive, while not actually reducing emissions.
Volkswagen has since paid out millions in compensation and several leading figures have been charged with fraud.
Tuesday's ruling could now possibly open up other car manufacturers to face hundreds of thousands of compensation claims.