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My Skoda has suffered an irreparable turbo fault - who is to blame?

I have a 10-year-old Skoda TDI with 1.9 diesel engine and 70,000 miles on the clock. My wife drives the car, and even she complained of lack of power. I took it to our local garage complaining that the turbocharger failed to work. On test driving, a very experienced mechanic checked the problem, and one final push on the accelerator activated the turbocharger that failed to close. As it was burning engine oil it did not stop when the ignition was turned off. The engine only stopped by braking and stalling it. The car then failed to start again and was towed back and found to have irreparable engine damage. Have you ever heard of this happening before, and is any party liable for blame?

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What has happened here is that the turbo bearing oil seals have failed badly and the turbo has sucked engine oil up through the seals and fed it into the engine. The engine then runs on its sump oil and, because it is a compression ignition engine, it cannot be stopped except by force stalling it. This phenomenon is actually more common on newer cars with diesel particulate filters because the engine has a cycle that injects extra diesel to regenerate the filter. If the filter is too clogged to regenerate, that extra fuel sinks into the sump, raising its level to a point that the engine runs on it uncontrollably.
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