By a landmark decision dated 18 June 2015, the German Federal Supreme Court (Bundesgerichtshof, "BGH") decided that model applications for conciliation (Güteverfahren) do not suspend the limitation period of claims for misselling if such applications are too generic and do not contain details on the financial product concerned, the amount invested, on the advice given and on the relief sought by way of the application. The cases which the BGH decided concerned private investors who had used model applications for conciliation which had been drafted by lawyers. These model applications had been offered by such lawyers to a wider public and had been used by a great number of investors. The BGH announced that a large number of such claims for misselling by private investors will now turn out to have no merits because they are time-barred.


Model applications for conciliation have been an instrument of choice in Germany for mass applications by private financial investors. They are directed against insurance companies, banks and other financial services providers.

Originally, conciliation proceedings as described in section 204 para. 1 no. 4 of the German Civil Code (Bürgerliches Gesetzbuch, "BGB") were introduced by the legislator as an alternative dispute resolution ("ADR") mechanism which usually amalgamates elements of different kinds of ADR tools, primarily of mediation. However, most claimants did not apply for conciliation with financial services providers because they believed in the advantages of ADR in their particular case. Their goal was a different one. Under German law, an application for conciliation is one of various mechanisms to suspend the limitation of a claim such as, e.g., applying for a statutory demand or filing a complaint with a court. Thus, the applications by private financial investors were filed in order to avoid alleged claims for misselling of financial products from becoming time-barred. This has become quite a burden on the financial services industry: for example, one German financial services provider was the target of applications from approximately 9,000 of its (former) customers.

Applying for conciliation is a quicker and cheaper way to suspend the limitation of a claim than filing a full-fledged complaint (including all exhibits) with a court. In most cases, filing a complaint with a court requires to instruct a lawyer. An application for conciliation can be filed by anyone. In addition, a lawsuit (which is often expensive) does not necessary have to follow. That is why so many investors chose applications for conciliation over filing a complaint with a court right away. If the respondent does not wish to participate in the conciliation or if the conciliation fails, the claimant still has six months to instruct a lawyer and to have such lawyer prepare and file a complaint with a court before the limitation can kick in.


The claimants of the four cases before the BGH requested damages for misselling from a financial services company. The claimants had invested in closed property funds between 1999 and 2001. Their alleged claims were to become time-barred on 2 January 2012. In order to suspend the limitation of the claims, they all filed applications for conciliation with the same conciliation body in December 2011. The applications for conciliation, which were largely identical, were based on a model application which had been drafted by a law firm. Apparently, several thousand investors throughout Germany had used the model application, and many court proceedings are currently pending before German courts.


The BGH decided that applications for conciliation generally need to specify the respective financial instrument, the amount invested, the approximate time period when the investment advice was given and at least a rough outline of the content of the investment advice. Further, the relief sought must be specified in the application for conciliation such that the opponent knows what kind of claim and what amount of claim it is up against. The content of the application for conciliation must put the opponent in a position where it can assess whether defending itself against the application will be successful and whether it would like to participate in the conciliation. In addition, the application must allow the conciliatory body to assess and prepare for its task of conducting the conciliation. The exact amount of the claim does not necessarily have to be stated.

The applications for conciliation which stood at the beginning of the four cases decided by the BGH did not fulfil the requirements set out above. The BGH criticized that these applications only contained the names of the applicants and the name of the relevant financial instrument. They did not give any details as to the amounts invested, the approximate time when the investment advice was given or any other details which would have helped to individualize the relevant investment. The relief sought was not specified in any detail, and the amount requested as compensation in each case could not have been inferred by the respondent from the information presented.

The BGH decided that because the applications did not fulfil the aforementioned requirements, the applications did not suspend the limitation of the claims. Therefore, the claims had become time-barred on 2 January 2012, and the claims were dismissed as being without merits by the BGH (the statute of limitation is treated as a matter of material law, not of procedural law under German law).


The judgment by the BGH (of which so far only a press release exists) will lead to several thousand complaints for alleged misselling against the same respondent being dismissed by various courts of first and second instance all over Germany in the weeks to come.

The judgment gives welcome guidance as to the (relatively high) requirements of filing applications for conciliation which have as their only goal the suspending of the limitation period. It raises the bar for private investor-claimants and gives financial institutions legal clarity and certainty.

BGH, decisions of 18 June 2015, docket numbers III ZR 189/14, III ZR 191/14, III ZR 198/14 and III ZR 227/14.