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Background

Frequency of use

How common is commercial litigation as a method of resolving high-value, complex disputes?

Germany sits at the heart of the European Union with its increasingly integrated markets and is the largest national economy in Europe as well as the fourth-largest in the world by nominal GDP. Manufacturing plays a significant role in its export-focused economy. At the same time, the German public court system enjoys an excellent reputation with regard to quality and efficiency. Germany has a relatively large force of well-trained, internationally experienced lawyers; so, quite naturally, the number of disputes in the German courts involving multiple parties in multiple jurisdictions, large amounts of money at stake or complex legal issues is comparatively high.

Litigation market

Please describe the culture and ‘market’ for litigation. Do international parties regularly participate in disputes in the court system in your jurisdiction, or do the disputes typically tend to be regional?

Germany does not have an excessively litigious culture just as it generally does not have a culture of ‘ambulance chasers’; litigation is typically seen as a last resort. Although Germany does not have a system of barristers and solicitors, litigation has become recognised as a specialist field over the last decade. Every litigating law firm with an international footprint offers the service of specialised litigators to its clients.

As the German economy is export-heavy and very well connected internationally, international parties regularly participate in litigation in Germany. With an advance in EU market integration, the number of complex cases with at least one party from other EU countries is continuously increasing. In reaction to the increasing number of international disputes and competition by alternative forums, the district court of Frankfurt am Main established the Chamber for International Commercial Disputes which allows parties as of 1 January 2018 to have cross-border disputes resolved by a German court under the rules of the German Code of Civil Procedure, with hearings held in English.

Legal framework

What is the legal framework governing commercial litigation? Is your jurisdiction subject to civil code or common law? What practical implications does this have?

Germany is a civil-law jurisdiction; its laws are almost entirely codified. The most important laws on procedure and jurisdiction governing commercial litigation are the German Code of Civil Procedure and EU Regulation No. 1215/2012 of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. The German Civil Code and the German Commercial Code most frequently govern the material law aspects of commercial litigation. Although most of the German law is codified, in-depth knowledge of the jurisprudence of the German and European courts is indispensable in commercial litigation because it is the only reliable source for the interpretation and rules for the application of the codified laws.

Bringing a claim - initial considerations

Key issues to consider

What key issues should a party consider before bringing a claim?

The two cornerstones for deciding whether or not to litigate are prospects of success and costs. The assessment of the prospect of success should not only encompass the legal assessment of the case, including questions of jurisdiction and absence of compulsory document production, but also aspects of strategy or other not strictly legal aspects of litigation, such as lack of confidentiality of court hearings and the impact of litigation on the party’s business. The evaluation of the cost concerns legal fees for lawyers, court fees and also cost reimbursement obligations in case of defeat. Furthermore, it encompasses expenses for technical experts, witnesses and other means of evidence.

Establishing jurisdiction

How is jurisdiction established?

In most cases, jurisdiction of the German courts is established through the place of residence of the defendant in Germany because it is the only case in which a jurisdictional challenge by the defendant is categorically excluded. The most important examples in which German courts assume jurisdiction over foreign parties are tort cases if the tort took place in Germany, cases of joint liability if one of the jointly liable parties has its residence in Germany and contract-related cases in which Germany was the place of performance of the contract. In business-to-business cases the jurisdiction of the German courts can also generally be stipulated by agreement of the parties; in business to consumer cases there are many rules on jurisdiction and venue of the German and EU law that cannot be set aside by agreement.

The defendant should raise jurisdictional challenges as early in the litigation as possible and before the conclusion of the hearing. In complex cases, the court has discretion to hear and pass judgment on jurisdictional challenges before the case proceeds to the merits stage. In the European Union (plus Norway, Iceland and Switzerland) EU Regulation No. 1215/2012 or treaties with similar content provide rules against parallel litigation. In cases involving parties beyond the borders of these countries, and unless the issue of parallel litigation is addressed in a treaty, no binding rules keep the German courts from assuming jurisdiction. The German courts do not apply the forum non conveniens doctrine.

Preclusion

Res judicata: is preclusion applicable, and if so how?

Rules on preclusion are codified in the German Code of Civil Procedure. Judgments passed by courts in other countries have res judicata effect in Germany if they are recognised. Judgements of EU-countries are recognised in Germany without the requirement of any special procedure. Other foreign judgments are recognised in an expedited procedure unless recognition is excluded for one of the reasons set out in section 328 of the German Code of Civil Procedure.

Applicability of foreign laws

In what circumstances will the courts apply foreign laws to determine issues being litigated before them?

German courts apply foreign material law if the foreign law is applicable to the merits of the dispute according to the German international private law (including by stipulation of the parties).

The application of foreign laws can make litigation more complex and costly because there is an increased obligation of the parties to substantiate their claims also in relation to the foreign legal implications. Furthermore, the courts have discretion to obtain expert opinions on the relevant foreign legal issues. The increased cost risk and typically decreased certainty about the chance of success can work to a party’s tactical advantage. Whether a tactical advantage can be derived from the application of foreign law has to be assessed case by case.

Initial steps

What initial steps should a claimant consider to ensure that any eventual judgment is satisfied? Can a defendant take steps to make themselves ‘judgment proof’?

If there is reason to believe that the defendant will remove assets or take other forms of action to elude enforcement of a later judgment, interim reliefs to ensure the enforceability of the claim are available to the claimant. In extreme cases, it is possible to pierce the corporate veil of German companies. Financial insolvency is the only legal way to become judgment proof, provided that the insolvency was not caused deliberately.

Freezing assets

When is it appropriate for a claimant to consider obtaining an order freezing a defendant’s assets? What are the preconditions and other considerations?

If there are indications that the defendant will remove assets in order to elude enforcement, the claimant may apply for a freezing injunction. The claimant must assert and provide:

  • prima facie evidence to the court - typically, by way of an affidavit;
  • that it has a claim against the defendant; and
  • that a reason of urgency for securing the future defendant’s assets exists.

Pre-action conduct requirements

Are there requirements for pre-action conduct and what are the consequences of non-compliance?

There are no specific requirements for pre-action conduct in Germany.

Other interim relief

What other forms of interim relief can be sought?

There are two forms of interim relief:

  • freezing injunctions, which serve to secure the enforcement of a monetary claim (eg, by way of seizure of a movable property or the registration of a mortgage). As the purpose of an interim relief is confined to the purpose of securing the enforcement of the claim, the exploitation of the seized property is not possible. The debtor may also be taken into personal custody, but this rarely happens in practice; and
  • preliminary injunctions, which serve to secure non-monetary claims. The court may, for example, order the surrender of an object.

Both forms of interim relief require a reason of urgency, as they constitute exceptions to the general rule that the defendant is not affected by an alleged claim prior to the rendering of a legally binding and enforceable court decision. The application for an interim relief must therefore convince the court that enforcement of the applicant’s claim is endangered or jeopardised without the issuance of the interim relief.

Alternative dispute resolution

Does the court require or expect parties to engage in ADR at the pre-action stage or later in the case? What are the consequences of failing to engage in ADR at these stages?

By law, the courts are obliged to work towards an amicable dispute settlement. Therefore, the courts frequently take part more proactively in exploring options for amicable solutions than in other countries. A settlement reached before a civil court constitutes a title of execution and may be enforced by means of public enforcement proceedings.

The courts do not require or expect parties to engage in alternative dispute resolution (ADR). However, most courts offer mediation free of additional court fees. The mediator is typically a judge of the court who is not associated with the case.

Claims against natural persons versus corporations

Are there different considerations for claims against natural persons as opposed to corporations?

Before bringing a claim against a corporation, it is advisable to obtain an excerpt from the commercial register in order to verify the identities of the legal representatives and the residence of the corporation. If the defendant is a general partnership, the claim can also be directed against its managing directors based on their accessory liability for the company’s debts.

Class actions

Are any of the considerations different for class actions, multi-party or group litigations?

No class actions comparable to class actions in, for example, the United States are currently available in Germany. All the above considerations apply to litigation with more than one claimant and more than one defendant. But see also the Update and trends section.

Third-party funding

What restrictions are there on third parties funding the costs of the litigation or agreeing to pay adverse costs?

Restrictions apply in relation to the identity of the funder. Law firms are not eligible as litigation funders. The professional laws allow German lawyers to enter into success-based fee arrangements in exceptional cases only.

The claim

Launching claims

How are claims launched? How are the written pleadings structured, and how long do they tend to be? What documents need to be appended to the pleading?

In order to launch a claim, the claimant needs to submit a statement of claim and make an advance payment of court fees. The claimant will usually provide proof of the payment as well as power of attorney. Both will be appended to the pleading.

After receipt of the court fees, the court will initiate the legal proceedings by serving the statement of claim on the defendant. The defendant then needs to declare whether it intends to defend itself against the claim. If this is the case, the court sets a deadline for the statement of defence.

The written submissions typically follow a certain structure and are usually divided into a factual and a legal part. In the factual part, the parties also offer evidence for their allegations. For example, they may refer to copies of documentary evidence, which are attached to the submission as appendixes, but they may also formally offer witnesses. The courts do not generally accept written witness statements as evidence.

There is no general rule on the length of written submissions. Typically, the length depends on the complexity of the case.

Serving claims on foreign parties

How are claims served on foreign parties?

The service of claims on foreign parties is effected by the courts. The specifics depend on the residence of the defendant: if the defendant has its residence in the EU, EU Regulation No. 1393/2007 of 13 November 2007 on the service of judicial and extrajudicial documents applies. Service of court documents on defendants outside the EU is effected in accordance with the Hague Service Convention or other treaties that may be applicable, depending on the defendant’s place of residence. Once the proceeding is pending, certain submissions may also be directly served from one attorney of record to the other.

Key causes of action

What are the key causes of action that typically arise in commercial litigation?

Breach of contract is the main cause of commercial litigation.

Claim amendments

Under what circumstances can amendments to claims be made?

Once a claim is pending, a claim can only be modified if the defendant consents to this being done, or if the court believes such a modification to be expedient. It is not to be regarded a modification of the suit filed if, for example, without any change to the cause of action, the statements made as to the facts and circumstances or the legal considerations are amended or corrected, or the demand for relief is extended or limited in terms of the main action, or as regards ancillary claims. In practice, the courts are rather generous with what they consider ‘expedient’. If an amendment does not introduce an entirely new, complex issue into the proceeding at a late stage, the courts usually allow the amendment, even without the defendant’s consent.

Remedies

What remedies are available to a claimant in your jurisdiction?

A party may ask for:

  • a judgment granting performance: this may be directed towards the delivery of goods; payment resulting from a contractual obligation; and payment of damages;
  • a judgment altering a legal relationship: this form of judgment is common in divorce proceedings, for example; and
  • a declaratory judgment: in this case, the court may make a binding declaration regarding a legal relationship.

Recoverable damages

What damages are recoverable? Are there any particular rules on damages that might make this jurisdiction more favourable than others?

When a defendant has been sentenced to pay damages, it is obliged to re-establish the condition prior to the harmful incident. Damages can also include loss of profit and, under certain circumstances, futile expenses. As the rationale underlying the recoverability of damages under German law is to eliminate the incurred damage, there are no punitive damages available in Germany.

Non-material damages are only compensated under very specific circumstances (for example, if the damages result from an injury of the body or the right to sexual self-determination).

Responding to the claim

Early steps available

What steps are open to a defendant in the early part of a case?

The defendant must first decide if it intends to defend the claim. If no defence is intended, the defendant may acknowledge the claim to save costs. In the vast majority of cases, the defendant files a notice of defence with the court.

If the defendant has a counterclaim, it may either set off its counterclaim against the principal claim by way of formally declaring so; or the defendant may file a formal countersuit. Even though the latter constitutes an independent legal action, the court will usually decide on both the claim and the counterclaim in the same proceeding. If a countersuit is filed, the court in which the initial lawsuit is pending also has jurisdiction over the countersuit, even if it would not otherwise have jurisdiction over the claimant.

In case the defendant believes that a third party is liable in whole or in part, the defendant should raise the issue in its statement of defence. If the defendant has a right of recourse against a third party, it should file a third-party notice. The third party may then decide whether to join the proceeding. Even if the third party decides against joining the proceedings, the third-party notice renders the judgment regarding the dispute between the claimant and the defendant binding in the follow-on proceedings between the defendant and the third party.

Jurisdictional challenges are most frequently brought on the grounds that the German court lacks specific jurisdiction (eg, the place of performance was not Germany or no joint liability exists with the anchor defendant). To avoid preclusion, jurisdictional challenges should be made as early as possible.

Defence structure

How are defences structured, and must they be served within any time limits? What documents need to be appended to the defence?

First, the defendant must notify the court of its readiness to defend against the lawsuit. By law, the defendant has two weeks to do so. Having first given notice of the intention to defend, the defendant may submit its full statement of defence within an additional period of time set by the court and can be prolonged upon application. The defendant should attach copies of any documentary evidence that it intends to rely on for its defence.

In rare cases, the courts order an advance first hearing. In such case the presiding judge sets a deadline for the defendant by which it is to submit a written statement of defence; an earlier separate notice of the defendant’s intention to defend against the lawsuit is not required.

Changing defence

Under what circumstances may a defendant change a defence at a later stage in the proceedings?

The defendant is free to change its defence until the point in time when submission of new or additional facts is precluded. In general, preclusion occurs upon conclusion of the hearing. The defendant always remains free to change or amend its legal reasoning at any time of the proceeding.

Sharing liability

How can a defendant establish the passing on or sharing of liability?

If the defendant believes that a third party is liable in part and that it has a right of recourse against the third party, the defendant may issue a third-party notice. The third party may then decide whether it wants to join the proceedings, resulting in it being capable of bringing forward the means of defence. Even if the third party decides against joining the proceedings, the third-party notice entails that the judgment regarding the dispute between the claimant and the defendant is binding in the follow-on proceedings between the defendant and the third party.

Avoiding trial

How can a defendant avoid trial?

The defendant can only avoid trial by admitting the claim or a settlement. In Germany, trials are usually no longer than one day and the parties cannot be called as witnesses, but the courts are free to ask the parties questions in order to clarify factual issues. You will usually not experience a ‘big show’ in German courtrooms.

Case of no defence

What happens in the case of a no-show or if no defence is offered?

In this case, the court issues a judgment by default against the absent party. The absent party can lodge an objection within two weeks after notification of the judgment. If the objection is admissible, the trial will continue and both parties may bring forward their arguments.

Claiming security

Can a defendant claim security for costs? If so, what form of security can be provided?

The defendant can only claim security for costs if the claimant is from a foreign non-EU country. Bank guarantees are the most common form of security.

Progressing the case

Typical procedural steps

What is the typical sequence of procedural steps in commercial litigation in this country?

Civil proceedings begin with the filing of the lawsuit. Within a period of two weeks from service of the lawsuit on the defendant, the defendant must notify the court that it intends to defend the lawsuit. After an additional period of usually two to six weeks, the defendant must file a full statement of defence. Thereafter, the court either schedules an early hearing or allows one or two more rounds of written submissions. Eventually a hearing will be scheduled. At the hearing, the court discusses the legal and factual situation with the parties and explores options for an amicable solution of the dispute. Usually, the court also announces if it intends to take evidence. Opening statements or extensive pleadings of the attorneys or the parties are rare. Depending on the further course of the proceeding, the court will allow post-hearing briefs, which are usually limited to addressing specific issues that have been discussed at the hearing. Following the conclusion of the hearing, the court will issue a decision; it may hand down a judgment or an order for the taking of evidence.

Bringing in additional parties

Can additional parties be brought into a case after commencement?

The plaintiff can extend the lawsuit to third parties and the defendant may bring counterclaims against third parties. Bringing third parties into a case is subject to preclusion, especially at later stages in the litigation. Essentially, the same rules as to the amendment of a claim apply.

Third parties can also intervene in the proceedings to support one of the parties if they have a legitimate interest in the party prevailing.

Consolidating proceedings

Can proceedings be consolidated or split?

The claimant may consolidate several claims against the same defendant in one action if the court has jurisdiction in relation to each of the claims.

The court may use its discretion to consolidate claims if:

  • the claims form the subject matter of several proceedings pending with a court;
  • the claims involve the same or different parties;
  • the claims have legal ties among each other; or
  • the claims could have been asserted in one single complaint.

The courts also have discretion to separate several claims brought in one complaint if this is justified by economy of procedure. In practise, the consolidation or separation of claims by order of the court is rare.

Court decision making

How does a court decide if the claims or allegations are proven? What are the elements required to find in favour, and what is the burden of proof?

The court decides whether an allegation is true or untrue at its discretion and conviction, and taking into account the entire content of the written submissions and hearings, as well as the results obtained by evidence being taken, if any. The court finds in favour if it is convinced beyond reasonable doubt that a fact submitted by a party is true.

The burden of proof always rests with the party in whose favour an alleged fact would work. However, in situations where it is typically very difficult or impossible for a party to prove a specific circumstance even though it bears the burden of proof, the law sometimes places rebuttable presumptions of proof on the other party. Also, the concept of prima facie evidence exists under German law.

How does a court decide what judgments, remedies and orders it will issue?

There are only two types of decisions: the court order and the judgment. The German Code of Civil Procedure determines which form of decision the court has to issue in a given situation. The decision on remedies depends on the claimant or counterclaimant’s pleadings. In case of a lawsuit for performance, the court is prohibited from granting reliefs that are unenforceable. The courts are also prohibited from granting the claimant more than or something different to what it had asked for.

Evidence

How is witness, documentary and expert evidence dealt with?

Documentary evidence and witness testimony are the most common forms of evidence used in Germany. The evidence is introduced by ‘offering’ it in a written submission. The court then decides whether or not to admit the evidence. The court must admit the evidence and hear any witness whose testimony to a certain fact a party offers unless the testimony would obviously have no relevance for the case.

There is no procedure for compulsory production of documents by one party to another in Germany and witnesses do not provide written statements of their testimony; rather, their testimony is ‘offered’ in support of particular facts and the witnesses are then questioned at the hearing, principally by the judge, regarding their recollection of those facts. The judge dictates a summary of the material points of their testimony during the hearing itself and this then appears in the form of a written ‘protocol’, which stands as a record of the testimonial evidence. Despite these differences, the relative advantages and disadvantages of oral testimony, compared to documentary evidence, are broadly similar to those in a common-law system. An advocate will seek to prove the client’s case by the best means of evidence available and the court will still assess a witness’s credibility against any consistencies and inconsistencies with regard to the documentary evidence. Documentary evidence generally has an advantage over witness statements as it is typically more reliable and precise than the recollection of witnesses.

Traditionally, German litigation made little use of party-appointed experts, relying instead on court-appointed experts where such expertise was required. However, as the number and complexity of technical issues before the courts increases, experts reports submitted by the parties are becoming a more frequent part of the process.

How does the court deal with large volumes of commercial or technical evidence?

There are no specific rules for this. The court will usually take the time needed to review the evidence piece by piece if and to the extent that it deems the evidence relevant. If the evaluation of the evidence requires technical or commercial expertise, the court has discretion to order support of a technical expert.

Can a witness in your jurisdiction be compelled to give evidence in or to a foreign court? And can a court in your jurisdiction compel a foreign witness to give evidence?

No witness can be compelled to give evidence to a foreign court in Germany and the German courts cannot compel a witness not present in Germany to give evidence in a German court proceeding. However, if a witness of foreign nationality is present in Germany, a German court has the authority to summon the witness and ultimately even order detention of the witness if the witness fails to appear for testimony.

How is witness and documentary evidence tested up to and during trial? Is cross-examination permitted?

Any party relying on documentary evidence must present the originals of all relevant documents to the court. In practice, however, photocopies instead of the original are often presented and accepted as evidence. Photocopies are - strictly speaking - not documentary evidence. However, if their authenticity is not disputed, they are an adequate substitute. If the authenticity of a document is challenged, the court may order an expert to examine the document or take any other reasonable measure to verify its authenticity.

In German civil proceedings, the court leads the examination of witnesses but the parties and their attorneys have the right to ask the witnesses questions. Technically, cross-examination is not prohibited but it is rarely performed in German public courts.

Time frame

How long do the proceedings typically last, and in what circumstances can they be expedited?

The duration of a proceeding vastly depends on its complexity, the court’s dockets and the conduct of the parties. On average, complex commercial litigation cases typically take about one and a half to three years in the courts of first instance and at least one year on the first appellate level. An appeal to the German Supreme Court usually takes at least another two years. There are no means to make a court expedite a proceeding. In cases of extreme delay, damage claims against the state in which the court is located are possible.

Gaining an advantage

What other steps can a party take during proceedings to achieve tactical advantage in a case?

The means to create tactical advantages on the back of procedural rules (without mistakes of the other party) are very limited. Default judgment is, of course, available if the defendant does not appear in the hearing or decides not to plead. The examples of summary judgment or striking a case without full trial do not apply because the mandatory hearing in a German court does not compare to a trial according to United States’ procedure. There are major conceptual differences between litigation in Germany and litigation in the United States. One of the implications of these differences is that the hearing stage of the litigation in Germany consumes much less time and plays a comparatively much less important role than in litigation in the United States.

Impact of third-party funding

If third parties are able to fund the costs of the litigation and pay adverse costs, what impact can this have on the case?

Third-party funding is generally possible in Germany. The third party will usually commit to pay the court fees, the attorney’s fees of both the party receiving the funding and the opposing party, costs incurred by witness examinations or expert opinions and costs for the enforcement of the claims. In case of defeat, the third party is typically obligated to pay all of the incurred costs. If the litigation is successful, the third party will receive a share of the proceeds from the litigation. Third-party funding should typically not have an impact on the case itself.

Parallel proceedings

How are parallel proceedings dealt with? What steps can a party take to gain a tactical advantage in these circumstances, and may a party bring private prosecutions?

A court presiding over a civil action is not bound by any decisions in parallel criminal or regulatory proceedings. Nevertheless, parties to a civil lawsuit may benefit from the parallel regulatory or criminal proceeding through the principle of ex officio investigation under the inquisitorial system (Amtsermittlungsgrundsatz). This principle plays a fundamental role in public and criminal proceedings in Germany and requires the respective court to actively investigate the facts of the case before it. The results of the investigations may then be made available to the parties in a civil lawsuit on application. It is therefore possible for the parties to obtain valuable information through this means to support their position in the civil litigation.

Private prosecution is not permitted in Germany. In order to support a civil claim one may report a criminal offence to the public prosecutor’s office but the investigation itself is a strictly governmental affair. For aggrieved parties it is possible to bring damage claims against the accused in a criminal court proceeding (Adhäsionsverfahren).

Trial

Trial conduct

How is the trial conducted for common types of commercial litigation? How long does the trial typically last?

The length of a trial depends on the complexity of the case. There is at least one oral hearing, which typically lasts a couple of hours.

Use of juries

Are jury trials the norm, and can they be denied?

Jury trials comparable to the ones in the US do not exist in Germany.

Confidentiality

How is confidentiality treated? Can all evidence be publicly accessed? How can sensitive commercial information be protected? Is public access granted to the courts?

German civil-litigation proceedings are generally public. However, there is the possibility to exclude the public from a hearing if this is necessary for the protection of privacy or professional secrecy. This requires a detailed request. A general indication concerning the sensitive nature of data is not sufficient. Without the parties’ permission, the court files, including the evidence on file, can only be accessed by somebody who has a legal interest in doing so. In practice, the courts will usually deny access to its files by third parties unless the parties to the litigation consent.

Media interest

How is media interest dealt with? Is the media ever ordered not to report on certain information?

Representatives of the press may be present at the hearings, but sound and film recordings for the purpose of public presentation or publication of their contents are prohibited.

Proving claims

How are monetary claims valued and proved?

Monetary claims are proved by parties’ submissions and the elements of evidence. In particular, the causality between the failure and the claimed damages plays a decisive role during the proceeding. If the existence or the amount of the damage is in dispute among the parties, the court rules on this issue at its discretion and conviction, based on its evaluation of all facts and evidence presented by the parties. The courts then also have discretion to obtain an expert opinion on the damage amount ex officio.

Post-trial

Costs

How does the court deal with costs? What is the typical structure and length of judgments in complex commercial cases, and are they publicly accessible?

In its judgment, a court only decides on the allocation of the costs but not the cost amounts. As a general rule, the ‘loser pays’ rule applies. Where each of the parties has prevailed for a part of its claim, the costs are to be shared proportionately. The costs to be reimbursed are limited to certain statutory amounts that depend on the value of the claim that was subject of the litigation. For example, the statutory legal fees to reimburse to the other party in case of a full defeat amount to approximately net €12,000 if the claim at issue had a value of €1 million.

Only judgments ruling on legal questions of general interest or that change long-standing jurisprudence are published in databases or journals. The parties are anonymised in the published copies. Upon request, any German court will provide a copy of an unpublished judgment, but also in this case the parties will be anonymised.

Appeals

When can judgments be appealed? How many stages of appeal are there and how long do appeals tend to last?

A judgment can be appealed within one month from the date that the judgment was served on the appellant. In the appeal proceedings, the court reassesses both facts and legal arguments. The parties are largely precluded from submitting new facts in appellate proceedings. In general, a new fact is precluded if it could have been brought forward in the first-instance proceeding.

There are two levels of appeals: the second level of appeal only concerns points of law. The appeal on points of law may be lodged only if the court of appeal has admitted to it being lodged in the judgment, or the court hearing the appeal on points of law has admitted to it being lodged based on a complaint against the refusal to grant leave to appeal on points of law. The appeal on points of law is also admissible if the matter has fundamental significance or if the development of the law requires a decision on the issues involved.

Enforceability

How enforceable internationally are judgments from the courts in your jurisdiction?

According to the principle of reciprocity, German judgments are enforceable by most states worldwide. In the European Union, the judgments of the German courts are enforceable even without an exequatur proceeding.

How do the courts in your jurisdiction support the process of enforcing foreign judgments?

According to the principle of reciprocity, Germany enforces foreign judgments if the respective state equally enforces German judgments. The grounds on which German courts will deny recognition of foreign judgments, which is the prerequisite for their enforcement, are set out in section 328 of the German Code of Civil Procedure. Once a foreign judgment has been recognised, it is technically the judgment of a German court. Thus, after recognition of the foreign judgment, the enforcement procedure is no different from the enforcement of a German judgment.

Other considerations

Interesting features

Are there any particularly interesting features or tactical advantages of litigating in this country not addressed in any of the previous questions?

In some courts the hearings can officially be conducted in English. Written submissions still have to be composed in German but some courts accept documentary evidence in English without translation, provided that the other party does not insist on a translation.

Jurisdictional disadvantages

Are there any particular disadvantages of litigating in your jurisdiction, whether procedural or pragmatic?

Generally speaking, there are no particular disadvantages. Pros and cons of one forum in relation to another will always have to be examined case by case. Generally, the efficiency and quality of the German courts’ work is high.

Special considerations

Are there special considerations to be taken into account when defending a claim in your jurisdiction, that have not been addressed in the previous questions?

Litigating a case on both the claimant’s and the defendant’s side requires a careful consideration of many aspects; the majority of those aspects have to be assessed case by case.

Updates and trends

Updates and trends

Updates and trends

On 1 November 2018 a new law introducing consumer class actions in Germany will come into force (Gesetz zur Einführung einer zivilprozessualen Musterfeststellungsklage). It is intended to strengthen consumers’ rights and to ease the burden on the courts caused by numerous individual but identical proceedings. It applies to cases where a large number of consumers have suffered damage by the same kind of conduct, for example cases regarding manipulated emission technology in cars.

Under the new legislation only certain institutions - mainly consumer associations - qualify as eligible claimants; the consumers are not (directly) involved in the lawsuit. The new law provides that once an eligible claimant has started a class action in relation to a certain issue, affected consumers can register their claim at a registry administered by the Federal Office of Justice. The class action is limited to declaratory relief. If the litigation is successful, the court issues a declaratory judgment with binding effect for all consumers who registered. This judgment is binding for follow-up proceedings between the registered consumers and the company.

The Code of Civil Procedure applies to the class actions with some exemptions regarding, for example, third-party intervention and the waiving of claims by the claimant institution. The qualifying institution also has the right to settle the case, but each consumer may withdraw from the settlement agreement.