Litigation

Last verified on Monday 7th June 2021

Litigation: Germany

Rüdiger Harms and Patrick Gerardy

Cleary Gottlieb Steen & Hamilton

Overview

1. Describe the general organisation of the court system for civil litigation.

Germany

Civil disputes (in excess of €5,000) are litigated in the regional courts as the courts of first instance (small-claims cases up to €5,000 are litigated in the local courts). Regional courts are organised in chambers, with specialised chambers for, for example, commercial disputes, unfair competition and IP matters. Special courts exist for labour, criminal, tax, administrative and social security matters.

Regional court judgments in civil matters may be appealed to the higher regional court. Both regional and higher regional courts are state courts. A further level of appeal, in principle limited to errors of law, is available, under certain conditions, to the German Federal Court of Justice (BGH), a federal court. Where constitutional rights are alleged to be violated, an extraordinary constitutional complaint to the German Federal Constitutional Court may be available. Pursuant to the provisions of EU law, German courts have the right, and in some cases the duty, to refer questions of EU law to the Court of Justice of the European Union (CJEU) to obtain a preliminary ruling.

German law, as a civil law system, does not recognise the doctrine of stare decisis. Thus, as a matter of law, a court is not bound by its own earlier decisions or earlier decisions of other courts. In practice, however, lower courts generally tend to follow (similar) decisions rendered by superior or other German courts.

There are no juries in Germany. Civil cases are always tried by professional judges, in commercial disputes sometimes together with lay judges.

Answer contributed by Rüdiger Harms and Patrick Gerardy

2. Give an overview of basic procedural principles that govern civil litigation in your jurisdiction.

Germany

As a basic notion of German civil procedure, it is up to the parties to initiate and end proceedings and to determine the substance and scope of proceedings, namely by way of formulating specific requests to the court and by submitting the underlying facts in support of the relief sought or defences pleaded (in principle, no investigation of facts ex officio). It is then upon the court to determine, construe and apply the law to the facts before it; pleadings with regard to the law are often welcomed by judges, but not legally required to substantiate a claim or defence (iura novit curia). Requests for relief and submissions will be considered only if referenced in an oral hearing; prior written submissions technically only prepare the hearing. However, in practice, parties usually refer to their written pleadings, and even tacit reference is widely accepted. Oral pleadings and, as the case may be, a taking of evidence shall take place before the adjudicating judges. However, oral pleadings in court are usually limited in scope. Rather, the parties are required to submit particularly the facts underlying the case (usually with their legal assessment) already in their prior submissions. Hearings are generally open to the public, with courts publicly announcing trial dates and admitting audience in the courtroom. In contrast, the court’s case file is not made available to the public (third parties will only be granted access to the files if they can establish a legal interest). Court decisions are commonly published through various channels.

Answer contributed by Rüdiger Harms and Patrick Gerardy

3. Describe the general organisation of the legal profession.

Germany

Admission as a lawyer is based on a two-step legal education: the study of law at university level (as evidenced by a first comprehensive exam administered on a state-wide basis) and a two-year practical, clerkship-type of training that ends with a second comprehensive exam (again administered on a state-wide basis). After passing the two exams, German lawyers are generally qualified to work as judges, attorneys-at-law, prosecutors or in any other legal function, subject to selection and appointment criteria depending on the respective branch.

Germany does not distinguish between barristers and solicitors. Once registered with the bar, every German-qualified attorney-at-law is admitted to appear before all German local, regional and higher regional courts, as well as the Federal Constitutional Court. By contrast, only a very limited number of specially designated attorneys-at-law (currently 39) are allowed to appear before the Federal Court of Justice in civil matters. Attorneys-at-law are mandatory members of, and organised in, bar associations. The bar associations, among a number of other competences, represent their members’ interests vis-à-vis the legislative and executive bodies of government.

Answer contributed by Rüdiger Harms and Patrick Gerardy

4. Give a brief overview of the political and social background as it relates to civil litigation.

Germany

Germany has a long tradition of civil litigation that has evolved over more than a century without major changes. Thus, Germans generally have a high degree of trust and confidence in the court system. The caseload of German court dockets is sometimes heavy, especially in larger cities. Nevertheless, the German court system is relatively efficient.

The typical pro-plaintiff attributes of certain other legal systems, such as pretrial discovery, “true” class actions and punitive damages, are not available in Germany. As a consequence, there are no typical professional or activist plaintiffs. However, the “diesel scandal” has triggered considerable momentum in the German litigation landscape.

Answer contributed by Rüdiger Harms and Patrick Gerardy

Jurisdiction

5. What are the sources of law and rules governing international jurisdiction in civil matters?

Germany

International jurisdiction in certain civil and commercial matters is governed by EU Regulation 1215/2012 (Brussels Ia Regulation) where the defendant is domiciled in an EU member state. Outside the scope of the Brussels Ia Regulation, the 2007 Lugano Convention provides for jurisdictional rules that apply in certain civil and commercial disputes between parties from an EU member state and, on the other side, from Switzerland, Norway, or Iceland. Another source of rules on jurisdiction is the 2005 Hague Convention on (Exclusive) Choice of Court Agreements. Where neither EU nor international law applies, German courts apply the jurisdictional rules of the Code of Civil Procedure (ZPO; English version available here), ie, international jurisdiction follows the same rules as in disputes between domestic parties.

Answer contributed by Rüdiger Harms and Patrick Gerardy

6. What are the criteria for determining the jurisdiction and venue of the competent court for a civil matter?

Germany

In civil and commercial matters, the regional courts (Landgerichte) generally have jurisdiction. For small claims (up to €5,000), the local courts (Amtsgerichte) have jurisdiction. Since 1 January 2018, specialised chambers in the areas of banking and financial transactions, construction and architects’ contracts, medical treatment and insurance contracts have been established at regional and higher regional courts (Oberlandesgerichte). Referral of cases from a particular area to specific judges is intended to improve the quality and speed of proceedings and decisions.

The appropriate venue generally is at the place of residence or seat of the defendant. In addition, a proper venue is, for example, at the place of the performance of a contract and at the place where a tort occurred. Unless exclusive jurisdiction of a certain court has been agreed on or applies under the statute (eg, in rental disputes), the plaintiff can choose among several available venues. Parties to commercial matters can agree on the venue both under German and EU law; however, this does not apply where at least one party is a consumer. 

Answer contributed by Rüdiger Harms and Patrick Gerardy

7. Does your jurisdiction commonly attract disputes that have a nexus with other jurisdictions?

Germany

Unlike certain common law jurisdictions, the German rules of civil procedure do not take a particularly expansive view on personal jurisdiction over non-German defendants. Jurisdiction is determined by the Brussels Ia Regulation or international treaties, where applicable, or the German Code of Civil Procedure. Nevertheless, in cross-border business transactions, particularly those with a German nexus, parties often agree on German law and German jurisdiction. Also, in certain (often tort-related) areas Germany as a court venue is considered attractive compared to other jurisdictions. This applies for instance to patent litigation due to the low cost and comparatively high speed of the patent litigation process in Germany. German courts have also repeatedly been chosen by plaintiffs to bring follow-on cartel damages actions. The CJEU approved the opportunity for cartel victims to jointly sue cartellists domiciled in various member states of the EU before the court of a member state where at least one of the cartellists is domiciled.

 

Answer contributed by Rüdiger Harms and Patrick Gerardy

8. How will a court treat a request to hear a dispute that is already pending before another forum?

Germany

Where a matter is already pending before (or has been finally decided by) a court in Germany, another court seised of the same matter should dismiss it as inadmissible ex officio.

Where a dispute is already pending before a court of another EU member state, pursuant to the Brussels Ia Regulation, the German court must stay its proceedings until the court first seised has determined the question of its jurisdiction. In an effort to limit abuse by lodging a “torpedo action” in member states with a notoriously slow judicial system, pursuant to the Brussels Ia Regulation, the court having exclusive jurisdiction pursuant to a jurisdiction clause will not stay its proceedings, even if another court has been seised first (see article 31 Brussels Ia Regulation).

Where a dispute is already pending before a court outside the EU, the German court will dismiss the claim only if a decision rendered by the non-EU court is recognisable in Germany. Pursuant to articles 33 and 34 of the Brussels Ia Regulation, a member state court that has jurisdiction will be granted discretion to stay proceedings in favour of a non-EU court first seised if the non-EU judgment can be enforced in the EU member state and a stay is necessary for the proper administration of justice.

Answer contributed by Rüdiger Harms and Patrick Gerardy

9. How will the courts treat a dispute that is, or could be, subject to an arbitration clause or an agreement to arbitrate, including in interim proceedings?

Germany

German courts defer to arbitration agreements and dismiss cases as inadmissible for lack of jurisdiction where a dispute is encompassed by a valid and binding arbitration agreement, provided that a party to the dispute invokes the relevant arbitration agreement prior to the oral hearing before the state court. Furthermore, German arbitration law provides for a special procedure before state courts where a party may file a request to decide whether a valid arbitration agreement exists for the dispute at hand (section 1032(2) of the Code of Civil Procedure (ZPO)).

Pursuant to section 1033 ZPO, an agreement to arbitrate does not exclude the state courts’ jurisdiction for interim relief proceedings. 

Answer contributed by Rüdiger Harms and Patrick Gerardy

10. May courts in your country review arbitral awards on jurisdiction?

Germany

German law provides for very limited review of arbitral awards. In cases in which the arbitral tribunal is seated in Germany, judicial review is available within a set aside proceeding (section 1059 ZPO). Moreover, judicial review is available, also in case of an award issued by a tribunal having its seat abroad, within an enforceability proceeding (sections 1060, 1061 ZPO). Grounds for review within both proceedings include the invalidity of the arbitration agreement, and thus, the lack of jurisdiction of the arbitral tribunal. A German court may also review the tribunal’s adherence to fundamental procedural rules such as the parties’ right to be heard and, under exceptional circumstances, challenge the award due to a violation of the German ordre public, consistent with the UNCITRAL Model Law and the New York Convention.

Arbitral awards denying jurisdiction qualify as final awards and can be challenged within a set aside proceeding in which the general annulment grounds apply (albeit, however, not specifically designed for court review of such jurisdictional awards). By contrast, interim awards affirming jurisdiction cannot be challenged in a separate set aside proceeding; rather, a party facing such an interim award may apply to a higher regional court and seek judicial review of the affirmative decision pursuant to section 1040(3) sentence 2 ZPO. Furthermore, a subsequent (final) arbitral award rendered in the same arbitration is subject to judicial review in a “normal” set aside or enforceability proceeding pursuant to section 1059 et seq ZPO.

Answer contributed by Rüdiger Harms and Patrick Gerardy

11. Are anti-suit injunctions available?

Germany

There are no specific provisions on anti-suit injunctions. Thus, the general rules on injunctive relief would apply. However, in Germany there has never been a tradition of anti-suit injunctions, and CJEU case law has effectively prohibited anti-suit injunctions ordered by state courts across EU member states.

The CJEU decided in disputes concerning the former Brussels I Regulation (No. 44/2001) that anti-suit injunctions in the context of both litigation and arbitration are impermissible when directed against court proceedings in another EU member state (CJEU Turner; West Tankers). However, the CJEU has held that the former Brussels I Regulation does not prevent a member state from recognising anti-suit injunctions rendered by arbitral tribunals (CJEU Gazprom).

Answer contributed by Rüdiger Harms and Patrick Gerardy

12. Which entities are immune from being sued in your jurisdiction? In what circumstances? In what circumstances can creditors enforce a court judgment or arbitral award against a sovereign or a state entity?

Germany

German law follows the established rules in public international law. Another sovereign may be sued for acta iure gestionis but not for acta iure imperii. Some persons are immune to being sued due to their diplomatic or consular status. Customary international law is part of the German legal order by virtue of article 25 of the German Constitution.

Creditors may not take enforcement measures against assets covered by sovereign, diplomatic or consular immunity (eg, embassy buildings and bank accounts, military equipment or tax claims). 

Answer contributed by Rüdiger Harms and Patrick Gerardy

Procedure

13. How are proceedings commenced? To what extent will a court actively lead the proceedings and to what extent will the court rely on the parties to further the proceedings?

Germany

Proceedings are generally commenced by the plaintiff filing a detailed statement of claim. The statement of claim is filed with the court of first instance, and the court effects service upon the defendant(s). The defendant is generally required to file a detailed statement of defence within a period of two to four weeks, which may be extended, for example, in more complex cases. 

After the exchange of the statement of claim and the statement of defence, the court may either order the exchange of further detailed briefs, or it may hold an oral hearing. German courts are required to take a fairly active part in furthering the proceedings. For instance, it is upon the court to decide which witnesses to summon or which expert to appoint to resolve a factual issue. The production of documents is rarely ordered. Courts are also encouraged to streamline the proceedings by prompting parties to specify or supplement their pleadings, and they may inform the parties about their preliminary assessment of the case at an early stage of the proceeding. The questioning of witnesses and experts is generally led by the court. There is no common-law-style cross-examination.

Answer contributed by Rüdiger Harms and Patrick Gerardy

14. What are the requirements for filing a claim? What is the pleading standard?

Germany

German law follows stringent pleading standards. Notice pleading is not sufficient. A statement of claim has to provide all the facts supporting the relief requested and the evidence relied on by the plaintiff on an allegation-by-allegation basis. Thus, a party generally needs to know all the key facts of the case before it starts litigation. However, in practice, courts are usually generous in allowing parties to supplement their pleadings, especially in reaction to the opposing party’s submissions. There is no pretrial discovery available in Germany. Also, the statement of claim must contain a specific request for relief, which is subject to subsequent amendment on certain conditions, however. Where the payment of money is sought, the request for relief must generally state the exact amount sought.

Answer contributed by Rüdiger Harms and Patrick Gerardy

15. What are the requirements for answering claims? What is the pleading standard?

Germany

The pleading standard for answering a statement of claim is substantially the same as the standard governing the statement of claim. Thus, the defendant shall specify its factual allegations and defences as much as reasonably possible; including evidence relied on by the defendant on an allegation-by-allegation basis.

Answer contributed by Rüdiger Harms and Patrick Gerardy

16. What are the rules regarding further briefs and submissions?

Germany

The pleading standard for further briefs and submissions is substantially the same as for statements of claim and statements of defence. The claimant may amend its requests for relief if the respondent agrees or if the court considers the amendment to be reasonable. The claimant may freely withdraw a claim until the start of the oral hearing; at a later stage, withdrawal is only permissible with consent of the defendant.

Parties are generally required to present all facts and evidence as early as possible. Failure to do so, especially where in violation of a time limit set by the court, unless properly excused, may lead to the preclusion of later submissions or allegations.

Further submissions regarding the law and the legal evaluation of the case are permissible at any time (but should be submitted before the court has finalised its ruling) and are not subject to time bars.

Answer contributed by Rüdiger Harms and Patrick Gerardy

17. To what degree are civil proceedings made public?

Germany

Civil court records are not generally open to the public. Instead, to be allowed to inspect a court file, a specific legal interest in the inspection must be demonstrated. However, third parties may request courts to disclose a (redacted) copy of decisions rendered. Pursuant to jurisprudence by the Federal Court of Justice, such a request does not require a legal interest in obtaining the requested decision but may be made without special requirements.

By contrast, oral hearings are generally open to the public, except for certain situations, for example, to protect privacy or business secrets. However, given the strong emphasis on detailed and substantiated written submissions, cases are often not discussed in detail during an oral hearing. Specifically, there is no comprehensive oral presentation of the case as is common in the Anglo-American procedural tradition. Usually, the presiding judge provides the court’s preliminary assessment of the case based on the written pleadings submitted. Instead of pleading the entire case, parties will often refer to their written submissions to a great extent unless specifically asked by the court to explain certain positions or elaborate on certain issues.

TV cameras and the taking of pictures or the use of recording devices is generally not allowed. There is an exception for proceedings with a great significance for the German contemporary history, which applies only in exceptional cases.

The operative parts of decisions are pronounced in open courtroom. The German Federal Court of Justice may now permit audio and television recordings of the pronouncement of its judgments in matters of public interest. Such public pronouncement is also recognised for Federal Constitutional Court decisions.

Answer contributed by Rüdiger Harms and Patrick Gerardy

Pretrial settlement and ADR

18. Will a court render (interim) assessments about any factual or legal issues in dispute? What role and approach do courts typically take regarding settlement? Are there mandatory settlement conferences between the parties at the outset of or during the litigation?

Germany

After the exchange of initial briefs, and before the start of the first oral hearing, courts are generally required to explore settlement options with the parties. Also, during the further course of the proceedings, German courts are required to be continuously mindful of options to amicably resolve the dispute among the parties. Courts sometimes issue preliminary opinions of certain issues or their preliminary assessment of the case, not least to promote amicable settlement.

It is common for German courts in an oral hearing to render oral assessments of the parties’ cases strengths and weaknesses and to discuss those with the parties. Often, these discussions facilitate settlement.

Answer contributed by Rüdiger Harms and Patrick Gerardy

19. Is referral to mediation or another form of ADR an option, or even mandatory, before or during the litigation?

Germany

There is no mandatory mediation or ADR for general commercial matters in Germany. However, courts are generally required to conduct a conciliation hearing at the first trial hearing and are free to suggest mediation or other forms of ADR to the parties at any point during the trial.

Answer contributed by Rüdiger Harms and Patrick Gerardy

Interim relief

20. What are the forms of emergency or interim relief?

Germany

German law provides for two types of emergency or interim relief: arrest and injunctions. In an arrest proceeding, the petitioner obtains the interim seizure of assets or in rare cases the interim arrest of persons. The arrest proceeding is available where there are strong reasons to believe that assets of the opposing party may not be available at a later stage for enforcement purposes once the regular litigation is concluded. This is generally the case if the judgment is to be enforced abroad, in a country that is not assumed to grant reciprocal recognition or enforcement to German judgments. Injunctions are available to provide an interim regulation of a disputed issue, such as the prohibition of a certain act (eg, violation of an anti-competition covenant or publication of libellous statements).

Answer contributed by Rüdiger Harms and Patrick Gerardy

21. What must a petitioner show to obtain interim relief?

Germany

To obtain an arrest, the petitioner needs to demonstrate by a preponderance of the evidence that it has a certain claim for the payment of money against the respondent, and that there are specific reasons to believe that without an arrest, the petitioner would not be able to enforce a later decision against the assets of the respondent.

To obtain an injunction, the petitioner must demonstrate by a preponderance of the evidence that the underlying claim exists and that there is an urgent need to act because otherwise the respective claim of the petitioner may be thwarted or its enforcement significantly hampered.

Answer contributed by Rüdiger Harms and Patrick Gerardy

Decisions

22. What types of decisions (other than interim relief) may a court render in civil matters?

Germany

The standard decision to be rendered by a German court in civil matters is a final judgment. German law also provides for partial judgments, which are available for instance where a party brings multiple claims, and one claim is already ripe for decision. Also, a court may issue an interim judgment on the issue of liability, with the determination of quantum to be left to the final judgment. German law further provides for provisional judgments. These are particularly relevant in documentary proceedings. Relief granted by courts in formal judgments includes performance orders, injunctions, annulment orders (eg, concerning shareholders’ decisions in corporate law disputes) and declaratory relief.

Answer contributed by Rüdiger Harms and Patrick Gerardy

23. At what stage of the proceedings may a court render a decision? Are motions to dismiss and summary judgment available?

Germany

The court is required to render a decision as soon as the case is ripe for decision, generally following one comprehensive oral hearing. If agreed by both parties, in suitable cases, a court may render a decision on the sole basis of the parties’ written submissions (ie, without conducting a hearing). A motion to dismiss or summary judgment are not available as technical instruments under German law, even though courts may dismiss a plaintiff’s case for lack of substantiation. In the alternative, where facts have been substantiated in a substantiated manner and then been disputed in a procedurally sufficient fashion, a case may be ripe for decision only after extensive taking of evidence.

In all situations, it is upon the court to determine whether the case is ripe for decision or what needs to be done in order to get to ripeness. A case is ripe for decision as soon as, in the court’s view, all factual questions relevant to the legal assessment are undisputed or have been resolved.

Answer contributed by Rüdiger Harms and Patrick Gerardy

24. Under which circumstances will a default judgment be rendered?

Germany

A default judgment against the defendant may be rendered where the plaintiff has stated a conclusive claim (ie, has presented facts that allow the court to draw all legal conclusions necessary to grant the requested relief), and the defendant fails to appear at the oral hearing (or fails to be represented by an attorney-at-law (as required from the regional court level onwards) or appears or is represented but voluntarily chooses to abstain from formulating a formal request at the hearing). Likewise, a default judgment against the plaintiff may be entered where the plaintiff fails to indicate his willingness to pursue the claim or to appear at the oral hearing. A default judgment is provisionally enforceable without the requirement to post collateral.

The party against whom a default judgment was entered may oppose the default judgment within a period of two weeks. In such a case, the proceedings need to be reopened. 

Answer contributed by Rüdiger Harms and Patrick Gerardy

25. How long does it typically take a court of first instance to render a decision?

Germany

According to statistics, 75 per cent of court proceedings in the first instance before the regional courts are resolved within one year. If a judgment is required, the average duration is approximately 15 months with regional differences within Germany.

Answer contributed by Rüdiger Harms and Patrick Gerardy

Parties

26. How can third parties become involved in proceedings?

Germany

German law provides for several means to involve third parties in a dispute. Plaintiffs may sue several parties as co-defendants from the outset or, at a later stage of the proceeding, extend their claims to include additional defendants. A defendant may bring a counterclaim that is directed not only against the plaintiff, but also (in exceptional circumstances even solely) against a third party, if the third party consents or the court finds it reasonable to include the third party in the dispute. In addition, both the plaintiff and the defendant may give a third party formal notice of the dispute where one party is concerned that if it loses the present proceedings, it may have recourse claims against the third party (or may be subject to recourse claims by a third party). For example, this is frequently done by a defendant contractor who may have a recourse claim against a supplier if the plaintiff is successful or by the defendant in a cartel follow-on damages case where the defendant might have contribution claims from a jointly liable co-cartellist. Such formal notice enables the third party to join the proceedings as intervenor, and support either the plaintiff or the defendant. Certain contents and the result of the proceedings will then be binding between the party giving the third-party notice and the recipient of such notice, should there later be a dispute among them on the topics that were subjects of the prior proceedings. Thus, in the contractor–supplier context, where the court finds that a product sold by the defendant contractor to the plaintiff was defective, such finding would be binding in a recourse proceeding brought by the contractor against its supplier. Finally, a third party can act as intervenor for the plaintiff or the defendant if it has a legal interest to do so.

Answer contributed by Rüdiger Harms and Patrick Gerardy

Fact-Finding and Evidence

27. Describe the rules of fact-finding in your jurisdiction.

Germany

In general, it is upon the parties to present to the court the facts that they wish to rely on to substantiate their claims and defences. Courts will not consider facts not submitted. As a general rule, courts do not engage in fact-finding ex officio and do not investigate the facts of the case. Nor will courts call into question undisputed facts. As a consequence, the parties need not offer or adduce evidence in support of undisputed facts. Only to the extent the facts presented by the parties contradict each other will the court take evidence – if such facts are relevant to the court’s assessment of the case and, hence, the outcome of the proceeding. The general rule pursuant to which the parties have the sole power to shape the factual scope of the proceeding is compromised in some respects: Courts have a procedural duty to guide the parties’ pleadings toward an efficient and just procedure, which is why the courts have to point the parties to a need to amend their pleadings. Furthermore, courts shall consider obvious facts, even if not submitted.

Answer contributed by Rüdiger Harms and Patrick Gerardy

28. Will a court take or initiate the taking of evidence or will it rely on the parties to request the taking of evidence and to present it?

Germany

It is each party’s obligation to present the facts and proffer the evidence it wishes to rely on. The court generally will not consider facts and evidence not proffered, or at least offered, by one of the parties; as a general rule, in civil cases courts do not engage in fact finding ex officio. Among the evidence proffered, the court will choose the items that it deems relevant to the outcome of the case. Thus, unlike in the Anglo-American system, the court will not necessarily hear all the witnesses that a party has proffered, but only the witnesses that the court chooses to summon. It is not uncommon that the disputes will be decided on the basis of the written submissions referred to in an oral hearing, but without formally taking evidence.

Answer contributed by Rüdiger Harms and Patrick Gerardy

29. Is an opponent obliged to produce evidence that is harmful to it in the proceedings? Is there a document disclosure procedure in place? What are the consequences if evidence is not produced by a party?

Germany

As a general principle, no party is obliged to “hand over the weapons” that the other side needs to prove its case. Thus, generally a party relying on certain facts must produce the evidence to support such facts. A party may, however, request that the court order the other party (or, in limited circumstances, a third party) to produce specific documents that are relevant to the outcome of the case. While German courts take different approaches in applying the document production provisions of German law (some are more generous, most are very restrictive), there is no general pretrial discovery procedure. Specifically, a party may not seek documents that are merely likely to yield relevant evidence (no fishing expeditions).

In 2017, the German Parliament adopted the 9th amendment to the German Act against Restraints of Competition (GWB English version available here) to transpose the EU Antitrust Damages Directive 104/2014 into German law bringing major changes regarding the possibility of obtaining disclosure of evidence through court orders in antitrust damages proceedings. Anyone in possession of evidence required to establish a (potential) damages claim – including the defendant – is obliged to disclose such evidence upon request of the claimant. Conversely, anyone in possession of evidence required to defend against a cartel damage claim is also obliged to disclose such evidence. Potential claimants may request disclosure even before initiating an action for damages by separately suing for disclosure. The scope of documents and information that must be disclosed upon request is very wide with only a few exceptions such as leniency statements and settlement submissions. Finally, the requesting party is obliged to reimburse the disclosing party for “reasonable” costs” associated with the disclosure. Similar claims for pretrial disclosure of evidence had been introduced in German IP law before, for example, the Patent Act (PatG; English version available here)). 

Answer contributed by Rüdiger Harms and Patrick Gerardy

30. Please describe the key characteristics of witness evidence in your jurisdiction. Is witness preparation allowed?

Germany

A witness offered for testimony by a party will be summoned by the court to appear in the hearing if the court deems the underlying fact disputed, his or her testimony relevant to the outcome of the case and the witness suitable for testifying to the specific fact. The court has discretion as to whether it swears in a witness or not. There are limited cases defined by statutory law in which a witness may refuse to testify, for example on the grounds of professional confidentiality. There are no pretrial depositions. Also, there are generally no written witness statements. Examination of witnesses is generally led by the court. Courts generally invite a witness to testify by giving his or her own comprehensive rendition of the facts. Parties and their lawyers have the opportunity to ask supplemental questions after the court has finished the questioning. Any such questioning by the opposing party’s counsel does not follow strict rules as known in other, especially common-law jurisdictions, and is neither as extensive nor intense as a common law-style cross-examination.

Witness preparation is uncommon in Germany. While technically not illegal, courts meet witness preparation with increased suspicion and may assign less credibility to prepared witnesses.

Answer contributed by Rüdiger Harms and Patrick Gerardy

31. Who appoints expert witnesses? What is the role of experts?

Germany

Only the opinion of a court-appointed expert counts as expert evidence. Opinions of party-appointed experts are generally only given the weight of party pleadings. Thus, the court generally chooses the expert. The court may invite suggestions by the parties and, in case the parties agree on an expert witness, the court must appoint such person. The court instructs the expert witness and may demand a written expert report. The expert is usually asked to appear before the court for questioning by the court and the parties.

Questions of (domestic) law cannot be the subject of expert testimony.

Answer contributed by Rüdiger Harms and Patrick Gerardy

32. Can parties to proceedings (or a partys directors and officers in the case of a legal person) act as witnesses? Can the court draw negative inferences from a partys failure to testify or act as a witness?

Germany

German law distinguishes between the examination of witnesses and the examination of a party. Technically, a party and certain party directors and officers cannot serve as witnesses. Where no other evidence is available, one party can request the examination of the opposing party (but not its own examination). The examination of a party on its own behalf is only permissible where there is some other piece of evidence for the fact to be proven. Apart from the formal examination of a party, courts generally interview the parties as to their positions at an early stage; any statements made by a party in such context are no formal evidence but may nevertheless be considered in the overall assessment of evidence. In this regard, negative inferences may be drawn.

Answer contributed by Rüdiger Harms and Patrick Gerardy

33. How is foreign law or foreign-language documentation introduced into the proceedings and considered by the courts?

Germany

Although the language of the proceedings is German, parties increasingly submit English language documents as exhibits. The courts may then ask for a translation if necessary. If foreign law is applicable, a German court is obliged to determine the relevant foreign law.

For this purpose a court will typically rely on the parties’ submissions and, when in doubt, appoint a suitable legal expert.

Answer contributed by Rüdiger Harms and Patrick Gerardy

34. What standard of proof applies in civil litigation? Are there different standards for different issues?

Germany

In civil proceedings, German law generally requires full proof. The court must be fully convinced of a fact to be proven, which requires conviction “beyond a reasonable doubt”; this must be backed by objective evidence. Circumstantial evidence may be enough for full proof, if the court is fully convinced. Mere probability or preponderance of the evidence is not enough.

The standard of proof may be different in certain procedural situations either by statute or established in case law. For the purposes of determining the amount of damages, for example, standard of proof is preponderance of the evidence (section 287 ZPO).

Answer contributed by Rüdiger Harms and Patrick Gerardy

Appeals

35. What are the possibilities to appeal a judicial decision? How many levels of appeal are there?

Germany

Claims brought before the local courts may be appealed to the regional courts if the amount in dispute on appeal is more than €600 or the local court grants leave to appeal. A further appeal to the Federal Court of Justice on matters of law is only admissible if it is granted by the regional court.

Decisions of the regional courts are subject to appeal before the higher regional courts (again provided that the amount in dispute on appeal exceeds €600 or leave is granted). Further appeal to the German Federal Court of Justice on matters of law is available, if granted by the higher regional court. In cases involving an amount in dispute on appeal of more than €20,000, a non-admissibility complaint may be lodged with the Federal Court of Justice if the appellate court does not grant the further appeal. If granted, the complaint paths the way for a further appeal on matters of law.

Further appeal on matters of law is only granted on issues of fundamental importance, to further develop the law in general, or to achieve a homogenous application of the law throughout Germany.

Answer contributed by Rüdiger Harms and Patrick Gerardy

36. What aspects of a lower court's decisions will an appeals court review and by what standards?

Germany

Generally, the appeals court reviews issues of law. If it is doubtful that facts were established properly before the court of first instance, those facts will be reviewed and, where necessary, newly found by the appeals court itself, including a taking of evidence if called for. The appeals court will also consider new evidence not yet available to the parties at trial level.

Upon further appeal, the Federal Court of Justice will only review matters of law. This also includes procedural law. To a very limited extent finding of facts by the lower courts may be overturned (ie, to assess procedural errors of law or when ascertaining whether the consideration of evidence by the court suffers from fundamental deficiencies, such as a violation of rules of logic or common sense).

Answer contributed by Rüdiger Harms and Patrick Gerardy

37. How long does it usually take to obtain an appellate decision?

Germany

If an appeal is manifestly unfounded, a decision may be rendered within a few months. The average duration of an appeal proceeding is between nine and 13 months, with regional differences within Germany.  

Answer contributed by Rüdiger Harms and Patrick Gerardy

Special proceedings

38. Are class actions available?

Germany

As a general rule, US-style class actions do not exist in Germany. However, for certain types of damages claims brought by investors based on false, misleading or omitted capital market-related information (eg, provided in securities prospectuses), a model declaratory proceeding is available under the Act on Model Proceedings in Disputes under Capital Markets Law (KapMuG; English version available here). A model proceeding under the Act combines a minimum of 10 “parallel” pending lawsuits into one model proceeding before a higher regional court (Oberlandesgericht). The court decides, with binding effect only among the original plaintiffs, on certain factual and legal issues relevant to the outcome of the original proceedings (which are being stayed in the meantime). Upon conclusion of the model proceeding, it is upon the original plaintiffs to continue pursuing their (monetary) claims individually. Although investors affected by the same conduct may register their claims with a public claims register, such registration only tolls the statute of limitation; a model declaratory decision (or settlement) has no binding effect in subsequent proceedings brought by registered plaintiffs.

In addition, in 2018, in light of the “diesel scandal”, the German legislator adopted a model declaratory proceeding for consumer disputes. Registered consumer organisations may initiate a model proceeding with the goal of determining certain factual and legal issues that will be binding for subsequent individual consumer actions. Interested consumers may opt-in to these “representative actions”. The declaratory determinations made in a model declaratory action may then form a basis for individual actions subsequently brought by involved consumers, and have a binding effect in follow-on proceedings.

In December 2020, the EU enacted Directive 1828/2020 on representative actions for the protection of collective interests of consumers. The EU member states shall implement the directive by 25 December 2022 and shall apply the implementing national legislation as from 25 June 2023. The directive sets forth a mechanism for representative actions brought by “qualified entities” (ie, consumer interests organisations) on behalf of consumers aggrieved by traders’ practices that violate consumer-related provisions of certain fields of EU law (eg, energy and telecommunications, financial services, product liability, data protection, travels, but not competition law). Such actions may seek injunctive relief or redress measures (inter alia, repair, replacement, reimbursement, compensation). It remains to be seen how the German legislator will transpose the directive into German law, and what the interplay with existing relief under the model declaratory action will look like.

Especially in cases of cartel damages claims or mass consumer claims, plaintiffs at times seek to bundle claims of aggrieved persons, such as parties damaged by anticompetitive conduct. In these cases, special purpose vehicles (SPVs) are set up and assigned aggrieved parties’ claims in exchange for a share in the proceeds. Often third-party funders work together with the law firm setting up the SPV, which must also comply with the requirements of the German Legal Services Act (RDG; English version available here).

Answer contributed by Rüdiger Harms and Patrick Gerardy

39. Are derivative actions available?

Germany

There are no specific rules on derivative actions in German law. However, a limited number of corporate derivative actions were established in case law, such as shareholders acting on behalf of the company against other shareholders. In limited circumstances shareholders may also bring certain claims against third parties or the management on behalf of the company.

Answer contributed by Rüdiger Harms and Patrick Gerardy

40. Are fast-track proceedings available?

Germany

An alternative to filing a claim may be an application for a payment order and later for an enforcement order. This proceeding is an expedited automated proceeding to obtain an enforceable title in a short period of time, if it is expected that the opposing party will not defend against the claim. The validity of the claim will be determined by a court only if the defendant objects to it. Upon objection, regular court proceedings commence and the plaintiff has to motivate his claim.

There are also special documentary proceedings where a provisional judgment may be rendered based on documentary evidence only. However, the defendant has the right to initiate subsequent proceedings not limited to documentary evidence. In its final judgment, the court may then amend, modify or affirm the provisional judgment.

Answer contributed by Rüdiger Harms and Patrick Gerardy

41. Is it possible to conduct proceedings in a foreign language?

Germany

In general, proceedings must be conducted in the German language. 

Answer contributed by Rüdiger Harms and Patrick Gerardy

Role of Domestic Courts In Arbitration Matters

42. In which conditions does your domestic arbitration law apply? Does it apply equally to purely domestic and international arbitrations, and to commercial and investor-state arbitrations?

Germany

German arbitration law, contained in the Code of Civil Procedure, applies if the (agreed or designated) seat of arbitration is domestic (ie, in Germany). However, some provisions likewise apply to foreign proceedings, eg, the right to object a state court’s jurisdiction on the basis of a conflicting arbitration agreement as well as the right to request a domestic court to support the arbitration proceeding, including in connection with a taking of evidence. Thus, German arbitration law only distinguishes between domestic and foreign arbitrations. Once the arbitration is deemed domestic based on a German seat (regardless of the nationality or seat of the parties involved), German arbitration law applies. There is no formal distinction between national and international arbitration (unlike in the UNCITRAL Model Law), nor between commercial and investment arbitration.

Answer contributed by Rüdiger Harms and Patrick Gerardy

43. Give an overview of instances in which state courts come into play in domestic and international arbitration proceedings.

Germany

Where the parties have entered into an arbitration agreement, state courts are no longer competent to decide the case on the merits. However, state courts’ supplementary jurisdiction exists in a limited, conclusive number of instances. Supplementary jurisdiction in arbitration matters includes, among others, disputes concerning (i) the appointment of arbitrators and arbitrator challenges; (ii) the arbitral tribunal’s jurisdiction; (iii) interim relief; (iv) supporting measures, in particular with respect to the taking of evidence; and (v) a petition to set aside or declare enforceable an arbitral award. With the exception of supporting measures under item no. (iv), which fall within a local court’s jurisdiction, higher regional courts are competent to decide arbitration matters. Decisions in arbitration matters are final as a general rule; only in disputes under items no. (ii) and (ii) above, an appeal to the Federal Court of Justice is available (albeit subject to strict admissibility requirements).

Answer contributed by Rüdiger Harms and Patrick Gerardy

44. Describe the rules governing recognition and enforcement of arbitral awards in your jurisdiction. To what extent do domestic courts review arbitral awards on the substance?

Germany

Domestic arbitral awards have the effect of final and binding (German) court judgments; they are subject to setting aside upon request by one party and pursuant to certain grounds set forth in the Code of Civil Procedure (including lack of arbitrability of matter; lack of valid arbitration agreement which encompasses the dispute; certain procedural errors; grave procedural errors such as a violation of equal treatment or parties’ right to be heard; and violations of substantive public policy).

Foreign arbitral awards cannot be challenged in German courts, but (like domestic awards) to be enforceable, require a declaration of enforceability by a German court in accordance with the New York Convention (NYC).

The grounds for setting aside a domestic arbitral award and the grounds to refuse recognition and enforcement of a foreign arbitral award in article V NYC are almost entirely identical in substance, including with respect to the public policy defence. German courts do not fully review arbitral awards on the merits. A révision au fond is prohibited in both set aside and enforceability proceedings; a merely “incorrect” award does not warrant setting aside or refusal of recognition or enforcement. However, pursuant to the public policy clause in both the ZPO and the NYC, manifest non-conformity of the award with fundamental notions of (German) procedural and substantive law (public policy) justifies setting aside or refusal of recognition and enforcement. Among such intolerable violations of fundamental rules of law is the inconformity of the award with German or EU competition law (with the extent of court review and the procedural specifics being subject to lively debate).

Answer contributed by Rüdiger Harms and Patrick Gerardy

Effects of judgment and enforcement

45. What legal effects does a judgment have?

Germany

A judgment issued by a German court is usually binding only inter partes. Very limited exceptions may apply in cases of legal succession and in special proceedings, for example, in shareholder actions.

The doctrine of res judicata applies, so an identical lawsuit may not be brought twice. As the legal system is a civil law system, courts are not bound by precedents. This applies to both factual and legal findings.

Third parties may be bound to certain factual and legal findings if they were given proper third-party notice.

Answer contributed by Rüdiger Harms and Patrick Gerardy

46. What are the procedures and options for enforcing a domestic judgment?

Germany

There are a number of procedures for the enforcement of a judgment, depending on the type of judgment and the assets to be seized. Competent authorities may differ depending on the type of enforcement measure.

When enforcing a money judgment, German law differentiates between movable (physical objects and claims or other property rights) and immovable assets (real estate, ships).

Claims are usually attached and transferred to the creditor, while physical objects are sold off in an auction.

Answer contributed by Rüdiger Harms and Patrick Gerardy

47. Under what circumstances will a foreign judgment be enforced in your jurisdiction?

Germany

Judgments rendered in another EU member state are directly enforceable in Germany without any declaration of enforceability being required, article 39 of the Brussels Ia Regulation. They shall be recognised without any special proceeding being required.

Recognition and enforcement may be denied upon complaint in certain instances, for example, if the decision is manifestly contrary to public policy (article 45 et seq of the Brussels Ia Regulation).

Judgments rendered in non-EU states must be declared enforceable first. This is usually done by way of an action for a declaratory judgment by the party relying on the judgment. The foreign judgment must satisfy certain prerequisites listed in section 328 ZPO before a court renders it enforceable. Public-policy conformity belongs to these requirements, similar to the standards applying to recognition of arbitral awards by German courts.

Answer contributed by Rüdiger Harms and Patrick Gerardy

Costs and Funding

48. Will the successful partys costs be borne by the opponent?

Germany

Germany operates under the “loser pays” principle. Costs may be split if both parties lose in part.

Only statutory attorney fees and reasonable expenses will be reimbursed. The statutory fees are tied to the amount in dispute. In large or complex commercial cases, the actual legal fees incurred may be much higher than the statutory fees. The difference is usually not recoverable from the opposing party.

Answer contributed by Rüdiger Harms and Patrick Gerardy

49. May a party apply for legal aid to finance court proceedings? What other options are available for parties who may not be able to afford litigation?

Germany

A court will grant legal aid if a party is in financial need and the claim or defence has a reasonable chance of success. The granting of legal aid in commercial cases, however, is quite uncommon. In addition, legal cost insurance is available and quite common.

Answer contributed by Rüdiger Harms and Patrick Gerardy

50. Are contingency fee arrangements permissible? Are they commonly used?

Germany

Contingency fees are generally prohibited by law. In circumstances where a client would otherwise not be able to pursue or defend a claim for economic reasons, a contingency fee may be agreed. 

Answer contributed by Rüdiger Harms and Patrick Gerardy

51. Is third-party funding allowed in your jurisdiction?

Germany

Apart from certain rules concerning legal protection insurance, there are no specific regulations regarding third-party funding. Third-party-funding companies usually require the financed party to work closely with them. However, they cannot formally take over the litigation. Recently, third-party funding has become prevalent in cases where cartel damage claims of multiple plaintiffs are bundled in SPVs.

Answer contributed by Rüdiger Harms and Patrick Gerardy

52. Are there fee scales lawyers must follow? Are there upper or lower limits for fees charged by lawyers in your jurisdiction?

Germany

The compensation of lawyers in Germany is regulated by the German Lawyer Remuneration Act (RVG). Statutory fees are generally tied to the amount in dispute and certain fee-triggering events or actions. The amount in dispute is capped at €30 million or €100 million depending on the situation. It is quite common in complex litigation proceedings to agree on hourly rates. However, German law requires lawyers to charge statutory fees as a minimum in the case of court proceedings.

Answer contributed by Rüdiger Harms and Patrick Gerardy

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