Translation costs in international litigation can exceed court and lawyer fees

In a legal dispute between an American or British business on the one side and a German business on the other side, the first things lawyers usually look at are jurisdiction, venue and applicable law. The party that finds itself having a “home game”, i.e. the party litigating at their local court, usually feels they have a strategic advantage. And indeed, if a lawsuit takes place in one’s own country and the applicable law is the law one’s own employees, inhouse counsels and go-to litigation lawyers already on retainer are familiar with, this makes matters easier.

However, there is one aspect which is often overlooked when international contracts are drafted. That’s the issue of procedural language, i.e. the simple question: What is the language of the civil court the parties have chosen? This post explains why the procedural language of the competent court is just as important as applicable law and jurisdiction itself.

Court language can be a huge cost factor

Let’s assume I represent a German company which manufactures high tech equipment and exports the same to the USA through a distributor in California. When the contract was negotiated a few years ago, my German client managed to get the US distributor to accept the jurisdiction of German state courts and German law to apply in case of a legal dispute between the parties. Sounds great, right? So, where is the problem for the German plaintiff?

Well, as is very common in US-German (and British-German) business relationships, the contract and all appendices are in English. What’s even more important: all correspondence between the parties, every purchase order, acknowledgement of delivery, memorandum, meeting minutes and pretty much every single email and letter exchanged between the parties are in the English language as well.

This poses a huge practical problem for either party in case they wish to sue the other party, because a German court of law — and this is hardly surprising — accepts only German language documents. The German Courts Consitution Act (Gerichtsverfassungsgesetz, GVG) in section 184 orders in no uncertain terms:

“The language of the court shall be German.”

In theory, the German court is permitted by law to hear foreign language witnesses in their native tongue if, as section 185 (2) of the Court Constitution Act states:

“An interpreter may be dispensed with if all the persons involved have a command of the foreign language.”

But in real life this very rarely happens because one party usually objects, even if just for the reason to annoy the other party and to run up their legal costs.

Certified translations of thousands of pages

And with regard to written documents, section 185 (2) GKG would not be of any help anyway. Therefore, the party that wants to file a complaint or petition must provide to the German civil court all documents relevant for the case both in the original version and as a certified translation. Depending on what the civil lawsuit is based on, this can be hundreds of even thousands of pages. Translation costs in such cases can easily exceed court fees or — in extreme cases — even legal fees.

What makes such lawsuits even more complex and cumbersome: The parties and their legal counsels are not always happy with the translation results. In business litigation, the meaning of a specific term used by a party in the contract, but also in letters, meeting minutes or emails can decide the lawsuit. Thus, the parties sometimes quarrel intensely about the question of whether the German word used by the translator catches the true meaning of the English  word in the original document. This sometimes turns into a lawsuit within the lawsuit and fills the lawyer’s time sheets.

English language witnesses in German courts

A similar problem poses itself with regard to witnesses and experts. If English speaking witnesses must be heard in a German civil court, the standard rule is that an interpreter must be present. The exception I have mentioned above (section 185 GVG) is in most cases only a theoretical option. Such interpreters make the court hearings cumbersome and tedious, not to mention the costs. In most cases, the judge, the parties as well as their lawyers have already perfectly understood what the witness had explained in English. Sometimes, the parties have a better understanding of specific technical terminology than the interpreter does. Still, the translation by the interpreter must be heard out and — what is even more important — this German translation, good or bad, will find its way into the official court records, not what the witness has originally stated in English.

Better alternatives?

Any experienced contract lawyer will bear this practical problem in mind and discuss the isue of procedural language with their client very early on. If, in a business relationship, it is clear from the beginning that all or most correspondence and documentation will be in one language (e.g. English), it hardly makes any sense to stipulate in the contract the jurisdiction of a court that works in another language (e.g. German).

In situations like these, the parties could opt for arbitration and agree on the procedural language creating the least hassle, which in most cases will probably be English. That way, if they want to, the parties are able to combine German substantive law with English language for the arbitration procedure. In many cases a fair compromise.

Of course, the parties can also mutually decide to opt for such English language arbitration after a dispute has already emerged, even if the contract states something else, for example the jurisdiction of German state courts. However, once the parties have started to “go legal”, one side is usually no longer willing to agree to such a change, because they would give up the “home game advantage”. Yet, in certain situations it may be worth asking the other side, especially if both parties plan to make claims and are thus both faced with the identical problem of having to provide tons of certified translations and costly interpreters for English language witnesses.

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For legal advice on German civil procedure and how to successfully litigate in Germany, contact the international litigation experts and trial lawyers of GrafLegal.

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