Checklist: Effective Defense against a Civil Action in Germany

In this post, we explain how to best react and defend your case when you find yourself at the receiving end of a German civil lawsuit. More specifically, how to avoid making major blunders right at the early stages of German civil proceedings.

Rule 1: Do not ignore letters from a German civil court

This piece of advice appears obvious but, in our experience, it nevertheless happens quite often: Many clients tend to either fully ignore such legal correspondence or to at least delay dealing with the matter until important procedural deadlines have already expired. Such deadlines, for example for the submission of a formal reply and for the application to dismiss the case, are set by the German civil court in the very first court order. These initial deadlines set by the German court are so called „Notfristen“ which means that they cannot be extended and you can not be reinstated if you miss to adhere to them.

Thus, whatever you will eventually decide to do about the lawsuit, you must first ensure that you fully understand what the letter from the court (or from the opponent’s lawyer) says and what the relevant time limits are. Such initial letters from a German civil court typically inform you about the fact that you have been sued in Germany and for what. They usually also contain either a specific calendar date or a period of time (e.g. two weeks from the date of service of the letter) within which you need to respond to the court.

At this stage of the proceedings you should:

(i) retain and keep safe the envelope, the process server receipt and/or any other accompanying document served to you in order to be able to prove on exactly what day you have been served with the German court papers; if the date of service is not stated anywhere on the paperwork, then you should make sure you have a witness who can confirm the date of service; and

(ii) check whether you were properly served, especially whether you have been provided with an English translation of the German court papers. If such an official translation is not enclosed in the bundle you may be entitled to refuse acceptance of these documents, i.e. object to the service of the plaintiff’s statement of claim. For more information about how German legal documents and court orders are being served abroad, see section 183 et seqq. German Civil Procedure Rules (Zivilprozessordnung). The requirements for the service of court papers between member states of the European Union are set down in EU-Regulation No 1393/2007. For service of German legal documents in the USA please see the Hague Service Conventions (1965). Practical tips for the service of German court documents to a party resident in the USA are given in the leaflet published by the German Federal Office of Justice, section United States of America (click on PDF download).

The first response to the German court does not have to be — and in most cases should not be — a substantive response (in German „Klageerwiderung“). Instead, it should only be the formal notification by the defendant (Beklagter) to the German civil court, that the defendant does not acknowledge the claim and intends to defend himself against the same. This is called a „Verteidigungsanzeige“ (notice of defense). This letter to the German court should explicitly state that by submitting this Verteidigungsanzeige you do not necessarily accept that the German court has jurisdiction and that German substantive laws do apply. Instead, you should expressly reserve the right to challenge the (international or local) jurisdiction of the German civil court as well as the matter of applicable laws.

Unless the action is brought before a German Amtsgericht (circuit court) or an Arbeitsgericht (labour court), you need to hire a German lawyer to submit the defense statement, because only a lawyer admitted to the German bar has the right of audience in the higher German civil courts (the German technical term for the requirement to be represented by professional legal counsel is „Postulationsfähigkeit“). If you write to the German court yourself, you run a high risk of your letters being entirely ignored, i.e. not even being answered. If you are lucky, the German court will inform you once again that you must be represented by a German legal counsel. If, however, the German judge is in a bad mood, he or she may issue a default judgment (Versäumnisurteil) against you right away.

Make sure that the German lawyer you hire is fluent in English to avoid the need for translations of internal correspondence. Also, you should discuss with your German lawyer what is the best timing for informing the German court that you are now officially represented by a German legal counsel. You might not want to do this too early, especially not before you have been served by the statement of claim. This is because from the moment you are being represented by a German legal counsel, the plaintiff can serve documents to that legal counsel within Germany. Also, from that moment on, the plaintiff  may no longer be obligated to provide translations of documents into English. Instead, you will have to get those German documents translated yourself (the costs generated by this can of course be claimed later on if you win the case). In short: once you have a German trial lawyer, life becomes easier for your German opponent.

Rule 2: Discuss strategy with your German lawyer early on

Once your German legal counsel has assessed the merits of the civil case against you, make sure you discuss legal strategy for the entire civil lawsuit early on. International cases are often much more complicated and tedious for both parties. Thus, the plaintiff may be relieved to get a settlement offer to resolve the dispute quickly. Especially, if the lawsuit would trigger high costs if the case went to the oral hearing stage, e.g. for interpreters and/or for flying in witnesses from abroad.

On the other hand, making a very early settlement offer can be interpreted by the German plaintiff as a sign of fear and weakness on your part. Thus, the best approach to counter a civil claim in Germany is a dual strategy:

(i) Dispute everything that can be credibly disputed and demonstrate to the other party what will happen if the civil lawsuit drags on, e.g.

• argue jurisdiction and applicable law, which in itself can take months;
• announce that you will summon witnesses and experts from abroad, which will trigger huge travel costs;
• threaten to countersue (the German technical term for a civil counterclaims is Widerklage, see s. 33 German Civil Procedure Rules);
• be difficult on every level, i.e. apply for extensions, object to the quality of translations that have been made by the opponent etc.;

(ii) while at the same time you suggest to the opponent to enter into settlement discussions. Coming from such a position of strength, settlement negotiations have a much better chance of yielding satisfactory results.

In most cases it’s best to have the respective lawyers discuss the settlement options off the record first (or “without prejudice” as our British colleagues like to say).

Rule 3: If an early settlement fails, prepare a very detailed substantive statement of defense (Klageerwiderung)

In a German civil lawsuit, the oral hearing itself is not as important as it is in the U.S.A. Since there exists no jury in a German civil court, there is no one to impress with brilliant oral pleadings or cross examinations (those also do not exist in a German court of law). Instead, the judge or a panel of judges is/are the sole audience. And, from having read the case file, these professional judges — in most cases — have pretty much made up their minds about what the relevant issues are and where the lawsuit is heading.

Unless the German civil case decisively depends on what witnesses will testify in court, a typical oral hearing in a German High Court lasts no longer than 30 minutes. Thus, the pre-oral hearing briefs to the court are of utmost importance. This is where you need to score your points and convince the German court of the merits of your case. If a German lawyer tells you that a short sloppy „shoot from the hip“ statement to the court is sufficient because you can always send a follow up statement later, that may technically be true in many cases. German courts are indeed somewhat lax and accept a party to submit a large number of writs. However, such an approach disregards the psychological aspect that a judge is influenced also by the quality of the written statement as such, i. e. by the style of the presentation, structure of the legal argument brought forward etc. German judges, as do judges everywhere, love easy to understand briefs. But they hate poorly thought through writs which give only bits and pieces of information, are incomplete or — the opposite — full of redundant repetitions or which only refer to annexes.

In international civil lawsuits, the issue of how to deal with the translation and interpretation of non-German language documents and witness statements is especially important. In German-American civil lawsuits there usually exist hundreds or thousands of pages (emails, agreements, letters, witness statements etc.) which are in English. Since the court language, obviously, is German (s. 184 German Courts Constitution Act), these documents need to be translated into German by a certified and officially sworn in translator (the German title is „bestellter und vereidigter Übersetzer“).

Although any relevant document must therefore be submitted as an exhibit, my recommendation is to still cite relevant parts of such documents directly in the lawyer’s statement itself, i.e. do not just refer to the exhibits with the translations. You should cite these passages in the original English language version first and then give a direct verbatim translation. As an American client you should make sure that your German trial lawyer provides a correct verbatim German translation to the court. This sometimes is even a good chance to give an English term the ideal “spin” with regard to that term’s meaning in German. Do not just leave translation issues esclusively to a professional translator. And always check the translation provided by the official translator before you submit the exhibit to the court to avoid the official translator having used a certain word which gives the translation of a relevant legal term an adverse connotation. It does, for example, make a huge difference whether the English legal term „guarantee“ is translated into German as „Garantie“ or as „Zusicherung“.

Rule 4: Drag the case on, wear the opponent out and try to settle again late stage

As mentioned before, German courts are comparatively lax and much more open to any party’s requests to extend deadlines, postpone hearings, summon additional witnesses or experts etc. If you are a defendant resident in the United States, you can and should use this rather permissive nature of most German judges to drag on the proceedings, for example by naming a U.S. resident witness who can only travel to Germany in a few months time. The German court will usually comply with such a request by the defendant’s legal counsel because the defendant may otherwise try to base an appeal on the court’s refusal to summon a witness.

Plaintiff wants to get the lawsuit over with. They hate it when nothing moves forward for months. Therefore, at a late stage of proceedings, they may be more open to (new) settlement negotiations, in order to just bring the proceedings to an end. Thus, even if the chances of winning the case do not look too good for you as the U.S. defendant, you may still be able to settle on better terms than the outcome of a German final judgement would be. The plaintiff will often agree to a significant reduction of the claim if you use the following (or additional) bargaining chips:

(i) Threaten with a late state countersuit (Widerklage, see above);

(ii) Threaten with appeal proceedings (in German called Berufung). Such appeal may take another 1-3 years during which the German plaintiff can’t enforce anything against the defendant because the judgment is not final yet. If, however, the parties settle, such settlement order is immediately enforceable, which is a huge advantage for the plaintiff;

(iii) Offer immediate payment in case of a settlement: This may also be a great incentive for the German plaintiff to agree to a settlement, because the German plaintiff must always be concerned about whether the German judgment can actually be enforcement in the USA and at what cost. Actually, enforcing German court judgments in the USA can be tedious and sometimes outright impossible. Therefore, the German plaintiff may well be willing to shave of a large percentage of the claim if the plaintiff can be certain that he receives at least the amount the parties have settled on right away.