The Process and Main Stages of Civil Litigation in Germany

Filing a Civil Complaint

In order to initiate a civil lawsuit (Zivilprozess) in Germany, the plaintiff (Kläger) files a complaint with the competent German court (see here). This complaint is called “Klage” or “Klageschrift”, which means “statement of claim”.

After due registration by the court and a very preliminary compliance check with regards to the formal requirements set out by the German Civil Procedure Rules, the complaint is then served to the defendant. In most cases, the court itself takes care of the service procedure, but only after the claimant has either paid the court fees (Gerichtskosten) or has been granted legal aid by the court, which requires the claimant to demonstrate reasonable chances of success.

Personal service of civil litigation documents is normally not required in Germany and – as long as there is a valid address of the defendant within Germany — the claimant does not have to bother with any matters of service at all (for details see here).

In addition to the Klageschrift (complaint) itself, the court will serve to the defendant a letter setting a deadline for the defendant to inform the court whether they wish to dispute the claim. This deadline is usually 2 weeks if the defendant is resident in Germany but can be significantly longer if the defendant resides outside Germany. The court documents will contain detailed explanatory notes on the rights and obligations of the defendant. If the defendant misses this deadline, the German court will issue a default judgment (Veräumnisurteil), which is explained here.

In the Klageschrift (civil complaint), the plaintiff or their lawyer first explain why this specific German court has jurisdiction (Zuständigkeit) and demonstrate that all other formal requirements are satisfied, for example that the plaintiff is duly represented by a German licensed lawyer which is required on the High Court level and up (Postulationsfähigkeit), that the case is not already pending elsewhere (anderweitige Rechtshängigkeit), and that the lawsuit is not frivolous (Rechtsschutzbedürfnis). This part of the complaint is called “Zulässigkeit der Klage” (admissibility of the complaint).

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What is an “Unterlassungsklage”?

If you start a business in Germany, it is hard to avoid being taken to court by a competitor who files a German cease and desist order lawsuit against you in order to tell you what you are allowed to do and what you are not. Why so?

Germans have a lot of rules. An old saying is “Alles muss seine Ordnung haben” which means “everything must be in order”. But what good are rules if no one bothers to obey them?

Unlike the Italians and the Greek, who – at least on paper – also have a lot of laws and regulations, which – however – in everyday life no one seems to care about, Germans cannot bear if someone continuously does not play by the rules. There is the cliché of the German pedestrian waiting for the traffic light to turn green at 3 a.m. in the morning with no car in sight.

Getting sued in Germany is a matter of weeks!

That is why an extremely popular litigation tool under German law is the “Unterlassungsklage”, the German version of a cease and desist order application. This is used in all areas of German life, business and private. A neighbor repeatedly parks his car in your driveway? File a cease and desist order to prevent that from happening again. Someone sends you unwanted advertising emails? File a cease and desist order. A business competitor does not comply with German trade regulations on his web shop? File a cease … Well, you get the picture.

Sounds funny, but this can be a serious obstacle for non-German businesses starting up in Germany. We have had cases where a British or US business was confronted with 50+ cease and desist lawsuits by German competitors within the first month of trying to do business in Germany. For more on the German tradition of stress testing any newcomers see this post: Harsh Unfair Competition Rules in Germany

More information on litigation and legal fees in Germany is available in these posts:

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


Copyright & Disclaimer All posts are copyrighted material. This blog is made available by Graf & Partners for educational purposes as well as to give you general information on German law, not to provide specific legal advice. Simply reading this blog does, of course, not result in any attorney client relationship between you and Graf & Partners. The blog should not be used as a substitute for competent legal advice provided by a licensed professional attorney in a specific legal matter.

 


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Get the best of both worlds: a professional German judge in a non-public civil proceeding

Parties to civil litigation often fear the public nature of a lawsuit, be it in the USA or in Germany. This is especially true for commercial and corporate cases as well as any litigation involving celebrities. The parties do not want their competitors and the public to learn about confidential business matters or — in case of celebrities — their private lives.

Therefore, many businesses and high profile individuals use arbitration clauses in their contracts to avoid ending up in a court room ful of reporters. However, arbitration is usually significantly more expensive compared to a “normal” German court case, because the arbitrators are high profile lawyers from big law firms who charge hourly rates north of EUR 500 easily. This is particularly trie in Germany where the statutory court fees are comparatively low (see here).

Furthermore, picking the right arbitrator(s) is difficult and time consuming. The parties need to agree on a competent lawyer who is available in the near future and who’s law office does not have a conflict of interest.

Mediation / Arbitration at German High Courts

In many cases, the ideal solution to this may be to opt for a German “Güterichterverfahren“, an open mediation / arbitration proceeding which takes place before a German high court judge (Güterichter) and to which the basic principles of the German civil procedure rules do apply. However, such a Güteverfahren is entirely confidential and the parties are free to define the scope of the dispute, i.e. they can include additional matters to achieve an overall solution. The German mediation / arbitration hearings in the Güterichterverfahren usually take place at the German court house but behind closed doors. There are official hearing minutes (Protokoll) but they are only available to the parties, not to the public.

What are the advantages of German high court arbitration?

German civil law judges actively encourage the parties to a legal dispute to consider such a court arbitration proceeding, even if a “normal” civil lawsuit has already been filed, see section 278 para. 5 German Civil Procedure Code. The advantages of this German high court arbitration are:

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Here’s why you can’t find any Process Servers in Germany

So you are a US, Canadian or British lawyer who needs to serve court papers to a party who is resident in Germany? Since you read this post, you have probably already realized that googling “Process Server Germany” does not get you anywhere. The simple explanation for why you are having such a hard time to find decent German process service providers on the internet: There aren’t any.

Germany has no tradition of instructing private process servers. No German lawyer would use them to deliver domestic legal documents to anyone who is resident in Germany. Because, under German civil procedure rules, they would simply see no need for it.

This post explains why the process server business sector never caught on in Germany and what German lawyers do in order to prove delivery of their legal papers.

Then how do German Lawyers serve Legal Documents?

Firstly, in German civil litigation, the German civil court usually serves the documents to the respective parties, witnesses and experts. This does not only refer to the court orders, but to all correspondence between the court and parties. While direct service from one party to the other is possible under german civil procedure rules, this is the exception to the rule. Since everyone who lives in Germany must be officially registered with the resident’s registration office (Einwohnermeldeamt), everyone — at least in theory — has an official registered private address and can be served with documents by simply sending those documents to said address.

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Avoid the #1 Litigation Blunder: Incomplete or incorrectly spelled Company Names of German Defendants

In corporate litigation, there can be no “close enough” approach when it comes to the designation of the Plaintiff or Defendant. A litigation lawyer who sues a German company must be dead-on with all factual information about the parties. The name of each company, corporation or partnership involved in the German civil procedure must be absolutely precise, complete and up to date.

Otherwise, under German civil procedure rules, you may lose the lawsuit. Simply because you have sued the wrong defendant. The German civil procedure buzzwords for this problem are “falscher Beklagter” and “fehlende Passivlegitimation”.

Even if the (incorrectly designated) defendant remains entirely passive throughout the German civil lawsuit, i.e. the Defendant does not object to anything and your client is thus awarded a German default judgment (Versäumnisurteil), the client’s joy about the German court judgment will most likely be short-lived, since chances are that the client will soon learn that the judgment is unenforceable.

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Checklist for (uncontested or contested) Divorce Proceedings in Germany

The German statutes dealing with the divorce of a marriage and the substantive requirements for the same are s. 1564 to 1568 German Civil Code (Bürgerliches Gesetzbuch, BGB). The specific civil procedure rules applicable to divorce cases in Germany are contained within s. 133 FamFG (German Code on Family Matters) which also refers to certain sections of the German Code of Civil Procedure.

Different sets of procedural rules apply to the various aspects of a German divorce (e.g. rules for the divorce itself, for maintenance, property separation, pension redistribution, child custody etc.). This makes it somewhat tricky to identify the correct set of rules, even for German lawyers if they are not experts in family law matters. In case you think we make German divorce procedure rules sound overly complicated, here is a typical Family Procedure statute. Check it out for yourself:

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How to get Equitable Relief (Equitable Remedy) under German Law

Equitable relief, also known as equitable remedies, is a legal concept which was historically developed by the old English courts. Thus, the terms equitable relief and equitable remedy are only being used by lawyers in common law jurisdictions where such judicial remedies are still available today.

In practice, seeking equitable relief means that a Plaintiff asks the court to award a non-monetary judgment against a Defendant. For example, an order requiring the Defendant to do something, i.e. to perform a specific act (thus the legal term “specific performance”); or an order requiring the defendant to refrain from doing something (this is typically called an “injunction”, in German “Unterlassung”).

Contracts drafted by lawyers in common law jurisdictions contain Equitable Remedy Clauses as standard boilerplate clauses. Lawyers from non-common law jurisdictions (like Germany, France or Spain), usually do not really understand what to make of these terms, especially since the expression “equitable” is not self explanatory. Still, German business executives sign contracts and CDAs which contain such equitable remedy clauses all the time, often without having a real clue what this would mean in case of a legal dispute.

The situation becomes especially confusing if a German lawyer uses an English language contract template (which is based on English or US law and thus contains such equitable relief clauses) and then simply modifies the template by making the contract subject to German laws and giving German courts exclusive jurisdiction. This happens all the time in German-British or German-US business relationships. Sometimes applicable law and jurisdiction clauses are changed at the last minute when the parties want to close the deal and the executives think it a good idea to agree on German, Austrian or Swiss law as a “compromise”. In all these German speaking countries, no lawyer or judge will know what equitable relief is. What will happen in an international legal dispute, if the business partners must go to a German (or Austrian or Swiss) court of law and find such an equitable remedy clause in the relevant agreements?

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The System of German Civil Law

German law is a traditional civil law system based on Roman law principles (more precisely on the eastern roman emperor Justinian’s Code) and also heavily influenced by the Napoleonic Code. In modern times, obviously, European Union law has modified German civil law, especially in the areas of contract law, business law and consumer rights. In contrast to the common law systems of Anglo-American jurisdictions, the German law system is based on a comprehensive compendium of statutes, i.e. thousands of laws (Gesetze) and regulations (Verordnungen). We explain the German statutes most relevant for German civil litigation in this post.

German Judicial System

While, strictly speaking, German judges are not bound by the judgments of other courts (precedent), not even by the rulings of the Bundesgerichtshof (BGH), i.e. Germany’s Federal Court of Justice, the judgements by the German higher courts  (Oberlandesgerichte and BGH) are usually being followed by German judges in the lower courts. Thus, where the facts of a case are similar to a case which was already decided by an Oberlandesgericht or even the Bundesgerichtshof, a court will usually not depart from the view of the OLG or BGH. This chart shows how the German civil courts are structured and how many judges hear a German civil lawsuit:

 

More information on litigation and legal fees in Germany is available in these posts:

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


Copyright & Disclaimer All posts are copyrighted material. This blog is made available by Graf & Partners for educational purposes as well as to give you general information on German law, not to provide specific legal advice. Simply reading this blog does, of course, not result in any attorney client relationship between you and Graf & Partners. The blog should not be used as a substitute for competent legal advice provided by a licensed professional attorney in a specific legal matter.


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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:

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Workshop on German Civil Procedure for U.S. Litigation Lawyers

Know and effectively use the tools of German Civil Procedure

Due to Brexit, many international businesses shift their focus from Britain to Germany when it comes to contract drafting in general and jurisdiction clauses in particular (see brochure “Contracts in Continental Law“). Why? As long as Britain was still a member of the EU, many German, Austrian and other continental European CEO’s were willing to accept English law as well as the jurisdiction of English courts. This was often a compromise reached in the negotiations between the contract lawyers of the U.S. and the German parties.

Those days are over. After Brexit, European Union law does no longer apply in Britain, which makes it pretty much unacceptable for the German (Austrian, French etc) side to accept English law as the governing law for the business relationship.  Instead, the contract lawyers of businesses located in continental European countries insist more and more on their domestic substantive and procedural laws to apply. Therefore, United States law firms that work internationally will be increasingly confronted with cross-border civil and commercial litigation cases that take place in Germany or Austria.

Bootcamp for practicing U.S. attorneys and in-house lawyers

Our 2 day seminar “How to litigate in Germany” introduces United States trial lawyers to the very different world of German civil procedure. The focus is on making non-German litigators aware of the many differences compared to a U.S. civil lawsuit, thus enabling them to effectively collaborate with the German trial lawyers in an international U.S.-German civil case.

Experienced German litigator Bernhard Schmeilzl cuts right to the chase: No boring lectures on theoretical isues, but hands-on practical advice on how to win civil lawsuits in Germany. Including some tips and tricks on how to unnerve your adversary by “being American on purpose”, for example by naturally applying certain U.S. procedural tools and tactics which, normally, are not used in a German lawsuit (written witness statements or even video depositions). If smartly used, such an approach can somewhat unhinge the opponent.

Who is the workshop for?

United States lawyers who wish to advise their U.S. clients with business ties to Europe on the basics of how to litigate in Germany (and Austria). U.S. law firms that provide legal advice to German business clients in order to understand their German client’s expectations with regard to litigation and arbitration. United States lawyers who are dealing with international litigation and who strive to better understand the tactics and  strategies in a German civil case. American legal scholars with an interest in the practical side of German civil litigation.

What does the workshop cover?

The key topics we explain and discuss in our German civil procedure workshops for United States litigators are:

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How to litigate a personal injury claim under German civil law

The general legal requirements to successfully sue someone in Germany based on tort are set out in title 27 of the German Civil Code, sections 823 et seqq. But don’t get your hopes up too high! In comparison to the USA and Britain, German courts usually award significantly less money when it comes to damage claims. The amount of compensation for pain and suffering (Schmerzensgeld) which is granted by German civil courts in personal injury cases is ridiculously low in the eyes of a U.S. litigation lawyer. A severed thumb, for example, “gets you” roughly $5,000 to $10,000.

The concept of punitive or exemplary damages is entirely unknown in Germany. Class actions, which U.S. lawyers take for granted to be available in cases like the German diesel scandal, are also not available under the German civil procedure rules. And don’t let anyone tell you something else: The new German litigation tool “Musterfeststellungsklage“, which was introduced in 2018 and which is sometimes — misleadingly — referred to as “German class action” (Sammelklage), is something entirely different and must not be confused with a U.S. style class action. The German Musterfeststellungsklage is only available in very limited circumstances and the plaintiff can only be a consumer protection organisation (Verbraucherschutzorganisation). And even if the consumer protection organisation is successful with the Musterfeststellungsklage, each individual claimant must still go to court to have the concrete damages of their individual cases assessed by the local court. The Musterfeststellungsklage ist only the first step, the actual value of the claim is determined in a second, ancillary law suit. All this makes the German “class action” a rather frustrating instrument.

Back to normal tort cases in German civil courts: We have explained some specific aspects of German personal injury and tort claims on our civil law blog Cross Channel Lawyers (enter “tort”). This current post now demonstrates the general legal test (Prüfungsschema) which a German litigation lawyer or a German judge uses to assess the merits of a tort case.

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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?

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Under German Succession Law, close Relatives can always claim a Share in the Estate, even if they were explicitly disinherited

For American and British estate and probate lawyers, German inheritance laws (Erbrecht), i.e. the statutory rules of succession and probate as laid out in the 5th Book of the German Civil Code, are full of surprises. Pleasant or unpleasant, as the case may be.

One of the more unpleasant examples is the fact that under German succession law, an heir can become fully liable for all of the deceased’s debts. This unfortunate result occurs automatically, i.e. by statutory German law, if he or she does not formally renounce the inheritance within a certain deadline (for details see the post: Indebted German Estate: How to avoid inheriting your German Relatives’ Debts).

This post, however, deals with happier news, at least from the perspective of the respective beneficiaries. Testators, who do not wish to leave their wealth to their offspring, their spouse or their parents, are less amused by the restrictions imposed on them by German inheritance law.

German children always inherit. Even if they were disinherited!

German succession law grants a statutory, indefeasible compulsory share (Pflichtteil) in the deceased’s estate to certain close relatives of the deceased. This means they are entitled to a portion of the estate, even if they have been explicitly cut out of the testator’s last will and testament.

Relatives who are entitled to claim this “German forced share” are:

  • the descendants (children, grandchildren etc);
  • the surviving spouse; and
  • the parents of the deceased, but only if the testator leaves no surviving children.

This compulsory share, which is similar to an elective share of a spouse in certain US states, is regulated in section 2303 German Civil Code:

Person entitled to a compulsory share of the estate; amount of the share

(1) If a descendant of the testator is excluded by disposition mortis causa from succession, he may demand his compulsory share from the heir. The compulsory share is one-half of the value of the share of the inheritance on intestacy.

(2) The parents and spouse of the testator have the same right if they have been excluded from succession by disposition mortis causa. The provision of section 1371 remains unaffected.

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Threatening someone to press criminal charges in Germany: Smart strategy or criminal offense?

Does German law permit claimants (or their lawyers) to threaten a debtor with pressing criminal charges against the debtor in case he or she refuses to pay a civil claim? Will a German lawyer have to face disciplinary sanctions when putting undue pressure on the opponent or their legal counsel?

All of this depends entirely on the circumstances of the case and the nature of the threat which is being used. This post explains if and to what extent the parties to a civil dispute in Germany are permitted to threaten each other with initiating criminal prosecution (Strafverfolgung) if the other side does not acknowledge the civil claim in dispute.

Legitimate use of pressure or criminal behaviour?

If you have a civil claim against someone, let’s say a contractual payment claim against a trustee, and you are convinced that your claim can also be based on tort, e.g. embezzlement or fraud, then it is perfectly legitimate under German law to threaten the debtor with a statement like:

“Unless you make full payment until the end of the week, I will not only sue you in civil court but will also press criminal charges against you for embezzlement.”

Under German law, in the above circumstances, a threat to press criminal charges constitutes neither coercion (Nötigung, see section 240 German Criminal Code) nor extortion / blackmailing (Erpressung, section 253 German Criminal Code) because there is a direct link between the actual claim and the criminal charges. The German criminal courts call this requirement of a direct connection “innerer Zusammenhang”.

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German Civil Court Case Files are not Public Records

U.S. lawyers do naturally assume that court files are public records and can be easily accessed and inspected by the public. Not so in Germany! As with, for instance, land registry information (see here), Germany is rather secretive when it comes to legal documents. Under German law, there is no general right to access court records in order to inspect and to copy the same. Instead, the written elements of a German civil lawsuit (lawyer’s statements, witness statements, expert opinions etc.) are considered to be a private and confidential matter, what is called “vertraulich” in German.

Are German court hearings open to the public?

Pursuant to section 169 German Courts Constitution Act, the court hearings themselves are in principle open to the public, except for family law cases, non-contentious probate proceedings and other sensitive matters. Audio and television recordings or transmissions during court hearings are, however, strictly prohibited in Germany. When you see TV coverage relating to a German trial (be it a civil trial or a criminal court), the footage you may see on TV is made before the judge opens the proceedings. Once the German court is in session, no recordings must be made and no pictures must be taken.

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