Get Your Free Copy of Our Civil Litigation Brochure
Practical Information from Court Savy German Litigators
In the brand new brochure “A Short Guide to Civil & Commercial Litigation in Germany”, I explain the basics of commercial litigation under German Civil Procedure Rules: How to prepare, which court to approach, whether to try to negotiate a settlement and – if so – when. How to adapt to the very different German civil procedure rules with regard to evidence. And finally, what to do and – more importantly – what not to do in a German courtroom.
After 20 years of experience in international litigation, working mainly for British and American clients, I am well aware of the typical misconceptions held by UK and US business owners and their lawyers. These misconceptions result in poor litigation strategy and – eventually – lost cases in German courts of law.
Avoid the trap of preparing your lawsuit as you would in the UK or USA when – in fact – you will face a German judge who has entirely different expectations.
The brochure is a must read for anyone involved in German civil litigation
Make sure you get your free copy by dropping us an email to info@graflegal.com
Check the National Register of German Attorneys at Law
The official professional title of a German lawyer is Rechtsanwalt (male) oder Rechtsanwältin (female). Only fully qualified German lawyers who have passed both legal exams are entitled to refer to themselves as “Rechtsanwalt” or – in short – “Anwalt”. The use of the word “Anwalt” in Germany corresponds with the use of “counsellor” in the USA.
The German legal profession is not divided into two classes of lawyers (solicitors and barristers). Instead, as in the USA, a German counsellor is permitted to appear and represent clients in court. Unlike in the USA, the right to practice law in Germany is not restricted to a certain German state (Bundesland) or region. Instead, while they take their bar exam in a certain state and are members of a local bar association, all German lawyers are admitted to all courts throughout the country. Thus, a Bavarian litigation lawyer from Munich may, for instance, appear in a Berlin court, without any need for prior registration or getting the licence registered in that state.
The only exception is the Bundesgerichtshof (German Supreme Court), where only specially accredited German lawyers have the right of audience in civil matters. Those lawyers are referred to as Rechtsanwälte am Bundesgerichts (for a list of these lawyers see here).
If you need to hire a German lawyer and you are uncertain whether the lawyer you have found on the web is actually admitted to practice law in Germany, there is a very easy way to check and verify the name and professional address of said lawyer online. Simply visit the official register of German lawyers on the website of German Bar Association (Bundesrechtsanwaltkammer). The same is true in case you are being contacted by an alleged German lawyer and something appears fishy. Simply go on the official register and contact the address given there to verify.
For legal advice on German civil procedure and how to successfully litigate in Germany, contact the international litigation experts and trial lawyers of GrafLegal and visit our YouTube channel
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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Why are German Wills often successfully challenged and voided?
As in most jurisdictions, a German Last Will can be challenged if the testator, at the time of making the Will,
(i) lacked mental capacity (in German: if he or she was “testierunfähig”); or
(ii) was under undue influence, e.g. pressured or threatened (“bedroht”); or
(iii) was under some false impression (“im Irrtum”), i.e. erred about certain circumstances.
These are the most commonly known standard legal reasons based on which a Will can be made void. German inheritance law, however, has a few surprises to offer.
More legal grounds for challenging Wills under German Succession Laws
Under German inheritance law, there are additional grounds for challenging a will which are unknown to most Common Law systems. These are the so called “Anfechtungen wegen Übergehung eines Pflichtteilsberechtigten”, section 2079 German Civil Code (Bürgerliches Gesetzbuch).
These rights to challenge and make void an otherwise perfectly fine German will often surprise and take aback even German beneficiaries and their lawyers. The idea behind these statutes is to protect the interests of the surviving spouse and of children if the Will has been set up at a time when the testator was not yet married to said spouse or the (additional) child has not been born. In these circumstances, if the testator does not amend, i.e. update, his or her “old” will, the spouse or child not mentioned therein can make this will void by appealing to the German probate court (Nachlassgericht), which must be done within certain deadlines.
The details on how to formally challenge a Will in Germany are explained in this blog here. and in the post “Contentious Probate in Germany”
More on litigation and legal costs in Germany:
- Making a Court Claim for Money in Germany: It’s actually quite easy
- Standard of Proof in German Civil Litigation
- German Litigation Experts explain Civil Procedure Rules
- How expensive is a German Lawsuit?
- Expert Reports on German Law
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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Corona forces German courts into de facto lockdown for 2020
If you want to end a German legal dispute in the foreseeable future – settle!
If you have beef with a German business partner, do not count on any help from German civil or business courts during spring and summer 2020. While German civil courts are officially still open and working, oral hearings (mündliche Verhandlungen) are being postponed, stayed or outright cancelled.
In theory, pursuant to sec. 128a German Civil Procedure Rules (link to the English translation of the statute available here) German court hearings (mündliche Verhandlung) can be conducted via video conference (skype, zoom etc), but most German judges are sceptical and unfamiliar with these options. Pre Corona, this was simply not necessary and virtually no German civil or business court judge has felt a need to consider an online video conference hearing.
Without such oral hearings, the court cannot decide the case, unless the parties agree on settlement terms which will then be confirmed and sealed by the court.
Corona forces parties to settle unless they are prepared to wait 6-9 months
Therefore: Try hard to settle any legal disputes as soon as possible! Even after the factual lockdown has ended (whenever that may be), it will take the German civil and business courts many months to get a grip on their backlog of cases.
Another important aspect to consider: Due to the unavoidable recession in Germany and around the world, in Summer and Fall of 2020 many German defendants will be bankrupt.
Thus, even if you eventually win the case, it will not do you (or your client) any good because chances are you (your client) will not be able to enforce the claim against the (bankrupt) German defendant anymore. So, settle the dispute, cut your losses and run!
More information on litigation and legal fees in Germany is available in these posts:
- Making a Court Claim for Money in Germany: It’s actually quite easy
- Standard of Proof in German Civil Litigation
- German Litigation Experts explain Civil Procedure Rules
- A German Claimant can’t be his own Witness
- Compensation for a wrecked Car under the German Law of Torts
- Does German Law of Torts know the Egg Shell Skull Rule?
- How expensive is a German Lawsuit?
- Expert Reports on German Law
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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Lawyer Video on Probate in Europe
Our special interest blog www.internationalprobatelaw.com deals with the matter of how to administer German-American estates, how to obtain probate in Europe (especially Germany, Austria and England), the overseas succession laws and estate taxes (death taxes) in Europe.
Contentious Probate Proceedings in Germany (Erbscheinverfahren)
Normally, German probate cases are dealt with the local surrogate court (Amtsgericht). They issue the German grant of probate (also referred to as letter of succession or letter of administration) in a quite straight forward proceeding. Compared to the USA, German probate courts are not involved in the administration of the German estate. Once, the court has issued the grant, the judge’s job is done. For more on non-contentious probate in Germany see the post “How to challenge a will in Germany” as well as various articles about this topic on Cross Channel Lawyers.
In the unfortunate case that someone challenges a will in an international probate case (contentious probate), matters become much more complicated and expensive.
This Video deals with the 24 most frequently asked Questions on Overseas Probate
The overseas probate law experts at Graf Legal assist with international estate matters between the USA and Europe since 2003. In our experience, these are the questions most American clients run into when they are faced with an international inheritance case. German lawyer Bernhard Schmeilzl answers them in the video below. The list of questions contains the respective start time for each question so you can jump right to the specific topic you are interested in:
1) What is an “Erbschein”? (00:11)
2) Is the process for hiring a German lawyer different from hiring a lawyer in the States? (00:57)
3) How much does it cost to hire a European Lawyer? (02:06)
4) My deceased relative owned property in Europe. Do I need a separate grant of probate for those assets? (03:04)
5) How does German or English probate differ from American probate? (04:01)
6) Can I be personally held liable for the debts of an international estate? (04:47)
7) What documents do I need to submit to the German and English probate courts to have access to he estate? (05:47)
8) How long does the international probate process take? (06:58)
9) Will I have to travel to Germany or England in order to access the assets my loved one land? (07:41)
10) What are the rules of intestacy in Germany? (08:22)
11) How can we sell foreign assets in an estate? (09:16)
12) How can I get access to assets in Germany or England? (10:09)
13) Who administers a foreign estate if there is no Will? (11:07)
14) How can I swear the oath or give the affidavit with regards to the probate application? (12:11)
15) How do I get an inheritance tax clearance from German and England? (13:20)
16) Is there an estate tax on foreign assets? (14:29)
17) I received a letter from German probate court because a relative has died. What do I need to do? (15:14)
18) Is a United States Will valid in Germany and England? (16:04)
19) What are “forced heirship” rules? (16:56)
20) Am I entitled to a share of the estate if a foreign relative has died? (17:53)
21) What happens if someone contests the Will in Germany? (19:01)
22) Can I act as the executor or administrator abroad myself? (19:49)
23) I have foreign assets. How can I ensure they avoid probate? (20:22)
24) What is the principle of universal succession? (21:21)
Or just watch the entire video here
What to do if you are served with a German Default Judgment?
In German civil litigation cases, the court will immediately issue a default court order (Versäumnisurteil) against any party that does not appear for a court hearing unless that party (claimant or defendant) is properly excused. This is why every German litigation lawyer worth his or her salt has the court’s phone number on speed dial in case the lawyer gets stuck in a traffic jam on the way to court. Otherwise, if there is a no show without a credible excuse or if a party is more than 15 minutes late, the court will issue the Versäumnisurteil right there and then.
In the good old times, there was a gentlemen’s agreement between German litigation lawyers not to apply for a default judgment in such a situation in order not to get the opposing lawyer into trouble with their client. But those days are long gone and nowadays it’s the exact opposite: it would be considered gross malpractice by a litigation lawyer not to apply for a default judgment if the other party’s lawyer does not show up for the hearing.
Even before an oral hearing date is set, the German court may already issue a Versaumnisurteil against the defendant if the defendant does not properly file the official notice of defence (Verteidigungsanzeige) within the so called “Notfrist” (meaning “emergency deadline” or “absolute deadline”) set by the German court. “Notfrist” (absolute deadline) means that such a deadline cannot be extended. It must be kept no matter what.
A common mistake by defendants in Germany is that the defendant him- or herself tries to correspond with the court instead of appointing a licensed legal counsel which is mandatory from the German High Court (Landgericht) level up. Only at the District Court level (Amtsgericht) or in Labour Courts a party may represent themselves (which, of course, is usually still a bad idea even if permitted). The specific requirements and consequences of a German civil procedure default judgment are set out in sections 330 to 347 German Civil Procedure Code.
Never ignore a Default Judgment
In case you have been served a German court document titled “Versäumnisurteil“, you must react immediately, especially if you own any assets in Germany, because these assets can very quickly be seized based on the default judgment alone. What makes the German default judgment so dangerous is the fact that it becomes final and binding if the party on the receiving end does not enter a formal protest (Einspruch) against said default judgment within a strict court deadline. The period is usually only two weeks from the day you have been served with the judgment, see section 339 German Civil procedure Rules. In cross-border cases, the court may grant somewhat longer filing periods, usually one month. Again, the tricky part is that on the level of German High Courts (Landgericht) and above, such a protest (Einspruch) will only be accepted if filed by a properly licensed German lawyer. Letters or faxes from the USA, even if send by a US attorney at law, will simply be disregarded. Therefore, you must not wait until the deadline is almost expired because you need to hire a German lawyer in time for them to file the protest on your behalf!
Default Judgments can be enforced even in case of a Protest
What makes matters even worse: Even if the party who has received a default judgment against them does file a protest in time and the civil lawsuit is thus continued, the other party may still use the existing default judgment to enforce the claim on an interim basis (vorläufig vollstreckbares Urteil). This means that just because the defendant may have missed a court deadline or was more than 15 minutes late for a court hearing, the claimant is able to immediately seize property, a bank account or the salary of the defendant in Germany. If only as a preliminary measure, i.e. the claimant must eventually return the seized German assets in case the court does rule against the claimant in the final judgment. However, until then, the claimant is already in possession of the assets which is a huge strategic advantage.
Thus, you should avoid at all times to risk finding yourself at the receiving end of a German default judgment.
More information on litigation in Germany:
- Making a Court Claim for Money in Germany: It’s actually quite easy
- Standard of Proof in German Civil Litigation
- German Litigation Experts explain Civil Procedure Rules
- How expensive is a German Lawsuit?
- Expert Reports on German Law
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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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:
- Making a Court Claim for Money in Germany: It’s actually quite easy
- Standard of Proof in German Civil Litigation
- German Litigation Experts explain Civil Procedure Rules
- A German Claimant can’t be his own Witness
- Compensation for a wrecked Car under the German Law of Torts
- Does German Law of Torts know the Egg Shell Skull Rule?
- How expensive is a German Lawsuit?
- Expert Reports on German Law
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.
Can German patients demand a complete copy of their medical file?
They certainly can. The German Civil Code contains an entire chapter on medical treatment and patient rights. Section 630g German Civil Code regulates that a patient has the right to demand to personally inspect the original patient file. This includes computer files as well as any handwritten notes that may exist. Nowadays, most physicians and certainly all hospitals keep patient files in electronic form. Thus, in practice, the doctors and medical institutions will offer to provide the patient with a copy of the medical records in such electronic form, i.e. as a CD, DVD or cloud based download option.
In some cases, especially when it comes to psychotherapy or mental disorder treatment, the neurologist oder psychotherapist may reason that it is against the patient’s best interest to grant him or her full knowledge of the file. However, this paternalistic view becomes more and more rare. Nowadays, German courts usually do rule in favour of the patient who wants to obtain full knowledge of his or her medical records, even if the patient may not be happy about the medical findings contained in such files.
How to obtain medical records to prepare a German tort case
We have explained in this post (link) how to make a personal injury claim in Germany. As far as compensation for pain and suffering (Schmerzensgeld) is concerned, such German personal injury lawsuits do not provide quite the same upside potential as in the United States due to the lack of a jury and due to the restrictive tradition of German law when it comes to non-monetary damages. Still, German law, in principle does compensate a patient for all costs, losses, expenses and also some non-monetary damages.
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.
May a Witness in German Civil Litigation refuse to give Testimony?
Under German Rules of Civil Procedure, any natural person, including minors, can be named as a witness (Zeuge) by a party to a civil procedure. The civil court then decides on whether and to what extent these witnesses (as designated by the parties in their briefs to the court) need to be heard, i.e. whether — in the view of the court — the specific issue which the witness shall give testimony on, is:
(i) relevant for the court’s decision; and
(ii) still in dispute between Plaintiff and Defendant after the exchange of briefs.
If the answer to both requirements is yes, the respective witnesses will consequently be summoned (geladen) by the German civil court. In practice, each witness will be sent a letter by the civil court (Zeugenladung) which demands the witness to attend an oral hearing in order to be questioned as a relevant witness on one or several specific issue(s), the so called “topics for questioning” (Beweisthema), see s. 377 German Civil Procedure Code. Thus, the witness is informed a few weeks prior to the actual oral hearing date what the court will ask him to testify on. The witness summons only describes this topic in rather broad terms. Normally, the witness summons letter does not contain any specific questions (this is different when it comes to expert witnesses). A typical example of the content of such a German civil court summons letter to a witness of fact would be:
“In the civil lawsuit between A and B regarding a car accident on Z-street on the … around … o’clock you have been named as a witness. You shall give testimony about the details how the accident occurred.”
In some cases, the court may permit the witness to testify in writing, i.e. by answering the questions by sending in a letter. This is, however, the exception to the rule.
Duties of a Witness under German Civil Procedure Law
The standard procedure is that the witness must attend the court hearing in person. Every person summoned by a German civil court has the duty to appear in court, to testify truthfully (s. 390 et seqq. German Civil Procedure Rules) and to swear an oath if this is demanded by the court (which it very rarely is, as I have explained here).
This general obligation of a German witness to give testimony in a civil lawsuit exists, however, exclusively vis-a-vis the court itself. There are no pre-trial depositions in Germany. Instead, the witness is questioned only in court and primarily by the judge.
German Civil Court Judges rarely put a Witness under Oath
Section 154 German Penal Code (Strafgesetzbuch) is titled “Meineid”, which is the German word for perjury, i.e. lying under oath to certain German authorities, either in a German court of law (Gericht) or in another official proceeding.
However, in real life, prosecution for perjury is very rare in Germany. This is not because all Germans are perfectly honest and no one lies in German court rooms (trust me, there is plenty of lying), but because not many German judges demand a witness to swear an oath. Not even when the judge is rather sure that he or she was just lied to by the witness.
Why does German law (appear to) employ such a soft approach towards “lying witnesses” in civil procedure? This post describes the method of hearing witnesses in a German civil lawsuit and explains why many civil law court judges in Germany are hesitant to put a witness under oath.
Witness Evidence in German Civil Litigation
First, you must remember that there is no jury in a German court of law (more here). The case is decided by a professional judge only. The German approach is that a witness shall be questioned by the judge (instead of by the parties) and shall tell “the story as the witness remembers it”. The witness shall coherently describe what he or she recalls, i.e. in a freely worded statement which is uninterrupted by constant questions by a party’s legal counsel. “Coherently” (“im Zusammenhang”) is the important buzzword here, see section 396 para. 1 German Code of Civil Procedure. This German civil procedure statute explicitly prohibits a rapid fire cross-examination style questioning of a witness.
The method of hearing witnesses in German civil litigation is therefore the exact opposite of the rather aggressive “question by question” approach used in the United States. German civil procedure rules do not believe in pressuring or leading witnesses. Instead, the German judge asks the questions rather broadly and then lets the witness speak. A typical question by a German civil court judge would be:
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:
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?
In German court, it’s never too late to agree to arbitration instead of litigation
If you find yourself entangled in German litigation (Zivilprozess), in particular business litigation, you and your opponent may not want to discuss your quarrels in the public eye. But can you still opt for arbitration even if the agreement between you and your German business partner does not contain an arbitration clause? Yes, you absolutely can. In fact, German civil procedure rules do encourage the parties to apply for the civil case to be transferred to a so called “Güterichter” (arbitration judge).
German civil courts have installed special chambers for such arbitration proceedings at all levels, see for example High Court Hannover. That way, the parties get a fully qualified and independent German judge as their mediator / arbitrator and they do not have to shop around. Costs for such a professional judge as arbitrator are also considerably lower than those of private arbitrators, because – from a cost perspective – the arbitration is still part of the official lawsuit. Therefore, arbitration proceedings before a German state judge (instead of a private arbitrator) have become increasing popular in Germany over the last 15 years and there are hardly any high profile business lawsuits in open German court anymore.
Arbitration before a professional German judge
The only requirement for this switch from German civil litigation (i.e. a classic civil lawsuit) to German arbitration before a professional judge is that the parties agree to it. Acording to section 278 para. (5) German Cicil Procedure Rules, the court shall suggest such arbitration to the parties. In fact, even if the German court does not initiate such a transfer, the parties to the legal dispute can “force” the court to transfer the case to the arbitration judge (Güterichter). From that moment on, the parties discuss the case in private, the hearings are no longer open to the public and everything that is discussed during the arbitration proceedings remains confidential. Not even the civil case judge (Richter im streitigen Verfahren) who has transferred the matter to the arbitration judge (Güterichter) will be informed about what went on in the arbitration proceedings. So even if the arbitration attempt ends up being unsuccessful, the parties go back to the initial judge and the original civil trial proceeds, neither party must fear to have disclosed any information detrimental to their German court case. Another advantage is that the parties can include additional aspects in an overall settlement agreement, i.e. they are not being bound by the core of the initial lawsuit.
Arbitration outside the German state court system
An alternative to having the civil lawsuit transferred to an arbitration judge (Güterichter) at the same German civil court, the parties can also opt for private arbitration. In that case, they choose their own arbitrator or arbitration panel and decide on their arbitration rules. The German civil court will then simply stay the proceedings according to section 278a para. (2) German Cicil Procedure Rules. In that case, costs will be higher, because such private arbitration is a separate proceeding and thus takes place outside the official cost schedule. Should the private arbitration attempt fail, each party can motion to the German civil court to resume the civil trial.
German Litigation vs. German Arbitration
In summary, switching from German civil litigation to arbitration (either before a German state judge or a private arbitrator) is usually a very good idea. Especially, if the parties do not wish the details of the civil dispute to become public. If the arbitration attempt fails, nothing is lost. Each party can simply state that they consider the arbitration unsuccessful. Then the regular civil lawsuit is continued and the German civil court will eventually issue a judgment.
More information on litigation and legal fees in Germany is available in these posts:
- German Litigation Experts explain Civil Procedure Rules
- How expensive is a German Lawsuit?
- Expert Reports on German Law
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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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 and in our free brochure “Guide to Civil Litigation in Germany:
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:
- Making a Court Claim for Money in Germany: It’s actually quite easy
- Standard of Proof in German Civil Litigation
- German Litigation Experts explain Civil Procedure Rules
- A German Claimant can’t be his own Witness
- Compensation for a wrecked Car under the German Law of Torts
- Does German Law of Torts know the Egg Shell Skull Rule?
- How expensive is a German Lawsuit?
- Expert Reports on German Law
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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