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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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.

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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:

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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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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:

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.

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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German Court Records: The Judge decides what goes on Record

How do you order a full transcript of a German court hearing? Well, that is a trick question in two respects.  First, because German civil court records are not public. Second, because there are no such full transcripts of court hearings. In German civil cases, no verbatim records of hearings, witness statements or other judicial proceedings are being made. Thus, you will not find a U.S.-style court reporter or stenographer in a German civil courtroom.

What court hearing minutes are there?

German Civil Procedure Rules (Zivilprozessordnung) cover the issue of how official court hearing minutes shall be taken in sections 159 to 165. According to section 160a ZPO:

The content of the record of the hearing may be noted in a usual form of shorthand, by using comprehensible abbreviations, or by recording oral statements on a sound or data carrier.

This shows that, instead of a court stenographer taking a verbatim record, the judge dictates a summary of what the parties or the witnesses have stated to a court secretary (Justizsekretär or Justizfachangestellte). Sometimes, especially in lower courts,  there is not even a court secretary, just the judge and his/her voice recorder.

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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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How to obtain a German judgment many months earlier than by way of a “standard” lawsuit

In certain situations, the German Code of Civil Procedure (Zivilprozessordnung) allows the plaintiff to file a fast track civil lawsuit, the so called “Urkunden-, Wechsel- und Scheckprozess”. The standard expression used by German lawyers is “Urkundsprozess”, which translates into “deed claim proceedings”.

These special “deed claim proceedings” (besondere Verfahrensarten) in a German civil court must not be confused with temporary restraining orders or preliminary injunctions (einstweilige Verfügungen, einstweilige Anordnungen), which are also available in Germany but have very different requirements, inter alia urgency (Dringlichkeit).

What is an Urkundsprozess?

In order to file a German “deed claim proceeding”, the plaintiff must not demonstrate any urgency at all. Instead, the deed claim lawsuit route is available to any plaintiff who is able to substantiate his or her claim by providing to the court specific documents, inter alia deeds (Urkunden), checks (Schecks), promise to pay notes (Schuldscheine), acceptance bills etc.

These special Urkundsprozess proceedings are regulated by s. 592 et seqq. German Civil Procedure Rules. In order to be able to opt for this procedural route, the plaintiff must be able to prove the claim entirely bydocumentary evidence (Urkundenbweis). In other words: The Plaintiff must produce one or more documents, in the original, which fully prove the claim. There must be no need for additional evidence. If, for instance, the plaintiff needs to call a witness for certain facts in order to prove the claim, then the fast track proceedings are not available and the plaintiff must file a “normal” civil procedure case.

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