Pros and Cons of Settling a Civil or Commercial Lawsuit under German Law
German litigation lawyers as well as German judges love it when the parties of a civil dispute enter into a settlement agreement (called “Vergleichsvereinbarung” or simply ”Vergleich“). Why? Because German civil procedure rules and other laws concerning German civil litigation (see this post) provide financial incentives for lawyers if they find a way to resolve the dispute amicably, i.e. if the lawsuit is ended without the need for a judgment or other formal order by a German court.
With regard to the German judge, the motivation to promote a settlement is obvious: If the parties settle, the judge does not need to spend many working hours hearing witnesses, examining documents and writing a judgment.
German Law encourages Settlements
Section 278 German Code of Civil Procedure explicitly rules that the court shall at all stages of the civil lawsuit “work towards an amicable resolution of the dispute”. The original German wording of the relevant statute is:
„Das Gericht soll in jeder Lage des Verfahrens auf eine gütliche Beilegung des Rechtsstreits oder einzelner Streitpunkte bedacht sein.“
This means that a German judge in a civil litigation matter shall proactively attempt to induce the parties to reach such amicable resolution by way of a court recorded settlement agreement (gerichtlicher Vergleich); details are explained below.
Everything you should know before hiring a trial (or any other) lawyer in Germany
First of all: German civil law is a codified system (more here). This means that pretty much everything you can think of as being relevant for a client-lawyer relationship is regulated by black letter law anyway. Thus, if you need a German lawyer (their official German title is Rechtsanwalt) quickly, feel free to just hire him or her by fax, email or even on the phone.
The Merits of Codification
In Germany, there is no need for written client-attorney engagement contracts, fee agreements or extensive “know your client” paperwork (especially not in private client business). Why? Because the obligations of a German lawyer towards his or her client are clearly laid down in various federal statutes of German law.
Final Judgments issued by United States Courts in Civil Law and Commercial Law Matters can be recognised and eventually also enforced in Germany
It is, however, a somewhat tedious procedure and there are a number of exceptions to this principle. This post explains how the domestication of United States court orders in Germany works and provides a practical guideline for U.S. lawyers and their clients who have obtained a U.S. court order against a German defendant or a debtor who owns assets in Germany. In short: this is how you enforce a U.S. judgment in Germany.
No International Treaties
Between the USA and Germany there exist no bi-lateral or multilateral international treaties with regard to the mutual recognition and enforcement of foreign court orders. Thus, when it comes to the domestication of U.S. judgments in Germany (and vice versa), the respective national laws apply. We must therefore look at the relevant German laws which regulate if, when and how foreign (i.e. non-German) court orders and judgments can be recognized and enforced within Germany.
