Legal Costs - German Civil Procedure

How to Win Commercial Lawsuits in Germany

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

How to Engage Graf & Partners as Your German Legal Counsel

Checklist & Terms of Engagement

If you consider hiring the German law office Graf & Partners to represent you in a German civil lawsuit, we recommend to carefully read the below checklist before you contact us with any details of your case. The information below will give you a better idea of whether Graf Legal is the right law firm for your German legal dispute.

We exclusively take on German civil and business litigation cases. While we may be able to recommend criminal defense lawyers, Graf & Partners themselves do not take on criminal cases. Our lawyers are licensed to practice throughout Germany and in all German civil courts. Since our law office is located in the south of Germany, you may incur significant travel expenses if you wish us to represent you in a case which is heard before a court in northern Germany. In high profile international cases, however, such travel costs are usually considered to be insignificant.
Before we can officially take on your case and open a file, we need to do a conflict of interest check and adhere to the Know Your Client (KYC) requirements. This means that we will need the full name, residential adress and a scan of the passport or official ID of the person(s) who wish to engage us as their German legal counsel. We will also need the details of the opponent in order to check whether the opponent is already on our client list.
Please send a short summary of the facts of your case and let us know which actions you wish us to take on your behalf. Please note that our law firm receives dozens of enquiries each day, so the best way to get your case evaluated by one of our lawyers is if you provide us with a concise description of what the dispute is about. The better you can describe your problem, the faster we can get back to you with a decision whether we are able to take on the case or not. Please have realistic expectations with regards to turn-around times. Some clients wait until the last-minute and then expect immediate attention to their matter, which isn’t always possible and – if possible – will trigger significantly higher legal fees.
Lawyer fees and costs: Our attorneys bill by the hour, usually anywhere between EUR 280 and EUR 400 net per full hour. We usually ask for an upfront payment for legal fees of, depending on the scope and legal complexity of the matter, at least EUR 1,000 up to EUR 20,000 plus German VAT where applicable. Please note that under German law, minimum statutory lawyer fees do apply in all forensic matters. Any German lawyer is legally obligated to charge at least these baseline fees which are calculated based on the „value of the case“, i.e. the amount in dispute. These minimum fees under the German Lawyer remuneration Act (Rechtsanwaltsvergütungsgesetz) will have to be charged regardless of how much time was spent on the case. More details in this post: Basic Principles of Legal Costs in Germany
Our minimum fee per case: The absolute minimum fee which we will charge in any litigation matter is EUR 1,000 net. We are a highly specialised boutique law firm with a limited number of expert international litigation lawyers. Therefore, we are unable to take on small claims cases.
Please note that contingency fee agreements are prohibited under German law, so please do not ask us to take on your case on a „no win no fee“ basis. The answer is no. More on the German contingency fee ban in this post: No Win No Fee Agreements are Void in Germany
Court fees: If you wish to initiate a German lawsuit, you will also need to pay court fees. These fees are due when we file the action on your behalf (Klageeinreichung). The court will not serve the complaint to the defendant unless and until you have paid the court fees.
Client paperwork: Once we have made sure that we are able to take on your case, we will ask you to sign a fee agreement and a power of attorney form. Comprehensive letters of engagement are neither customary nor required under German law, because all clients are already well protected by German statutory law and professional lawyer regulations. More in this post: How to Retain a German Lawyer

If you decide to instruct our law office based on the above terms, we are looking forward to assessing your case and to representing you in a German court of law. Visit www.GrafLegal.com, the German civil litigation experts with 20+ years in international civil, business and corporate litigation.

Contentious Probate in Germany

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

Mediation before a German High Court Judge

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:

confidentiality, non public procedure
experienced professional German judges who are absolutely impartial hear the case; neither party must fear that a private arbitrator (or their law firm) has any hidden stakes in the matter
very reasonable costs since the German statutory court fee table does apply
in case of a settlement, the judge will issue an enforceable court order
if the parties do not reach a settlement, they have not lost anything because they can always go back to the standard civil litigation proceedings (streitiges Zivilverfahren) in which another judge will then hear the case

More information about this Güterichterverfahren (not to be confused with the Gütetermin, which is part of any German civil litigation) is available here and 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.

How to sue (the right) German Company or Corporation

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.

Why? Because the German bailiff (Gerichtsvollzieher) and the German court competent for seizing assets (Vollstreckungsgericht) will refuse to take any actions of enforcement (Zwangsvollstreckung) based on that judgment as soon as they realize that he Defendant’s name is incorrect or unclear. And they will realize because the Defendant will now object and bluntly state „that’s not me on the German judgment“.

When filing a lawsuit against an German business, be absolutely certain to use the correct company name of defendant

It is, therefore, a rather costly and embarrassing mistake when a foreign, i.e. non-German, litigation lawyer who files a complaint against a German legal entity is a bit careless about the defendant’s legal name or/and business address.

Even if the Plaintiff’s lawyer is not being sloppy, mistakes can easily be made, because many companies only give a short version of their actual company name on their stationary and on their website.

If a lawyer does not verify the full company name with the German company register before filing the lawsuit, the damage is done. Naming the wrong party is particularly dangerous when the Defendant is part of a group structure (in German called “Konzern” or “Unternehmensgruppe”).

Big corporations like Siemens, BMW or Volkswagen, for example, have hundreds of subsidiaries and project companies. Sometimes, those subsidiaries have very similar names and the difference is only one letter, one figure or the added name of a town. So, “XYZ Project GmbH” is not necessarily identical with “XYZ Project GmbH, Munich”.

The ending tells you the legal nature of the German business

Also, the ending of the company name is extremely important because that annex to the company name (which is usually an abbreviation)tells you whether the German business is actually a corporation, a limited liability company, a partnership or some other legal entity. It is extremely easy to make a mistake here!

Don’t miss! One Letter can be a Game Changer

Let’s use my own law firm as an example. On our websites, blogs and brochures, our law firm uses the name “Graf Legal”. This is, however, only the unofficial trade name for our US-German law department. The actual and legally correct name of our law office, as filed with the German company register, is this:

Graf & Partner Partnerschaftsgesellschaft mbB

The above business is, however, an entirely different entity compared to:

Graf & Partner Partnerschaftsgesellschaft mbH

Did you even notice the difference between the two? The diffference is only in the last letter. With regard to the first entity, i.e. in “Partnerschaftsgesellschaft mbB”, the “mbB” stands for “mit beschränkter Berufshaftung”, i.e. „limited professional liability“, which means that the entity is a German partnership of professionals (in this case lawyers) and damage claims based on malpractice against these lawyers are capped. For any other claims and debts, all law firm partners remain fully liable with their entire fortune.

In contrast, “Partnerschaftsgesellschaft mbH” is something entirely different, because “mbH” stands for “mit beschränkter Haftung” which means that this is not a partnership, but a company and the entire liability of the company is limited, regardless of what the claim against the company may be based on. Thus, one single letter (B or H) makes the difference whether you sue a German limited liability partnership of natural persons or a German company.

How to research the correct name of a German business

As shown above, you cannot rely on the defendant’s website or stationary. Instead, you must do a proper search on the German company register (Handelsregister) in order to find out the official legal name of the company you want to sue, i.e. the legal name under which it has been incorporated and is officially registered with the German company register. Also, you should use the Germany company’s official registration number in the petitions to the German court.

The first step would be a basic online name search, which is explained below. In larger cases, you should obtain a complete extract on the company from the German company register (Handelsregisterauszug). These German company register documents show you the company history with regard to directors, shareholders, office addresses etc. In addition, you can check the financial history of the company by inspecting their annual financial reports. This does not work for all German businesses, however, only for companies, corporations and certain partnerships.

We explain how to read a German company register extract in this post here.

Another Example

In order to practice an online search, let’s use the example of the German company which uses “airstage” as the trade name on their website. The contact informatiuon they give on their website looks like this:

Now, if you take the information on their website at face value, you will probably file a lawsuit against a German business by the name of “airstage”. But is that their actual legal name? You can research this for yourself by visiting the official German company register website Unternehmensregister. Big surprise: The search for “airstage” in the official company register comes up empty:

If you then do some more research on the company, either by using their address or the company number, you will find that the official company register record of the defendant shows that the actual name of the company is “Effekt-Technik GmbH”. The term „airstage“ does not appear in the official records at all.

This detail is extremely important because if you rely on the website and sue against “airstage”, all the German the court documents as well as the final court order will also name “airstage” as the Defendant. This will most certainly create procedural problems later on, either when it comes out during the civil procedure or when you wish to enforce the court order, because it is simply not the correct company name and no company by the name “airstage” does exist.

Now, if the name issue comes up during the ongoing civil procedure, the German Defendant will probably not be able get away with arguing that the lawsuit does not refer to them, because they use this name on their official website http://airstage.de/kontakt/ Still, even if it would cause merely a procedural hiccup by generating a query from the German court, this may costs a few weeks.

The problem is indeed greater if the court has actually already handed down a judgment which designates the defendant with an incorrect name and this judgment has already become binding. Then chances are, you have obtained an entirely useless judgment because it will not be enforceable.

In order to avoid all such confusion, the Plaintiff’s litigation lawyer, in the above example, should use the following company details, especially the company register number:

Effekt-Technik GmbH, a limited liability company established under the laws of Germany, registered with the German Company Register kept at District Court (Amtsgericht) Stuttgart under the company register no. HRB 225042. The official company address is: Nürtinger Str. 64, 72667 Schlaitdorf, Germany. The company is being represented by their company directors (Geschäftsführer) Mr Rainer Mugrauer and Mr Günther Mugrauer.

If the petition to the German court specifies the company like this, there is no room for error whatsoever.

Long Story short

Before filing a complaint in a German civil lawsuit, make absolutely sure that you have researched the complete and accurate company name as well as their correct current address and the correct names of the current partners or company directors.