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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The Process and Main Stages of Civil Litigation in Germany
Filing a Civil Complaint
In order to initiate a civil lawsuit (Zivilprozess) in Germany, the plaintiff (Kläger) files a complaint with the competent German court (see here). This complaint is called “Klage” or “Klageschrift”, which means “statement of claim”.
After due registration by the court and a very preliminary compliance check with regards to the formal requirements set out by the German Civil Procedure Rules, the complaint is then served to the defendant. In most cases, the court itself takes care of the service procedure, but only after the claimant has either paid the court fees (Gerichtskosten) or has been granted legal aid by the court, which requires the claimant to demonstrate reasonable chances of success.
Personal service of civil litigation documents is normally not required in Germany and – as long as there is a valid address of the defendant within Germany — the claimant does not have to bother with any matters of service at all (for details see here).
In addition to the Klageschrift (complaint) itself, the court will serve to the defendant a letter setting a deadline for the defendant to inform the court whether they wish to dispute the claim. This deadline is usually 2 weeks if the defendant is resident in Germany but can be significantly longer if the defendant resides outside Germany. The court documents will contain detailed explanatory notes on the rights and obligations of the defendant. If the defendant misses this deadline, the German court will issue a default judgment (Veräumnisurteil), which is explained here.
In the Klageschrift (civil complaint), the plaintiff or their lawyer first explain why this specific German court has jurisdiction (Zuständigkeit) and demonstrate that all other formal requirements are satisfied, for example that the plaintiff is duly represented by a German licensed lawyer which is required on the High Court level and up (Postulationsfähigkeit), that the case is not already pending elsewhere (anderweitige Rechtshängigkeit), and that the lawsuit is not frivolous (Rechtsschutzbedürfnis). This part of the complaint is called “Zulässigkeit der Klage” (admissibility of the complaint).
The second part of the German statement of claim, the so called “Begründetheit der Klage” (justification of the claim), deals with the actual legal merits of the claim. In this part of the civil complaint, the German plaintiff’s lawyer describes the nature of the injury and damages and lays out how the defendant caused the harm.
The actual “application for relief” (Klageantrag) is usually stated right at the beginning of the complaint (i.e. on page 1 or 2). Some old-fashioned German litigation lawyers, however, put the demand for relief at the end of the German civil complaint. In the Klageantrag, the plaintiff may seek a wide variety of remedies, inter alia the payment of a specific amount of money to compensate for the damages (Zahlungsanspruch), or a court order against the defendant to stop a specific conduct (Unterlassungsanspruch). A German civil court may order many other types of relief, for details see this post.
Preparation of a German Civil Case
As we have explained in other posts (here), there is neither any discovery procedure under German civil procedure rules, nor are there any depositions or written witness statements. There is also no jury and no cross-examination of witnesses. German civil cases are much more centered around the judge (or panel of judges). These judges do not appreciate showboat lawyers trying to create a spectacle (to impress their client). Instead, these German judges want to be presented the relevant facts. Calmly and without aggressively attacking witnesses or experts. Remember that nowadays approximately 50% of German high court judges are female. They are usually not a fan of too much lawyer testosterone in the courtroom.
Since there is no jury and since the professional German judges are already well aware of the facts of the case from the submitted briefs, there are usually also no closing arguments. Once the relevant witnesses are heard (questions are asked by the judge!), the judge gives the parties an opportunity to discuss the case, especially to consider a late stage settlement. If this fails, the oral hearing is usually ended rather abruptly and the court adjourns.
This German style of a rather “mellow approach to civil litigation” often creates considerable frustration for US clients and their US attorneys because they feel that their side is not being presented as it should be. And a reasonable dose of US style aggressiveness in a German courtroom can work wonders. We frequently use these “shock and awe” tactics for our international clients. However, overdoing this in a German courtroom can be counterproductive. German trial lawyers who represent US or UK clients in Germany must explain the options and openly discuss strategy.
All this leads to a very different preparation of the civil lawsuit compared to the USA or the United Kingdom. In general, the oral hearings themselves are much less dramatic and also much less important for the outcome of the lawsuit. The lawyer’s briefs (Schriftsätze) together with reports of expert witnesses (Sachverständige), who are selected, instructed and questioned by the court – not by the parties, are generally what decides the case.
Settling a German Lawsuit
To avoid the stress, delay and expense which come with a formal trial, German civil procedure rules encourage litigants to attempt to reach any amicable resolution of the legal dispute. Thus, it is not only permitted but highly recommended and expressly encouraged by German civil litigation judges to settle a lawsuit – at any stage. The German system of statutory legal fees (both court and lawyer fees) also incentivises settlements. To be blunt: German lawyers earn more fees if they can get their clients to settle. More on this in the post: How to Settle a Lawsuit in Germany.
Oral Hearing in German Civil Proceedings
As explained above, there is no jury. Thus, oral hearings in German civil lawsuits are much shorter. If there is no need to hear witnesses or experts, and if the parties are unwilling to discuss a settlement, the hearing can be over in 10 minutes. For more on oral hearings in a German civil procedure see here .
The taking of evidence in a German civil trial is explained in this post here. Further major differences between civil litigation in German and the USA are that (i) there are no verbatim records or transcripts of what is said in the German oral hearings (details here), much less are there any video cameras or live broadcast; and (ii) the court documents are not public record.
How are Judgments issued by German Civil Courts?
Once all evidence is presented, expert reports have been obtained and once there has been at least one oral hearing, the court decides whether there is the need for another oral hearing or whether the court is willing to allow the parties to submit one final statement within a specific deadline (Schriftsatzfrist).
Whenever the court is satisfied that all relevant aspects have been duly dealt with and both parties have had sufficient opportunity to state their arguments and to present their evidence, then the court informs the parties about the date on which the judgment will be handed down (Verkündungstermin). Again, since there is no jury, this is a rather undramatic. In the vast majority of cases, neither party shoes up for the rendition of the judgment (Urteilsverkündung), because that would be over in 2 minutes since the judge only reads the operative provisions (Urteilstenor), i.e. who has won the lawsuit. In practice, both parties’ lawyers have a paralegal call the court on the day of the Urteilsverkündung and ask the court clerk to fax or email an advance copy of the judgment. The official copy of the German judgment will then be sent by post within a few days. Usually, the judgment is served to the parties’ lawyers who will then evaluate the reasons given by the court. Based on this evaluation, they will then advise their clients on whether it makes sense to officially appeal the German judgment.
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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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:
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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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:
You want your day in German Court? Don’t get your hopes up too high!
How important is the oral hearing stage in German civil litigation?
When you read the relevant sections of the German Code of Civil Procedure (Zivilprozessordnung) one gets the impression that in a German civil case the parties will extensively lay out and discuss the case in front of the judge. Section 128 ZPO, which is headed “Principle of oral argument” states:
(1) The parties shall submit their arguments regarding the legal dispute to the court of decision orally.
More specifically, section 137 German Civil Procedure Code sets out the following :
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”.
What are the Rules of Evidence in Germany?
In a German civil lawsuit, a relevant fact must be proven by the claimant, or more precisely by the party bearing the burden of proof, if the defendant disputes the alleged fact to be true. For details on who bears the burden of proof and what needs to be done to convince the court see the post: Standard of Proof in German Civil Litigation.
Types of Evidence admissible in German Civil Courts
In sections 355 to 370, the German Code of Civil Procedure (Zivilprozessordnung, ZPO) lays out some general rules on how a German civil court takes evidence. The court (be it a single judge or a judiciary panel (see here: GERMAN COURT SYSTEM) determines:
- which alleged facts are still remaining in dispute after the parties have exchanged their briefs (“verbleibende streitige Tatsachen”, also called “Streitstand”);
- who must produce the evidence on these disputed facts; and
- how much time is this party granted to submit sufficient evidence.
With regard to all this, the German civil court issues a so called Beweisbeschluss, i.e. a court order on the concrete evidence to be taken, section 358 German Code on Civil Procedure. The content of this Beweisbeschluss can, for instance, be an order to hear a witness or the decision by the court to instruct an independent expert (Sachverständiger) to provide the court with an expert opinion (Sachverständigengutachten).
What are the rules regarding pre-action conduct before litigation in Germany?
Let’s be blunt: There aren’t any! The German Code of Civil Procedure (Zivilprozessordnung, ZPO) does not impose any specific pre-action requirements on the parties or their legal counsels. In Germany, there is neither a pre-action protocol to adhere to, nor any pre-trial discovery. Read more on German Civil Procedure Rules in the post German Laws relating to Civil Litigation.
Thus, if you wish to do so, you can basically shoot from the hip and file a German civil or commercial lawsuit against someone without even giving them prior warning that such a lawsuit is coming their way. One reason why this “let’s sue first and discuss later” approach is quite common in Germany is that legal costs are relatively low when compared to litigation costs in the USA or Britain.
A short warning letter is still recommended
In real life, of course, such ambush lawsuits are not the rule. In most cases, the parties do write back and forth about a claim before someone files a lawsuit. However, if a claimant does not expect the defendant to constructively participate in such pre-trial discussions or if statute of limitation deadlines are closing in, the claimant can skip this stage and immediately file a petition (Klage) with the German civil court in order to put pressure on the defendant.
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.
