GERMANY Law and Practice Contributed by: Thomas Lennarz, Peter Wende and Christian Piroutek, CMS
collective redress mechanisms under German law ‒ namely, the model declaratory action and the redress action. 1.2 Basis for the Legislative Regime, Including Analogous International Laws The German collective redress regime is not modelled on the US class action approach. Traditional US fea- tures such as opt-out participation, pre-trial discovery, jury trial, and punitive damages are absent. German law has deliberately avoided importing these instru- ments, considering them inconsistent with the princi- ples of German civil procedure. The main external reference for Germany’s collective redress regime is EU legislation. The adoption of the EU Representative Actions Directive was decisive in shaping the most recent reform. This new mechanism goes beyond earlier German tools, as it permits claims for damages and other remedies on behalf of consum- ers and micro-enterprises in a single procedure. Principal sources of law include the Injunctions Act, the Act on Model Proceedings in Capital Market Dis- putes, the Consumer Rights Enforcement Act, and the Code of Civil Procedure. 1.3 Implementation of the EU Collective Redress Regime Germany fully implemented the EU Representative Actions Directive in October 2023 through the Con- sumer Rights Enforcement Act. The Consumer Rights Enforcement Act introduced the redress action, com- plementing existing mechanisms such as the model declaratory action. Unlike earlier procedures, the redress action allows qualified entities to directly claim damages or other remedies (eg, repair, contract termi- nation, or reimbursement) on behalf of consumers and micro-enterprises in single-track proceedings. Although aligned with EU standards, the German regime contains the following specific features. • Strict opt-in requirement ‒ consumers and micro- enterprises must register individually in the official claim register ( Klageregister ) to participate. • Qualified entity requirements ‒ only consumer organisations that are listed under the Injunctions
Act or registered at EU level may bring claims. They must be largely independent of business funding (no more than 5% of annual resources from corporate donations). • Scope of application ‒ Germany extended the scope of the redress action beyond the minimum required by the EU Representative Actions Direc- tive. Although the EU Representative Actions Direc- tive obliges EU member states to make representa- tive actions available only in relation to breaches of certain EU consumer protection provisions (and their national transpositions), the German legislator opted for a broader approach. Under the Con- sumer Rights Enforcement Act, redress actions are generally available for all disputes between con- sumers and companies. • Similarity of claims ( Gleichartigkeit ) ‒ redress actions are admissible only if the claims arise from comparable facts and raise materially similar legal issues. This threshold reflects the legislator’s intent to prevent fragmented or overly complex group proceedings. • Inclusion of small businesses ‒ unlike the ear- lier model declaratory action, the redress action extends standing to small businesses with fewer than ten employees and an annual turnover or bal- ance sheet not exceeding EUR2 million. Germany has transposed the EU Representative Actions Directive without major deviations but with a rather conservative design. Critics argue that the opt-in requirement and strict admissibility criteria may reduce practical effectiveness compared to broader collective systems such as in the Netherlands. At the same time, early cases – ranging from energy price adjustments to large-scale disputes against digital service providers – demonstrate that the mechanism is already being used in practice. 2. Legal Framework 2.1 Collective Redress and Class Action Legislation Germany does not have a single codified class action law. Instead, several statutes form the framework for collective redress, as follows.
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