GERMANY Law and Practice Contributed by: Thomas Lennarz, Peter Wende and Christian Piroutek, CMS
3. Procedure for Bringing Collective Redress/Class Actions 3.1 Mechanisms for Bringing Collective Redress/Class Actions As mentioned in 1.1 History and Policy Drivers of the Legislative Regime , the two main collective Redress Action mechanisms in Germany are the model declar- atory action and the redress action. The following overview focuses on the individual aspects of the model declaratory action and the redress action. Model Declaratory Action The model declaratory action was introduced in 2018 in response to large-scale consumer claims, most prominently Dieselgate. It allows qualified consumer organisations, rather than individual consumers, to bring proceedings to establish common legal or fac- tual questions. Consumers may participate by opting in through the official claim register, which is publicly accessible and provides information on pending pro- ceedings. Model declaratory actions are heard by the higher regional court ( Oberlandesgericht ) in the district where the defendant has its registered seat. Appeals against final judgments can be brought before the Federal Court of Justice ( Bundesgerichtshof ). Redress Action In 2023, Germany implemented the EU Representa- tive Actions Directive by enacting the Consumer Rights Enforcement Act. This created the redress action, which directly addresses the limitations of the model declaratory action. Unlike the earlier model, the redress action allows qualified entities to pursue both monetary and non-monetary relief on behalf of consumers and micro-enterprises in a single step pro- cedure. Available remedies include damages, repair, termination of contracts, price reductions, and reim- bursement of purchase prices. The proceedings follow a structured path. Whereas the initial steps (filing of the redress action by a quali- fied entity and registration of consumers and small businesses with the claim register) are the same as for the model declaratory action, the proceedings before the court are structured differently. After filing
and registration by potentially affected consumers or small businesses, the court assesses the admissibility and merits of the action. If the court finds the redress action to be generally justified, the court issues a basic redress judgment ( Abhilfegrundurteil ), which inter alia defines eligibility criteria for compensation. Parties are then invited to propose a collective settlement. If no settlement is reached, the court issues a final redress judgment ( Abhilfeendurteil ), triggering implementation proceedings. Compensation is then administered by a court-appointed administrator through a dedicated fund ( Umsetzungsfonds ). As with the model declaratory action, the competent court for redress actions is the higher regional court at the defendant’s seat. Appeals are handled by the Federal Court of Justice. 3.2 Overview of Procedure The model declaratory action enables qualified enti- ties such as consumer associations to file a lawsuit to establish general factual or legal issues relevant to a large number of consumers. Individual consumers cannot file such claims themselves; their only option is to register in the official public claim register to join an existing action. Registration suspends the limita- tion period and ensures that claimants are bound by the judgment. Once a model declaratory action has been filed, no other action concerning the same facts may be brought, and consumers who register are barred from pursuing parallel individual proceedings. The court’s judgment is declaratory in nature: it determines wheth- er certain facts or legal grounds exist, but it does not itself award damages or provide enforceable relief. As a result, consumers must still bring individual follow- up proceedings to obtain compensation or other rem- edies. This two-stage structure has been criticised as inefficient, both for consumers (who face additional litigation costs and delays) and for consumer associa- tions (which must commit significant resources with- out being able to deliver final relief). In comparison with other collective mechanisms, such as the assignment models often used by legal tech companies (whereby individual claims are bundled and pursued by an assignee in ordinary civil proceed-
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