GERMANY Law and Practice Contributed by: Daniel Engel, Antonia Hösch, Mathäus Mogendorf and Viola Sailer-Coceani, Hengeler Mueller
associated with litigation. Coverage for arbitration and ADR may be available depending on the specific policy, though standard policies traditionally focused on court litigation, and some explicitly exclude alter- native dispute resolution mechanisms such as media- tion or arbitration. 5.5 Costs Germany follows the “loser pays” principle: the losing party bears both its own and the prevailing party’s legal costs, including court fees and statutory attorney fees. If both parties win and lose in part, costs are divided proportionally according to the correspondent win-loss-ratio. Importantly, in state court proceedings only statutory attorney fees (see 5.1 Legal Fees ) are recoverable; to the extent that a party’s actual costs for legal representation exceed the statutory fees (eg, due to hourly-rate billing), the excess is not recover- able. 5.6 Assessment of Costs The primary factor in assessing costs is the dispute value ( Streitwert ), which determines both court fees and statutory lawyer fees according to fixed statutory scales. The court allocates costs based on the out- come of the case, applying the loser-pays rule propor- tionally to each party’s success or failure on the merits (see 5.1 Legal Fees and 5.5 Costs ). German law provides for different types of interim relief. The main forms are arrest and interim injunc- tion, supplemented by an independent procedure for taking evidence ahead of main court proceedings, and the European account preservation order (see 2.6 Interim Relief ). An arrest secures monetary claims (or claims convert- ible into monetary claims) by allowing the applicant to freeze assets of the defendant’s movable or immov- able property. 6. Interim Remedies 6.1 Availability of Interim Relief An interim injunction comes in three forms: the protec- tive order ( Sicherungsverfügung ) preserves the status quo; the regulatory order (Regelungsverfügung) pro-
visionally determines the legal relationship between the parties; and the performance order ( Leistungs- verfügung ) compels the defendant to perform or omit certain activities. 6.2 Interim Relief to Support Arbitration and ADR State courts may issue interim measures sought to secure claims raised in arbitration. State courts may also authorise the enforcement of interim measures issued by an arbitral tribunal. The arbitral tribunal may order any provisional or protective measure it consid- ers necessary and may require appropriate security. According to the prevailing (though controversial) view, the state court incidentally reviews the validity of the arbitration agreement when deciding on authorisa- tion. The court exercises discretion and may amend the interim measure for enforcement purposes if nec- essary. 6.3 Timing of Applications for Interim Relief Applications for interim relief are often filed before the main proceedings have begun. There is no statutory deadline, but the applicant must demonstrate urgen- cy. German courts generally require filing within one to two months from the time the applicant becomes aware of the infringement. In some cases, particu- larly in competition law, a prior warning letter may be required. Decisions on interim relief applications are typically issued within a few days. The applicant may there- fore file shortly before the consequences they seek to prevent take effect, provided the one-to-two-month urgency window is observed. In many cases, the court will schedule a hearing before issuing its decision in order to avoid a violation of the opposing party’s right to be heard. The opposing party may file a protective brief ( Schutzschrift ) with a central register, setting out
its defence in advance. 6.4 Security for Costs
German law does not generally provide for security for litigation costs. Security for costs can be granted at the opponent’s request if the applicant’s usual place of residence is outside the EU or EEA. With regard to interim measures, there is no clear-cut line of case law
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