GERMANY Law and Practice Contributed by: Daniel Engel, Antonia Hösch, Mathäus Mogendorf and Viola Sailer-Coceani, Hengeler Mueller
7. Mass Claims and Class Actions 7.1 Procedural Mechanisms Germany lacks a single, comprehensive class action mechanism comparable to, eg, the US model. Instead, German law provides several distinct procedural instruments forming a fragmented system of collective redress. The most notable mechanisms are the model case proceedings in capital markets cases and the model declaratory action ( Musterfeststellungsklage ), enabling courts to determine factual or legal prerequi- sites relevant to individual claims, and representative actions ( Verbandsklage ), which can grant injunctive relief, absorption of profits, or damages. These instru- ments are governed by separate statutes, including the Consumer Rights Enforcement Act ( Verbraucher- rechtedurchsetzungsgesetz , VDuG), the Capital Markets Model Case Act ( Kapitalanleger - Musterver- fahrensgesetz , KapMuG), the Injunctions Act ( Unter- lassungsklagengesetz , UKlaG), the Act Against Unfair Competition ( Gesetz gegen den unlauteren Wettbe- werb , UWG), and the Act Against Restraints of Com- petition ( Gesetz gegen Wettbewerbsbeschränkungen , GWB). Additionally, the leading decision proceeding ( Leitentscheidungsverfahren ) allows the Federal Court of Justice to provide guidance on legal questions aris- ing in mass litigation, though without formally binding effect on lower courts. 7.2 Standing Requirements Standing rules vary by mechanism. Under the Con- sumer Rights Enforcement Act, the Injunctions Act, the Act Against Unfair Competition, and the Act Against Restraints of Competition, only qualified consumer associations registered under Section 4 Injunctions Act may bring claims. The Federal Office of Justice maintains a publicly accessible register of such associations. Showing the existence of under- lying individual claims or actions is not a prerequi- site. However, it must be established that the rights of a determinate group represented by the claimant association have been or may be infringed. A redress action under the Consumer Rights Enforcement Act additionally requires at least 50 potentially affected consumers. Participation operates exclusively on an opt-in basis, requiring active registration of individual claims.
if and when security for costs can be ordered against foreign parties. 6.5 Interim Injunctions A party can apply for interim injunctions. The applicant must file its application with the competent court – generally the court having jurisdiction over the main proceedings – and must demonstrate an underlying claim ( Verfügungsanspruch ) and a ground justifying the measure ( Verfügungsgrund ). The applicant must credibly demonstrate ( Glaubhaftmachung ) that both the claim and the grounds exist, persuading the court that the relevant facts are more likely true than not. The specific requirements depend on the type of injunction: a protective order ( Sicherungsverfügung ) requires a risk that changes to the existing situation could prevent or significantly impede enforcement; a regulatory order ( Regelungsverfügung ) requires that regulation of a disputed legal relationship is neces- sary to avoid significant harm or prevent impending violence; and a performance order ( Leistungsverfü- gung ) requires that the opponent’s prompt compli- ance is essential, that awaiting ordinary proceedings would be unreasonable, and that the applicant’s harm substantially outweighs any detriment to the oppo- nent. Financial interests alone are typically insufficient. Where the prerequisites are met, the court decides at its discretion which specific measure is appropriate. Parties can also apply for an asset freeze (arrest), but the applicant must show that the defendant is active- ly taking steps to undermine enforcement of a future judgment. Insolvency of the defendant is generally insufficient as an argument. The interim injunction must be enforced within one month after issuance. 6.6 Summary Judgment German law does not formally provide for summary judgment. However, in all proceedings, the court will conduct a preliminary analysis of the pleadings. If the court finds that the pleadings do not satisfy the legal requirements for stating a case or (as the case may be) raising a relevant defence, the court will grant or dismiss the claims following an initial hearing without further trial or taking of evidence.
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