GERMANY Law and Practice Contributed by: Daniel Engel, Antonia Hösch, Mathäus Mogendorf and Viola Sailer-Coceani, Hengeler Mueller
In contrast, under the Capital Markets Model Case Act, any investor who is a claimant in individual pro- ceedings may initiate a model case, provided model case applications have been filed in at least ten pro- ceedings. 7.3 Relief Collective redress does not involve a distinct dam- ages regime. Damages relief is limited to compensa- tory relief, restoring affected individuals to the position they would have been in had the wrongful conduct not occurred. Punitive or exemplary damages are unavail- able. Under the Consumer Rights Enforcement Act, courts may order payment of a collective sum ( kollek- tiver Gesamtbetrag ) for distribution among registered consumers. Qualified consumer associations may also seek the absorption of profits ( Gewinnabschöp- fung ) obtained through intentional or grossly negligent unfair commercial practices, with proceeds payable to the Federal Office of Justice. Declaratory relief estab- lishing binding prerequisites for individual claims is available under the Consumer Rights Enforcement Act and the Capital Markets Model Case Act. Injunctive relief to prevent or stop unlawful practices is avail- able under the Injunctions Act, the Act Against Unfair Competition, and the Act Against Restraints of Com- petition. 7.4 Class Actions, Mass Claims and Arbitration Collective redress mechanisms are generally court- based, and Germany has no established practice of class arbitration. Under prevailing German legal doc- trine, class arbitration is impractical: individuals can- not be compelled to participate in arbitration in the absence of a binding arbitration agreement, nor may they voluntarily intervene without one. 7.5 Trends Germany’s collective redress landscape is evolving, though it remains fragmented. The enactment of rep- resentative action in 2023, implementing the EU Rep- resentative Actions Directive, was a significant step forward but has seen only 17 actions filed to date. Legislative reform continues: the Capital Markets Model Case Act has recently been restated and will be re-evaluated in 2029, and the Consumer Rights
Enforcement Act in 2028 alongside the EU Repre- sentative Actions Directive. An emerging trend is an increase in profit absorption ( Gewinnabschöpfung ) actions. Notably, qualified con- sumer associations may now engage litigation funders for such actions, with funders receiving a share of the recovered proceeds.
8. Evidence 8.1 Disclosure
German litigation follows the principle of party pres- entation ( Beibringungsgrundsatz ) without a general disclosure obligation. There is no discovery; how- ever, courts may order the production of specific documents under Sections 142 and 421–424 Ger- man Code of Civil Procedure, provided that the party can sufficiently identify the relevant documents and show their relevance for the case. In arbitration, the approach is flexible: document production is deter- mined on a case-by-case basis under the tribunal’s broad procedural discretion (Section 1042 (4) Ger- man Code of Civil Procedure). In international arbitra- tion proceedings seated in Germany, tribunals tend to allow a broader production of documents, often following the IBA Rules on the Taking of Evidence in International Arbitration, although still falling short of the wide-ranging discovery typical of common law systems. 8.2 Privilege Given that there is no discovery in the first place, German law does not provide for a general doctrine of privilege, nor does it provide for an attorney–cli- ent privilege as known in common law jurisdictions. Instead, protection is afforded through specific rules on professional secrecy and rights to refuse testimony under Section 383 German Code of Civil Procedure, covering, inter alia, lawyers, tax advisers, or other per- sons bound by statutory confidentiality obligations. These protections apply directly in state court pro- ceedings and, by analogy, in arbitration, and may jus- tify withholding documents. In international arbitration proceedings seated in Germany, tribunals regularly devise procedural solutions to ensure a level playing field – typically by determining the applicable privilege
242 CHAMBERS.COM
Powered by FlippingBook