GERMANY Law and Practice Contributed by: Tanja Pfitzner, Fabian von Schlabrendorff and Niklas-Arne Hecht, Pfitzner Legal
2.3 Third-Party Funding for Plaintiff and Defendant Third-party funding is available to both plaintiffs and defendants. 2.4 Minimum and Maximum Amounts of Third-Party Funding There is no limit on the amount a third-party funder can provide. De facto, however, some litigation funders only provide funding above a certain minimum amount in dispute. 2.5 Types of Costs Considered Under Third- Party Funding Third-party funding can cover all fees and expenses, including costs of legal representation and court fees. In addition, the agreements can include any costs of the other party to be borne by the funded party if it loses the case. 2.6 Contingency Fees A contingency fee in litigation that transfers part of the proceeds to the attorney may be agreed: • for (attachable) monetary claims up to EUR2,000; • in summary proceedings for a payment order; • in enforcement proceedings; or • in individual cases if the client’s financial circum- stances prevent them from litigating without agree- ing a contingency fee. Agreements, by which the attorney undertakes to bear court costs or costs of other parties, are inadmissible. In extrajudicial matters, a contingency fee may as of recently be agreed for (attachable) monetary claims up to EUR2,000 and for permitted collection services. 2.7 Time Limit for Obtaining Third-Party Funding There are no restrictions on when a party may obtain the services of a third-party funder.
ever, in some federal states, under certain procedural conditions, the parties are required to seek mediation or conciliation before initiating court proceedings. It is nevertheless common practice to send a warning letter, a request for payment or a notification to the opponent or to initiate collection proceedings prior to the commencement of court proceedings. This can avoid potential cost disadvantages, and some pre- trial measures can also trigger legal consequences favourable to the plaintiff, such as the suspension of the limitation period or the initiation of the debtor’s default, which leads to an interest claim. 3.2 Statutes of Limitations Statutes of limitations are considered part of German substantive law. The limitation periods applicable to civil actions are therefore contained in the Civil Code. The general limitation period for the assertion of a claim is three years, beginning at the end of the year in which a claim arises and the plaintiff is aware of the claim or at least should have known that a claim exists. Depending on the subject matter, special limi- tation periods may apply, ranging from a few days to 30 years. The limitation period may be suspended by various events, most importantly negotiations, the filing of a statement of claim or the initiation of proceedings with a registered conciliation institution. The parties may also conclude a waiver of limitation agreement. The plea of limitation is subject to party autonomy. A court may dismiss a claim based on statute of limi- tations only if the defendant invokes the statute of limitations. If such a statement is not made by the defendant, the court will not take the limitation aspect into account in the decision, even if the claim is obvi- ously time-barred. 3.3 Jurisdictional Requirements for a Defendant When a claim is filed, the court determines on its own whether an international, subject matter, local and functional jurisdiction exists based on the facts and law pleaded at the time the claim became legally pending.
3. Initiating a Lawsuit 3.1 Rules on Pre-Action Conduct
In general, there are no specific rules on pre-action conduct before commencing court proceedings. How-
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