GERMANY Law and Practice Contributed by: Tanja Pfitzner, Fabian von Schlabrendorff and Niklas-Arne Hecht, Pfitzner Legal
the statement of claim can be inspected on the notice board of the court and by publication in the Federal Gazette and, if appropriate, in daily newspapers. The statement of claim is deemed to have been served one month after the date of the last of these publica- tions. 3.6 Failure to Respond If the defendant fails to respond to the statement of claim or does not appear before the court at the hear- ing, the court may, at the request of the plaintiff, issue a default judgment granting the plaintiff’s claim(s). If a judgment by default has been delivered, the defendant may lodge an objection within two weeks of service of the judgment. The proceedings are then restored to the state in which they were before the defendant’s default. 3.7 Representative or Collective Actions Representative or collective actions are not tradi- tionally recognised. It is a fundamental principle of German civil procedural law that only the parties to civil proceedings are bound by the outcome of such proceedings. In recent years, however, the legislature has created certain forms of collective actions in some areas. Injunctions Act The most important form of collective proceedings has been the right of certain registered interest groups to bring an action for injunctive relief on behalf of their members and in the common interest, particularly in cases involving unfair business practices by compa- nies towards consumers, invalid general terms and conditions or other practices that violate consumer protection law or copyright law. Model Proceedings in Capital Market Disputes In case of false, misleading or incomplete capital mar- ket information, certain legal or factual issues relevant to many pending civil proceedings can be decided in model proceedings with binding effect for all. Pro- ceedings may also be initiated if such information is used or if a required disclosure is omitted. This law may also be applied in the case of claims for perfor- mance under a contract based on an offer under the Securities Acquisition and Takeover Act. Since 2024,
claims against custodians of crypto-assets as well as claims related to ratings for issuers or providers of investments and auditors’ reports on the annual finan- cial statements and consolidated financial statements of issuers of capital investments can also be decided in model proceedings. Such model proceedings take place if at least ten plaintiffs file a corresponding peti- tion in individual proceedings. The model proceed- ings are then conducted before the competent higher regional court and, on appeal, before the Federal Court of Justice. The issues established in the model decision are binding for the parties in the individual proceedings. All other aspects of the respective cas- es, eg, causal connection or amount of damage, are decided by the courts of the individual proceedings. Model Declaratory Action In 2018, the legislature introduced a model declaratory action to facilitate collective redress for consumers in cases of mass damages caused by large companies. It cannot be initiated by individual consumers, but only by certain qualified entities. Once a qualified entity has filed such a claim, each individual consumer can decide to opt in and apply for registration. Consumers who opted in are not directly involved in the conduct of the action. The model declaratory action does not end with an enforceable judgment, but with the deter- mination of the (non-)existence of factual and legal conditions for the (non-)existence of a claim or legal relationship between a consumer and a company. To obtain an enforceable judgment, each individual con- sumer must then bring an individual action in which they can benefit from the binding determinations of the model declaratory decision. Consumer Rights Enforcement Act With Directive (EU) 2020/1828 on representative actions for the protection of the collective interests of consumers and repealing Directive 2009/22/EC (the “Representative Actions Directive”), the EU had taken a further step towards cross-border consumer partici- pation in civil actions. Under the directive, qualified entities may bring representative actions for injunc- tions and redress on behalf of a group of consumers against infringements of European Union law harmful to consumers’ collective interests. Due to the possibil- ity to obtain enforceable judgments, it offers a higher
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