GERMANY Law and Practice Contributed by: Tanja Pfitzner, Fabian von Schlabrendorff and Niklas-Arne Hecht, Pfitzner Legal
level of consumer protection compared to the German model declaratory action of 2018. The German Consumer Rights Enforcement Act, which entered into force on 13 October 2023, imple- ments the requirements of the Directive and, in addi- tion to moving the Model Declaratory Action to this Act, introduces a new type of Representative Action for performance or damages applying to all disputes between consumers and businesses (“Redress Action”). All matters that could be litigated in an indi- vidual civil lawsuit can now be litigated in these Repre- sentative Actions. These actions can only be brought by a qualified entity which has to show in its state- ment of claim that at least 50 consumers are affected and that the consumer’s claims present substantially similar questions of law or fact. The opt-in principle applies to these Representative Actions – ie, once a qualified entity has filed such a claim, each individual consumer or small business entitled to sue (ie, com- panies with less than 50 employees and an annual turnover of no more than EUR10 million) can decide to opt in and apply for registration. This is possible until three weeks after the conclusion of the oral hearing in the first instance. The Redress Action proceedings are structured in three phases: First, the judicial redress procedure is carried out, which encompasses the basic redress judgment on the merits of the case, a settlement eval- uation phase and, if no settlement can be reached, the final redress judgment including the total compensa- tion amount. This is followed by the implementation phase, in which the compensation is distributed by an administrator appointed by the court who decides on eligibility and the individual amount of damages. The administrator’s decision is subject to judicial review. Finally, any potential follow-on proceedings are car- ried out, eg, if the administrator has refused to fulfil a claim asserted by a consumer in full or in part in the implementation phase, or if the defendant com- pany raises objections, provided that this claim or this objection could not have been raised during the previ- ous phases. 3.8 Requirements for Cost Estimate German attorneys are required, under the rules of pro- fessional conduct, to inform their clients of the esti-
mated costs that may arise during legal proceedings. The standard of advice is that the client must be able to decide, on an informed basis, about the potential costs and cost risk, whether or not to file an action.
4. Pre-Trial Proceedings 4.1 Interim Applications/Motions
German civil procedural law provides for several inter- im applications a party may file before the commence- ment of proceedings. These applications are not lim- ited to case management issues. They include interim injunctions to ensure the enforceability of a claim or to protect a party from irreparable harm. Further interim applications are motions for the preservation of evi- dence and security for costs. 4.2 Early Judgment Applications Courts have a legal obligation to expedite the pro- ceedings. German procedural law does not provide for a general form of “early judgment”, but specific types of judgments are available that are comparable to the concept of early judgment. If a court is convinced that liability and at least some damage has been incurred, it can make an interlocu- tory judgment based on the claim, leaving the quan- tification of the claim open. Such judgments often motivate the parties to settle the amount of damages. A court may also issue an interlocutory judgment on certain contentious procedural issues. Such judg- ments are at the sole discretion of the court. A court may also, at its discretion, decide on only part of the claims or counterclaims when this part is ripe for a final decision. Early judgments can also be declaratory in nature and cover basic legal issues underlying the dispute – eg, if a plaintiff claiming complex damages as a shareholder of a company is a shareholder at all. The court must decide on such an application of a party. At the discre- tion of the court, a judgment under reservation may be made in cases where the defendant has declared the set-off against the claim. If the claim is fully heard but the circumstances of the set-off are not, the court may decide on the claim subject to the judgment being later adjusted based on the set-off.
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