GERMANY Trends and Developments Contributed by: Oliver Sieg, Helmut Katschthaler, Philipp Koch and Charlott Kujath, Noerr
Arbitration clauses are common in reinsurance and cross-border contracts. ARIAS Deutschland, for example, is a well-established platform for alterna- tive dispute resolution, providing a recently updated sample arbitration clause. Initially focused on rein- surance disputes, it has extended to D&O insurance. In particular, contracts with cross-border elements or multi-party involvement (such as product liability claims involving several insurers, claims directed at several D&O-insured persons at once, or even cases involving both primary and reinsurers) may benefit from alternative dispute resolution methods. Mass Claims Mass claims remain at a high level in Germany, con- fronting companies with significant exposures due to a cumulation of losses, which translate across to the insurance and – via aggregation – reinsurance market. While German law has, in comparison, imposed rela- tively high hurdles on the organisation of mass actions for decades, the legislature has significantly strength- ened collective redress mechanisms in recent years, particularly in light of consumer protection consid- erations – eg, via the Consumer Rights Enforcement Act ( Verbraucherrechtedurchsetzungsgesetz (VDuG)), which introduced an action for redress by qualified consumer associations, allowing consumers to opt in to claims brought by such associations against companies. This is a significant departure from the traditional German model of declaratory actions ( Mus- terfeststellungsklagen ) under which courts only deter- mined whether the prerequisites for claims were ful- filled, without granting individual compensation. This new representative action may cover claims for cartel damages, capital investment disputes and product liability claims, but also extend to disputes concern- ing widely used standardised contracts (which could include mass risk insurance). As a result, the VDuG materially increases collective litigation risk and the potential aggregate exposure for companies and their insurers. By way of example, in August 2026, the Berlin senate administration’s IT system was targeted by a massive cyber-attack with professional hackers blackmailing authorities and later publishing more than 5.6 tera- byte of data – 1.2 million files – for download on the
darknet. Although investigations suggest that only data classified at the lowest security level was com- promised, this incident, like similar attacks, has the potential to trigger a wave of compensation claims by consumers under the General Data Protection Regula- tion. The case also illustrates how closely cyber-risks and mass claims are intertwined. From an insurance industry perspective, actions brought by consumer associations challenging the validity of premium adjustment clauses in private health insurance and surrender fee clauses in life insurance have demonstrated that these new collec- tive redress instruments are likely to find a significant field of application in the insurance sector. Mass claims may also be brought by special purpose vehicles (SPVs), legal entities which bundle claims assigned to them and file them as one plaintiff and as one case in exchange for a percentage of the potential payout. The Federal Supreme Court has confirmed that assignability – especially in consideration of the Legal Services Act ( Rechtsdienstleistungsgesetz (RDG)). However, the Federal Supreme Court recently defined strict limitations, noting that excessive bun- dling of and control over the assigned claims which practically prevent effective judicial protection can lead to forced separation of claims, or even the inva- lidity of assignments. Third-party litigation funding for mass claims has experienced a general surge in Germany, histori- cally starting in the area of air-passenger rights and expanding into compensation claims in connection with corporate scandals (such as Volkswagen or Wire- card). Funding for mass actions has gained even more popularity due to increasingly capable AI tools mak- ing large numbers of proceedings more manageable, and thus more lucrative. Notably, third-party funding is restricted under VDuG, which requires that profit shares of third-party litigation funding must be capped at 10% and must be disclosed by the parties. The approaches to increase options for collective redress facilitate the court access of consumers with smaller claims, meaning that liability insurers, in particular, could see a surge in expensive combined claims and thus higher legal proceeding costs.
146 I NSURANCE L I T IGATI O N 2026
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