GERMANY Law and Practice Contributed by: Michael Molitoris, Tanja Hütt, Maike Dickmann and Simon Marchlewski, SZA Schilling, Zutt & Anschütz
context, regulatory requirements set a minimum standard for product design that must gener - ally be observed by manufacturers, insofar as safety-related features are concerned. If regula - tory requirements are not met, a product defect will be assumed. On the other hand, compliance with regulatory requirements does not necessarily mean that the “product” is defect-free. While there is an indica - tive effect, it is possible that safety expectations of product users exceed the recognised techni - cal standards, therefore constituting a defect. According to Section 1 (2) number 4 of the ProdHaftG, a manufacturer is only exempt from liability if it can prove that the product defect is specifically due to the “product” having com - plied with mandatory legal provisions at the time it was placed on the market. The new Product Liability Directive (EU) 2024/2853 expressly stipulates that safety requirements under EU or national law must be considered when assessing the defectiveness of “product” . It remains to be seen how the Ger - man legislature will implement this into national law. 2.14 Rules for Payment of Costs in Product Liability Claims The product liability law does not contain any specific cost-bearing rules meaning that the general rules of the ZPO apply. According to these rules, the unsuccessful party in a lawsuit must pay the court costs, including costs of tak - ing evidence such as costs for a court appointed expert witness and the opposing party’s costs, provided they were necessary for the appro - priate pursuit or defence of the lawsuit. In the event of a partial success or defeat, the costs are apportioned.
An exception to this is the costs of means of challenge or defence which were not successful. These costs may be imposed on the party that brought it even if it has prevailed on the merits of the case. The successful party is therefore entitled to reimbursement of costs from the losing party. However, this is limited to the statutory fees, which depend on the amount in dispute. If the successful party has agreed a higher fee with its lawyer (for example, an hourly rate) it must cover the difference between this and the statu - tory costs itself. 2.15 Available Funding in Product Liability Claims Third-party litigation funding is generally per - mitted under German law. Litigation funders are independent service providers who assume the cost risk of a lawsuit in return for a share of the outcome. Litigation funders have become increasingly prominent in recent years, particu - larly in connection with mass claims brought by consumers or follow-on antitrust claims. For lawyers, agreements in which the amount of remuneration depends on the success of the lawyer’s work or in which the lawyer receives a percentage of the amount won as a fee (contin - gency fees) are not generally permitted. There are only very limited exceptions to this rule, eg, for small claims of no more than EUR2.000. It is also not permitted to agree on fees that are lower than the statutory fees. Another option for financing a lawsuit is to take out legal expenses insurance. Legal aid is only granted in certain cases if the applicant is unable to pay the legal costs due to their personal and economic circumstances and if the proposed legal action has a reasonable chance of success.
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