GERMANY Law and Practice Contributed by: Tanja Pfitzner, Fabian von Schlabrendorff and Niklas-Arne Hecht, Pfitzner Legal
Agreements, by which the attorney undertakes to bear court costs or costs of other parties, are inadmissible. In extrajudicial matters, a con- tingency 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. In general, there are no specific rules on pre- action conduct before commencing court pro- ceedings. However, 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 noti- fication 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 con- tained 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 3. Initiating a Lawsuit 3.1 Rules on Pre-action Conduct
at least should have known that a claim exists. Depending on the subject matter, special limita- tion periods may apply, ranging from a few days to 30 years. The limitation period may be suspended by vari- ous events, most importantly negotiations, the filing of a statement of claim or the initiation of proceedings with a registered conciliation insti- tution. The parties may also conclude a waiver of limitation agreement. The plea of limitation is subject to party autono- my. A court may dismiss a claim based on stat- ute of limitations 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 obviously 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. The determination of international jurisdiction is based either on EU law, in particular the Recast Brussels Regulation or the Lugano Convention 2007, or on the provisions on local jurisdiction contained in the Code of Civil Procedure. In principle, a defendant must have its domicile or registered seat of business in Germany to be sued in Germany. In addition, other factors, such as the location of a branch, or the place of performance of the contract, the occurrence of damage or the commission of an unlawful act, may establish the jurisdiction of German courts.
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