Hello and welcome back to the Pinsent Masons Podcast, where we try to keep you up to date with the most important developments in global business law every second Tuesday. I'm Matthew Magee, and I'm a journalist here at Pinsent Masons and this week, we investigate changes to commercial litigation in Germany designed to make the courts compete better against arbitration. We also ask whether Australia's ban on foreigners buying property there will make houses more affordable as intended.
But first, we've got some business law news from around the world:
First mass action under Ireland's new law could impact all tech companies
New listing rules for Singapore IPOs and
UK care providers have been urged to review hiring practices
A mass action lawsuit in Ireland against Microsoft for alleged breaches of the General Data Protection Regulation could have ramifications for other tech platforms that use real-time bidding in online advertising, according to experts. The case is the first to be filed under Ireland's new representative actions regime. The Irish Council of Civil Liberties successfully applied to the High Court to launch the lawsuit against Microsoft with the case centred on the allegation that Microsoft has no way to monitor or control what happens to personal data once it's been broadcast to potential advertisers. Dublin-based commercial litigation expert Zara West said this litigation should be monitored closely as it's likely to provide a blueprint for future mass actions in Ireland. The case will also provide clarity on how qualified entities intend to fund representative actions in light of current limitations on the rules concerning litigation funding.
Authorities in Singapore are proposing relaxing some of the rules governing flotation on the Singapore Exchange stock market. The Monetary Authority of Singapore wants to streamline the initial public offering (IPO) process by simplifying prospective disclosures for primary listings. MAS has also suggested allowing issuers to gauge investor interest during the early stages of the IPO process to support book building and investor familiarity. Under MAS's proposal, issuers who already have primary listings elsewhere can use the same prospectus with minimal changes. Mark Tan, an expert in corporate and commercial law, said the initiatives aim to revitalise Singapore's equity market following a decline in listings and trading activity. The Singapore Exchange Regulation is also planning rule changes to make it more attractive to investors.
Care providers in the UK have been urged to review their hiring practices amidst recent changes to immigration policy there. The UK government has placed conditions on the recruitment of new workers from overseas and outlined plans to ensure new roles in the social care sector are filled by UK workers only in the coming years. In March, the government confirmed that care providers intending to recruit a new overseas worker would first have to demonstrate that they've tried to recruit from the pool of existing care workers in the UK who need new sponsorship. That change took effect on the 9th of April. Healthcare expert Joanne Ellis said care and healthcare providers need to be aware of and in contact with the local pools of unsponsored care workers in their area.
The biggest business disputes very often have an international element – either the business activity concerned is elsewhere, or an involved company is headquartered. So when choosing where to do business, companies want reassurance about how international disputes will be settled. In a bid to increase its attractiveness to these large international businesses Germany has been tweaking its courts system, and now companies in some federal states there can conduct commercial disputes entirely in English, and with new levels of confidentiality. Munich-based disputes expert Johanna Weißbach told me what has just changed.
Johanna Weißbach: So in October 2024 the German legislator issued a new law and this new law aims at strengthening the position of German courts when it comes to commercial litigation and the legislator wants to make Germany as a venue more attractive for businesses to conduct litigation in the actual courts and not in arbitration. And the new law contains mainly 2 aspects. One is that it allows the German federal states to introduce so-called commercial courts and commercial chambers, and in addition to that, it introduces new ways to secure confidential information in German court proceedings. The new commercial courts will be established with the German Court of Appeal so the second instance courts and different to usual court proceedings, proceedings can be conducted in English completely in English. So usually we have German as language of the proceedings. All the documents need to be submitted in German. The hearings are to be held in German and in front of the commercial courts now the whole proceedings can be done in English. So no translations necessary, no translators necessary. The judges will need to conduct the hearings in English and the parties are allowed to plead their case in English. And that's new, this wasn't possible before at all.
Matthew Magee: It's not just about the language used in the disputes. Companies are very keen to avoid giving away commercial and confidential information in the course of disputes, and the new plans have an answer for that too.
Johanna: So one reason why parties opt for arbitration is that arbitration proceedings are confidential and court proceedings are open to the public, not the actual case file but the hearings are and the judgements sometimes are and even the day when a judgement is actually rendered by a court, the public can attend and listen to what's being said and also in German courts outside the courtroom, there are lists of all the cases which are heard on one day. So it's all out, out in the public and a big that's something which businesses don't like, which is why they go for arbitration and the German legislator is aware of that and the ways to protect confidential information, which were to date included in the German Code of Civil Procedure, were limited. There were some, but limited ones. And the new law now allows the court to treat confidential business information as confidential and they now have further options to redact it, for example, or to put it in a separate part of the file and so on, or also limit the access to quartering for the public.
Matthew: With it's English language documents and hearings, it's full verbatim transcripts and case management conferences, the system is consciously modelled on arbitration, another very private way of resolving business disputes. This isn't an accident, says Johanna.
Johanna: So the law aims at bringing commercial litigation from arbitration to the regular courts by providing a system which might be more attractive for businesses. So it's an alternative to arbitration which the German legislator tries to establish. I think one reason for the legislator is that Germany in general tries to be a more attractive venue for businesses, and if the German legal landscape is an attractive one for businesses, that might be one reason why businesses decide to go into Germany because it has a favourable legal landscape.
Matthew: So this sounds like an exciting and useful new addition. Which court systems used in commercial disputes is generally decided at the point of signing the contracts and included in those contracts. So should companies rush to choose this new German system as the forum for all disputes? Not so fast, says Joanna.
Johanna: My recommendation at this point in time would be to monitor and see how those cases go about. I think at this point in time it needs to be evaluation and you can always do a test, for example. I mean you can do both. You can, for example, include a jurisdiction clause which says arbitration unless, and then you have a catalogue of cases which could go to a commercial court. But I think it's really up for the lawyers to advise the parties and for the businesses to evaluate the options and perhaps find some middle ground. But I would never, I wouldn't advise that it's green light for commercial courts at this point in time. I'd say it's too early. Proceedings will be conducted in English in front of the commercial courts but if the cases are appealed to the German Supreme Court, it is not clear that the proceedings will be held in English again, because the German Federal Supreme Court can say no, I want to have these proceedings in German. So it might happen that everything has been done in English and then the Supreme Court comes and says no, now we need to do it in German. Then everything needs to be translated and so on. So that's a bit of a black box.
Australia is facing a residential property crisis – house prices in many places are very high, rents are high and spare capacity in the system is low. So Australia some years ago adopted a policy of restricting the degree to which foreign investors could buy certain kinds of residential property. The Australian government has just tightened those rules, restricting further the circumstances in which foreign people or organisations can buy property there. Sydney-based property expert Deanne Sevastos clarified what the rules say, and what is new.
Deanne Sevastos: Earlier this year, the Australian Federal Government introduced a new policy that imposes a temporary ban on foreign persons purchasing established residential dwellings in Australia. So that ban came into effect on 1 April 2025 and is expected to remain in place until 31 March 2027. So the one thing with this ban is whilst it does introduce a temporary ban on foreign persons purchasing established residential dwellings, there were previous restrictions in terms of what foreign persons could purchase in regards to established residential property. So there were some exceptions, which was if you were a temporary resident, you know, relocating—let's say, for example, a student coming into Australia—they could purchase an established dwelling being something that's previously not occupied or sold and live in it whilst they were here studying for example. Under this new temporary ban, they could not do thatThey wouldn't be allowed to—there wouldn't be an exception for that. What those students would potentially have to do, or their families, would be purchase new off-the-plan dwellings. So something that's, you know, brand new apartments, for example. And under this change as well, effectively a corporation or a developer—foreign investor—came in and would have been buying, for example, established residential dwellings, but they intended to redevelop over a period of time. They could have, for example, just knocked down that property and put a new house up there and they would have been entitled to request an exemption on that basis. Now that has been tightened up to actually say, no, you can't buy an established dwelling, basically just put a new dwelling on there and that's sufficient. You actually have to create 20 new dwellings. So obviously that moves it away from someone who could buy an established dwelling, knock it down, put a new dwelling on there. Now they actually have to create an actual bona fide development. So the point of that is what it's trying to do is create more housing supply in the market.
Matthew: The policy goal of banning foreign investment is to bring down house prices by increasing the amount of housing available.
Deanne: The aim of the government is for it to assist with the housing crisis as currently Australia's experiencing and the high cost of housing in Australia, which is notoriously high, especially when you consider it on a global perspective. The perception is that if you've got foreign investors coming in purchasing local assets or real estate in Australia, that increases or drives up the pricing and makes it less and less affordable. So when you've got a lot of people and you look at effectively the exchange rate of the Australian dollar. So some of the other economies where they're looking at investing money overseas, you can get an influx of foreign investment where Australia and the housing market here is a relatively good investment for them to purchase, which then increases, I suppose, the demand. But the supply has remained unchanged, which then drives up the prices, which then, I guess, it's a cycle that makes it harder for local buyers to get into the market.
Matthew: So if the plan is to have an impact on the whole housing market, how big an effect might a foreign ban have? Having looked at the structure of real estate investment in Australia, Deanne has doubts about whether the policy can ever deliver significant change.
Deanne: If you look at foreign investment in Australia overall, for the financial year ending June 2024, foreign investment in Australian residential property amounted to about $10.52 billion, which was actually a decrease from the previous year, which had $15 billion in foreign investment. And then to give some context, in the July–September quarter for 2024, foreign investment for real estate investments during that reached about $1.3 billion just for that quarter, of which China was the largest source of approved residential real estate proposals by value. Having said that though, when you put that into context, in 2024, the Australian Bureau of Statistics actually reported that Australian residential property investment saw approximately 723,000 property settlements across all the states on mainland Australia, which was an increase on the previous year and the total value of those settlements at its peak reached $714.7 billion. So when you put that into the context of how much foreign investment in established real estate acquisitions in Australia, it's only about 1.5%. So realistically this temporary ban, whilst the government is saying it's aimed at helping the housing crisis and to help alleviate the increasing costs and the affordability of housing realistically it's only really targeting a really small part of the market for Australian real estate investment.
Matthew: The main problem the government's trying to address is land banking, she says. But that's not unique to foreign investors. It may just be in the end, she says that the activity of foreign investors is just easier to control.
Deanne: There's quite a bit of debate as to how effective this policy is. I think it's questionable the impact that it's actually going to have in terms of housing affordability as well as making more housing available. Because I think the underlying issues that sit behind that, which are the housing supply constraints and a rise in construction costs really sit at the heart of what this policy says it's trying to achieve, but doesn't actually address those points. So as much as it's looking at trying to increase their housing supply by removing a part of the market that was previously part of the demand for the housing supply, realistically, whilst that may make more established dwellings potentially available, it doesn't necessarily drive the cost of those down. But then having said that, in terms of wanting to stimulate the growth of new or the increase of new dwellings that are made available to the market a big factor that impacts that occurring is the rising construction costs which effectively and a lot of people would have seen or experienced when COVID hit in terms of cost of construction, having gone up. And then as a result, a lot of developers who had been looking at developing residential properties and to create new dwellings, the cost to those developments, obviously from where they would have been modelled originally and the feasibilities just exponentially increased. So you've got the cost to actually build it going up. There were supply constraints in terms of actually getting materials and what that would cost to get them in or how long it took. So a lot of those newer developments where there was going to be a lot of housing coming onto the market, those developments have either fallen over, had builders going into liquidation or just not proceeding at all and then having to be sold off as a distressed asset potentially. So I think there are lots of things that play that this temporary ban can't and actually does address. So realistically, without those underlying issues being addressed, the effectiveness of this ban is really just targeting a very small part of the market. I don't believe it is going to address the bigger issues.
Thanks once again for listening and spending your valuable time with us. We know there's lots else that is seeking your attention, so we appreciate every minute you spend in our company. Remember, you don't need to wait to hear from me. You can get fast, accurate news and analysis every day at pinsentmasons.com, or you can sign up for a weekly digest of only the things you care about at pinsentmasons.com/newsletter. But thanks for joining me today, and until next time, goodbye. The Pinsent Masons Podcast was produced and presented by Matthew Magee for International Professional Services firm Pinsent Masons.
