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German justice ministers call for reform of the system of mass proceedings

Out-Law News | 01 Dec 2021 | 2:35 pm | 2 min. read

Germany’s Conference of Ministers of Justice (JuMiKo) has called for significant reform of the rules governing civil mass proceedings, with the aim of reducing the burden on the German courts.

According to the JuMiKo’s resolution (PDF/119 KB - in German language), increasing the number of court staff and digitising the courts alone will not solve the problems in coping with the rising number of mass proceedings. It has therefore called on the federal justice minister to initiate a corresponding reform package.

Mass actions, in which the interests of a large number of affected consumers are bundled and represented in court, have been increasing in Germany for years. According to experts, this is mainly due to the fact that legal tech companies and claims management companies specialising in this field are reaching out to affected consumers with advertising. Modern technology enables those businesses to bundle similar cases and jointly represent the consumers' interests in court. In return, they usually demand a success fee. This is considered attractive to consumers especially if their damages are so small that they shy away from individual court proceedings and the associated costs.

"Claims management companies and legal tech platforms can facilitate consumers' access to justice with low-threshold offers in certain areas and save costs. In addition, they can open up new business areas for small and medium-sized enterprises," said Bavarian justice minister Georg Eisenreich, on whose initiative the JuMiKo resolution is based. In the context of these mass proceedings, however, there are sometimes "unnecessary additional burdens for the courts and unnecessary delays". The standardised pleadings often have little relation to the individual case, the annexes are not always correctly assigned and queries from the court often remain unanswered, he said.

The JuMiKo has proposed a review of Germany’s civil law, civil procedure law, professional and legal services law as well as the laws on fees and costs. This review should consider whether legislative changes in these fields would mean that legal disputes can be resolved more quickly. This would go beyond the idea for a new procedure for preliminary rulings in class actions by the German Supreme Court, which had been outlined by the JuMiKo this summer. The resolution leaves open how exactly reforms could look like, but clarifies that the rights of citizens should not be limited.

Eisenreich said: "Effective enforceability of consumer rights is important. However, the current legal situation leads to an unnecessary drain on valuable judicial resources. Courts need the legal tools to deal with mass claims in a reasonable time."

According to Johanna Weißbach, a litigation law expert at Pinsent Masons, Eisenreich's assessment is in line with current opinions by the courts and judges themselves. As reported by the Frankfurter Allgemeine Zeitung (German-language article), nine presiding judges at the Augsburg Regional Court wrote a 'flaming letter' to the Munich Higher Regional Court, pointing out that the increasing number of mass proceedings was leading to overwork and affecting mental health and motivation. In its letter, the court said that the professional image of judges was changing fundamentally and the Regional Court was mutating into a mere "flow heater".

"The District Court of Frankfurt am Main has made similar statements: the court is currently facing a wave of lawsuits against Germany’s Federal Financial Supervisory Authority, which is being sued in connection with the Wirecard insolvency", Weißbach said. "There are already 1,500 cases pending, and numerous other lawsuits have been announced. The president of the court indicated that the workload could hardly be handled with the current number of judges."