Modernisation and digitalisation of civil proceedings laid down in the coalition agreement
On 24 November 2021, the German political parties of SPD, Bündnis90/Die Grünen and FDP presented their coalition agreement
. The parties’ objectives include the modernisation and digitalisation of civil proceedings and also the further expansion of collective redress in that context.
Expanding collective redress and strengthening legal tech providers
One key objective stipulated by the coalition agreement in the judicial sector is to further develop collective redress:
“We will expand collective redress. We will modernise existing instruments such as those under the Capital Investors Model Proceedings Act (Kapitalanleger-Musterverfahrensgesetz – “KapMuG”) and examine the need for additional instruments. We will implement the EU Directive on representative action in a user-friendly manner, further developing the model declaratory action, enabling also small businesses to make use of such ways to sue. We will stick to the requirements for associations entitled to bring action” (page 106 of the coalition agreement).
The KapMuG, which was prolonged in September 2020, will expire at midnight on 31 December 2023 (Section 28 KapMuG). Both the parliamentary group of Bündnis 90/Die Grünen (Bundestag document 19/17751) and the parliamentary group of FDP (Bundestag document 19/22349) had already presented specific suggestions for revising the KapMuG during the legislative procedure on which the future coalition was now able to build. Those suggestions concern, for example, an explicit delimitation from other instruments of collective redress, higher influence for competent courts on the initiation and the subject matter of the model proceedings and a concentration of jurisdiction across the federal states.
The announcement that “small businesses” will also have the opportunity to make use of collective redress instruments can be understood as a paradigm shift. So far, this possibility has only been available to consumers. It remains to be seen how the term “small business” will be defined.
The coalition also intends to adhere to the model declaratory action and to improve it in the course of introducing the action for performance, which is required under Directive (EU) 2020/1828 (see here for details). The tried and proven representative action system is also to be maintained. This means that, also in the future, only organisations holding a corresponding authorisation will be entitled to sue. These organisations will be able to choose from a variety of instruments, ranging from injunction proceedings and a model declaratory action to an action for performance. In addition, Verbraucherzentrale Bundesverband (vzbv), the federal association of consumer advice centres can also expect to receive additional financial resources for bringing collective actions (page 112 of the coalition agreement).
It remains to be seen what the announcement that the legal framework for legal tech companies will be expanded, the wording of which is almost identical to a section in the FDP’s election manifesto, actually means (page 112 of the coalition agreement). It is possible that the FDP’s failed draft bill of 2020 which provided for a wide liberalisation (Bundestag document 19/9527) will be put on the agenda again. It is definitely to be expected, however, that offers to enforce claims against a contingency fee will be supported.
Online hearings and digital proceedings for small claims
Furthermore, the coalition agreement provides for a moderate modernisation of civil proceedings:
“Legal proceedings are intended to become faster and more efficient: it should be possible to hold hearings online, the taking of evidence should be documented by audio-visual recordings and more specialist tribunals should be used. Citizen-friendly digital proceedings are intended to make it easier to enforce small claims in court.” (page 106 of the coalition agreement)
The coalition parties are following up on a discussion paper presented by judges regarding the modernisation of civil proceedings and the many positive experiences they had with online hearings during the coronavirus pandemic.
A real virtual hearing, where even judges do not have to be present in the courtroom, could be an improvement compared to the current practice where one camera for the entire courtroom often has to suffice. Of course, the principle of public hearings will also have to be upheld here. If, in the future, audio-visual recordings can be made in addition to written testimonies and the wording of the hearing is recorded in its entirety, this will also make it possible for appellate courts to assess the evidence more comprehensively and will catch up with the practice that already exists in other jurisdictions and arbitration proceedings today.
The implementation of digital proceedings to assert small claims requires a closer look. It is well possible that it serves to reduce barriers for individuals to obtain legal protection. However, when this is implemented, it must be ensured that the procedural rights of adverse parties and their possibilities to effectively defend themselves against being held liable without justification are also protected under the Constitution and have to be safeguarded.
Specialised English-language divisions
The coalition’s wish to enable specialised English-language divisions for international commercial and business disputes (page 106 of the coalition agreement) will result in the further opening of Germany as a legal venue to international litigation, as the previous establishment of commercial courts in individual federal states has shown (see here for details).
Noerr is a pioneer in the defence of collective and mass actions. With a specialised team of more than 40 lawyers in its Class & Mass Action Defense practice group, Noerr regularly advises on the defence against capital investor model proceedings, model declaratory actions und representative actions as well as on defending claims by structured claim vehicles and in mass actions.