Precedential ruling for mass claims to be introduced at Germany’s highest court

The German Bundestag has adopted the federal government's bill to introduce a precedential ruling procedure at the Federal Court of Justice (BGH) with minor amendments.

Mass proceedings involve a large number of individual lawsuits in identical or similar cases. The steadily increasing number of such mass actions, for example in the areas of delayed flights and data protection, has been a burden on the German judiciary for years.

Precedential rulings by the BGH are intended to relieve the civil courts in the future. The concept is that the courts dealing with similar cases could be guided by a lead ruling handed down at an early stage by the highest German court. This would enable them to conclude the proceedings more quickly, ideally avoiding lengthy and costly appeal proceedings.

To deliver a precedential ruling, the BGH will be able to select a suitable case – one which offers the broadest possible spectrum of unresolved legal issues – from the appeals pending before it. Once that case has been selected, the BGH may issue a decision even if the appeal is withdrawn or the case is settled. The decision is made without oral hearing as a reasoned order. The BGH needs to limit its decision to the considerations relevant to the mass action. The decision of the BGH will be formally binding on the parties and will provide guidance for lower courts and the public.

If the BGH initiates proceedings under the new law, the lower courts may suspend any parallel proceedings pending before them.

The Bundestag has made changes to the draft law in connection with this suspension: ‘The government's draft provided that the courts could only suspend proceedings with the consent of both parties,’ Johanna Weißbach, a mass litigation expert at Pinsent Masons, said. ‘The requirement for consent was criticised during the legislative process. The wording of the law passed by the Bundestag is now somewhat more far-reaching: the parties are to be heard before the suspension. Only if a party objects and invokes valid arguments against a suspension – such as imminent insolvency of one of the parties or the advanced age of the claimant – no suspension is possible.’

The period of suspension is limited to one year if one of the parties requests the continuation of the proceedings after one year. However, if there are significant reasons, the proceedings can be suspended for longer than a year.

The law will enter into force on the day after its publication in the Federal Law Gazette.