In our initial blog-post on this topic (“Things are getting serious for compaines: New class action in Germany“), we have already provided information on the first draft by the German Federal Government. Below we summarize the most important proposals of the Bundesrat on this proposal and the Federal Government’s response to them.
A. Proposals on the Consumer Rights Enforcement Act (VDuG)
The Bundesrat proposes that for collective actions (i.e., both for model declaratory actions and for the new redress actions to be introduced), the provisions applicable to proceedings before Regional Courts (Landgerichte – LG) are to be applied mutatis mutandis to the proceedings before the the Higher Regional Courts (Oberlandesgerichte – OLG) having jurisdiction at first instance in such collective actions. The Federal Government agrees with this proposal. The – at least clarifying – regulation appears appropriate, since the Higher Regional Court acts here in the first instance and therefore acts as a full factual instance (and not as an appellate instance with the fundamental restriction to the correction of errors of law).
Another proposal of the Bundesrat could lead to a noticeable expansion of the scope of application of the new collective action. So far, a collective action is only admissible if the claims sued for are of the same kind, Sec. 15 VDuG. This requires that the claims are based on the same facts (or a series of comparable facts) and that the same factual and legal issues are relevant to the decision. On the one hand, the Bundesrat would like to expand this by stipulating that it should only be a matter of “essentially” the same questions of fact and law. On the other hand, individual objections and defenses – in particular the statute of limitations defense – should not, according to the wishes of the Bundesrat, stand in the way of such similarity. This would not be so far-fetched without the suggested clarification, especially for the statute of limitations defense, since it often depends here on the individual knowledge or possibility of knowledge by the individual creditor. The Federal Government would like to examine this suggestion in the further legislative process.
The Bundesrat would also like to extend the scope of application of the coercive measures against the entrepreneur provided for in the draft law if the entrepreneur fails to fulfill claims of a consumer beyond a payment in response to a corresponding request by the administrator. Up to now, only non-personal acts of the entrepreneur can be enforced with the coercive measures of a penalty payment or, alternatively, compulsory detention. The Bundesrat would like to extend this remedy to personal acts. Since the Federal Government has agreed to this proposal, it is likely that the extended possibility of coercive measures will also be included in the final law.
Furthermore, the Bundesrat asks that the two-week period for objections by the contractor to the final invoice, which has been provided for in the draft to date, shall be extended. The Federal Government will examine this proposal. Since the deadline for the contractor, especially when hundreds or even thousands of individual claims are bundled in a collective action, appears very short and at the same time the legal consequence of missing this deadline – the fiction of the final invoice as accepted – is drastic, this proposal of the Bundesrat is certainly appropriate.
Furthermore, the Bundesrat would like the point in time up to which consumers can register their claims in the association action procedure to be moved back significantly. The current draft provides that claims can be filed up to two months after the first hearing. However, the Bundesrat would like consumers to be able to file claims until the end of the last oral hearing. The Bundesrat is expressly concerned here with relieving the burden on the judiciary. It hopes for a bundling effect of such a collective action, which would also be more attractive for consumers because they could make their decision to file a claim later and thus on a more reliable basis of information. The Federal Government does not see any need for adjustment at this point. This is because it is only through the filing of the claim that the court and the parties learn which individual claims (and thus also which total volume) form the basis of the specific collective action.
B. Further proposed amendments
Furthermore, the Bundesrat is in favor of an extended possibility of suspending individual actions against the background of an ongoing collective action. The Federal Government does not wish to follow this proposal either; it expressly wants to give each consumer the choice between collective legal protection in the form of a collective action or individual legal protection. This is to be welcomed.
Finally, the Bundesrat has proposed that the simple filing of a collective action should in itself bring about the statute of limitations for all claims affected by this action. The Federal Government was certainly right to reject this far-reaching proposal. It is certainly appropriate that only an opt-in by the respective consumer to the collective action should lead to a suspension of the statute of limitations for his claims. Only in this way his individual claim will also become the subject of the collective action.
The Bundesrat has proposed numerous and significant changes to the scope of a collective action and the associated benefits for consumers. The Federal Government has taken up only some of these amendments, but has rejected any that go too far.
BT-Drs. 20/6878 is available HERE.
Do you have any questions about this news, or would you like to discuss it with the author? Please contact: Dr. Florian Niermeier