Update: Preventing Precedent Made More Difficult

Now that was quick: Last week, the German Bundestag passed a law amending the Code of Civil Procedure (ZPO) designed to allow the Federal Supreme Court (Bundesgerichtshof) to issue judgments that create precedents.

As previously reported, banks and insurance companies in particular had increasingly withdrawn appeals or acknowledged claims against them literally at the last minute to prevent such judgments. If the indications in the oral hearing (mündliche Verhandlung) were such that the court would find against them, they pulled the plug on the proceedings and prevented the publication of a full judgment against them. The minister of justice decided to take action quickly, ahead of the general election in September this year, while the current parliament is still in session. She announced these plans in an interview earlier in the month. The amended provisions were included in an act dealing with e-justice (Gesetz zur Förderung des elektronischen Rechtsverkehrs in der Justiz) last week and almost instantaneously passed into law.

As of January 2014, a party to appeal proceedings (Revision) pending before the Federal Supreme Court can not any longer unilaterally prevent a judgment from being given, once the oral hearing (mündliche Verhandlung) has commenced. If the party roles are reversed, then the acknowledgement of a debt will only result in a short form judgment without legal reasons being stated (and hence be only of limited value as a precedent), if the other party agrees.

The revised rules thus still allow for a consensual termination of proceedings, and cynics may argue that the consent requirement will simply be a factor in pricing the settlement. This may be true for certain matters, but in particular actions brought or supported by consumer action groups are now likely to be followed through to judgment. And in my view, any further steps would have been an undue limitation of party autonomy in civil litigation. By the way, this reform is in part undoing the 2002 reforms, when the consent requirements were abolished in order to speed up proceedings – a step back into the future. Then, they were considered a mere formality. But as with Sec. 522 ZPO, these reforms did not stand the test of time.

 

 

 

 

 

 

 

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