In an interview in Friday’s Frankfurter Allgemeine Zeitung, Winfried Bausback, the Bavarian Minster for Justice set out his plans to amend the limitation rules in such a way that the heirs of owners of looted art could reclaim their property from Gurlitt (Kein Vertrauensschutz für bösgläubige Besitzer). Bausback, a professor of public law by trade and, as it happens, the member of the Bavarian Landtag for my home town Aschaffenburg, was appointed to the office in October 2013, just before the Gurlitt case was to become public and found himself thrown into the limelight immediately. Here is how he proposes to address the limitation issue:
Under German law, the restitution claim of an owner (Eigentümer) against the possessor (Besitzer) does not become automatically invalid or unenforceable once the limitation period has expired. The limitation rules operate as a defense: a defendant must expressly need to invoke the limitation in order to successfully defend the restitution claim of an owner.* The idea behind Bavaria’s legislative initiative is to introduce a two-pronged test which the claimant must meet in order to invalidate the limitation defense. The first requirement is that the property must have been lost in a legal sense (abhandengekommen). Secondly, only a bona fide possessor shall be entitled to rely on the statute of limitation and accordingly, the defendant must be a bad faith possessor.
In my opinion, the first element of the test does not add much of a burden for a claimant, because claimants will need to show that they retained title to the property, and in doing so, they will most likely rely on Sec. 935 German Civil Code (BGB) anyway, which rules out a bona fide acquisition of title in case of lost property. The concept of lost property includes stolen property, and as applied by the courts, I would expect it to cover all known sub-groups of looted art. The second prong is more tricky, in particular since the planned changes of the Civil Code (BGB) provide for the burden of proof as to the bad faith of the possessor to remain with the owner.
In the interview, Bausback was asked whether the general doctrine of good faith (Sec. 242 German Civil Code) was not good enough as a tool for courts to prevent undesirable outcomes. This general doctrine is indeed the only solution that I do see at this point in time, de lege lata. Bausback rightly says that Sec. 242 BGB is inherently vague and that an express statutory basis is preferable. I could not agree more.
However, Bausback also acknowledges that the solution must pass two hurdles of a constitutional nature. First, the new limitation regime must be of a general nature and not be designed just for the Gurlitt case (Verbot des Einzelfallgesetzes, Art 19 Basic Law, Grundgesetz). Secondly, there is the issue of retroactive effect (Rückwirkung) which legislative changes may only have under certain circumstances, which the case law of the Federal Constitutional Court (Bundesverfassungsgericht) has defined. The first hurdle appears to be an easy one to take. On the second one, Bausback the constitutional law professor is confident that his proposed amendment of the Civil Code will pass it. What seems to be relatively clear, however, is that the new law must become effective before any litigation is already pending for it to be applied in that case.
As previously noted, the limitation of restitution claims was discussed in 2001/2002, when the law of obligations in the German Civil Code were widely recast. At the time, the law makers were aware of the limitation issues in the context of looted art, and various proposals on how to address the problem were made.** Unfortunately, parliament at the time decided to leave the law unchanged, and opted for legal certainty of an absolute 30 year limitation period over doing justice to each individual case. The Bavarian initiative in that sense can build on that discussion over a decade ago and finally get it right.
According to Bausback, Bavaria will introduce the proposed new legislation via the Upper Chamber, the Bundesrat, shortly. We will keep you posted.
* In the 2012 landmark Hans Sachs case, for example, this defense was not invoked by the Deutsche Historisches Museum, and hence, when the Federal Supreme Court (Bundesgerichtshof) ruled against the museum with respect to the special restitution limitations, the claim of the heir of Hans Sachs succeeded and the collection had to be returned. The Federal Supreme Court did not have to rule on the limitation issue.
** See for example Siehr, Kurt: Verjährung der Vindikationsklage? ZRP 2001, 346; von Plehwe, Thomas: Verjährung des dinglichen Herausgabeanspruchs und Ersitzung in Fällen abhanden gekommener Kulturgüter – zur Notwendigkeit einer Reform, KUR 2001, 49. Siehr also wrote on the City of Gotha case: Verjährt ein Anspruch auf Herausgabe des Eigentums? Deutsches Verjährungsrecht vor englischem Gericht, in: Carl/Güttler/Siehr, Kunstdiebstahl vor Gericht, City of Gotha v. Sotheby’s/Cobert Finance S.A. (Berlin 2001) 53-75.-->