At the outset of a litigation, clients inevitably ask how long the matter will take. And they do not want me to quote the lyrics of an old Cat Stevens song. But frankly, in many cases, that would be the best I could do. And going by two recent decisions, I would need to add, being the cautious lawyer that I am: “You’re still young, there’s so much you have to go through…”
These two decisions of the Federal Constitutional Court (Bundesverfassungsgericht) dealt with shareholder suits which went on for a shockingly long time of twenty years or more. In the one case the underlying transaction was the domination agreement as part of the AEG/Daimler merger in 1988 and the other matter involved a transaction with ABB‘s German subsidiary in 1986. The ABB/Daimler matter was pending from 1989 until 2009 in the Frankfurt courts; the first instance alone did not come to an end until 2007. The ABB matter in Mannheim started in 1986 and was still alive at the end of 2011. In each of the cases, the Federal Constitutional Court found that the shareholders’ constitutional right of due process was violated.
For the shareholder who took the matters to Karlsruhe and the Federal Constitutional Court, it was a moral victory only – the legislation that introduced a (very limited) right to claim damages came into force too late for them.
I have posted here earlier about this new legistaion and the attempt of the German parliament to speed up the courts by creating claim for damages – but only after having been forced to do so by the European Court of Human Rights. Would that new law have made any difference here? The jury is still out, but I doubt it.