On behalf of the team

On 13 July 2021, the German Federal Court of Justice, the Bundesgerichtshof (BGH), upheld a model for collecting mass claims.[1] The decision is a breakthrough for the possibility of collective redress in Germany. This applies not only, but in particular, to cartel damage claims. With this decision, the BGH anticipated the upcoming reform act for class actions that is still to enter into force. Importantly, the BGH did not see a significantly increased risk of unqualified legal services in the model for mass claims. In addition, the BGH clarified that the model for mass claims does not lead to conflicts of interest. This is because they all have a common interest in the most efficient implementation possible. The BGH concluded that there are risks related to the different degree of likelihood of execution of claims when these are combined in a group arrangement. Claims that have a lower likelihood of execution could adversely affect claims that have a higher likelihood of execution. The BGH nevertheless ruled that the advantages of sharing the cost risks and strengthening the negotiating position outweigh these possible risks.

Although the decision of the BGH related to a somewhat special scenario (enforcement of claims against the former director of an insolvent company), its relevance goes far beyond the collection of claims related to insolvent companies. Claims for damages due to cartel formation have often been the frontrunners in shaping the legal landscape for collective redress in Germany. Many leading cases, such as the well-known CDC cases (“Cartel Damages Claims”) before the Court of Appeal of Düsseldorf and the European Court of Justice related to claims due to cartel formation.

[1] Bundesgerichtshof 13 July 2021, II ZR 84/20.