Forensic Accountant for Business Litigation in Germany

You need to understand German company accounts?

In order to win a business or corporate law suit, understanding the numbers is often equally important as knowing the legal aspects of the case. The same is true if you plan to acquire a German business. Thus, the German-British litigation lawyers as well as the M&A experts at Graf & Partners (www.grafegal.com) regularly team up with German forensic accountant Hermann Werle.

Hermann obtained his degree in business administration from Regensburg UAS in 1982. Throughout his 25 year career he then worked as inhouse accountant, head of controlling, CFO and company director / CEO for renowned German and international companies and was involved in a number of mergers including Mallinckrodt, Sherwood Davis & Geck and U.S.-Surgical. Thus, Hermann gained a wealth of professional experience in various industrial sectors. While his core competence is finance, he also has practical experience in HR, IT, purchasing, warehousing and distribution.

In 2014, Hermann set up his own financial consultancy firm and provides professional advice to German and international firms, often in collaboration with the German and British litigation lawyers of Graf & Partners. His main focus is on the areas:

  • forensic accounting in cross-border litigation cases and
  • German-British and German-American merger & acquisition deals (financial due diligence)

We have worked with Hermann Werle on dozens of business litigation cases as well as international mergers. Our German as well as our international clients have always been extremely impressed by his skills, in particular his ability to break down and explain the most complex situations to non-accountants, i.e. to litigation lawyers and judges.

More information on litigation and legal fees in Germany is available in these posts:

For more on German business and corporate law see these posts:

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Experts on German-British and German-American Legal Matters

Since 2003, the German business and corporate law firm Graf Partners LLP specialises in British-German and US-German legal cases. Our German business and corporate lawyers are native speaker level fluent in English, have many years of practical experience with clients from Britiain and the USA and are part of a well established network of law, tax and accounting firms.

Managing partner Bernhard Schmeilzl was admitted as German Rechtsanwalt (attorney at law) to the Munich Bar in 2001 and specialises in international cases ever since, with a focus on German-American and German-English commercial, corporate and also probate cases. In addition to obtaining his German legal exams with distinction, he also graduated from the English University of Leicester where he obtained his Master of Laws degree in EU Commercial Law in 2003.

In 2014, Graf Partners LLP has set up the international litigation department GP Chambers which focuses on providing professional litigation services to British and US-American clients, both on a commercial and a private client level. The Graf Partners litigation lawyers regularly appear before German law Courts throughout the country and provide specialist legal advice, support and advocacy services in all commercial and civil law matters, ranging from contract disputes, corporate litigation and employment, to damage claims, divorces and contentious probate. If you wish us to advise or represent you in a German or cross border case, or if you need an expert report on German law, please call +49 941 463 7070.

Pursuing Legal Action in Germany?

You found the German law firm perfectly equipped to address your legal needs in Germany

Since 2003, German law firm Graf & Partners specialises in providing legal advice and litigation services to British and American clients. The majority of our clients come from Britain, the USA or other English speaking countries and are in need of pursuing a legal matter in Germany. If you need a competent and trustworthy attorney anywhere in Germany, our experienced contract lawyers and bilingual litigators will be happy to assist.

The firm’s managing partner Bernhard Schmeilzl and several other lawyers in our litigation team have studied and worked in the USA and/or Britain. As a result, Graft & Partners have established a unique and impressive international legal practice, which focuses specifically on British-German and German-American legal cases and issues. Our Anglo-German lawyer team is headed by British and Canadian citizen Elissa Jelowicki, a qualified English solicitor, and Registered European Lawyer, admitted to the Munich Bar Association. Therefore, foreign clients and instructing lawyers from the UK and America are able to discuss their specific case with a native English speaker, who also knows the English legal system.

Our German and British litigation lawyers appear before German law Courts throughout the country and are also experienced in (Commercial) Arbitration and Alternative Dispute Resolution. We provide specialist legal advice, support and forensic services in all commercial and civil law matters, ranging from contract disputes, corporate litigation and employment, to damage claims and contentious probate. In addition, our family law experts deal with international divorces and child custody matters. In relation to other legal areas, e.g. criminal law or tax, we will be happy to recommend qualified German lawyers from other chambers, who are also fluent in English.

On a regular basis, we speak on German-American and British-German legal issues at lawyer conventions and at in-house events of international companies and law firms. See here for some of the topics we have spoken on recently:

More information on litigation and legal fees in Germany is available in these posts:

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Call the experts on German-British and German-American legal matters

Since 2003, the German law firm Graf Partners LLP with its headquarters in Munich specialises in British-German and US-German legal cases. Our German lawyers are fluent in English, have many years of practical experience with clients from Britiain and the USA and are part of a well established network of law, tax and accounting firms.

Bernhard Schmeilzl_crop1Managing partner Bernhard Schmeilzl was admitted as German Rechtsanwalt (attorney at law) to the Munich Bar in 2001 and specialises in international cases ever since, especially German-American and German-English commercial and probate cases. In addition to obtaining his German legal exams with distinction, he also graduated from the English University of Leicester where he obtained his Master of Laws degree in EU Commercial Law in 2003. 

In 2014, Graf Partners LLP has set up the international litigation department GP Chambers which focuses on providing professional litigation services to British and US-American clients, both on a commercial and a private client level. The Graf Partners litigation lawyers regularly appear before German law Courts throughout the country and provide specialist legal advice, support and advocacy services in all commercial and civil law matters, ranging from contract disputes, corporate litigation and employment, to damage claims, divorces and contentious probate. If you wish us to advise or represent you in a German or cross border case, or if you need an expert report on German law, please call +49 941 463 7070.

Pitfalls of German Law (Part 2)

Be careful when suing a German Kommanditgesellschaft (KG), an Offene Handelsgesellschaft (OHG) or a Gesellschaft bürgerlichen Rechts (GBR)

The single most common mistake foreign claimants and their non-German litigation lawyers make when taking a German business to court is that they only sue the partnership itself and not the personally liable partners (persönlich haftende Gesellschafter).

To avoid any misunderstanding: This post deals with German partnerships (Personengesellschaften) as debtors, not with German limited liability companies (GmbH) or German corporations (Aktiengesellschaft). If the debtor is a German company, then – normally – only the company itself can be sued, not the company’s shareholders. There may be special circumstances when a director of even a shareholder may be personally liable for a company debt (piercing the company veil, in German: Durchgriffshaftung), but this is the exception to the rule.

The situation is entirely different with German partnerships, which come in four different shapes and forms:

  • Kommanditgesellschaft (KG), mostly in the form of a GmbH & Co KG
  • Offene Handelsgesellschaft (OHG)
  • Gesellschaft bürgerlichen Rechts (GbR), also called BGB-Gesellschaft
  • Partnerschaftsgesellschaft (PartG)

What these German partnerships have in common is that there is at least one partner who is liable for all business debts with his entire personal property (Privatvermögen). The relevant statute is section 128 German Commercial Code (§ 128 Handelsgesetzbuch). With regard to the OHG and the GbR all partners are fully liable. With regard to the Kommanditgesellschaft (KG) there are two kinds of partners: fully liable partners (Komplementäre) and limited partners (Kommanditisten), who are only liable up to the amount they have invested.

Now, if you (or your client) have a claim against such a German KG, OHG, GbR or PartG, the biggest mistake you can make is to sue only the partnership itself. This is because with a court order against the partnership you can only enforce your claim against the partnership, i.e. the business assets of said partnership. In many cases, however, it is likely that there are no longer any business assets to go after as the partnership is doing poorly or has even folded.

In these circumstances, you will naturally want to go after the personally liable partners of the partnership. And, you can. But only if you have listed them as joint and several co-debtors (Gesamtschuldner) in your lawsuit against the partnership.

If you (or your litigation lawyer) have not done this, then the court order cannot be enforced against the partners. You will have to start a new lawsuit all over again. In some cases, you may of course face limitation problems by then (German limitation periods are explained here).

Thus, whether you sue the German partnership in Germany or abroad, you must ensure that you do not only list the partnership itself as a defendant but also every personally liable partner which you may want to enforce the court order against at a later stage. Psychologically, this puts much more presure on the defendants and thus increases the chances of payment or a favourable settlement agreement. By the way: the lawsuit costs are not increased by co-suing the partners. So there is no reason whatsoever not to include them in your court claim.

See here for other “Pitfalls of German Law“.

More information on litigation and legal fees in Germany is available in these posts:

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The law firm Graf & Partners was established in 2003 and has many years of experience with British-German and US-German legal matters.The Anglo-German litigation lawyer team of GP Chambers is well equipped to advise and represent clients from the UK, the USA and other English speaking countries. If you wish us to advise or represent you in a German or cross border case, or if you need an expert report on German law, please call +49 941 463 7070 in order to contact German lawyer Bernhard Schmeilzl, LL.M. (Leicester), managing partner and head of the litigation department. Bernhard is also frequently asked by British and US Courts and Tribunals or by legal counsels to provide expert reports and legal opinions on German law.

Dodging Debts by Moving to the UK?

Has your German Debtor moved to the UK and declared himself or herself bankrupt under the UK / British Insolvency Rules?

Since we specialise in British-German legal matters, our firm very often gets enquiries from German individuals, companies or banks regarding a situation whereby a German individual has moved to the United Kingdom and declared bankruptcy in order to avoid paying their debts and liabilities back in Germany. Even further, it is quite common that civil proceedings will have been commenced in Germany, but particular the individual pleads that they do not need to repay the debt in Germany in light of their bankruptcy back in the UK.

The way individuals are able to declare bankruptcy in the UK is now much much easier than before (yes, a bit shocking considering it was not that difficult before). Previously, one would have to petition to the Court, however, as of 6 April 2016, the individual debtor no longer has to. Instead, they must make an online application to an adjudicator (not a judge anymore). If a debtor’s application provides all the prescribed information, and is considered appropriate, the adjudicator will automatically (this is indeed what makes the new system scary) make a bankruptcy order pursuant to its statutory jurisdiction under the Insolvency Act 1986 (IA 1986). The adjudicator is an official appointed by the Secretary of State for the Department for Business, Energy and Industrial Strategy (again – this adjudicator no longer has to be legally qualified).

The adjudicator has no inherent discretion over whether to make an order (again this probably concerns you if you believe that the individual is not telling the truth). If the statutory requirements for an order are met, the adjudicator must make it; if they are not met, the adjudicator cannot make the order.

The statutory requirements are:

  • The adjudicator had jurisdiction under section 263Iof the IA 1986 to determine the application on the date the application was made.
  • The debtor is unable to pay his or her debts at the date of the determination.
  • No bankruptcy petition is pending in relation to the debtor at the date of the determination.
  • No bankruptcy order has been made in respect of any of the debts which are the subject of the application at the date of the determination.

The adjudicator must make a bankruptcy order against the debtor, or refuse to make such an order, before the end of 28 days from the date of the bankruptcy application, unless the adjudicator requests further information from the debtor. If the adjudicator requests further information the adjudicator has 42 days from the date of the application to make an order. If the adjudicator does not respond to the debtor before the end of this period, the application is deemed refused.

What do you do in such a situation? Well, the process is not easy, but it is possible to overturn such a bankruptcy order, referred to a lot of time as a „sham bankruptcy in order to avoid paying debts“. The courts have retained their general jurisdiction over all bankruptcy proceedings commenced following the adjudicator’s bankruptcy order (including a rescission or annulment application), and will also hear any appeal from the adjudicator’s decision to refuse to make a bankruptcy order.  Moreover, it is an offence if the individual knowingly or recklessly to make any false representation or omission in making a bankruptcy application to the adjudicator or providing any information to the adjudicator in connection with a bankruptcy application.

It is also an offence knowingly or recklessly to fail to notify the adjudicator of a matter in accordance with a requirement imposed by the legislation. It does not matter whether or not a bankruptcy order is made as a result of the relevant application, and it will be no defence that any part of the offence was committed outside England and Wales.

So, if you are owed money in Germany and believe that your German debtor has run to the UK to declare themselves bankrupt, and in fact, it is a sham, you should contact the local bankruptcy department as soon as possible so that it can be overturned.

For more information about German law, in particular civil litigation and debt collection in Germany see these posts:

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The law firm Graf & Partners was established in 2003 and has many years of experience with British-German and US-German legal matters.The Anglo-German litigation lawyer team of GP Chambers is well equipped to advise and represent clients from the UK and other English speaking countries. If you wish us to advise or represent you in a German or cross border case, or if you need an expert report on German law, please call +49 941 463 7070. To contact English solicitor Elissa Jelowicki in Munich please write an e-mail to elissa(AT)grafpartner.com.

English Speaking German Lawyers and Litigators based in Munich

Experienced German Legal Counsel for British and American Clients

Since 2003, the German law firm Graf Partners LLP with its headquarters in Munich specialises in British-German and US-German legal cases. Not only are the German lawyers at GP fluent in the English language, but they have many years of practical experience gained by working for commercial and private clients from Britain and the USA. From conveyancing of German property, drafting international agreements, representing foreign clients in German courtrooms and preparing expert reports and legal opinions on German law for British and American courts. We know what English and American clients expect from their German legal counsel. We do not simply explain the German law but we focus on the – sometimes very significant – differences, especially when it comes to German civil procedure rules.

Bernhard Schmeilzl_crop1Managing partner Bernhard Schmeilzl was admitted as German Rechtsanwalt (attorney at law) to the Munich Bar in 2001 and specialises in international cases ever since, especially German-American and German-English commercial and probate cases. In addition to obtaining his German legal exams with distinction, he also graduated from the English University of Leicester where he obtained his Master of Laws degree in EU Commercial Law in 2003. But do not mistake Bernhard for a German lawyer who focuses merely on German-British legal matters.

While Bernhard is well acquainted with the ways of English solicitors and barristers and their respective ways to go about a case, he is even better equipped to team up with United States attorneys at law. And this is not just from from watching the TV series Suits or Better call Saul (which he does), for that matter. Bernhard has lived, studied, coached baseball and worked in the USA on a number of occasions. His history of extended stays in the United States goes back as far as 1990 and 1993, when George Bush (the father) was President. Bernhard can therefore rely on a network of friends and business partners across the USA, especially in New York and New Jersey as well as in California.

In 2014, Graf Partners LLP has set up the international litigation department GP Chambers which focuses on providing professional litigation services to British and US-American clients, both on a commercial and a private client level. The Graf Partners litigation lawyers regularly appear before German law Courts throughout the country and provide specialist legal advice, support and advocacy services in all commercial and civil law matters, ranging from contract disputes, corporate litigation and employment, to damage claims, divorces and contentious probate.

So, if you need a German lawyer who did not just have English in school, but who really speaks your language and knows where you are coming from, contact the experts on German-American and German-British law:

gp-logoa German limited liability partnership of German lawyers admitted to the Munich Bar Association (Rechtsanwaltskammer) with the right to represent clients in all courts of law throughout Germany, registered with the District Court Munich, Partnership Register Nr. 438, represented by its managing partners Bernhard Schmeilzl and Katrin Groll.

Our central switchboard number in Germany is: +49 (0) 941 463 7070

For more information about civil litigation in Germany see these posts:

For more information on cross border probate matters and international will preparation see the below posts by the international succession law experts of Graf & Partners LLP:

More information on buying property in Germany, the German Land Registry, the German conveyancing process and the rights and duties of tenants and landlords in Germany is available in these posts:

No Win No Fee Agreements are Void in Germany

No win no fee agreements (contingency fees) between a client and lawyer are prohibited under German law. This has always been the tradition of German law (more here). The reasoning behind this rule is that German lawyers shall not undercut each other, because this would lead to poorly financed law offices providing very poor services to their clients. Also, German lawyers shall not be under the influence of undue incentives, i.e. trying to win a case no matter what including tampering with evidence, influencing witnesses etc. Continue reading

Compensation for a wrecked Car under the German Law of Torts

Car Accidents: How are Damages calculated under German Law?

Each year, German police registers 2.2 million traffic accidents (for official 2016 stats see here). German insurers, lawyers and Courts are thus constantly faced with the question how to calculate damage claims after a car accident has occured.

If the car can still be repaired, the matter is fairly simple. The Defendant must pay for the costs for a state of the art repair plus the so called “merkantilen Minderwert”, i.e. the reduction in market value due to the fact that the car has been involved in an accident, even if the car has been repaired.

What if the car is beyond repair or the costs would be unreasonably high?

The general principle under German law is that in case of a “write off” (Totalschaden, i.e. if economically it makes no sense to repair the car), then the Claimant is entitled to the so called “Wiederbeschaffungswert”, i.e. the amount necessary to purchase a substitute car with identical value of the damaged car, minus what the Claimant may have received as scrap value payment for the damaged car (if anything). Mostly, experts and lawyers refer to the so called “Schwacke Liste“, a German company which since 1957 publishes lists with the current market value of virtually every car out there. This being used as a first point of reference. The individual condition of the car before it was damaged is then taken into account.

In addition to that “Wiederbeschaffungswert” (replacement purchase value), the Claimant can (only) demand interim car hire costs for a reasonable period, i.e. for the time which the Claimant needs to look for a suitable replacement car and purchase it.

More on civil litigation and evidence rules in German Courts of law and before German arbitration tribunals:

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The law firm Graf & Partners was established in 2003 and has many years of experience with British-German and US-German legal matters.The Anglo-German litigation lawyer team of GP Chambers is well equipped to advise and represent clients from the UK and other English speaking countries. If you wish us to advise or represent you in a German or cross border case, or if you need an expert report on German law, please contact German lawyer Bernhard Schmeilzl, LL.M. (Leicester), managing partner and head of the litigation department. Bernhard is also frequently asked by British and US Courts and Tribunals or by legal counsels to provide expert reports and legal opinions on German law.

German Law of Torts: Are Accident Victims entitled to a New House?

Can a disabled injured person claim for the predicted cost of accommodation or only the actual costs after they have been incurred?

Under German law, a person who is impaired by an accident is entitled to adequate housing. The extent and amount necessary for adequate housing depends on what an impaired person would reasonably require. This can be determined by an expert, who will be appointed by a German court.

However, a difficult and strongly debated question under German law of torts is whether the injured person may only claim compensation for costs he or she has actually incurred (reimbursement approach) or whether the injured person is entitled to request a lump sum payment for necessary measures, even if actual costs have not (yet) been incurred, based on sec. 843 (3) German Civil Code (for details see German Supreme Court ruling of 19 May 1981, published in NJW 1982, p. 575; also see Münchner Kommentar zum BGB, Band 5, Auflage 6, § 842, Rd. 66 and Rd. 77).

Those in favour of the “lump sum approach” argue that German law does accept the concept of so called “fiktive Pflegekosten” (fictitious costs for home help), i.e. the market value of such home help (usually between EUR 7 and EUR 10 per hour, depending on the cost of living in the area where the Claimant lives) must be paid by the injurer regardless of whether the injured person actually hires paid help or whether a relative or friend provides such help without remuneration. Thus, costs which are objectively necessary for modifying an existing or buying another house must also be compensated by the wrongdoer, regardless of whether and when the impaired person actually incurs these costs.

The mainstream opinion amongst German litigation lawyers seems to be, however, that under German law, notional costs cannot be claimed. Consequently, a Claimant can only request reimbursement of the amounts he or she has actually spent on housing (repair, modification, new purchase etc). This view is supported by legal literature (e.g. Gerhard Küppersbusch “Ersatzansprüche bei Personenschaden” [“Claims in the case of personal injury”] 10th edition 2010) as well as by case law (Higher Regional Court Hamm, ruling published in VersR 2003, 780).

So, what actual costs can an impaired person claim under German law of torts? Here are some examples:

  • If a new apartment is rented, which better suits the individual’s needs, then the additional rental costs must be reimbursed. It may get difficult, however, if this new apartment has additional advantages (e.g. more rooms for other family members). Then, there may be a reduction.
  • In case an existing house is remodelled to meet the special requirements of an impaired person, the reasonable and adequate remodelling costs must be reimbursed. The above re-additional advantages does apply here as well: modification of a house or flat usually leads to an increased value of the same, which then again must be set off (this was also discussed in the Supreme Court ruling of 1981)
  • In case a new house is built or another house is bought, a German court would verify whether the impaired person has obeyed his duty to keep the damage at a minimum (obligation to mitigate losses), i.e. if it would have been less cost-intensive to rent an adequate house, especially since leasing an apartment or even a house is much more common in Germany than it is in the UK. However, even if the Court is convinced that buying or building another house was necessary, then it is very difficult to calculate the exact amount which must be compensated by the injurer, because this new house will often have a higher value. This extra value of the new house compared to the previous house is not recoverable and must be deducted from the claim. Thus, one must differentiate between the increase of value and the necessary and reasonable costs caused by the accident. These are difficult issues which usually involve a number of experts.

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The law firm Graf & Partners was established in 2003 and has many years of experience with British-German and US-German legal matters.The Anglo-German litigation lawyer team of GP Chambers is well equipped to advise and represent clients from the UK and other English speaking countries. If you wish us to advise or represent you in a German or cross border case, or if you need an expert report on German law, please contact German lawyer Bernhard Schmeilzl, LL.M. (Leicester), managing partner and head of the litigation department. Bernhard is also frequently asked by British and US Courts and Tribunals or by legal counsels to provide expert reports and legal opinions on German law.

A German Claimant can’t be his own Witness

Litigation Practice in German Court Rooms differs hugely from English Civil Procedure

Under the English Civil Procedure Rules, it is common practice that a Claimant provides a witness statement to the court. To the eyes of German lawyers and Judges, this is a strange concept, because German law does not allow parties to provide witness statements as evidence before the Court.

Under section 447 German Civil Procedure Rules (CPR), a party (Claimant or Defendant) may only provide evidence by her / his own personal statement of facts, if the other party expressly consents to such “Parteivernehmung” (evidence by party statement). Obviously, such permission is usually not granted. Thus, in a German Court room, a party is not able to give “hard evidence” by giving a statement in his/her own words. German law simply does not trust such party statements to be objective and accurate.

German Claimants and Defendants may, of course, present their side of the story and the German Civil Courts will take such statements by the parties into due consideration, but they will not be considered as hard evidence, see section 453 Civil Procedure Rules (CPR):

Evaluation of the evidence obtained in examining a party

(1) The court is to evaluate, at its discretion and conviction, the testimony of the party pursuant to section 286.

The general principle regarding evaluation of evidence is contained in section 286 German Civil Procedure Code (CPR):

Evaluation of evidence at the court’s discretion and conviction

(1) The court is to decide, at its discretion and conviction, and taking account of the entire content of the hearings and the results obtained by evidence being taken, if any, whether an allegation as to fact is to be deemed true or untrue. The judgment is to set out the reasons informing the conviction of the judges.

(2) The court shall be bound to statutory rules of evidence only in the cases designated in the present Code.

Section 448 allows the German Civil Court to formally examine a party directly:

Section 448 Ex officio examination

Even if no petition has been filed by a party, and without consideration of the onus of proof, the court may direct that a party or both of the parties be examined regarding the facts and circumstances at issue, if the results of the hearings and of the taking of evidence, if any, do not suffice to establish to the satisfaction of the court the truth or untruth of a fact or circumstance that is to be proven.

This is, however, not often done and is meant as a means of last resort.

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Thus, under German procedural law, party statements are not considered “hard evidence”, but are instead qualified as mere “Parteivortrag”. If the other party disputes such Parteivortrag, then the party bearing the burden of proof for this issue will lose the case unless the party can present hard evidence. In other words: Parteivortrag per se is not enough, even if the judge believes the Parteivortrag is true. Without hard evidence in the form of documents or real witnesses the Claimant will have not made their case under German Civil Procedure Rules.

In addition, even expert reports, if submitted by a party, are not considered real evidence, but only constitute so called “qualifizierter Parteivortrag” (qualified party statement). In order for an expert report to be taken seriously under the German Civil Procedure Rules, the expert must have been chosen and appointed by the Court. This is a very different approach compared to civil litigation in England.

When our German litigation lawyers represent English or American Claimants in German Courts, these clients and their foreign legal counsel usually have a very hard time understanding that we do not ask the Client to submit a written Witness Statement and that we also do not recommend to get an expert opinion straight away. The reason is, as explained above, that under German Civil Procedure Rules, witness statements are not being submitted in written form anyway (much less the statement of a party), because the judge questions the witnesses during the oral hearing. If a legal counsel approaches a witnesses at any time before the court hearing, this may be seen as trying to influence the witness. So, any “preparation” or “coaching” of a witness, is at best useless, and at worst it will be considered as attempting undue influence by a party, which may render the testimony of the witness worthless.

In regards to experts (Gutachter or Sachverständige), it may in some cases be necessary to get a pre-trial expert report in order to get a better understanding of some facts (for example medical or technical issues). However, while such a pre-trial expert opinion (Privatgutachten) may of course be submitted to the German Court, the Claimant and Defendant must always be aware of the fact that such a “privately obtained expert report” is not hard evidence under the German Civil Procedure Rules. The expert’s findings will, in most cases, not be accepted by the other party and in that instance, the Court must and will select and instruct a neutral expert in order to provide a report directly to the Court. So, from a perspective of trial strategy, if in a certain technical area there are not many experts available, it may be unwise to obtain a pre-trial report from such expert, because he or she will then be “burned”, i.e. cannot be chosen by the Court anymore.

After all of the above, it is rather surprising that a party’s legal counsel (the Rechtsanwalt, i.e. the German barrister) is permitted to act as a witness for his / her client. If, for example, at any time during pre-trial negotiations, the Defendant (let’s say in a meeting or a phone conversation) has admitted to some fact which helps the Claimants case, the Claimant’s counsel may give a witness statement about this, which is then considered hard evidence. It does not happen very often that a German litigator stands up and gives a formal witness statement for the benefit of his client. And if it does, all the lawyers look at each other as if they feel that something must not be quite right. However, the German Supreme Court (Bundesgerichtshof) has ruled that a German lawyer is permitted to act as a witness for his own client,  Court Order of 8.5.2007 – VI ZB 80/06 (for details see here).

More on civil litigation and evidence rules in German Courts of law and before German arbitration tribunals:

– Making a Court Claim for Money in Germany: It’s actually quite easy

– How expensive is a German Lawsuit?

– German Litigation Experts explain Civil Procedure Rules

– Standard of Proof in German Civil Litigation

– Does German Law of Torts know the Egg Shell Skull Rule?

– If you are bitten by a Dog in Germany

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The law firm Graf & Partners was established in 2003 and has many years of experience with British-German and US-German legal matters.The Anglo-German litigation lawyer team of GP Chambers is well equipped to advise and represent clients from the UK and other English speaking countries. If you wish us to advise or represent you in a German or cross border case, or if you need an expert report on German law, please contact German lawyer Bernhard Schmeilzl, LL.M. (Leicester), managing partner and head of the litigation department. Bernhard is also frequently asked by British and US Courts and Tribunals or by legal counsels to provide expert reports and legal opinions on German law.

Standard of Proof in German Civil Litigation

Is the Standard of Proof any different under German Law than English Law?

The standard of proof in German civil litigation is defined in section 286 German Civil Procedure Rules (Zivilprozessordnung):

Section 286: Evaluation of evidence at the court’s discretion and conviction

(1) The court is to decide, at its discretion and conviction, and taking account of the entire content of the hearings and the results obtained by evidence being taken, if any, whether an allegation as to fact is to be deemed true or untrue. The judgment is to set out the reasons informing the conviction of the judges.

(2) The court shall be bound to statutory rules of evidence only in the cases designated in the present Code.

Thus, a certain fact is (only) proven if the judge is personally fully convinced that this certain fact is indeed true. The German word for this is “Vollbeweis”, i.e. full conviction. This is a somewhat higher threshold than the concept of “the balance of probabilities” which is used in common law systems.

However, please note that section 287 German Civil Procedure Rules reduces this high standard of proof threshold (Vollbeweis) for the questions of whether a damage has occurred and what the exact amount of compensation shall be:

Section 287: Investigation and determination of damages; amount of the claim

(1) Should the issue of whether or not damages have occurred, and the amount of the damage or of the equivalent in money to be reimbursed, be in dispute among the parties, the court shall rule on this issue at its discretion and conviction, based on its evaluation of all circumstances. The court may decide at its discretion whether or not – and if so, in which scope – any taking of evidence should be ordered as applied for, or whether or not any experts should be involved to prepare a report. The court may examine the party tendering evidence on the damage or the equivalent in money thereof; the stipulations of section 452 (1), first sentence, subsections (2) to (4) shall apply mutatis mutandis.

(2) In the event of pecuniary disputes, the stipulations of subsection (1), sentences 1 and 2, shall apply mutatis mutandis also to other cases, insofar as the amount of a claim is in dispute among the parties and to the extent the full and complete clarification of all circumstances authoritative in this regard entails difficulties that are disproportionate to the significance of the disputed portion of the claim.

Thus, one must take a close look at what exactly is in dispute between the parties. With regard to the question of damages and their extent, German Courts use a standard of proof concept which is very similar, if not identical with the “balance of probabilities” concept. However, section 287 CPR does, for example, not apply to the question of whether the Defendant has injured the Claimant at all. For this, as for many other questions, the basic rule of “full conviction” (Vollbeweis) remains applicable.

More information on litigation and legal fees in Germany is available in these posts:

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The law firm Graf & Partners was established in 2003 and has many years of experience with British-German and US-German legal matters.The Anglo-German litigation lawyer team of GP Chambers is well equipped to advise and represent clients from the UK and other English speaking countries. If you wish us to advise or represent you in a German or cross border case, or if you need an expert report on German law, please call +49 941 463 7070 in order to contact German lawyer Bernhard Schmeilzl, LL.M. (Leicester), managing partner and head of the litigation department. Bernhard is also frequently asked by British and US Courts and Tribunals or by legal counsels to provide expert reports and legal opinions on German law.