Yes. Although the underlying principle of German Civil Procedure is the two-party adversarial procedure, the legislature has developed and introduced a range of mechanisms over time, a development that culminated in the introduction of the collective redress action in 2023 by implementing the European Collective Redress Directive.

a. Collective redress action („Abhilfeklage“)

The redress action under the German Consumer Rights Enforcement Act (“Verbraucherrechtedurch-setzungsgesetz”, in short: “VDuG”) allows qualified entities (e.g., consumer associations) to bring collective claims directly seeking performance, in particular payment or other remedies, on behalf of a large number of consumers. Unlike the model declaratory action, the court may issue a binding decision on the substance and quantum of consumers’ claims, enabling affected consumers to obtain relief without having to bring individual follow on proceedings. It is, however, too early to assess its overarching impact. Currently, there are still mass litigation cases ongoing which have commenced before the entry into force of the redress action.

b. Model declaratory action („Musterfeststellungsklage“)

The model declaratory action under the German Consumer Rights Enforcement Act allows qualified consumer associations to bring collective proceedings seeking a binding judicial determination of common factual or legal issues arising from mass harm. While the action clarifies liability-related questions, it does not provide direct redress; consumers must pursue individual follow on claims to obtain performance, unless a collective settlement is reached. As a result, the impact of this mechanism on the conduct of class actions in Germany was limited.

c. Capital markets model declaratory action („Kapitalanlegermusterverfahren“)

The capital markets model declaratory action under the Capital Markets Model Action Act (“Kapitalanleger‑Musterverfahrensgesetz”, in short: “KapMuG”) provides for the consolidation of identical factual and legal issues arising in multiple capital‑markets disputes, in particular claims based on false, misleading or omitted public capital‑market information. Upon application by a certain number of claimants, such issues are referred to a Higher Regional Court, which renders a binding model decision. This decision is then applied in all individual proceedings which are stayed until the binding model decision is issued. The overall impact on the conduct of class actions in Germany is – by law – limited, as this mechanism addresses only certain investor claims related to capital-markets disputes. Also, following a binding model decision, consumers must still pursue their individual claims to obtain a performance judgment e.g., ordering the defendant to pay damages.

d. Injunctive collective action („Unterlassungsklage“)

Injunctive collective actions under the German Act on Injunctive Relief (“Unterlassungsklagegesetz”, in short: “UKlaG”) allow qualified entities (e.g. consumer associations) to seek court orders requiring respondents to cease and desist from unlawful practices, in particular the use of invalid standard terms and conditions or violations of consumer protection legislation. Although such proceedings were relatively common, the impact on the conduct of class actions in Germany, however, was limited. The proceedings are aimed solely at eliminating unlawful conduct and preventing future infringements not providing for damages or reimbursement for affected consumers.

The injunctive collective action (cf. above, 1. d.) was introduced already in 2002 and was the first tentative attempt to introduce an effective mechanism addressing violations of consumer law potentially affecting a large number of consumers, as individual enforcement can be de facto ineffective in such cases given that they typically result in only minor harm, if any. The injunctive collective action should close a potential enforcement gap by allowing collective injuncting relief. Qualified entities can bring those collective actions e.g., when the use of certain terms and conditions could violate statutory law.

The capital markets model declaratory action (cf. above, 1. c.) was introduced in 2005 as a result of the experience gained following one of the Telekom’s IPOs, as German civil courts were overwhelmed by countless investor lawsuits.

The model declaratory action (cf. above, 1. b.) was introduced in 2018 as a response to the diesel emissions matter at a purely national level, as a general model declaratory action based on the capital markets model declaratory action procedure. This was provided for under sections 606-614 of the Code of Civil Procedure (“Zivilprozessordnung”, in short: “ZPO”), now governed by sections sections 41 and 42 of the German Consumer Rights Enforcement Act. German legislature acknowledged that (unlawful) conduct by companies can affect more than only a few consumers. Apart from the diesel emissions matter, prominent examples include excessive account fees, or unlawful price‑adjustment clauses. All of these practices have in common that they typically affect and potentially harm a large number of consumers. The experience gained e.g. from the diesel emissions matter, in particular the wave of individual civil proceedings against car manufacturers, provided a significant impetus for the further development of collective procedural mechanisms, in particular, as first and second instance courts were overwhelmed by the sheer number of claims. The average duration of ordinary civil proceedings at affected courts increased, while the quality of judicial decisions, especially in cases relating to the diesel emission matter, declined, as courts sought to rely on (legally defensible) interpretations of the law that avoided e.g., comprehensive taking of evidence, allowing for a quicker conclusion of proceedings.

However, as stated above, the impact of the model declaratory action has been (and remains) limited. As a model declaratory action will only result in a declaratory judgment on certain factual or legal prerequisites of a claim, consumers would still have to pursue their claims through individual follow-on litigation. This often requires significant perseverance and substantial financial resources, as companies are usually well equipped to defend themselves. In some cases, the financial loss suffered by the individual consumer is so minor that, from the consumer’s perspective, the effort and costs associated with bringing an individual claim against the company do not appear worthwhile. For this reason, the introduction of the redress action in 2023 (cf. above, 1. a.) constituted the logically necessary next step in the development of collective redress mechanisms. In order to restore balance between consumers on the one hand and companies on the other, the redress action allows qualified entities to bring proceedings directly seeking performance (e.g., payment of damages).

The frequency of class actions is quite low compared to the filings received by the Local and District Courts in ordinary civil law matters. Since the introduction of the redress action, only 11 (at least partially) redress actions were brought before the Higher Regional Courts as competent first instance courts in such proceedings. In total, there are currently only 49 model declaratory and/or redress actions pending since 2019 according to the public register maintained by the Federal Office of Justice. For comparison, the number of civil law claims filed in 2024 with the Local Courts amounts to approximately 800,000 and with the District Courts to approximately 317,000 (as published in the end of 2025).

For the sake of completeness, the number of capital markets model declaratory actions or injunctive collective actions is not publicly available. Although the relevant information system for capital markets model declaratory actions provides for an overview of Higher Regional Courts and for file numbers, details and documents can only be accessed by participants of the respective proceedings. In May 2026, the overview contains 75 proceedings without indicating their specific status. Moreover, there is no nationwide, consolidated statistical data on the number or volume of proceedings brought under the German Act on Injunctive Relief. Such proceedings are conducted on a decentralised basis and are not separately reported in official judicial statistics.

All mechanisms have in common that the Higher Regional Courts are the designated first instance courts. Apart from that, there is no special jurisdiction vested in a specific court as e.g., the Competition Appeal Tribunal in the UK.

With this in mind, some federal states have concentrated jurisdiction for collective actions on a specific Higher Regional Court for all such actions statewide, although at least one more Higher Regional Court exists in the same federal state (e.g., Higher Regional Court Hamm, Bavarian Supreme Regional Court – “Bayerisches Oberstes Landesgericht”). Also, there can be specialized senates for specific areas of substantive law. In competition matters, the German Act against Restraints of Competition provides for the functional jurisdiction of the Cartel Senate at the competent Higher Regional Court for all collective actions involving antitrust matters.

Apart from that, certain courts and some types of claims are more prevalent. Unfair commercial practices are frequently enforced through injunctive actions by consumer associations before Higher Regional Courts in venues with headquarters of major companies. The same ratio applies for capital markets model declaratory actions regarding e.g., false, misleading or incomplete statements in securities or investment prospectuses, as well as the model declaratory and redress actions. Since the introduction of the redress action in 2023, there is – for instance – a high prevalence of such actions before the Higher Regional Cour Hamm, because the federal state of North Rhine-Westphalia has concentrated collective proceedings on this court and as North Rhine-Westphalia is home of many major companies.

A lot of these claims concerns consumer law or terms and conditions as well as contract law. Although consumer law produces the largest volume of collective claims, such claims often come with a lower per‑case amount in dispute. Competition law claims, mentioned as an example in the question, are still among the most significant drivers of ‘collective’ litigation in Germany, albeit rarely through a single ‘class action’ claim, but through ongoing mass litigation cases (cf. below answers to question 5).

There is no definition of those terms by German law. However, the term ‘class action’ (“Sammelklage”) is understood in German legal terminology as the consolidation of claims of numerous injured parties in a single proceeding, and the term ‘collective redress’ (“Kollektiver Rechtsschutz”) is an umbrella term used e.g., by the European legislature and in legal doctrine.

The German legal order historically did not have such structures before the above-mentioned mechanisms have been introduced. While it was generally possible to assert claims by multiple parties against the same defendant(s) through subjective joinder (“subjective Klagehäufung”), the court retained the power to sever the proceedings where the individual cases differed in their factual or legal assessment. Given that the German Civil Procedure is based on the two-party adversarial principle, the handling of such (rare) claims has been challenging for civil courts. Therefore, courts have often severed the proceedings (also for statistically reasons). Furthermore, to actually substitute a class action through these procedural means, claimant counsel would also have had to establish separate mandates with all group members (including the conclusion of engagement letters) which is practically impossible.

Therefore, circumstances which would have been triggering class actions e.g., in the US, have therefore triggered mass litigation in Germany. In such mass litigation, claim assignment models have been developed by claimants’ counsels and litigation funders. Mass litigation refers to civil proceedings in which a very large number of legally and factually similar claims are pursued in parallel. It consists of separate individual lawsuits filed by different claimants, each asserting their own claim. These actions are not bundled into a single proceeding but remain procedurally independent. While the cases are parallel in the sense that they raise comparable factual and legal issues, each case retains its own procedural standing and is assessed individually by the respective court. Typically, mass litigation attracts litigation funders and claim purchasing vehicles using aggressive marketing strategies to acquire mandates.

Within the meaning of the applicable statutory framework, all ‘civil proceedings’ (“Bürgerliche Rechtsstreitigkeiten”) concerning claims of a larger number of consumers against an undertaking can be brought by qualified entities as redress or model declaratory action. This therefore covers all civil law disputes that would fall within the jurisdiction of the ordinary civil courts and are not matters of other courts (e.g., family law or labor law courts). Additionally, those civil proceedings do have to concern ‘consumer matters’ (“Verbrauchersachen”) in the sense that e.g., a redress action is limited to claims from consumers (or small businesses) against businesses.

That said, from a factual perspective, the commencement of collective redress proceedings in Germany is triggered by specific circumstances and events which might differ depending on the type of collective redress instrument being used. However, the fundamental factual trigger is a scenario in which a large number of consumers (or small businesses) is affected by the same or similar circumstances, typically involving mass consumer harm through comparable losses, systematic violations impacting many individuals, or widespread failures of products or services.

Typical examples of such circumstances or events include inter alia,

• product defects and safety issues (e.g., diesel defeat devices, airbag failures, food safety or pharmaceutical product issues);
• consumer contract violations (e.g., unlawful price adjustment clauses, hidden fees or charges, invalid terms and conditions in consumer contracts);
• financial services and investment issues (e.g., false prospectus information, unauthorized bank charges, invalid interest rate adjustment clauses);
• transportation and travel issues (e.g., flight delays and cancellations, failure to perform or deficient performance of a package holiday);
• data protection and privacy breaches (e.g., mass data breaches, unlawful data processing);
• environmental and health issues (e.g., environmental pollution affecting local communities, toxic exposure cases); and
• anti competitive arrangements (e.g., collusive practices, potentially resulting in higher consumer prices).

Regulatory findings play an important de facto role, although the interaction between collective redress and regulatory enforcement measures in Germany is limited (with one exception). As decisions of regulatory authorities and/or documents obtained by inspection of the public authorities’ files can be used in civil proceedings to proffer certain facts, those decisions or documents carry a significant factual weight. However, they generally do not have formal binding effect on civil courts in most areas of law.

For instance, the decisions of the ‘Federal Motor Transport Authority’ (“Kraftfahrt Bundesamt”, in short: “KBA”) played an important role in the diesel emission matter, as claimants submitted the KBA’s decisions and relied upon as evidence to demonstrate the existence of defects and the unlawfulness of the defeat devices used.

Another example are the decisions of the ‘Federal Institute for Drugs and Medical Devices’ (“Bundesinstitut für Arzneimittel und Medizinprodukte”). Claimants submitted its decisions and field safety notices in cases concerning implantable cardioverter-defibrillators to demonstrate and proof the existence of product defects and to assess whether manufacturers fulfilled their product observation obligations.

A notable exception concerns decisions of competition authorities: According to the German Act Against Restraints of Competition (“Gesetz gegen Wettbewerbsbeschränkungen”) decisions of the European Commission and of national competition authorities have a formal binding effect on civil courts. Hence, there is, by law, an interaction between regulatory enforcement findings and potential antitrust follow-on redress actions, as claimants can rely on the findings of an infringement of competition law in order to substantiate and proof their claims for damages.

As indicated above, a variety of conduct and causes of action can be the basis of the different mechanism with the redress action having the broadest scope. It encompasses all civil law claims and legal relationships between consumers and business, regardless of the specific legal basis. This includes contractual claims, tort claims, unjust enrichment claims and statutory claims like e.g., cartel damages. The redress action is not limited to payment claims but can encompass any form of performance (e.g., repairs, replacements, price reductions, contract termination). Therefore, various conducts are covered by redress actions, e.g. producing and placing defective products on the market causing harm to multiple consumers (cf. answer to question 6).

Yes, there are some limitations:

• In regard to the redress action, only civil law disputes that would fall within the jurisdiction of the ordinary civil courts can be brought as redress action before the courts; both the redress action and the model declaratory action are confined to claims asserted by consumers or, in limited cases, small businesses. Consequently, e.g., claims arising under family law or labour law are excluded, as these fall within the jurisdiction of the specialized family and labour law courts, as are business to business claims outside the small business exception.

Furthermore, there is a minimum threshold of 50 affected consumers (or small businesses) and a similarity requirement excluding highly individualized claims.

• The declaratory model action is additionally, by its legal nature, limited to declaratory judgments, hence excluding direct performance claims.
• The capital markets model declaratory action is limited to certain capital markets claims e.g., claims based on false, misleading or omitted public capital‑market information.
• The injunctive collective action is limited to claims for injunctive relief.

Redress actions, declaratory model actions and injunctive collective actions can only be brought by certain qualified entities, e.g. consumer associations.

Such qualified entities must meet a set of statutory criteria. In essence, the qualified entity’s purpose has to be safeguarding consumer interests, it has to have a sufficient membership base, it must have been duly registered and active for at least one year, it must appear capable of fulfilling its statutory tasks effectively and sustainably, it must appear not to assert claims for the purpose of generating income (e.g., from warning letters), and neither grants benefits to its members nor provides individuals acting for the association with excessive remuneration.

Additionally, statutory law provides for qualified entities filing redress actions or model declaratory actions that those entities do not receive more than five per cent of their funding from corporate contributions, and that qualified entities from other Member States of the European Union that are listed in the register maintained by the European Commission pursuant to Article 5(1), fourth sentence, of Directive (EU) 2020/1828, can also bring such actions before German courts.

Regarding capital markets model case actions: Those proceedings are the only form of collective action in Germany in which a model claimant litigates. Although claimants can request the initiation of such proceedings when certain preconditions are met, the model claimant is appointed by the competent Higher Regional Court, which considers, inter alia, the claimant’s ability to adequately represent the interests of other participating claimants.

On the claimants in the procedural sense for redress or declaratory model actions, cf. answers to question 10. Qualified entities seated in another EU member state can potentially also bring redress or declaratory model actions before German courts.

Also “claimants” in the sense of consumers affected, can be from another member state of the EU. Consumers from another EU Member State may participate in a German redress action or model declaratory action by registering their claims with the German claims register in due form and within the prescribed time limits.

The EU Representative Actions Directive expressly provides for the possibility of such cross‑border cases. However, the practical effectiveness of such participation depends to a significant extent on the law applicable to the foreign consumer’s claim.

There is no statutory maximum class size; however, the class must consist of a minimum of 50 consumers for redress and declaratory model actions.

By contrast, the capital markets model action requires only a quorum of ten model case applications – one initial application and nine further applications filed within six months after the publication of the first one. If this quorum is not met, the model case application is rejected and the underlying proceedings continue. If the quorum is met, capital markets model proceedings will be initiated.

Consumers are required to register in due form and within the prescribed time limits in the relevant register maintained by the Federal Office of Justice (“Verbandsklageregister”).

Jurisdiction is conferred on the Higher Regional Courts (“Oberlandesgerichte”) at the defendant’s general place of jurisdiction, i.e. the defendant’s seat.

Potentially, there could be jurisdictional obstacles to redress actions in cross-border matters, as international jurisdiction must be verified separately for each consumer claim.

Such jurisdictional obstacles can, in particular, be discussed in relation to tort-based claims. If consumers from different member states opt-in in proceedings which have been initiated in another member state where a special forum is located, those consumers can potentially not rely on this special forum (under the Brussels I Regulation, special jurisdictional forums like the place of performance, article 7 no. 1 Brussels I Regulation, or place of harmful event, article 7 no. 2 Brussels I Regulation, can only cover claimants from the member states where those forums are located).

Consequently, when consumers are based in different jurisdictions, the defendant’s general forum constitutes, in principle, the only viable common forum under articles 4 and 63 of the Brussels I Regulation (e.g., its registered seat).

Germany adopted an “opt in” mechanism when implementing the redress action. Consumers are required to register in the redress action register maintained by the Federal Office of Justice (“Verbandsklageregister”).

The redress action has to be filed with the competent Higher Regional Court in whose district the general place of jurisdiction of the defendant is located (the federal states can, however, assign competency for such proceedings to one Higher Regional Court for multiple districts in the federal state).

In addition to the general procedural requirements applicable to statements of claim under civil procedural law, the statement of claim in redress action or model declaratory actions must include:

• identification of, and evidence demonstrating, the claimant’s status as a qualified entity;
• a clear and comprehensible explanation that the redress action may affect claims of at least 50 consumers, or (b) the declaratory relief sought in a model declaratory action may determine claims or legal relationships of at least 50 consumers;
• the value of the matter in dispute;
• an indication of whether the action is financed by a third party and, if so, the identity of that third party; and
• a brief description of the underlying factual circumstances for publication in the claims register.

As with ordinary civil proceedings, the claimant has to pay an advance in court costs (“Gerichtskostenvorschuss”) for the Higher Regional Court to serve the action.

According to section 15 (1) German Consumer Rights Enforcement Act (“Verbraucherrechtedurchsetzungsgesetz”) the claims must be ‘essentially similar’ (“im Wesentlichen gleichartig”), which requires cumulative that

• the factual circumstances are the same or comparable and
• the same factual and legal questions are decisive.

The essential similarity of claims (“Gleichartigkeit der Ansprüche”) is a central and the most important special admissibility requirement for redress actions. If similarity is lacking, the action must be dismissed as inadmissible through a procedural judgment.

Pursuant to section 13 (1) of the German Consumer Rights Enforcement Act, the Code of Civil Procedure (“Zivilprozessordnung”) is applicable. Hence, the usual civil procedure rules apply. However, the German Consumer Rights Enforcement Act naturally provides for several supplementary and amending provisions, as the collective proceedings deviate from ordinary civil law proceedings:

The redress action comprises five phases, the first one is relatively similar to ordinary civil proceedings. Following the first phase, the court issues a redress basic judgment (“Abhilfegrundurteil”), determining either the collective total amount, or the method for calculating individual consumer amounts. The second phase is dedicated to settlement negotiations. If no settlement can be reached, the third phase follows, in which the court decides by redress final judgment (“Abhilfeendurteil”). The fourth phase, the implementation proceedings, concerns the appointment of an independent case administrator, the establishment of an implementation fund, the payment of the collective total amount into the fund by the defendant and, finally, the payment to the registered consumers. If applicable, a fifth phase follows regarding the potential increase of the total amount, the so-called increase procedure.

Model declaratory actions could reportedly be concluded in less than one year if the proceedings progress favourably or a few years. The VW case took reportedly 1.5 years until a settlement was reached. Regarding the redress action, there is no reliable data available yet on the duration of such proceedings. However, the complexity of the multi-stage proceedings (cf. answer to question 19) has been criticized in literature as a potential source of multi-year delays, in particular as both judgments could be appealed to the Federal Court of Justice independently.

The redress action provides direct performance to consumers. The available remedies are very broad and include

• monetary remedies (e.g., damages, refunds, price reductions, compensation for expenses, use or value) and
• non-monetary remedies (e.g., repair, replacement, contract termination/rescission).

The model declaratory action provides declaratory relief. It enables binding declarations on whether factual or legal conditions for claims exist or do not exist (e.g., defectiveness of contract objects, applicability of attribution norms).

The measure of damages in collective redress proceedings depends on the specific design of the action: Claimants may (i) aim for payment of (e.g., damages) in a ‘collective total amount’ (“kollektiver Gesamtbetrag”) for the affected consumers, or, claimants may (ii) name affected consumers and their specific claims explicitly.

(i) The Consumer Rights Enforcement Act provides courts for the possibility to determine a collective total amount benefitting from procedural facilitations: The standard of proof is lowered from full conviction to overwhelming probability, and damages may be estimated pursuant to section 287 German Code on Civil Procedure. The collective amount is then calculated cumulatively based on the average individual loss or damage, the number of registered consumers, and the likelihood of entitlement. Although the total amount can be estimated, claimants must fully prove the underlying factual basis.

(ii) Where claimants name affected consumers and specify their individual claims, however, full proof of each individual claim applies.

If no settlement can be reached, the court issues a final redress judgment ordering the defendant to pay the collective amount and appoints an independent administrator. During the subsequent implementation procedure, the independent administrator assesses the individual entitlement of registered consumers by verifying their individual claims and distributes the funds. If the defendant’s payment is insufficient, the trustee may request an increase in a separate increase procedure. In case, the defendant paid too much into the fund, the surplus will be refunded. Therefore, the collective total amount is, by its legal nature, provisional.

No, punitive or exemplary damages are not available in German collective redress proceedings.

Collective actions are assigned to multiple judges in Germany, as collective redress and model declaratory actions, capital markets model declaratory action as well as injunctive collective actions are exclusively handled in first instance by Higher Regional Courts where senates decide. Such senates are composed of three professional judges (including the presiding judge) according to the Courts Constitution Act. The provisions in the German Code on Civil Procedure (“Zivilprozessordnung”) concerning single-judge proceedings (“Einzelrichterverfahren”) in ordinary first instance proceedings before the District Courts are not applicable.

No, Germany does not have a jury system. This also applies for collective actions.

Yes, there is a mechanism for the collective settlement of redress actions.

Following the announcement of the redress basic judgment, the court shall invite the parties to submit written settlement proposals for the implementation of the judgment. The court may even set a (extendable) deadline for the submission of such a proposal. If the redress proceedings are not terminated by an effective settlement and the redress basic judgment has become final, the court will continue proceedings issuing a redress final judgment in the end of the next phase. As the settlement constitutes a ‘collective settlement’ (“kollektiver Vergleich”) that potentially binds registered consumers despite being concluded only between the qualified entity and the defendant, there are certain requirements for court settlements in redress action proceedings:

• The court settlement may only be concluded three weeks following the hearing.
• The settlement requires court approval (cf. answer to next question) to protect the interests of the registered consumers who are not taking part in the settlement negotiations.
• Following publication of the settlement, any registered consumer may opt out within one month by declaration to the Federal Office of Justice. Consumers who have opted out are not bound by the settlement, all other registered consumers are bound.

In capital markets model proceedings, the model claimant and the model defendant(s) may submit settlement proposals to the court or accept a court‑proposed settlement. This settlement requires also court approval. This approval mechanism serves to protect the interests of joined parties (“Beigeladene”) who are not themselves parties to the settlement. Once approved, the settlement is served on the joined parties, who may opt out within one month. The settlement becomes effective only if less than 30 % of the joined parties declare withdrawal. An effective settlement binds all joined parties who have not opted out.

Yes, the courts have to approve collective settlements. Settlements are approved by decision if the court considers the settlement as appropriate, taking into account the state of facts and issues, in particular the interests of the affected consumers (or other investors than the model claimant as joined parties – “Beigeladene” – in case of capital markets model declaratory actions); otherwise, the court refuses its approval.

No, there is no procedural obligation to undertake alternative dispute resolution before initiating redress action proceedings in Germany.

In general, litigation funding is emerging in Germany and has, in particular, played a significant role in mass litigation. Broadly speaking, two models prevail in mass litigation matters: investor‑funded claim‑purchasing or claims‑collection vehicles, and third‑party litigation funding arrangements financing individual consumer actions:

Claim purchasing vehicles or collection service providers exist using an assignment model to bundle consumers’ claims. Potential claimants assign their claims to the claim purchasing vehicle or collection service vehicle which will bring the case of various injured parties for joint assertion before court. These vehicles or providers are often funded by investors, but also by third party litigation funders.

In contrast to this, there also exists usual third-party funding. The third-party litigation funder pays the court costs and legal fees of the proceedings for an individual claimant. If the action is successful, the third-party litigation funder will be compensated for payment of the advance in court costs and legal costs, additionally earning a success fee. Usually, this fee is calculated as a percentage of the amount won or a multiple of the capital contributed by the litigation funder.

In the context of collective redress, ligation funding is still allowed; but participation of third-party litigation funders is significantly regulated (cf. answer to question 30.).

According to the Consumer Rights Enforcement Act, a redress action is (or becomes – if the qualified entity agrees on a litigation funding agreement later on) inadmissible, if it is financed by a third party

• being a competitor of the defendant,
• being dependent on the defendant,
• providing for funding in return for consideration of more than 10 percent of the proceeds,
• probably influencing the conduct of the proceedings by the qualified entity to the detriment of consumers (e.g., settlement decisions).

As indicated above, the qualified entity must disclose whether it is funded by a third party and if so it has to disclose to the court the origin of the funds used to finance the action. Additionally, the litigation funding agreement concluded with the third-party litigation funder must be submitted.

1. Data Protection and Privacy Issues

Data protection and privacy issues have emerged as significant business risks. As indicated above, the admissibility of a redress action is dependent on essential similarity of the consumers’ claims. But until a recent decision of the Federal Court of Justice on data protection law, the prevailing opinion in legal literature was of the view that claims for damages under article 82 General Data Protection Regulation (“GDPR”) would not be suitable for enforcement by way of a collective redress action. However, the German Federal Court of Justice has substantially lowered the threshold for establishing damages under article 82 GDPR by equating “loss of control” over personal data with damage, as unauthorized third-party access to personal data can constitute a compensable injury without requiring proof of specific harm.

2. Greenwashing and ESG Issues

Environmental, Social, and Governance litigation, particularly in the environmental domain, have become a focus of collective actions in Germany. The “Deutsche Umwelthilfe” has announced a ‘major offensive against greenwashing’ (“Großoffensive gegen Greenwashing”) and initiated injunctive proceedings against numerous companies challenging environmental marketing claims such as “climate neutral,” “CO2-neutral,” and other sustainability assertions.

3. Contractual Issues

The initial wave of collective actions has focused on unilateral price increases and price adjustment clauses in consumer contracts e.g., in the energy and telecommunications sectors, These actions challenge the validity of contractual terms allowing for unilaterally price or contract terms adjustments (e.g., the Vodafone case concerned a monthly price increase in the amount of EUR 5 affecting up to 10 million consumers).

Apart from the trends set out above describing the emerging business risks (cf. answers to question 31), banking and financial services cases have trended in the last years.

The new redress action introduces a range of unresolved legal questions that can only be clarified through judicial practice (including e.g., the determination of the collective total amount, issues arising in the implementation phase, jurisdictional questions in cross‑border cases). The first substantive decisions on redress actions will therefore play a decisive role in shaping Germany’s collective redress legal framework, as these early decisions will determine whether the redress action meets or exceeds expectations, or whether it follows the trajectory of the model declaratory action. Given the fundamental nature of the issues at stake and the cases’ precedent‑setting character, they constitute the most significant developments likely to occur in German collective redress law over the next twelve months.

Yes, ESG matters have been brought before court (cf. above, answers to question 31).

Yes, proposals concern e.g., relaxing provisions regarding litigation financing, expanding provisions regarding standing to sue, improving procedural design (e.g., fast-track proceedings). However, any reform following the mandatory evaluation which will take place in 2028 will likely have to take into account the significant legal developments by the first substantive decisions and to consider the overall development of collective redress in Europe. Should alternative approaches adopted in other member states prove effective, their potential adoption should be considered. This includes also the opt out mechanism adopted in the Netherlands.