Germany Introduces Class Actions For Consumer Claims

The Situation: The German Parliament has approved the Act on Model Declaratory Proceedings ("Act"), which introduces, for the first time, class action-style litigation for consumer claims.

The Plan: The Act will give qualified institutions the right to raise claims on behalf of groups of consumers in order to obtain a declaratory judgment. In contrast to the initial proposal to the German parliament, the Act now provides for the jurisdiction of the Higher Regional Courts in the first instance and includes a presumption that model proceedings always have fundamental significance. This allows the parties to file an appeal on points of law to the Federal Supreme Court.

Looking Ahead: The Act becomes effective on November 1, 2018.