Legal Advice

Lawsuit by associations: Extension to injunctions and remedial actions

On 07.07.2023, the Bun­des­tag pas­sed the so-cal­led Ver­bands­kla­gen­richt­li­ni­en­um­set­zungs­ge­setz (VRUG). An ap­pro­val by the Bun­des­rat is not re­qui­red. It is ex­pec­ted that the law will en­ter into force af­ter the sum­mer break in Sep­tem­ber.

The law im­ple­ments Di­rec­tive (EU) 2020/1828, which re­qui­res mem­ber sta­tes to pro­vide for two ty­pes of re­pre­sen­ta­tive ac­tions - in­junc­tions and re­me­dies. Up to now, re­me­dial ac­tions do not exist in Ger­man law. The re­gu­la­ti­ons now re­qui­red for re­me­dial ac­tions by as­so­cia­ti­ons have been bund­led in a new Con­su­mer Rights En­force­ment Act (VDuG).

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The new re­me­dial ac­tion ex­tends to all ci­vil dis­pu­tes in­vol­ving claims and le­gal re­la­ti­ons­hips of a large num­ber of con­su­mers against a com­pany (Sec­tion 1 (1) VDuG). It thus ex­tends not only to con­su­mer pro­tec­tion pro­vi­si­ons, but also to tort law. Re­me­dial ac­tion can be con­side­red, in par­ti­cu­lar, in the case of claims for da­ma­ges un­der data pro­tec­tion law, pro­duct lia­bi­lity ca­ses or an­ti­trust da­mage claims. So-cal­led small com­pa­nies are put on an equal foo­ting with con­su­mers and can also join re­pre­sen­ta­tive ac­tions, Sec­tion 1 (2) VDuG.

Note: Small com­pa­nies are only those with fe­wer than ten em­ployees and an an­nual tur­no­ver or an­nual ba­lance sheet of no more than 2 mil­lion Euro.

Con­su­mers them­sel­ves are not en­tit­led to bring an ac­tion, but cer­tain qua­li­fied do­mestic con­su­mer as­so­cia­ti­ons as well as cor­re­spon­ding qua­li­fied en­ti­ties from other EU mem­ber sta­tes, Sec­tion 2 VDuG. In or­der to par­ti­ci­pate in the re­me­dial ac­tion, con­su­mers must re­gis­ter with the re­gis­ter of re­pre­sen­ta­tive ac­tions (so-cal­led opt-in). The ti­ming of the re­gis­tra­tion was hotly dis­pu­ted in the le­gis­la­tive pro­cess. A con­su­mer-fri­endly ap­proach pre­vai­led. Ac­cor­ding to this ap­proach, re­gis­tra­tion is still pos­si­ble th­ree weeks af­ter the con­clu­sion of the last oral hea­ring.

The re­qui­re­ments for the si­mi­la­rity of the claims af­fec­ted by the re­me­dial ac­tion have been lo­wered com­pa­red with the go­vern­ment draft. Thus, the claims con­cer­ned now only have to be "es­sen­ti­ally si­mi­lar", Sec. 15 (1) Sen­tence 1 VDuG.

The plain­tiff no lon­ger has to prove that the claims of at least 50 con­su­mers are af­fec­ted by the ac­tion for re­dress. In­stead he only has to de­mons­trate that the claims are af­fec­ted in a com­pre­hen­si­ble man­ner, Sec­tion 4 (1) VDuG.

The pro­ce­dure of an ac­tion for re­me­dial ac­tion pur­su­ant to Sec­tion 16 (1) sen­tence 2 VDuG, ac­cor­ding to which the plain­tiff as­so­cia­tion claims per­for­mance to con­su­mers who have not been na­med, is li­kely to be of par­ti­cu­lar prac­tical re­le­vance. Thus, first a ba­sic re­medy judg­ment is is­sued, which me­rely con­ta­ins the lia­bi­lity pa­ra­me­ters. Sub­se­quently, in a so-cal­led sett­le­ment phase, the con­vic­ted en­tre­pre­neur can or­ga­nize the ful­fill­ment of the claims him­self. If this does not suc­ceed, a re­me­dial judg­ment fol­lows, in which, for ex­am­ple, in the case of pay­ment claims, the con­vic­ted en­tre­pre­neur is or­de­red to pay a col­lec­tive to­tal amount. The dis­tri­bu­tion to the en­tit­led con­su­mers is car­ried out by a trus­tee in a so-cal­led im­ple­men­ta­tion pro­ce­dure.

The filing of an ac­tion for re­dress only sus­pends the sta­tute of li­mi­ta­ti­ons for claims of re­gis­te­red con­su­mers and small busi­nes­ses (Sec­tion 204a (1) sen­tence 1 no. 4 VDuG). Con­su­mers are thus still free not to re­gis­ter for a re­me­dial ac­tion and in­stead to take the route of an in­di­vi­dual ac­tion. Ac­cor­din­gly, in ad­di­tion to the re­me­dial ac­tion, there will pro­bably still be in­sol­vency pro­cee­dings in the fu­ture. This will ul­ti­mately ex­acer­bate exis­ting lia­bi­lity risks for com­pa­nies.

A re­gis­ter of ac­tions by as­so­cia­ti­ons is kept at the Fe­deral Of­fice of Justice (Sec­tion 43 VDuG). The Hig­her Re­gio­nal Courts at the place of ju­ris­dic­tion of the com­pany are re­spon­si­ble for the re­spec­tive law­suits.

Note: Any third-party fun­ding for the law­suits pur­su­ant to Sec­tion 4 (3) VDuG must be dis­clo­sed to the court by the en­tity en­tit­led to file the law­suit.

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