Germany Introduces Model Declaratory Action Law

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On 14 June 2018, the German Bundestag passed a law on the introduction of a model declaratory action.
Germany Insurance
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On 14 June 2018, the German Bundestag passed a law on the introduction of a model declaratory action.

Under the new law, qualified institutions such as consumer associations will be able to bring actions on behalf of at least ten consumers to establish whether the claim is generally founded. The only parties to the model declaratory action will be the association and the defendant. Consumers affected by the claim will be able to opt in by registering their claims in a public register. The court's declaratory judgment will then be binding for any potential future claims brought by the consumer. Should the association and the defendant decide on a settlement, such settlement will have to be approved by the court before it becomes binding. Affected consumers will then have a period of one month to opt out of the settlement.

The new law is supposed to take effect on 1 November 2018, just before the majority of claims by VW car owners in connection with the "Dieselgate" scandal become time-barred. It is, however, debatable if the new model declaratory action will actually aid in facilitating the enforcement of claims for consumers. Many stakeholders have voiced criticism as to its effectiveness, fearing that consumers may find it difficult to register their claims in the public register and will therefore not benefit from the suspension of the limitation period.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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