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Germany

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The Wirecard story is a true economic thriller: monies disappeared, offshore accounts were faked, managers were arrested or fugitive, possibly with connections to intelligence services. As such, Wirecard goes down as one of the most sensational scandals in German economic history. Today, it has been almost three years since Wirecard AG filed for insolvency. Since then, private and institutional investors have been trying to recoup their losses through individual lawsuits or model declaratory actions against…

In January 2023, the German Federal Ministry of Justice published “Guidelines for the strengthening of the courts in commercial disputes and for the introduction of (English speaking) commercial courts” (Guidelines). The Guidelines are the first step in implementing a legislative project of the labor/liberal/green coalition. In their coalition agreement, the three parties had agreed to “allow the introduction of English-speaking specialized chambers for international commercial and business disputes.” Currently, the possibilities to conduct civil/commercial proceedings…

In recent years, Germany has seen major financial scandals causing political and legal turmoil. The two most prominent scandals are the so called “cum/ex” tax scandal and the “Wirecard” financial fraud scandal. For many people, these names are associated with money lost. Litigators associate “cum/ex”, “Wirecard” and further scandals with proceedings against auditors and tax advisors; a hot topic for litigation in Germany. Disputes are centered around the liability of auditors and tax advisors: Former…

In Germany, arbitral tribunals decide most disputes arising from M&A transactions. Parties often are concerned that German state courts are not experienced and therefore in no good position to decide complex and high-value M&A disputes. Parties favor arbitration because it allows them to choose arbitrators who have either experience in negotiating complex transactional agreements or in handling M&A disputes. The downside of this preference for arbitration over litigation is that not much case law is…

A recent judgment by the German Federal Court of Justice paves the way for forum shopping in abuse of dominance cases[1]. Following the European Court of Justice’s Wikingerhof decision, the Federal Court of Justice has clarified that tort jurisdiction may apply even if the conduct in dispute is covered by contractual provisions. In addition, the Federal Court of Justice has confirmed the restrictive interpretation of generic choice-of-forum clauses of the sort that is often found…

Introduction A lot has been said and written about the Wirecard scandal in Germany. Books and scholarly articles have been published, movies about the case are blockbusters in theatres. Therefore, just briefly here: Wirecard was the poster child start-up company in Germany, active as an (online) payment service provider. The German federal government lobbied for Wirecard with its international counterparts. In summer 2019, Wirecard publically announced that an amount of approx. EUR 2 billion on its…

A few weeks ago, the Regional Court of Hanover dismissed a cartel damage lawsuit by a claims vehicle for lack of legal standing[1]. The judgment deserves scrutiny, as it confirms a trend among German courts to dismiss bundled claims on this basis[2]. 1. The incentive for bundling claims German law knows no class actions, and no specific means of collective redress that would provide cartel victims with payment titles. Therefore, cartel victims sometimes bundle their…

In October 2020, the German Government announced an action plan to improve the work of auditors in Germany (see https://globallitigationnews.bakermckenzie.com/2020/10/21/unlimited-liability-for-auditors-in-germany/). This action plan resulted from the Wirecard scandal, one of the biggest financial scandals Germany has ever seen. Among others, the auditors of Wirecard had failed to uncover the massive financial fraud scheme that the top managers of Wirecard had created. An investigation committee of the German Parliament is still trying to get to the…

The Hamburg Commissioner for Data Protection and Freedom of Information (“Hamburg DPA”) imposed a 35.5 million Euro fine on a global fashion company’s subsidiary in Germany for violations of the GDPR. This million Euro fine is the highest fine known in Germany so far. It follows: the 14.5 million Euro fine imposed in October 2019 by the Berlin Commissioner for Data Protection and Freedom of Information (“Berlin DPA”) against a real estate company for violating…

In June 2020, the Wirecard-scandal hit the financial markets. The German financial service provider Wirecard AG (“Wirecard”), a DAX 30 company, filed for insolvency after revelations that an amount of EUR 1.9 billion was missing from its books and the auditors had refused to certify Wirecard’s balance sheet. The company’s stock fell more than 70 % in only two days. In the future, books and movies will certainly exploit this scandal: a crime thriller including fake banks on…