The leading decision procedure is coming – doubts remain
Written By
Counsel
Germany
I am a Counsel in our Munich office and part of the Dispute Resolution practice group. My focus is on commercial litigation before state courts and arbitral tribunals. In addition, I specialise in the defence of mass claim actions in various areas of law and sectors, including data protection law, insurance and the automotive industry.
On 18 October 2024, the Federal Council passed a law to introduce a leading decision procedure at the Federal Court of Justice (FCJ). It is expected to come into force at the end of October once it has been signed by the Federal President and published in the Federal Law Gazette. The law aims to ease the courts’ burden by allowing the FCJ to clarify relevant legal issues through leading decisions in mass proceedings. Examples of such mass proceedings include diesel cases and unauthorised clauses in fitness studio, insurance or banking contracts.
Mass proceedings continue to burden the German judiciary. Diverging case law on the same legal issues leads to uncertainty for both claimants and defendants. The new leading decision procedure at the FCJ is intended to relieve the burden on the lower courts. However, it is questionable whether it will actually bring more efficiency and legal certainty to mass proceedings.
Efficient processing and relief of mass proceedings
Mass proceedings consist of numerous individual lawsuits with similar claims, often involving the same core legal issues. The new procedure aims to allow the FCJ to select certain claims from the ongoing appeals as leading cases. Those selected should cover a broad range of unresolved legal questions that are "relevant to a large number of other proceedings".
Once the FCJ clarifies these questions, similar cases pending before the lower courts may be uniformly decided based on this leading decision, facilitating a quicker and easier resolution for the claimants. A leading decision should have a signalling effect, guiding lower courts on how the FCJ assesses the respective legal issues and potentially relieving the courts of many similar lawsuits.
Until now, parties have been able to withdraw appeals to avoid FCJ judgments. However, under the new procedure, a leading decision can be made even if the appeal is withdrawn for strategic reasons or if proceedings end in another way.
Guiding decision as an orientation aid
In a leading decision, the FCJ should focus on those aspects most relevant to mass proceedings. In its reasoning, the FCJ should explain how it would have ruled on key legal issues, taking into account the underlying facts. However, a leading decision is not founded on the merits of the case itself, so is not…
