NAfter months of quarrels within the coalition, Federal Minister of Justice Marco Buschmann (FDP) presented the draft bill for faster and simpler legal options for consumers on Thursday – without the content of the dispute with Consumer Protection Minister Steffi Lemke (Greens) being ended. The novel remedial action is a central consumer policy project. In the future, consumer associations should be able to sue private customers for damages against companies in similar cases directly in the civil courts.
So far, only facts that are important for the outcome of the process can be collectively determined within the framework of the model declaratory action. In a second step, after a successful model declaratory action, consumers have to enforce the claims, for example for repairs or damages.
With the help of the remedial action, consumers should now be able to obtain their rights “in one go”. According to the Ministry of Justice, the new legal instrument could be useful, for example, in the case of consumer claims for compensation due to the cancellation of a flight or claims for interest payments against financial institutions due to the mass use of ineffective contractual clauses.
No agreement on the design
The draft creates a “fair and balanced legal framework so that disputes about consumer rights can be clarified more easily and companies receive legal certainty more quickly,” said Buschmann. However, there is still no agreement on the structure of the remedial action between the Ministry of Justice, which is responsible because of its responsibility for civil law, and Lemke’s Ministry of Consumer Protection, which is active in an advisory capacity.
The core issue is that the draft is too business-friendly for consumer advocates. The Lemke Ministry has now merely given up its resistance to the draft being sent to the federal states and the associations. They now have until March 3rd to comment.
Infringement proceedings against Germany
Buschmann is under time pressure because the EU Commission has already initiated infringement proceedings against Germany. As early as the end of 2022, Germany should have implemented the EU directive on class actions, which aims to strengthen collective consumer protection in court. A draft by the Ministry of Justice has been circulating since September with the aim of strengthening consumer rights in Germany in mass proceedings. However, according to the Lemke Ministry, the interests of consumers were not sufficiently taken into account.
This criticism is also reflected in the reaction of the Federation of Consumer Organizations to the draft that has now been published. In one particularly important point, this is disappointing, said the head of the association, Ramona Pop. The period in which those affected could join a lawsuit is “much too short”. Many of those affected would be excluded, such as people “who learned about the lawsuit from the media and first have to check whether they are really affected”.
Dispute about the time of registration
According to the draft, consumers must register for the remedial action no later than the day before the first court hearing. With the support of Lemke’s ministry, the consumer advocates had fought to ensure that it was still possible to register for a remedial action during the trial and even after a judgement. “An early binding registration for a procedure with an uncertain outcome will drive up the number of individual lawsuits,” warned the parliamentary director of the Greens parliamentary group, Till Steffen. The assessment of the rapporteur for the FDP parliamentary group, Judith Skudelny, is different: “The draft relieves the judiciary of unnecessary individual lawsuits.”
The economy had argued that the litigation risks would be unfairly distributed if consumers were able to join the redress action until shortly before a judgment or even afterwards. During the entire process, companies would not know whether they were dealing with claims from 100 or 100,000 consumers. Buschmann also commented in this direction on Thursday: “Defendants should continue to know when a process begins and how high the sum of the claims being negotiated is.” The minister also defended the statute of limitations, which the Greens also find too narrow. There must be time limits, the minister said. “That is what the principle of justice demands.”