Update on the German Federal Supreme Court’s leading decision procedure – Relief of consumers and judiciary?

The Federal Government's approach is going in the right direction to help speeding up proceedings at the courts and thereby relieving the burden on the judiciary and consumers. However, there is still criticism of the draft law, because the relief effect depends on further factors:

On the one hand, it is relevant how many appeals are allowed by the courts of appeal or how many appeals are allowed by the Federal Supreme Court on a complaint of non-admission. On the other hand, the extent of the relief depends on how many parties decide to appeal to the Federal Supreme Court in further proceedings. The Federal Government's draft law ties in with the object that the parties can prevent proceedings pending before the Federal Supreme Court by settling or withdrawing the appeal.

However, this problem is only partially solved by the introduction of a leading decision procedure. The parties are free to decide after the second instance not to appeal to the Federal Supreme Court by means of an appeal or a non-admission appeal. The losing party up to the second instance could include in its considerations that by not filing an appeal with the Federal Supreme Court, a final judgement is issued, but similar facts could nevertheless be decided differently in another individual action in the context of mass proceedings before another court. Since there is no Supreme Court decision by the Federal Supreme Court in this case, there is no clear orientation for the judiciary. The question therefore arises whether mass proceedings could not be countered more effectively by already allowing the courts of instance to declare proceedings to be lead decision proceedings.

Furthermore, the parties no longer have comprehensive power of disposal over proceedings that the Federal Supreme Court has declared to be lead decision proceedings. The parties can no longer prevent a leading decision on this legal question. This contradicts the principle of disposition enshrined in the German Code of Civil Procedure. The principle of disposition includes the right of the parties to dispose of the legal dispute as a whole. In particular, this also includes the right to end the legal dispute prematurely, i.e. without a judgement. The opposite of the principle of disposition is the official maxim that applies in German Criminal Procedural Law: According to this maxim, the state is the master of the proceedings. However, such management of the legal dispute has so far been alien to civil proceedings.

The leading decision procedure thus represents, in addition to the model declaratory action, the capital investor model proceedings and the intended introduction of the action for redress, a further possibility of civil procedural design in the context of mass proceedings. These means of collective legal action in consumer disputes are united by the goal of making legal enforcement more efficient and cost-saving for the state and consumers. The model declaratory action, for example, was introduced in consumer disputes in order to determine the preconditions for the existence of claims in the case of mass damages by bundling claims and to clarify the central legal questions in advance in a procedure with effect for all injured parties.

The German Federal Council is expected to deal with the draft law at the end of September 2023.