German Counsellor Hans W. Roepke: Background

The Personal Injury Claims Process in Germany

Negotiations are the first choice – Litigation is the last resort

Unlike the tort claims process in the United States, in Germany we begin by and stay with negotiation with the defendant's insurer. Only if all settlement attempts fail do we then take the client's case to court. This is standard procedure due to the considerable financial risks involved.

Another important way in which the German process differs from American procedure is the "loser pays" rule. Should the court rule against you, you will have to bear not only your own legal services fee, but those of your opponent AND the court costs for both parties. Also, if you claim, say, €150,000, but the court finally awards only €75,000, you will be responsible for 50% of the total legal costs incurred.

German insurance companies usually want to settle out of court, especially when the claiming party resides outside the territory of the European Union. In case of annuity judgments, for instance, future economic fluctuations might make periodic payments financially cumbersome for all concerned.

It is quite important that correlated Social Insurance payments may not be assessed against the final award. As far as US military personnel are concerned, future disbursements, e.g. retirement pay, and certain payments by VA in particular, will likewise not decrease the final award. The Collateral Source Rule—otherwise inapplicable in Germany and most other European countries—will prevail.

For ordinary financial disputes, the German legal system allows access to 1) The Municipal Court, 2) the Regional Court, and 3) The Higher Court of Appeals. The German Supreme Court (Federal Court of Justice) hears an appeal from the Higher Court of Appeals only if that court has consented and/or the appeal involves a novel principle of law or deviates from a previous Supreme Court decision. The Federal Court of Justice, however, may refuse to accept the appeal altogether. (similar to certoriari) Municipal Courts, as a rule, handle civil cases involving a case value up to €5,000, meaning that for amounts greater than this, claims must be filed with the Regional Court.

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