Litigation

Last Update:
Related Topics:
  1. Häufige Fragen zum gerichtlichen Mahnverfahren
  2. Gebühren im gerichtlichen Mahnverfahren
  3. Mahnbescheid
  4. Vollstreckungsbescheid
  5. Zwangsvollstreckung
  6. Klageverfahren
  7. Insolvenzanmeldung
  8. Langzeitüberwachung
Table of contents:
  1. What is litigation?
  2. How does litigation proceed?
  3. What are the costs of litigation?
  4. How long does litigation take?

What is litigation?

Litigation, also known as contentious proceedings, is a formal court process to resolve a disputed claim between a plaintiff and a defendant. It aims to achieve a binding decision by a court. In the context of the judicial dunning process, litigation becomes necessary if the debtor disputes the claim.

How does litigation proceed?

1. Objection or appeal

Litigation begins when the debtor objects to a dunning notice or appeals against an enforcement notice during the judicial dunning process. These actions suspend the dunning process and lead to a contentious proceeding.

2. Transition to contentious proceedings

After an objection (on request) or appeal (automatically), the case is transferred to litigation. The competent court reviews the case and initiates the formal steps for handling the dispute.

3. Competent court

  • Claims up to €5,000:
    Cases with a dispute value below €5,000 usually remain with the district court. While the creditor can theoretically represent themselves, hiring an attorney is strongly recommended to improve the chances of a successful outcome.

  • Claims above €5,000:
    For claims exceeding €5,000, the case moves to the regional court, where legal representation by an attorney is mandatory.

4. Filing the lawsuit and statement of claim

The plaintiff (creditor) submits a statement of claim to the competent court at the debtor’s place of residence. This document outlines the disputed claim and its justification in detail. The court serves the claim to the defendant (debtor).

5. Court determines the next steps

The court decides whether to proceed with written submissions or schedule an oral hearing:

  • Written preliminary proceedings:
    The defendant is given a deadline to respond in writing to the claim.

  • Early first hearing:
    The court may schedule an initial hearing and set a deadline for the defendant’s written response. In almost all cases, both parties are represented by attorneys.

6. Default judgment

If the defendant fails to meet the response deadline, the court can issue a default judgment, granting the plaintiff an enforceable title without further hearings.

7. Contentious hearing

If the case proceeds to a full hearing, several steps may follow:

  • Witness testimony and evidence collection:
    The court may summon witnesses and examine evidence. If the defendant’s response is deemed irrelevant, the court may decide the case at any time.

  • Written proceedings:
    In German civil law, extensive written submissions are common. Both parties present their arguments in writing. If the defendant submits a defense, the court will eventually schedule an oral hearing.

  • Oral hearing:
    For claims under €600, the court may handle the case entirely in writing (§ 495a ZPO). Otherwise, an oral hearing is held where attorneys present and defend their arguments.

8. Judgment

After the hearing, the court delivers its decision. The judgment may be announced immediately or provided later in writing. It is binding for both parties.

9. Enforcement of judgment

If the court rules in favor of the plaintiff, they receive an enforceable title, enabling enforcement proceedings to recover the claim through measures like seizing the debtor’s assets.

What are the costs of litigation?

Litigation costs typically include court fees, attorney fees, and other potential expenses. Key cost components are:

1. Court fees

Court fees are determined by the value of the claim and are regulated by the Court Fees Act (GKG). They include:

  • Filing fees:
    Payable when the claim is filed. Higher dispute values incur higher fees, calculated in units.

  • Court expenses:
    Costs for serving documents, summoning witnesses or experts, and other court-related expenses.

2. Attorney fees

Attorney fees are based on the German Attorneys’ Fees Act (RVG) and the claim amount. They include:

  • Procedural fee:
    Covers all legal activities during the case.

  • Hearing fee:
    Charged for representing the client during oral hearings.

  • Settlement fee:
    Applicable if the case is resolved through a settlement.

  • Expense allowance:
    A flat fee for attorney expenses, such as postage and copying.

3. Other potential costs

  • Expert and witness fees:
    If experts or witnesses are involved, their costs must be paid, typically by the party requesting them.

  • Travel expenses:
    If attorneys or parties need to travel for the case.

  • Enforcement costs:
    Additional costs may arise if enforcement proceedings are required after judgment.

Who pays the costs?

  • General rule:
    The losing party typically pays all costs, including the court fees and the opposing party’s attorney fees (§ 91 ZPO).

  • Partial success:
    If both parties win and lose parts of the case, the court may apportion the costs.

How long does litigation take?

The duration of litigation varies greatly, ranging from several months for simple cases to several years for complex disputes. The timeline depends on the complexity of the case, the court’s workload, and the actions of the parties involved.

1. Filing and serving the claim (2–4 weeks)

The plaintiff submits the claim to the court, which reviews it and serves it to the defendant. This typically takes 2–4 weeks.

2. Defendant’s response (4–6 weeks)

After receiving the claim, the defendant has 4–6 weeks to respond, as set by the court.

3. Preparing for the hearing (2–6 months)

The court schedules a hearing date. Both parties may present further evidence or witnesses. This phase can take 2–6 months, depending on case complexity and availability of participants.

4. Oral hearing and judgment (1 day to several months)

The hearing usually lasts a day. The court may issue its judgment immediately or take several weeks to provide a written decision.

Total duration (6 months to several years)

  • Simple cases: 6–12 months.

  • Complex cases with extensive evidence or witnesses: 1–3 years or more.

  • Appeals can extend the duration further.

Factors affecting duration

  • Case complexity: More evidence or witnesses increases time.

  • Court workload: Heavily burdened courts take longer.

  • Party actions: Extensions, delays, or tactical moves can lengthen the process.

  • Appeals: Legal challenges add significant time.

Close collaboration with an attorney and thorough preparation can help streamline the process and minimize delays.