English courts abroad—Germany waits to move forward

With motions to move more German courts into English language already afoot, Dr Barbara Mayer, of Friedrich Graf von Westphalen & Partner, evaluates how lingual subtleties may be no harder to overcome than legal subtleties when judges and lawyers hear cases. Given Brexit uncertainty and Germany’s dispersal of economic, political and legislative power across many cities and regions, a nationwide network of functioning English courts might not be so far off.

What changes have been introduced concerning English in German courts? When and why were changes made?

The introduction of chambers for international commerce into the German judicial system has been discussed for some time now. A draft law proposes to install such chambers at regional and high courts, exempting only the Bundesgerichtshof as the German supreme court for civil matters. The chambers would hear entire cases in English.

It is however unclear, whether the bill will be passed by the Bundestag any time soon—two years ago the Bundesrat (second chamber of the German parliament) proposed it for a second time, after the Bundestag did not debate a similar first bill introduced during the previous legislative session. However, the result of June’s Brexit referendum has left much uncertainty regarding the British legal market and could thus give new impetus to the project in an attempt to attract international lawsuits to Germany.

Usually, the stipulation of a London forum is driven by the language of the contract itself—if the documents material to a dispute are in English, it seems sensible to have a court deciding the matter in the same language. The choice of law then follows naturally, forming a seemingly sacrosanct trinity of the material language, the applicable law and the competent court. This choice, however, is not always a sensible one—German law, due to its traditionally high degree of codification and the publication of a great number of rulings, is very stringent, efficient and predictable. Also, the costs of litigating before a German court are rather low and highly predictable. The bill therefore aims to preserve the benefits of the aforementioned trinity hinging on the material language by merely exchanging the law applicable and having German courts hear and rule in English.

What types of cases fall under the remit of the changes?

The bill is tailored for cases related to international commerce. The vast majority of international contracts are negotiated and closed in English as the governing language. The same lawyers drafting and negotiating these contracts are therefore well-equipped to handle matters in English in front of a court.

How well is the scheme working?

As mentioned above, the draft bill has not been passed yet. However, even today German courts are at liberty to hear cases in English (or any other language) as long as all the parties are agreed thereto. There has even been a much regarded model project with the Cologne high court—the rota has been adapted so that cases where both parties agree to be heard in English are assigned to a specific judge or chamber.

What sort of feedback has there been?

The introduction of English as a language in at least some German courts has long been debated and called for. While both legal professionals and ministry officials agree that it would strengthen the German forum, for the second term running the bill has not been read by Parliament. Critics have raised the concern that the court’s language when hearing a case and the language of the law governing the case cannot reasonably be dissociated. While it is true that—especially in the densely codified German law—the grammatical interpretation of the exact wording of both contracts and legislation are intertwined, it is also true that a great number of contracts already deviate from the legislative ideal, using inaccurate and sometimes even incorrect terminology. Correcting this flawed (German) terminology is not necessarily easier than interpreting a contract in a different language. While it is unclear if and when the legislation mentioned above will be introduced, a looming Brexit has given new thrust to the matter.

How likely is it that this could compete with what is offered by the London legal market? Could Brexit have an impact on this?

Much of the strength of the London legal market comes from the immense concentration of (financial) business and legal competence within a few square miles. No measure by the German (or any other) legal system can single-handedly disrupt the well-tried London machinery. However, especially in light of the uncertainty with regard to the development of British law post-Brexit, many businesses are now looking into steady and more predictable alternatives. The Berlin parliament would thus be well advised to introduce the international chambers mentioned above as soon as possible.

German business is spread out over the whole of Germany fairly evenly. Frankfurt is the undisputed financial hub, Munich and Stuttgart are home to many important (and not only car) manufacturers, Hamburg hosts the second biggest commercial port in Europe. Many world leaders in their field are still located in small and seemingly rural towns, often being the sole or major employer there. Correspondingly, there is no central legal district, even the five German supreme courts are located in five different cities. The international chambers, accordingly, would not be centralised in one location but would be installed with the regional and high courts all over the country allowing for easy and nationwide access.

Are there likely to be any future developments in this area? Are there any plans for expansion of the existing measures?

The linguistic proficiency of judges or lawyers should not be a problem. An already big and still increasing number of German legal professionals have obtained LLM degrees from all over the world, and attending a class in legal terminology of a foreign language is compulsory for all law students at German universities. Furthermore, not only most business lawyers, but also many judges, in particular the younger ones, have spent part of their studies and their training in an English speaking country.

A (rather more formal/legal than economic) concern with hearing cases in a foreign language is that court proceedings are open for public scrutiny as a general principle. Debating cases in a foreign language might be seen as if the public would be locked out by closing the court room doors. However, English is not exactly a ‘foreign’ language these days, with roughly 70% of Germans being able to actively communicate in English. Even today, seeing as many cases are built on documentation in English, judges occasionally agree with the parties to discuss in the lingua franca of the 21st century. Only the judgment must still be delivered in German afterwards. This could now change, if the law mentioned above is enacted.

Interviewed by Julian Sayarer. The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

 

 

 

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