Germany updates

Aviation

Contributed by Arnecke Sibeth Dabelstein
Aircraft repossession in Germany
  • Germany
  • July 11 2018

Although aircraft repossession is used only as a last resort, it remains unfortunately inevitable in some cases. Under German law, there are no self-help rights available to owners in order to take possession of an aircraft. It is possible to obtain interim injunctions or arrest orders before the German courts; however, those require a substantial amount of time to prepare court documents, as the entitlement to the claim must be shown to be prima facie.

Extended rights for passengers of connecting flights outside EU territory
  • Germany
  • July 04 2018

A recent European Court of Justice decision presents a major change of case law in Germany with regard to the applicability of EU Regulation 261/2004 to connecting flights departing from an airport situated outside an EU member state. The decision has countered the longstanding position of the Federal Court of Justice, which held that the applicability of the regulation to each flight should be examined separately, even if the flights were operated by the same airline and were booked together.

No compensation for missed flight due to security check delays
  • Germany
  • June 27 2018

In its latest decision, the Federal Court of Justice has reiterated that passengers are responsible for their own schedules and must allow sufficient time for airport security checks. The decision may lead to more flexible case-by-case judgments and suggests that airports, airlines and the state are not solely responsible for losses incurred from delays at airport security, but that every passenger has their own obligations and responsibilities.

Regional court prohibits HolidayPirates' error fare alerts
  • Germany
  • June 13 2018

The Munich Regional Court recently addressed the promotion of error fares by an online portal for cheap flights, hotels and travel packages in Germany. The promotions, which had encouraged customers to book error fares for flights published accidentally by airlines, were deemed unlawful due to a deliberate obstruction of competition in contravention of the Act Against Unfair Competition. The court's decision is appropriate considering the high number of consumers reached by online portals.

Passenger rights and information obligations under wet lease agreement
  • Germany
  • May 09 2018

The Federal Court of Justice recently clarified the liability of airlines with respect to passenger rights and information obligations when a flight is operated under a wet lease. EU Regulation 261/2004 defines an 'operating air carrier' as an air carrier that performs or intends to perform a flight under a contract with a passenger or on behalf of another person having a contract with that passenger. The Federal Court of Justice held that in case of a wet lease, the lessee must be regarded as the operating air carrier.


Banking

Contributed by Herbert Smith Freehills Germany LLP
Negative interest on existing cash deposits imposed by change in terms and conditions unlawful
  • Germany
  • February 16 2018

The Tubingen Regional Court recently held that negative interest on a consumer's existing cash deposits imposed by a German bank by unilaterally changing the bank's general terms and conditions was unlawful. According to the court, the defendant bank violated the rules of the general terms and conditions regime because it did not differentiate between existing deposits and newly deposited cash.

EAPO regulation: initial experiences with German courts
  • Germany
  • January 05 2018

As of January 2018, the EU regulation which established a new European Account Preservation Order (EAPO) procedure will have been effective and in force for one year. In Germany, the most important conclusion which can be drawn from the past year is that the German courts are adopting EAPOs. However, as the procedure is still fairly new to the courts, it has taken time and effort on the part of creditors.

Are arrangement and processing fee clauses in commercial loan agreements invalid?
  • Germany
  • September 08 2017

The Federal Court of Justice recently issued two rulings declaring that processing fee clauses in standardised commercial loan agreements are invalid as they unreasonably disadvantage borrowers. Previously, the majority of lower German court rulings had upheld the validity of such clauses in commercial loan agreements. Going forward, lenders have a number of options to deal with the issues raised in these new court decisions.


Competition & Antitrust

Contributed by CMS
Federal Court of Justice resolves dispute on limitation periods in cartel damages claims
  • Germany
  • June 28 2018

Litigants may now seek cartel damages for a longer period as the Federal Court of Justice has affirmed the suspension of the statute of limitations for antitrust claims before 1 July 2005. The court's judgment creates legal certainty and increases Germany's attractiveness as a jurisdiction for plaintiffs in cartel damages cases. It is also a major setback for defendants in cases concerning cement, truck and sugar cartels (among others), which will face even bigger damages claims.

Federal Court of Justice rules on price comparison tool ban
  • Germany
  • March 29 2018

The Federal Court of Justice recently held that absolute prohibitions to participate in online price comparison tools imposed on distributors in selective distribution systems amount to a hardcore restriction under Article 4c of the EU Block Exemption Regulation on Vertical Restraints. A closer look at the German decision reveals some doubts as to its compatibility with two European Court of Justice decisions.

Court avoids decision on per se illegality of restrictions of competition by object
  • Germany
  • February 15 2018

A recent Celle Regional Court decision on a clear resale price maintenance case has been heavily debated because the court held that restrictions of competition by object can be compatible with Article 101(1) of the Treaty on the Functioning of the European Union if they have no potentially significant effects on competition. The Federal Supreme Court has since overruled the decision, leaving it open as to whether the potential effects on competition must be considered in such cases.

Ninth amendment of Act Against Restraints of Competition
  • Germany
  • June 15 2017

The Federal Parliament recently adopted the ninth amendment to the Act Against Restraints of Competition. The agreed amendments take account of the ongoing digitalisation of the economy and also intend to close legal gaps in the liability for violations of competition law. However, one of the main aims of the proposed reform is to implement the EU Directive on Antitrust Damages Actions, increasing the efficiency of competition enforcement.

Joint venture between competitors – joint production: yes; joint commercialisation: no!
  • Germany
  • April 13 2017

Following an anonymous complaint, the Federal Cartel Office (FCO) recently investigated a joint venture between two competitors. The FCO did not have to decide finally on the case, but it preliminarily concluded that the joint venture facilitated market coordination between the two parents. The FCO applied a presumption according to which both parents would take into account information from the joint venture when deciding on their own market conduct.


Employment & Benefits

Contributed by CMS
Grand coalition's plans for labour law
  • Germany
  • March 14 2018

The Christian Democratic Union of Germany, the Christian Social Union in Bavaria and the Social Democratic Party of Germany recently concluded negotiations for a new grand coalition. The 177-page coalition agreement contains very specific proposals for changes to labour law, including with regard to the maximum duration of successive fixed-term employment contracts, substantial restrictions for fixed-term contracts and employees' entitlement to part-time work for a limited period.

Pay Transparency Act: information claims
  • Germany
  • February 21 2018

The Pay Transparency Act bundles together some regulations and requirements that had already been established and is intended to close the adjusted gender pay gap. That the act's practical relevance has proved limited thus far can be explained by the fact that it was not possible to assert the information claim until January 6 2018. Nevertheless, it should be kept in mind that the legal consequences of failings to provide information have yet to be clarified.

Act to Strengthen Company Pensions brings important changes for employers
  • Germany
  • January 17 2018

The Act to Strengthen Company Pensions has introduced pure defined contribution schemes for the first time. This means that employers will not promise specific or calculable retirement benefits, but merely undertake to pay specific contributions to an external pension provider. However, it remains to be seen whether the legislature has managed to strengthen and further spread company pension schemes as intended based on the act.

German corporate codetermination withstands ECJ scrutiny
  • Germany
  • August 23 2017

Since the Berlin Higher Regional Court referred the question to the European Court of Justice of whether it is compatible with EU law that only workers employed in Germany are eligible to participate in the election of workers' representatives on the supervisory board, Germany's legal sector has been eagerly awaiting an answer. The answer is now available and is likely to allow the legal sector to breathe a sigh of relief.

Consultation procedure for collective redundancies
  • Germany
  • July 05 2017

In reorganisation scenarios, German employers must comply with a number of statutory regulations. If a reorganisation involves redundancies and if certain thresholds are exceeded in this respect, special attention must be paid to the regulations aimed at preventing collective redundancies. Any notice of dismissal given in violation of the regulations to prevent collective redundancies contained in Sections 17 and 18 of the Act on Protection Against Unfair Dismissal is invalid.


Franchising

Contributed by Noerr LLP
Requirements for interim injunction to enforce obligation to operate business
  • Germany
  • February 06 2018

The Bochum Regional Court recently looked at whether a franchisee's contractual obligation to operate a business can be enforced by way of an interim injunction. To grant an interim injunction to enforce the obligation to keep the business open, it must be demonstrated that the franchisor faces serious losses at least equivalent to a threat to its survival or to drawbacks that cannot later be remedied.

No compensation claim for franchisee where franchisor must block customer data when agreement terminated
  • Germany
  • October 24 2017

The Federal Court of Justice recently ruled that an authorised dealer, such as a franchisee, has no compensation claim in analogous application of the regulation governing sales representatives contained in the Commercial Code if the franchisor is contractually obliged to block the customer data provided to it by the franchisee, to discontinue using it and to delete it at the request of the sales intermediary when the contract is terminated.

No significant obstruction to advertising franchise systems
  • Germany
  • April 04 2017

The Federal Court of Justice recently criticised a franchising advertising flyer in terms of competition law. One interpretation of this judgment is that it makes the advertising of franchise systems significantly more difficult. However, this point of view does not ultimately do justice to the decision, as the judgment does not fundamentally question the typical advertising of franchise systems.

Adequate substantiation of franchise and marketing fees in arrears
  • Germany
  • March 07 2017

A Brandenburg Higher Regional Court decision regarding the payment of franchise and marketing fees in arrears shows the importance of a substantiated presentation of a claim, as well as the importance of accurate, transparent and comprehensible billing by franchisors. The court could not ascertain whether there were unpaid franchise or marketing fees, as the franchisor failed to present sufficient facts demonstrating the exact amount of the franchise and marketing fees in the respective timeframes.

Federal Supreme Court decision complicates franchisor advertising on behalf of franchisees
  • Germany
  • June 14 2016

The Federal Supreme Court recently ruled that a franchisor's supplement containing prices stipulated as being "non-binding recommendations" obtainable only "in participating markets" constituted an act of unfair competition as the disclaimer was insufficient. The judgment raises questions about disclaimers, franchisor advertising obligations and whether franchisors are prohibited from enlisting franchisees to participate in a promotion.