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Covid-19 impact on civil and insolvency matters

Germany
Content provided by:
European Judicial Network
European Judicial Network (in civil and commercial matters)

1 Covid-19 impact on civil proceedings

1.1 Time limits in civil proceedings

To date, no measures have been adopted on civil-law time limits; the only provisions relate to prolonged interruptions to criminal proceedings. German law on civil procedure contains flexible provisions on the extension of time limits, stay of proceedings and restitutio in integrum, which help in the case of litigation during the Covid-19 crisis.

Further information on legislative measures can be found on the Federal Ministry of Justice and Consumer Protection’s website.

1.2 Judicial organization and Judiciary

Statutory provisions for civil proceedings already provide the courts with a broad scope to react flexibly to the current exceptional situation. It is for the relevant courts and judges to decide what measures to take on a case-by-case basis, e.g. written procedure, dispensing with the taking of evidence, or giving evidence via videoconference. Judicial independence is preserved.

1.3 EU Judicial Cooperation

Cooperation in family matters (Regulation (EC) No 2201/2003):

The Federal Office of Justice has restricted physical attendance by its officials on health grounds. However, the central authority is fully operational in accordance with Regulation (EC) No 2201/2003. Applications can be submitted in paper form.

Cooperation in matters relating to maintenance obligations (Regulation (EC) No 4/2009):

The Federal Office of Justice has restricted physical attendance by its officials on health grounds. However, the central authority is fully operational in accordance with Regulation (EC) No 2201/2003, although the processing of cases may still be subject to delay. Applications can be submitted in paper form.

The taking of evidence (Regulation (EC) No 1206/2001) and the service of documents (Regulation (EC) No 1393/2007):

The operation of the judicial system in Germany is gradually being broadened to take into account infections and local specificities. Delays to the execution of applications for notifications and the taking of evidence cannot therefore be ruled out. In particular, judges take local circumstances into account when ruling independently on the execution of applications for the taking of evidence.

2 Insolvency related measures adopted or planned for adoption in member states after the outbreak of the pandemic

2.1 Substantive insolvency measures and related contracts affecting measure

2.1.1 Insolvency suspension

2.1.1.1 Suspension of duty to file for insolvency (debtors)

The suspension of the duty to file for insolvency in the case of companies, partnerships in which no partners have unlimited liability, and associations and foundations was lifted on 1 May 2021. However, certain legal consequences of the suspension still apply, in particular the extended protection against appeals under Section 2(1) Nos 2 to 5 of the Covid-19 Insolvency Suspension Act in its current version.

2.1.1.2 Protection of debtors about insolvency filing from creditors

The limitation of a creditor’s right to file for insolvency ceased to apply on 28 June 2020. Since 29 June 2020, the lodging of an application for a creditor has been fully reinstated if the creditor has a legal interest in the opening of insolvency proceedings and demonstrates that their claim and the reason for opening the proceedings are credible.

2.1.2 Claim enforcement suspension and contract termination suspension

2.1.2.1 General / specific moratoria on claims enforcement / certain types of claims enforcement

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2.1.2.2 Suspension of contract termination (general / specific contracts)

Suspension of the termination of lease contracts. Landlords are not permitted to terminate leases for land or premises on the basis of non-payment of rent by the tenant in the period between 1 April 2020 and 30 June 2020, provided non-payment was a consequence of the Covid‑19 pandemic. Termination is suspended until June 2022.

2.2 Civil, including insolvency courts suspension and procedural suspensions

To date, there are no measures on time limits in civil proceedings. There is no need for specific measures because the legal situation in Germany allows judges to respond appropriately to the effects of Covid-19 on ongoing court proceedings.

2.3 Other insolvency measures (those relating to avoidance actions, reorganization plans, informal agreements, and others if appropriate)

For the duration of the suspension of the obligation to file for insolvency, the liability risks for managers, creditors and contractual partners of insolvent companies were mitigated in order to promote the provision of additional capital and the continuation of business relations, see Section 2 of the Covid-19 Insolvency Suspension Act (COVInsAG). Individual facilities continue to apply, such as the clarification that the repayment of new loans granted during the suspension period is considered not to be detrimental to creditors until 30 September 2023 (Section 2(1) No 2 COVInsAG). Payments on claims which were deferred until 28 February 2021 are also deemed not to be detrimental to creditors until 31 March 2022, unless insolvency proceedings were opened before 18 February 2021 (Section 2(1) No 5 COVInsAG). Section 4 COVInsAG shortens the forecast period for the overindebtedness test until 31 December 2021 and various access facilitations apply during the same period to ‘self-administrative’ and ‘shield’ procedures (cf. Sections 5 and 6 COVInsAG).

2.4 Related non-insolvency measures (payment deferrals, bank loans, social security, health insurance, business subsidies)

Consumers’ credit obligations in relation to consumer loans were – under certain conditions – deferred for three months effective from 1 April 2020; the rule expired on 30 June 2020.

Deadlines in company law are extended for holding general meetings; right of physical presence of shareholders or their proxies can temporarily be suspended by the Management Board (stock corporations).

Consumers and microenterprises unable to make payments as a consequence of the crisis were granted the right to refuse to perform ‘essential contracts for the performance of a continuing obligation’ (including but not limited to the supply of gas, water, power and telecommunications services), provided such contracts were concluded prior to 8 March 2020. This rule expired on 30 June 2020.

Last update: 22/10/2021

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