Corporate Litigation

Class action renaissance

The Volkswagen diesel affair is the most prominent example of a trend that is seeing class actions back on the agenda in Germany: shareholders and institutional investors are increasingly suing for damages arising from stock market losses following scandals and wrongdoing in companies.

In class actions, investor representatives are closing ranks with international (often US) firms or litigation funders, and thus elevating the topic to new heights, both qualitatively and quantitatively. In this respect, legislation in a number of EU member states is playing into their hands and leading to the Europeanization and globalization of such proceedings.

In other disputes related to stock corporation law, the trend toward more complex major proceedings is continuing, for instance when it comes to shareholder disputes. Conflicts between shareholders remain a topical issue, with those at Media-Saturn and Tönnies being just two examples.

One overarching trend is the increasingly strict liability regime within companies. In addition to liability aspects, criminal law and compliance elements often feature here. D&O insurers are proving tough negotiators when it comes to coverage. The settlement in the Breuer/Deutsche Bank case is a prime example of the complexity of such negotiations between a multitude of participants with widely varying interests. In addition, a recent Federal Court of Justice (Bundesgerichtshof) decision on the possibility of transferring D&O insurance claims to the employer raises new questions. With increasing frequency, D&O disputes are being brought before the courts of arbitration or dealt with in settlements.

A field for corporate heavyweights

In highly dramatic cases like VW, the established players – who are by no means always the large firms – are holding their dominant positions. When supervisory and management boards get into difficulty, these are the go-to firms for D&O liability issues, for example.

It speaks volumes, however, that Hengeler Mueller as a German firm is attaching more and more importance to international cooperation with its best friends in litigation work. Such networks are indispensable in today’s high-profile instructions. Freshfields Bruckhaus Deringer, as well as other well-known outfits like Gleiss Lutz and Linklaters, which are traditionally among the best-known names for top-flight corporate litigation work, long ago internalized international synergies. Competitors like Latham & Watkins, who are predestined for international work with their setups, are hot on the heels of these leading firms, but, unlike these, still lack established contacts in German boardrooms.

But the gap is closing: there is no doubt that these firms all cover the whole gamut of advice, from advice to company directors and litigation following structural resolutions, to squeeze-outs for major (DAX) companies and banks. Firms such as CMS Hasche Sigle, Noerr and Hogan Lovells, on the other hand, are broadening activity through their pre-eminent sector specialties and connections.



This chapter deals with disputes between companies on the one hand and on the other with investors, companies and individuals as shareholders that go before the courts, for example in challenges against board resolutions. This chapter also concerns disputes between shareholders and cases involving company directors. Cases concerning D&O insurance litigation or post-M&A disputes are dealt with in the previous subchapter on ?commercial litigation and liability, since the legal basis is different. Other firms with litigation experience can be found in the ?corporate chapter.