Capital Investor Model Proceedings in Germany under the revised Capital Markets Model Case Act

Capital investor model proceedings under the German Capital Markets Model Case Act are an accepted instrument of collective redress in mass disputes concerning capital investor claims. However, there was consensus that the structure of the proceedings needed to be improved to handle mass proceedings relating to capital markets law more effectively. To this end, in July 2024 the law was revised for the second time since its introduction in 2005, introducing changes not only to key aspects of the design of the proceedings, but also to their material scope of application and for the first time special rules for disclosure of evidence which are inspired by the rules applicable in follow-on competition damages case. This article summarises the key elements of the revised Capital Markets Model Case Act.

1. Introduction

The Capital Markets Model Case Act (Kapitalanleger-Musterverfahrensgesetz – KapMuG) was introduced in 2005 as a le...

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1. Introduction

2. Scope of application

3. Basic structure of the model case proceedings and its relationship to individual actions

4. Initiation of model case proceedings

4.1. Model case application

4.2. Order for referral to the Higher Regional Court

4.3. Order for opening of model case proceedings

5. Parties involved and relationship to individual proceedings and claims

5.1. Parties to the model case proceedings

5.2. Suspension of further individual proceedings (opt-in model)

5.3. Registration of claims and suspension of the statute of limitations

6. Disclosure of evidence

7. Possible outcomes of the model case proceedings

7.1. Settlement

7.2. Consensual termination and withdrawal of claims

7.3. Model case ruling

8. Relationship of the Capital Markets Model Case Act and representative actions under the Consumer Rights Enforcement Act

9. No 'sunset clause'

10. Concluding remarks