Which locks are proof of locksmithing

Legal practice. II. The causes. I. The problem


1 Legal Practice Arbitration Against Ordinary Jurisdiction: How to Strengthen Civil Justice? Civil litigation as a cultural achievement should focus on reality * Lawyer at the BGH Prof. Hilmar Raeschke-Kessler, LL.M., Ettlingen near Karlsruhe The culture of debate is changing. The discussion on investment arbitration within the framework of TTIP has not only discredited arbitration (regularly with legal participation in the arbitrators), but also obscures the view of the cases that in the legal world like to reach the ordinary arbitration tribunals: Why is it German civil litigation is sometimes not very attractive for economic matters? The author himself, a lawyer at the BGH, advocates making the code of civil procedure more flexible and thereby strengthening it, so that civil justice remains attractive even for major economic matters. The ZPO reform of 2002 led his assessment to a weakening of the BGH. I. The problem Arbitration has gained the reputation of taking away beautiful, that is, economically significant cases from ordinary jurisdiction and thus jeopardizing legal development; Allegations that can also be heard from federal judges in Karlsruhe. The fact that the mood has changed not only among the judges, but also in the economy, can be determined by an anecdote: As a very young lawyer, assigned to Martin Peltzer 1, one of the great masters of corporate law, I had the last century, to prepare a lunch between Winfried Werner 2, then the highly respected chief legal advisor of the immaculate Deutsche Bank and Ottoarndt Glossner 3, then chief lawyer of the AEG, which was in liquidation and later long-standing President of the German Institution for Arbitration (DIS). Both gentlemen were unable to resolve their dispute despite the help of Martin Peltzer. The meal ended with the words of Winfried Werner, then the BGH will decide, after which all those involved returned peacefully to their workplaces. The BGH judgment was a bit long in coming, but it came. Years later, and long after the revision law was reformed in 2002, I had to address the German group of the International Chamber of Commerce (ICC) to chief lawyers of large companies on the case law of the Federal Supreme Court. The discussion about this began with the contribution of the chief lawyer of a DAX group, who said, with everyone's approval, Mr. Raeschke-Kessler, please stay away from us with the BGH. The 70th German Juristentag in Hanover 4 dealt with the loss of importance of the state courts for the economy, and Juve dared to claim that arbitration is on a predatory course to the detriment of state jurisdiction. 5 I see three main reasons for this noticeable change in mood, which, however, does not correspond in all respects to reality 6: (1) the reform of the revision law of 2002 and its implementation through the strict case law of the BGH that immediately followed, (2) a partial one inflexible ZPO and (3) the better organized modern arbitration procedure that follows an international standard. II. The causes 1. The reform of the revision law of 2002 and its implementation by the BGH The reform of the revision law of 2002 under the leadership of the then Federal Minister of Justice Herta Däubler-Gmelin took place against the background of the idea that the old revision law was the regularly higher-value dispute of the Inappropriately privileged the economically stronger and that the then applicable legal remedies were exposed to the accusation of social imbalance. 7 Nevertheless, under the revised 543 ZPO, access to the BGH should also be possible under the concept of fundamental significance if other effects of the legal dispute on the general public particularly affect their interests, such as the actual or economic weight of the matter for the right-hand traffic involved. 8 However, the legislature failed to expressly state the economic importance of a matter as a reason for admission to an appeal to the Federal Court of Justice in 543 ZPO. This omission has already led to criticism and warnings during the legislative process. If the access to economically significant proceedings to the BGH is restricted, it can be foreseen with a fair degree of certainty that economically significant proceedings will migrate from ordinary jurisdiction to arbitration. The Federal Court of Justice would then not only be eliminated by the legislative act as a forum for deciding on disputes between companies, but also by deliberately turning away from the state jurisdiction, which in economically important matters would hardly accept a final decision by the higher regional courts there, where there is no monopoly of jurisdiction. The effects of such a ban on legal remedies on the legal culture are regrettable. The legal training by the Federal Court of Justice then takes place on the basis of the remaining- * The contribution goes back to a lecture that the author gave on June 11, 2015 as part of an event of the Working Group on Commercial and Company Law on the occasion of the 66th German Lawyers' Day in Hamburg. 1 Lutter / Scholz / Sigle (eds.), Festschrift for Martin Peltzer 2001, p. V VII. 2 Hadding / Immenga / Mertens / Pleyer / Schneider (eds.), Festschrift for Winfried Werner 1984, p. V-VII. 3 Plantey / Böckstiegel / Bredow (eds.), Festschrift for Ottoarndt Glossner Callies, report A for the 70th DJT, 2014, A 7 ff. 5 Juve Rechtsmarkt 06/15, p. 28 ff. 6 Wolf, NJW 2015, 1656 ff .; Prütting, AnwBl 2015, 546 ff. 7 BT-Drs. 14/4722, S BT-Drs. 14/4722, S AnwBl 11/2015 Arbitration against ordinary jurisdiction: How to strengthen civil justice ?, Raeschke-Kessler

2 the small cases. As the court of the small coin or as a consumer protection court, the BGH would lose its role model for correct law in economically significant cases that the arbitral tribunals would also have to apply in their disputes. 9 The warning, issued in 2000 in the Festschrift for the resigning President of the Federal Court of Justice Karlmann Geis, was unable to influence the case law after the ZPO reform came into force on January 1, 2002. It is true that the Fifth Civil Senate stated in one of the first decisions on the new revision law that a legal dispute, because of its actual or economic weight, could be of particular importance not only for the property interests of the parties but also for the general public and would then be of fundamental importance, which leads to the approval of the revision. 10 But that has largely remained lip service. The downright dramatic restriction of access to the BGH was made possible by the earlier case law on 543, 544 ZPO, according to which the appeal should not be allowed even if a legal error of the court of appeal is obvious or obvious, so that it can be done by anyone or at least by an expert without further can be recognized. 11 This was received with astonishment and with a shake of the head by the legal departments of the companies and by business lawyers. In its early decisions, the Federal Court of Justice never considered the consequences of an obvious misjudgment with an amount in dispute of 1 million euros or more for a medium-sized company. They were and are obvious. Such a misjudgment can trigger the bankruptcy of the company to whose detriment it was made, resulting in the loss of jobs and damage to its creditors. Consequently, in the years after 2002, the Federal Court of Justice settled most of the lawsuits between commercial enterprises by means of non-acceptance decisions, regardless of whether the amounts in dispute were 1 million euros, 10 million euros or a multiple thereof, unless the appellate courts had expressly permitted the appeal. Admission by the higher regional courts was seldom done because they believed that the reform legislature had assigned them the task of removing an inappropriate privilege of the economically stronger through the previously applicable legal remedies. 12 In this way, in 2007 I obtained a non-acceptance decision in the form of the two-line still customary today, according to which the case has no fundamental significance and the further training of the law as well as the safeguarding in a payment suit by Euro in connection with the bankruptcy of a large company uniform case law does not require a decision by the appeal court and therefore no more detailed justification is given. 13 In the statement of grounds of appeal, I submitted that the existence of creditor companies was at stake with around creditors and, among other things, derived the fundamental importance of the matter from this. The Federal Court of Justice accompanied the two-liner with a press release on the same day 14, thereby confirming the general interest and the fundamental importance of the matter. The motive of this case law was certainly also to ensure the functionality of the Federal Court of Justice. 15 In fact, however, it has shaken the existing confidence of the economy from misjudgments of the appellate courts by the Federal Court of Justice, permanently shaken. In the case of economically significant matters, resorting to arbitration was the foreseeable consequence. 2. Inflexible or outdated rules in the ZPO Our basically adaptable and excellent ZPO is inflexible or outdated in some points in order to meet the needs of modern large-scale proceedings, such as those that can arise in a dispute over the construction of a large power plant. The state judge only has a discretion to carry out the proceedings if this is expressly granted to him in the individual provisions of 253 ff. ZPO through an optional provision. This is a great advantage for the majority of the proceedings, because it means that the judge has to act within fixed guard rails. Agreements between the parties cannot limit or expand the judge's discretion. The process is thus under the rule of the judge, but not the parties. But the dispute over the construction of a large power plant does not fit between the legal guard rails. So far, the law does not allow any exceptions to the rule. In arbitration, the parties can largely regulate the procedure themselves. Your authority to regulate is limited solely by the few mandatory provisions of Book 10 of the ZPO (1042 para. 3 ZPO). This only includes the granting of a fair hearing, the requirement to treat the parties equally and the prohibition to exclude lawyers as authorized representatives. 16 Since the parties have rarely agreed the implementation and course of an arbitration procedure in detail and the institutional arbitration rules only provide an external framework for this 17, the discretion of the arbitral tribunal for the actual implementation of the procedure is almost unlimited. In contrast to the state judge, the arbitrator can adapt the procedure of the procedure to the needs of the respective case. This is particularly advantageous in major business cases, as shown below in comparison with the options available to the state judge and for which best practice has now emerged in arbitration. 9 Raeschke-Kessler in Festschrift für Karlmann Geiß (2000), pp. 155,156 f. 10 BGH vom V ZR 291/02, BGHZ 154, 288, quoted according to juris Rn BGH vom V ZR 291/02, BGHZ 154, 288 according to juris margin no. 15 mwn. 12 See BT-Drs. 14/4722, S decision of XI ZR 342 / press statement BGH No. 189/2007 v XI ZR 342 / BGH vom V ZR 291/02, BGHZ 154, 288, quoted from juris Rn Statt aller: Zöller -Geimer, ZPO, 30th ed., 1042 Rn. 1 ff. 17 Cf. 24 DIS Arbitration Ordinance. Arbitration against ordinary courts: How to strengthen civil justice ?, Raeschke-Kessler AnwBl 11 /

3 3. Six disadvantages for state court proceedings In large economic disputes, there are at least six recognizable disadvantages in proceedings before the state court compared to arbitration: 9 First: Even in large economic proceedings, the state judge does not need the parties to plan how it will be carried out and how it will proceed to participate. Such a participation leads to a noticeably better cooperation between the court and the parties and thus to a considerable gain in efficiency. Second, the party cannot be a witness itself. The taking of evidence by taking a party is tied to special requirements (445 ff. ZPO), which do not always do justice to the frequently occurring four-eye situation. In the medium-sized economy in particular, the final negotiations are often conducted personally by the business owners or managing directors. If large companies or large banks are involved in this, they can regularly be represented by the second or third level. In the event of a dispute about the content of the contract negotiations, the business owner or manager cannot be a witness, but the second and third level representative can. 9 Third: The state judge only rarely orders the written testimony that is possible under Section 377, Paragraph 3 of the Code of Civil Procedure, because only secondary points can be recorded with them. 18 Written testimony, on the other hand, is considered particularly efficient in large arbitration proceedings because it allows significant testimony to be separated from insignificant testimony in the run-up to the oral hearing and thus to dispense with questioning unproductive witnesses from the outset. This saves you time and money, especially during the oral hearing. 9 Fourth: Each witness is to be heard individually (394 ZPO). This means that the time-saving procedure of joint witness hearing by the so-called witness conferencing 19 is ruled out. Witness conferencing is useful when witnesses of the same level of knowledge face each other. It is also considered particularly efficient for the joint hearing of experts. 20 The provisions on the examination of witnesses in the ZPO limit the arsenal of the state judge. Therefore, there is hardly any serious credibility check of the witnesses, such as that made possible by real cross-examination 21. The frequent non liquet in state court proceedings is an unnecessary stopgap solution. 9 Fifth: For large economic proceedings, the possibility, according to 142, 424 ZPO, of forcing the opponent to submit documents that the opponent has in possession, the content of which can be disadvantageous for him, is insufficient. The decision as to whether the opponent has to submit a document is at the discretion of the court and is therefore largely beyond the control of the Federal Court of Justice. 22 The Kirch v. Deutsche Bank case before the Munich Higher Regional Court was a good example of the insufficient scope of this provision. Kirch only helped when the public prosecutor's office searched the premises of Deutsche Bank, during which suspected documents were found and confiscated.Sixthly: The record keeping of the oral hearing by the state judge according to 159 ff. ZPO is also in a mess. This applies in particular to the taking of evidence from an examination of witnesses or experts. It is still customary for the chairman to dictate the questions and answers in his own words 24 and in this way to reinterpret what has actually been said, mostly unconsciously, but at the same time in a decisive manner. This became particularly clear in connection with the Kirch v. Deutsche Bank trial. In the subsequent criminal proceedings against leading managers of Deutsche Bank for false testimony in the civil proceedings, it turned out that their lawyers had literally recorded the evidence in the civil proceedings by a court stenographer in the English court reporter. According to reports in the press, the verbatim transcript differs from the content of the summary court transcript dictated by the chairman of the OLG Senate. 25 The discrepancies between what is recorded and what is actually said can be relevant to the decision. 4. Six advantages for arbitration In international arbitration, the IBA Rules on the Taking of Evidence 26 published by the International Bar Association (IBA) in 1999 at the latest and revised in 2010 have developed a procedural standard that includes all subsequently revised institutional arbitration rules such as strongly influenced the ICC arbitration in 2012 and is also used as a model in purely domestic German arbitration proceedings. 27 In this way, a so-called best practice 28 has developed in both international and national arbitration, which is in any case superior to the current proceedings before the state courts in economically significant disputes. The following points should be emphasized: (1) Hearings of the parties on procedural management At the earliest possible point in time, i.e. after it has been constituted and the application has been received, the arbitral tribunal should hear the parties on the course of the proceedings, establish a binding procedural calendar with them and determine the manner in which evidence is to be gathered and discuss evidence.29 It is the purpose of this hearing called a somewhat cumbersome procedural management conference to ensure that the arbitration proceedings are conducted quickly, cheaply and fairly. 30 Following this, the arbitral tribunal regularly issues its procedural order No. 1, in which it translates the results of the hearing into binding rules that are to apply for the entire course of the arbitration proceedings. In this way, the number of rounds of submissions, written witness statements yes or no, the exchange of Do- 18 Zöller-Greger, ZPO, 30th edition, 377 Rn Peter, Witness Conferencing, Arb.Int. 2002, 47 ff. 20 Nedden / Herzberg-Haller / Stumpe, ICC-SchO / DIS-SchO (2014), Art. 26 ICC-SchO Rn Nedden / Herzberg-Haller / Stumpe, aao, Art. 26 ICC-SchO Rn BGH of III ZR 514/13 , juris Rn. 26 mwn> Wirtschaft v Zöller-Stöber, ZPO, 30th edition, 159 Rn www Spiegel-online from: Witness in the Deutsche Bank trial: Frosty reunion with Judge Kotschy. 26 The German translation of the IBA Rules for Taking Evidence in International Arbitration is available at www / ibanet.org. 27 Eberl-Schlosser, Evidence in Arbitration (2015) 2 Rn Kreindler / Schäfer / Wolff, Arbitration (2006), Rn. 731; Eberl-Eberl, loc. Cit., 1 marginal number Art. 24 ICC Arbitration Ordinance. 30 Art. 2 Para. 1 IBA Rules. 824 AnwBl 11/2015 Arbitration against ordinary jurisdiction: How to strengthen civil justice ?, Raeschke-Kessler

4 Document yes or no according to Art. 3 IBA Rules, verbatim transcript of the oral hearing yes or no as well as the date and duration of the oral hearing. At this point in time, the parties can already be heard about the technique of questioning witnesses and experts, individual questioning, witness conferencing, cross-examination, so that they are not surprised by a decision of the arbitral tribunal on this almost at the end of the proceedings immediately before the oral hearing. The parties often manage to come to an agreement on important procedural issues during this first hearing, despite their dispute on the matter. The early hearing can therefore also lead to an objective atmosphere for the entire duration of the arbitration proceedings and thus contribute to the psychological defuse of the dispute between the parties. After the entire part of the written arbitration procedure has been concluded and the matter at issue for the oral hearing has been determined, the arbitral tribunal regularly discusses the process and organization of the hearing with the parties around one month before the hearing. It records the result of the hearing in a further ruling, which becomes the binding basis for the oral hearing. If this has not already happened at the first hearing, this is the latest point in time at which the arbitral tribunal has to hear the parties on the method of questioning witnesses and experts, individual hearing, witness conferencing, cross-examination and, if there is no agreement, decide on this. 31 This protects the parties from surprises at the hearing. (2) The party can be a witness According to Article 4, Paragraph 2 of the IBA Rules, the legal representatives of a party can also be witnesses. 32 This is based on the experience that legal representatives of the parties, especially in the case of large contracts, are often directly involved in the entire contract negotiations or at least in their final phase. It therefore makes sense to allow this group of people to be unreservedly as witnesses, for example about the content of the contract negotiations. The special position of the witness as a legal representative and thus a possible personal interest in the outcome of the legal dispute is only taken into account and weighted in the second stage in the assessment of the witness testimony by the arbitral tribunal. (3) Written statements by witnesses In international arbitration proceedings, written statements by witnesses as stipulated in Art. 4 Paragraph 4 6 IBA Rules are state of the art. 33 If the arbitration takes place in Germany, for example, and a witness from New York who has been named on a key point has to travel, his appearance incurs nothing but costs if, to everyone's surprise, he declares at the hearing that, to everyone's surprise, he can answer the facts that he is aware of say nothing because he does not remember it, or if he invokes a right to refuse to testify in his favor. If he had been asked for a written testimony at the time of the exchange of the pleadings, he would have declared to the inquiring party that he would not remember the matter or that he would have made use of his right to refuse to testify. He would then not have been named as a witness and would not have incurred any unnecessary costs. The situation is not fundamentally different in purely domestic German arbitration proceedings. Therefore, in large arbitration proceedings, written statements by witnesses, which must be submitted together with the pleadings, have now become commonplace. They are covered by the procedural discretion according to 1042 para. 4 ZPO, provided that the arbitral tribunal has heard the parties beforehand. This is best done at the very beginning of the proceedings in the first meeting between the arbitral tribunal and the parties, on the basis of which the arbitral tribunal determines the details of the proceedings. (4) Witness conferencing The joint hearing of witnesses on a specific issue by witness conferencing is one of the best methods in arbitration to get to the heart of the matter quickly and to determine what actually happened. 34 This method uses knowledge from group dynamics. Engineers who have worked together trustingly on the contractor and client side in the planning and construction of an industrial plant are more willing to reconstruct what actually happened during a joint interrogation. In the case of individual interrogation in the absence of the other witnesses, it is difficult to overcome a witness's blocking attitude. The later confrontation with another witness who testified to the contrary, initiated by the court, tends to stiffen rather than give up a testimony made earlier. On the other hand, the first witness who spoke can immediately be ready to correct his testimony if the second witness, with whom he had worked trustfully in the past, presents his view of things immediately after the first testimony and both witnesses together in Speech and counter-speech try to reconstruct what actually happened without the intervention of the arbitral tribunal, if possible. (5) The obligation to submit unfavorable documents In numerous arbitration proceedings, a party can only prove an essential and decisive point of its submission if it succeeds in compelling the other party to make such a disadvantageous document available to it so that it can do so can submit evidence to the arbitral tribunal. The details of the procedure to be followed by the requesting party are set out in Art. 3 IBA Rules. Art. 9 IBA Rules contains a catalog of possible objections with the help of which a party can defend itself against a request for surrender. Both provisions must therefore always be read and viewed in conjunction. 35 Schlosser rightly considers the IBA Rules to be a successful synthesis of the 31 Kreindler / Schäfer / Wolff, Arbitration (2006), Rn. 852 ff. 32 Art. 4 Para. 2 IBA Rules: Anyone can be a witness, too the party itself or officers, employees or other representatives of a party. 33 See the sample of a written witness declaration in Nedden / Herzberg, ICC-SchO / DIS-SchO, Art. 25 ICC-SchO, margin no. 116 et seq. 34 Bühler / Webster, Handbook of ICC Arbitration, 2nd edition 2008, margin no ; Eberl-Risse / Haller, op -Kessler AnwBl 11 /

5 components of common law and civil law that are worthy of change and are therefore also a guideline for purely national proceedings. 36 In international practice, the arbitral tribunal decides on such a surrender request by drawing up a so-called Redfern schedule. 37 This is a list in which the arbitral tribunal notes the reasons for and against the surrender of each individual document that is described and requested. It records its respective decision on this in the last column. According to Art. 3 i. In conjunction with Art. 9 IBA rules, a request for surrender in the blue as a so-called fishing expedition or a discovery based on the US model are in no way permitted. 38 (6) Verbatim record of the oral hearing The course of the entire oral hearing is regularly recorded word for word in large arbitration proceedings with the consent of the parties by so-called court reporters, this applies to both international and purely domestic German proceedings. 39 Specially trained stenographers are available for this, but, as far as I know, only speak German or English and who, because there are still relatively few of these in Germany, have to be booked well in advance. Word protocols come in two variants, a simple and a luxury version, with significant price differences. In the simple version, the arbitral tribunal and the party representatives receive raw minutes with the option of making corrections on the evening of each hearing day about 2 to 3 hours after the end of the meeting. The luxury version consists of so-called life notes: the protocol appears in real time with a lag of no more than a second on the screens in front of the arbitration tribunal and party representatives and therefore enables immediate correction if necessary. I myself prefer the simple model without a screen because it enables the arbitral tribunal to see who is speaking and does not force them to look at the screen. 9 Second: 128 et seq. ZPO are to be supplemented by an optional or optional provision, according to which the court must hear the parties at the earliest possible point in time after receipt of the application for the course of the proceedings in suitable (large-scale) proceedings and, as a result of the hearing, the entire hearing To structure the procedure up to and including the oral hearing in a ruling and to draw up a binding schedule. 9 Third: 445 ff. ZPO are to be deleted and replaced by provisions according to which a party can also be a witness and the party position is only to be taken into account when assessing evidence. 9 Fourth: In appropriate proceedings, the court should be able to demand the submission of written witness statements after hearing the parties beforehand. 9 Fifth: 394 ZPO is to be deleted and replaced by a provision that enables the court, after hearing the parties, to hear witnesses and experts by means of a witness conferencing. 9 Sixth: 159 ff. ZPO are to be added to the effect that, in the case of suitable procedures, a verbatim record of the oral hearing can be made by a court reporter, provided that the parties agree to this and have agreed to bear the associated additional costs. III. Proposed solutions The overview shows that it is actually small things that can trigger major effects that would have to be changed or improved in the ZPO in order to restore the undisputed and self-evident primacy of the Federal Court of Justice as the leading judicial body, which the German Interprets the law in a binding manner for arbitration. Six proposals to the legislature on this point: 9 First: The wording of 543 para. 2 no. 2 ZPO must be added to the effect that the economic significance of the case may also require a decision by the appeal court. Prof. Hilmar Raeschke-Kessler, LL.M., Ettlingen near Karlsruhe The author is a lawyer at the BGH and honorary professor at the University of Cologne. Reader reactions to 36 Eberl-Schlosser, loc. Cit., 2 marginal numbers at Nedden / Herzberg, ICC-SchO / DIS-SchO, Art. 25 ICC-SchO, marginal number S. Eberl-Schlosser, op. Risse, Arbitration in Germany, 2nd edition, Sect. 29 DIS-Rules, Rn AnwBl 11/2015 Arbitration against ordinary jurisdiction: How to strengthen civil justice ?, Raeschke-Kessler