Enforcing the Law

Place of Jurisdiction

Although in Germany fewer disputes have to be settled in court than anywhere else in Europe, some legal disputes still need to be resolved through litigation. If the lawsuit involves cross-border activities, the first thing that must be determined is which country has jurisdiction. While for civil lawsuits jurisdiction is determined pursuant to the rules of the conflict of laws, disputes involving German administrative and/or tax procedures may only be adjudicated in the proper German courts. Principally, the law of the place of litigation also determines the applicable procedural law.

For cross-border civil law disputes within the European Union, the determination of the place of jurisdiction is uniformly regulated by Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I Regulation). Insolvency and arbitration matters are excluded from this. The ascertainment of whether the dispute is within the European Union is determined primarily by the habitual residence of the plaintiff.

The Regulation reflects European substantive-law provisions on determining which legal system is to govern: in principle, the contracting parties are free to choose which law (jurisdiction) is to govern them. If the litigating parties have not agreed on such a jurisdiction, then the defendant must be sued in the Member State in which the defendant is domiciled. The same holds true for consumer and employment contracts. In these cases, a consumer/employee can only be sued in the place in which s/he is domiciled; the parties here are not free to alter this through a choice of forum clause.