1. German Federal Court of Justice rules on reimbursement of disputed workshop invoices by insurance companies
On 16 January 2024, the German Federal Court of Justice (Bundesgerichtshof, “BGH”) decided five cases, all of which concerned the allocation of the so-called “workshop risk” (Werkstattrisiko). The term describes the risk that the party responsible for the damage to a vehicle (or, in practice, that party’s insurance company) will argue that the workshop invoice for the repair of the damaged vehicle is inflated.
This risk is generally borne by the liable party. The BGH has now clarified that this is not only the case when an invoice is inflated due to inappropriate use of materials or time. It also applies to cases in which the workshop invoices repairs that were not actually carried out, without the party suffering the damage being aware of this. As long as the liable party bears the “workshop risk”, it cannot argue that the invoiced costs were not objectively necessary for the repair of the damaged vehicle. However, the party suffering the damage bears the burden of proof that the damage to the respective vehicle exists and was caused by the liable party.
If the party suffering the damage has not yet paid the workshop invoice, the workshop risk is allocated as described only if the party suffering the damage sues the liable party (or the insurance company) for payment directly to the workshop and not to himself. In addition, the party suffering the damage must assign to the liable party all claims against the workshop relating to the workshop risk. The option of the party suffering the damage to invoke the workshop risk allocation may not be assigned to third parties.
Relevant for: Mobility providers, insurance providers, workshops.
Further details here (available only in German)
2. EU Parliament and Council agree on new CO2 emission levels for heavy-duty vehicles
On 18 January 2024, the EU Parliament and Council announced that they had reached an agreement on future CO2 emission standards for new heavy-duty vehicles entering the EU market from 2030.
Under the current agreement, stricter CO2 emission standards will be introduced in 2030, 2035 and 2040 that are 45% (2030-2034), 65% (2035-2039) and 90% stricter than the previous 2019 levels.
In particular, all new urban buses must be zero-emission by 2035. The new emission levels also cover almost all trucks, long-distance buses and trailers. Small trucks are not yet covered, although the Commission will review this exemption by 2027.
The European Parliament and Council must now formally approve the terms of their agreement. The new legislation will then enter into force following publication in the Official Journal of the Union.
Relevant for: Manufacturers.
Further details here
3. EU Court of Justice rules on car manufacturer trademark case
A German car manufacturer has successfully defended its trademark in a case decided by the European Court of Justice (“ECJ”, case C-334/22).
In the case, a trader offered non-original radiator grilles adapted for older models of the manufacturer’s cars. These grilles contain a component that is designed to hold the manufacturer’s emblem and is therefore similar or identical in shape to the manufacturer’s trademark as the emblem is to be mounted on it.
The ECJ held that such use of the manufacturer’s trademark by the product distributed by the trader is liable to infringe the functions of the trademark which are, in particular, guaranteeing the origin or quality of the goods.
Relevant for: Manufacturers, trading companies.
Further details here
4. German Higher Regional Court finds T&Cs imposing no-fault liability on intermediary invalid
In a court case that highlights the impact of the German T&C control regime on B2B contracts, the Higher Regional Court Hamm (Oberlandesgericht Hamm) found a clause that was used by a company which intended to impose a no-fault liability on an intermediary seller invalid.
In the case at hand, the plaintiff had purchased dried fruit from an intermediary which in turn had obtained the goods from a Turkish seller and had them shipped directly to the plaintiff. The dried fruit were contaminated and therefore unfit for sale and consumption.
The plaintiff sued the intermediary for damages, relying on a provision in its terms and conditions which stated that the seller guaranteed (zusichern) certain requirements specified by the plaintiff, including the absence of pests.
However, the court held that the provision was invalid because it deviated, without sufficient justification, from the fundamental legal principle under German law that liability for damages generally arises only from culpable conduct.
While parties can generally deviate from such principle, the court considered it an unreasonable disadvantage for the affected party to do so in general terms and conditions. The court referred to a general principle, upheld by the BGH, according to which deviations can only be justified in exceptional cases if the interests of the user of the terms and conditions outweigh those of the other party or if the deviation is compensated by granting other legal advantages. According to the court, these principles are applicable to B2B contracts without restrictions.
As the court found that the intermediary had not culpably breached its obligations under the purchase agreement, the claim was dismissed.
Non-German market participants are often surprised by the extent to which terms and conditions are regulated under German law even in B2B business relationships. The court’s decision shows the importance of a thorough review of T&Cs and the careful drafting of the relevant provisions in contractual relationships.
Relevant for: All (mobility) companies.
Further details here (available only in German)
5. Plaintiff cannot escape German law in judgment of German Federal Court of Justice
The German Federal Court of Justice (Bundesgerichtshof, “BGH”) recently decided a case in which the parties had agreed that a rental agreement for an apartment located in Germany would be governed by the law of another jurisdiction. When the landlord sought to evict the tenant, the tenant argued that under the Rome I Regulation, apart from the selected governing law, mandatory German law also applied to their contractual relationship.
The BGH sided with the lessee and held that, despite the deviating governing law clause included in the rental agreement and the fact that the rental agreement was drafted in a language other than German, mandatory German law still applied to the rental agreement under Article 3 (3) of the Rome I Regulation.
According to the court, mandatory local law is applied unless the connection of the agreement in question to the selected jurisdiction is objectively significant, for instance because the criteria of Article 4 Rome I Regulation are met.
In the present case, the court found only connections to Germany in the agreement. Therefore, the parties could not exclude mandatory German law from applying to their contract.
As these general principles apply to all contractual relationships, not only residential leases, parties should always be mindful of the possible application of mandatory local law provisions. In the future, it will be particularly interesting to see how more nuanced cases will be decided.
Relevant for: All companies.
Further details here (available only in German)
6. European New Batteries Regulation becomes mandatory in all EU member states
As of 18 February 2024, the European New Batteries Regulation will become mandatory in all EU member states. Under the new regulation, all batteries must contain a certain percentage of recycled metals.
Starting in 2025, recycling and collection requirements for used batteries will be implemented and become progressively stricter. By 2027, consumers are to be enabled to change the batteries in their own devices such as mobile phones themselves. Each battery will also contain a QR code with a link to detailed information about the battery’s life cycle, capacity, durability and contents.
Relevant for: Manufacturers.
Further details here
