In a decision dated 11 September 2024, the Federal Court of Justice ruled that the principle that the creditor lacks the necessary ‘burden’ for an immediate appeal (‘sofortige Beschwerde’) if, in his application for the fixing of a fine, neither a specific amount nor an approximate range of the fine has been requested, and the court has set the amount of the fine at its discretion, this also applies to a legal action initiated by qualified consumer associations (file no.: I ZB 93/23).
The Federal Court of Justice is thus continuing its case law, which it had already established in its decision of 23 November 2023 (file no.: I ZB 29/23).
The background to the decision is as follows:
The debtor had been enjoined to assert certain health claims in the distribution of foodstuffs vis-à-vis consumers.
The debtor repeatedly violated the injunction. A fine of EUR 1,000 was imposed for the first violation; regarding further violations, the creditor (a consumer association) requested the imposition of a ‘substantial fine’. The creditor left the amount of the fine to the discretion of the court, in the exercise of which ‘the hope for expenses incurred, which the debtor in particular seeks to obtain by failing to take appropriate compliance measures’, should be taken into account. The costs for such effective compliance would amount to a five-digit sum.
Regardless of this, the District Court imposed a further fine of EUR 1,500 on the debtor. The Court of Appeal of Stuttgart dismissed the appeal as inadmissible but allowed further appeal to the Federal Court of Justice on points of law.
The Federal Court of Justice (FCJ) ruled that the appeal on points of law was admissible; however, it was unfounded on the merits.
The Court of Appeal was right to assume that the creditor’s appeal against the imposition of a fine was precluded by the lack of a ‘burden’ if neither a specific amount nor an approximate range for the fine was requested in the application for the imposition of a fine and the court set the amount of the fine at its discretion. The appeal of a creditor in proceedings for the imposition of a penalty requires a special statement of reasons if a penalty has been imposed at all on his application. If the creditor’s application for an order, including its reasoning, does not indicate either a (minimum) amount or an order of magnitude for the requested fine, the creditor is subject to the court’s discretion in sanctioning the debtor’s conduct. Its legal protection objective is then limited to the imposition of (some) means of order. If the court, as in the case, exercises its discretion and imposes a means of order, such a legal protection objective pursued by the creditor is fulfilled and there is no complaint.
The consumer association had argued that these principles would not apply to the case of a qualified consumer association applying for a penalty. It was not appropriate to transfer these principles because it was not reasonable to expect consumer associations to bear the cost risk associated with quantifying the penalty in the event of a (partial) rejection of the application.
The FCJ rejected this view. The fact that a qualified consumer association pursues claims under unfair competition law in its own name but in the collective interest does not justify exempting it from the cost risk that could arise for it under sections 91 et seq. of the Code of Civil Procedure, which applies to every claimant, if the court decision falls short of the claim filed.
The consumer protection association had also asserted that the court of appeal had ignored the creditor’s submission in the application for the amount of the fine. The FCJ also rejected this submission. The court of appeal had dealt with the submission and could not reasonably be said to have derived any such substantive meaning from it.
In summary, it should be noted that creditors, regardless of whether they are qualified consumer associations or companies, etc., should substantiate the fine when applying for a fine to be imposed, to be able to argue a ‘burden’ in the event that a lower fine is imposed.
