Markesinis’s German Law of Torts: A Comparative Treatise 9781509933198, 9781509933228, 9781509933211

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MARKESINIS’S GERMAN LAW OF TORTS Since its first appearance in 1986, this magisterial work has won uniform praise from many of the world’s leading comparatists. It has been acclaimed by senior judges and has been cited by the courts of many countries. This new, substantially rewritten and systematically updated fifth edition of the work, contains over 95 leading judgments, most translated in their entirety, along with references to over 2,000 other decisions from Germany and the common law world. While the book remains an ideal tool for teaching comparative torts and comparative methodology, the fact that it has been extensively rewritten makes it an indispensable source of inspiration for those with a professional interest in tort litigation and tort law reform. This edition has paid particular attention to liability for internet activity, medical liability and the protection of personality rights and private life.

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Markesinis’s German Law of Torts A Comparative Treatise Fifth Edition Entirely Revised and Updated

Edited by

John Bell and

André Janssen, in collaboration with Colm McGrath With a Foreword by

Professor Sir Basil S Markesinis QC, FBA, LLD, Drhc (mult.)

HART PUBLISHING Bloomsbury Publishing Plc Kemp House, Chawley Park, Cumnor Hill, Oxford, OX2 9PH, UK HART PUBLISHING, the Hart/Stag logo, BLOOMSBURY and the Diana logo are trademarks of Bloomsbury Publishing Plc First published in Great Britain 2019 Copyright © Basil Markesinis, John Bell and André Janssen, 2019 First Edition 1986 Second Edition 1990 Third Edition 1994 Third Edition reprinted with amendments and additions 1997 Fourth Edition 2002 Basil Markesinis, John Bell and André Janssen have asserted their right under the Copyright, Designs and Patents Act 1988 to be identified as Authors of this work. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system, without prior permission in writing from the publishers. While every care has been taken to ensure the accuracy of this work, no responsibility for loss or damage occasioned to any person acting or refraining from action as a result of any statement in it can be accepted by the authors, editors or publishers. All UK Government legislation and other public sector information used in the work is Crown Copyright ©. All House of Lords and House of Commons information used in the work is Parliamentary Copyright ©. This information is reused under the terms of the Open Government Licence v3.0 (http://www. nationalarchives.gov.uk/doc/open-government-licence/version/3) except where otherwise stated. All Eur-lex material used in the work is © European Union, http://eur-lex.europa.eu/, 1998–2019. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication data Names: Markesinis, Basil, 1944- author.  |  Bell, John, 1953- author.  |  Janssen, André, 1972-, author. Title: Markesinis’s German law of torts : a comparative treatise / Basil S. Markesinis, John Bell, André Janssen. Other titles: Comparative introduction to the German law of torts   |  German law of torts Description: 5th edition.  |  Chicago : Hart Publishing, an imprint of Bloomsbury Publishing, 2019.  |  Includes bibliographical references and index. Identifiers: LCCN 2019027729 (print)  |  LCCN 2019027730 (ebook)  |  ISBN 9781509933198 (hardback)  |  ISBN 9781509933204 (Epub) Subjects: LCSH: Torts—Germany.  |  Liability (Law)—Germany. Classification: LCC KK1922 .M373 2019 (print)  |  LCC KK1922 (ebook)  |  DDC 346.4303—dc23 LC record available at https://lccn.loc.gov/2019027729 LC ebook record available at https://lccn.loc.gov/2019027730 ISBN: HB: 978-1-50993-319-8 ePDF: 978-1-50993-321-1 ePub: 978-1-50993-320-4 Typeset by Compuscript Ltd, Shannon

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To the memory of my father, who like all Greeks loved Bavaria and the memory of my mother, who transmitted to me her enduring love for England BSM

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FOREWORD TO THE FIFTH EDITION Teaching German law in innovative ways Teaching law through legal decisions was never an English speciality; it was more developed by American law professors in keeping with their tradition of their cultivation of what they called the Socratic Method. I venture to suggest that it is permissible, to claim here that my work marked a change in this respect, certainly for English legal literature. This is the first innovation this work can lay claim to, but not the only one. For I proclaimed my intention, pursued in all the editions of my work which in the fullness of time was expanded to cover the entire Law of German Obligations such as the law of contract, unjust enrichment and extra-contractual liability. My second innovation was thus to present the German law in a way that while not deforming its language and terminology would make a constant attempt to suggest that the Germanic civil law on the subject and that of the common law had many more similarities in their solutions than the believed differences that separated them would maintain. This of course was never taken to suggest that the raw material of each country relied on identical concepts to order to produce their respective results; nor did it imply that the reasoning processes of a codal-based system with its own very rich evolutionary history could be similar – and even less identical – with that of the English common law. Yet in terms of results the systems were far closer than any other scholar had suggested thus far and personally I found it pleasing to be able to refer to significant similarities among two major legal systems of the modern world which are increasingly forced to address similar problems and, almost inevitably, produce analogous if not even similar results. This innovation was, in fact, the most original of the two mentioned above and allowed me to claim that various benefits could be derived if we accepted this innovative claim. For my aim to achieve these innovations was facilitated by searching for the German solution in decisions and not codal matter. Belief in this gut intention, could, in some cases, reveal how German lawyers were often able to depart from their codal summaries of their law. The case law of § 242 BGB (good faith) offers one of the most remarkable case law developments of this kind. Emphasising innovations courts disaster; gradualism can reduce the dangers. An author may know what he is aiming to achieve by his work but is not obliged to boast about it from the outset of his intended journey of discovery. Indeed, if he wishes to introduce English casuistically trained law to a system which, like German law, prides itself for its ability to analyse concepts, do so with admirable system, apply it with logic and also achieve all this with the progression of its legal system in an admirable manner and even in areas of the law – such as human rights – where the system chosen for comparison with it was reputed to be more advanced than most other legal systems in force. So one way of not making this course of reform through comparative law intellectually indigestible was not to serve it as one single course.

viii  Foreword to the Fifth Edition The effort thus began between 1978 and 1980 when I was asked to update Professor Lawson’s masterly account of Negligence in the Civil Law. The book treated its subject in Roman law but towards its second half Professor Lawson included quite a few cases from French and German law and, in this restricted by brilliant introduction of contemporary European materials, I saw my opening the door of the modern systems enabling me to bring them into the picture in order to achieve the aforementioned but not yet openly proclaimed aims of mine. Of course I was interested in bringing foreign cases into courses of foreign law in order to make my wider aims noticed, studied and, one day, used in practice. In this I was helped by the fact that only two years earlier I had co-authored with RWM Dias an ­introductory book entitled The English Law of Tort. A Comparative Introduction which contained excursus to each of the main English sections of tort law offering the interested reader information about the German counterparts. The German material was neither too extensive but not too thin and slender and this so as to trigger my English Cambridge students in the interest of German law. In short, I ‘vaccinated’ my English students by ­injection in their body elements of foreign law which could in some cases provide them with antibodies of foreign law. The next phase came from abroad: my invitation to teach comparative torts at Cornell Law School. The aforementioned book provided the basis of the course; Tony Weir’s old but masterly account of Anglo-French law offered the students French law and I convinced Peter Martin to provide funds to begin my collection of Anglo-German law which now is included in my Texas Institute of Global law. These funds were eventually reinforced with funds offered to me as a research grant during my many years in Texas. With funds secured I began a systematic search for German cases. The German Law of Torts was beginning to take shape. This story, by the way, has its own moral. For think deeply about the evolution of your career, from its earliest stage, and then see how what lies ahead can also assist your wider academic and intellectual plans The German Law of Torts is born In the early 1980s of the last century the funds for the website on German law were found, first from Cornell, then from the von Caemmerer Stiftung, and finally from the ­Anderson Foundation of Houston. A team of translators was willing to offer their talents and translated cases which I helped collect and occasionally annotated. What was still to be done was to invite eminent lawyers from Germany and England to contribute supporting ­forewords to make the book useable, not just by students but also by the courts. P ­ rofessor Werner Lorenz, Lord Goff of Chieveley, The Rt Hon the Lord Bingham of Cornhill, The Rt Hon Sir Steven Sedley, Professor Odersky, former President of the BGH, President Hirsch, of the BGH, all volunteered and wrote highly supporting forewords with the result that the two volumes on the Law of Obligations began to be cited by English courts. Good news however never predominates in such long-term projects so, as the person who invited the above to work for our increasingly recognised comparative work I must also express the sadness of all involved in this venture at the death of Tony Weir, Lord Goff of Chieveley, Lord Bingham of Cornhill, KG, and Hannes Unberath, a most talented former student of mine. The talent of the above was unique and much needed. And by lending their names to our cause they bestowed some of their own reputations to the project and did so for the benefit of the practising lawyers from all the countries who supported the worthy endeavour of bringing lawyers from different systems closer together.

Foreword to the Fifth Edition  ix The years to come Our work is now 39 years old and its strength has attracted the support of unique jurists anxious, willing and able to prolong its life in the years to come. It is this aura which has attracted our two highly acclaimed new authors – John Bell, by common consent the leading comparatist of this country, and Andre Janssen a German scholar who has experience of teaching in Germany, Hong Kong and the Netherlands – willing to lead the book and its readers into the future. It is thus most gratifying to the principal original author to see that his motivating aims, set out above, are welcome to a new generation of scholars. To my delight, I therefore wish my successors all the very best in the endeavours they have already undertaken with visible signs of success. Sir Basil Markesinis QC, FBA Oxford, 7 April 2019

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FOREWORD TO THE FOURTH EDITION This is the fourth edition of The German Law of Torts by Professor Basil S Markesinis and with Dr Hannes Unberath appearing for the first time as a co-author. The three previous editions of the book, despite being modestly subtitled A Comparative Introduction, already presented a comprehensive and excellent comparative account of the German law of torts. That is why from the very outset this work proved such a remarkable success among jurists the world over. This success has been confirmed by the fact that the work has seen four editions in the space of about sixteen years. It was thus a great honour for me to be invited to write the foreword to its latest edition. The writers of the earlier forewords included two senior Law Lords, Lord Goff of Chieveley and Lord Bingham of Cornhill, colleagues for whom I have the highest esteem and to whom I feel bound by ties of true friendship. The high regard I have always had for the previous editions of this work also extends to the companion volume entitled The German Law of Contracts and Restitution, which ­Professor Markesinis wrote together with two other German colleagues. Taken together the two volumes present a full and complete account of the German law of obligations. Now I have read through the latest edition of The German Law of Torts I note that a large number of its passages have been changed, some substantially expanded, and all entirely updated. For the first time the book also includes more than 150 fully translated decisions of German courts, most of them being accompanied by highly stimulating and informative notes. The material in this book is throughout presented in an elegant and most instructive way. For the authors display their thorough learning with a lightness of touch and, even humour – a feature of English writing which we Germans so often admire. This work has been written primarily for the English-speaking jurist in mind: the student and, as Lord Goff convincingly argued in his earlier and learned foreword, the practitioner as well. Nonetheless, I would like to add that it is also a most inspiring book for someone who has been educated in German law and practises law in Germany. This is not only because the subject matter has been handled in such an intellectually stimulating manner. One can also benefit directly from seeing how problems encountered in one’s own system (and the methods developed to solve them) have been handled from the common law perspective. It was thus with great pleasure that I read the passages in the Introduction under the title ‘Style, form, and content of the judgments of the BGH’. For it was rewarding to see one’s own experience reflected through the eyes of a foreign colleague and one, whom I might add, is willing to look at my system in a benevolent and perceptive manner. The exercise was invaluable in broadening and complementing my own perception of my experience in this matter. It seems logical to the German reader that each section contains a self-contained dogmatic part followed by cases most of which are followed by highly instructive and informative notes. The latter undoubtedly reflect the case-law approach of the

xii  Foreword to the Fourth Edition ­ nglo-American systems. I would like to stress however that the importance of precedents A has increased significantly in Germany as well over the last few decades. For though in German law there is formally no doctrine of stare decisis, as a matter of fact past decisions determine the entire legal reality – in and outside the courtroom. This is particularly true of the decisions of the B ­ undesgerichtshof. A distinguished comparative lawyer, Professor Andreas Heldrich, currently Rector of the Ludwig-Maximilians University of Munich (where Professor Markesinis did so much of his work on this book), examined this important question in his lecture celebrating 50 years since the founding of the Bundesgerichtshof on 1 October 2000. (‘50 Jahre Rechtsprechung des BGH – auf dem Weg zum ­Präjudizienrecht?’ ZRP 2000, 497). There he concluded that despite differences in emphasis, judge-made law and ­statutory law were in equal ways the cornerstones of the Anglo-American and German systems. We live in an age of ever-increasing cooperation between the European nations and we can consider ourselves privileged to be witnesses of this process. Its future success will crucially depend on finding the right balance between convergence on a broader scale and conserving the particular characteristics and traditions of the individual legal systems. The same can be said about the harmonisation brought about by the European institutions. However, the desire to preserve one’s own tradition should not prevent one from studying the weaknesses and the strengths of the legal system of one’s neighbours. On the contrary, doing so will be extremely rewarding and will contribute to one’s own strength. Where the native legal system encounters difficulties or novel situations, it is particularly desirable to rely on arguments derived from comparative law while searching for the appropriate answer to such difficulties elsewhere. This book greatly assists this process. In a letter which he once wrote to me Basil Markesinis mentioned that The German Law of Torts ‘has been the work of my life for over twenty years’. This remark, uttered in the most modest and endearing of ways, deeply impressed me. The author, having completed the fourth edition of his book (together with Hannes Unberath), has truly taken his vision of generating greater understanding between Anglo-American and German jurists to new heights. I am thus confident that I speak on behalf of all my colleagues at the Bundesgerichtshof when I say we wish this remarkable book the continuing success it so richly deserves. Prof. Dr. Walter Odersky Emeritus President of the Bundesgerichtshof December 2001

FOREWORD TO THE FOURTH EDITION I know that I shall be forgiven if, in a foreword to the fourth edition in only sixteen years of this path-breaking book, I do not traverse the high ground covered with such distinction by my predecessors Professor Lorenz, Lord Goff and Lord Bingham. There is nothing in this new edition which does not justify their praise, and much – not least the judgments in translation – which gives fresh grounds for it. Instead let me reflect briefly on the significance of the point of time at which the book appears. It is a moment when the United Kingdom, by now accustomed to the supremacy of the law of the European Union, has newly patriated the European Convention on Human Rights and is learning to live with its occasionally demanding norms. It has in consequence found its own law of torts under unexpected pressure as the Strasbourg court has found unacceptable the sometimes high thresholds being set by the common law for access to justice against state entities. Such decisions provoke regular journalistic and political assaults on an undifferentiated place called ‘Europe’ where foreign judges ordain how the United Kingdom should be run. Germany (and its juridical predecessor, the Federal Republic) has travelled this road for much longer than we have, but without quite the same sense of imposition. Its post-war Grundgesetz has been the primary source of those civil rights for which we look first to the common law and then to the European Convention. Its civil code, like other codes, is not a comprehensive set of answers but a framework for finding them, and in that respect not very different from the common law. So it is unsurprising to find a strong emergent parallelism not only between the problems each jurisdiction has had to deal with but between the modes of reasoning by which they are resolved. One sees it in the tentative movement of the United Kingdom’s courts towards the kind of indirect horizontal application of rights with which German theory and practice are already familiar. When, as has begun to happen, the United Kingdom’s courts have to decide how far they are called upon to protect the privacy of individuals from unwanted intrusion, they will have the reasoning and experience of the German courts – the French courts too – to call upon. It is reasoning and experience which extends into areas that are familiar but still extremely troublesome to our courts, such as state liability and economic loss, and into others which we are still coming to grips with, such as wrongful procreation. On these and some of the many other topics which it covers, The German Law of Torts has already been cited in the judgments of anglophone courts from Australia to Canada to South Africa, as well as those of England and Wales. This is its great and growing value. It  no longer represents, as comparative law used to represent, an absorbing academic pursuit. It represents a body of working jurisprudence developed by able lawyers to cope with ­problems common to both our jurisdictions, and doing so on a largely shared foundation of basic rights and norms. To an increasing extent judges as well as practitioners will turn to books like this (in the too-rare instances where they exist) for workable ways of developing law for the new millennium in the United Kingdom and elsewhere. Whether convergence or divergence follows, it will be time and effort well spent.

xiv  Foreword to the Fourth Edition Once again, by making educated inquiry possible and furnishing a wealth of otherwise inaccessible information about the German law of torts, Professor Markesinis, with his new co-author Dr Unberath, has earned the gratitude of more people than he will ever know. The Rt Hon Sir Stephen Sedley Royal Courts of Justice London December 2001

FOREWORD TO THE THIRD EDITION The German Law of Torts has, within a remarkably short period, become a classic of ­European legal literature. Three editions in under eight years: the record speaks for itself. For the monoglot English-speaking reader, Professor Markesinis’ book has no peer and no rival. The reasons for the book’s outstanding success are not hard to divine. First is the intrinsic interest and importance of the subject. Only a small part of the German Civil Code is devoted to the law of torts, but it is an important, perhaps increasingly important, part. And the Code itself, described by Maitland as ‘the most carefully considered statement of a nation’s law that the world has ever seen’, is a work well worthy of serious study. That is a truth which our fathers perhaps overlooked, but of which our grandfathers were fully aware. A distinguished scholarly survey of the tort paragraphs in the German Code would be achievement enough. But it would scarcely earn the widespread acclaim with which ­successive editions of the book have been greeted. That is the product of the book’s second great virtue: its treatment of German tort law not as a series of abstract principles or general theories but as a code of legal rules worked out and refined by practical application in the courts to actual human beings in real situations. So the law comes to life in a way readily understood by the common lawyer, and congenial to him, not as the dream of a legal philosopher but as a source of solutions to practical problems, a system deeply rooted in the untidy earth of ordinary life. This is as much a casebook as a treatise on jurisprudence. It is, however, the book’s third great virtue which assures it a place in the library of the well-armed practitioner (and even judge). That virtue, proclaimed in the full title to the book, lies in the expert and skilful comparisons persistently drawn between the solutions achieved by German judges applying the Code and judges in the United Kingdom and other common law jurisdictions applying rules derived from statute and authority. Problems which have exercised, and often baffled, common law judges – responsibility for economic loss, the scope of duties of care, liability for psychiatric damage, the protection of privacy, environmental liability – are here set in a comparative context which yields fresh insights, suggests new possibilities and stimulates the jaded imagination. Professor Markesinis has chosen his moment well. As the countries of Western Europe draw closer together, as frontiers disappear and barriers fall, opportunities to learn from the experience of others become more plentiful and the need to take advantage of those opportunities more obvious. This important book may fairly be seen as contributing to that increase in mutual understanding upon which international harmony and cooperation so closely depend. TH Bingham MR Royal Courts of Justice 25 March 1994

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FOREWORD TO THE SECOND EDITION I am honoured to be invited to contribute a Foreword to the Second Edition of this ­remarkable and, certainly to me, most valuable book. The theoretical case for the study of comparative law has long been made out. The ­problem now is not whether comparative law should be taught in our universities, and studied by our law students. The problem is rather how it should be presented, not merely as an aspect of legal culture, but as a subject which is capable of influencing our work, whether as scholars or as practising lawyers in the development, exposition and application of legal principles, in the context of our own domestic legal system. It must never be forgotten, by those who teach and write about law, that, for those who study it and those who practise it, our own domestic law bristles with difficulties which are hard to master, and problems which are difficult to solve. In working through a heavy university curriculum, and in the helter-skelter of professional life (whether in practice or on the bench), it is not at all easy to accommodate the introduction of material from other legal systems, and especially from civil law systems with which we are unfamiliar. Even in appellate tribunals, it is hard enough to master and to reconcile existing English material – statutes, cases and academic writings. Moreover, in the great majority of cases, the point is a relatively narrow one which is subjected to intensive examination; and it is the practical implications of any particular solution which exercise, perhaps, the greatest influence. It is only by grasping the practicalities of university study, of professional lawyers’ ­practices, and of work in the courts, that it is possible to conceive an appropriate vehicle for bringing comparative law to bear, as a useful tool, and as an effective influence. For these purposes, books on comparative law which are general in nature, however admirable in themselves, however educational in a cultural sense, are of little direct use. To be influential in a more practical way, comparative law material has to be far more closely focused; and, not only that, it has to be readily comprehensible, practically orientated, and thoroughly reliable, by which I mean both accurate and up to date. It stands to Professor Markesinis’ great credit that he has fully grasped the realities of the situation in which the comparative lawyer finds himself. He understands how necessary it is that work on comparative law should be closely focused, for it to be of practical benefit to English lawyers. He understands how necessary it is that such work should be thoroughly reliable, demonstrating the author’s deep and genuine understanding of this subject, set in the practical and theoretical context of its own legal system. He understands how necessary it is that it should be readily comprehensible; for example, despite his own mastery of languages, he recognises the need to present the primary sources in copious and felicitous translation for the English lawyer. He understands, too, the need for it to be practically useful, by travelling far beyond the provisions of codes to the real cases which trouble the courts and by including reported judgments from those cases, set in their theoretical context as seen by indigenous lawyers.

xviii  Foreword to the Second Edition It is perhaps even more to Professor Markesinis’ credit that he is not only capable of mastering fully a substantial topic from a foreign system of law demonstrating his expertise to the satisfaction of leading lawyers from that legal system; he also has the courage to embark upon so exacting a task as the critical exposition of such a topic, and the determination and industry to carry that task through to its fulfilment. I speak, of course, of the present book, his Comparative Introduction to the German Law of Torts. It came as no surprise to me that the first edition of the book was so successful and was so warmly received. I know of no more directly useful book on comparative law than this. It is a book which can not only be usefully consulted by creative lawyers in this ­country; it is one which is capable of influencing directly the solution of problems with which we have to grapple in our own domestic law. Too often, German law is presented to us as over-theoretical and ridden with concepts. Here, however, we can see German judges at work, tackling the same problems as we have to tackle, coming up with solutions sometimes the same as ours, sometimes different – and, when they are different, sometimes (it may be thought) better than those which we have chosen. It has truly been said that the most beneficent effect of the study of other systems of law is that we learn more about our own. In this book, Professor Markesinis has taught us all how comparative law is best presented to achieve that admirable objective. I gladly commend this new edition. As with all new editions of successful law books, it has grown in size. But, as the reader will soon discover, this is no mere update; it has involved substantial rewriting, as well as the incorporation of much new and valuable­ material, from Anglo-American law as well as from German law. In the result, it will be even more useful to us than its predecessor; and I am bold enough to predict that it will be even more successful. Robert Goff House of Lords

FOREWORD TO THE FIRST EDITION When I was invited to write a few words of introduction to this book I accepted immediately and without any hesitation, even though at that time I had not yet read the manuscript. Lawyers usually are cautious people, but in this case there was no risk involved. Since I knew the author’s previous publications dealing with the law of tort on a comparative basis, I had no doubt that his project of a Comparative Introduction to the German Law of Tort would be a great success. There were two further reasons why I gladly accepted this invitation. For many years the author cooperated most fruitfully with the late Professor Lawson, who some decades ago was my tutor in Oxford. Both Dr Markesinis and I owe this great comparatist very much, for he had the rare gift of illuminating difficult problems by quick and penetrating observations. The other reason is the author’s connection with Cornell Law School, which encouraged and supported this book. This brings back to my memory the wonderful time I spent there working in Rudi Schlesinger’s team exploring the common core of legal systems in the area of formation of contracts – a project of comparative law conducted under the auspices of the Cornell Law School which has been favourably received by scholars all over the world. The present book, I am sure, will not merely serve its immediate purpose of introducing the reader to the German law of tort; no doubt it will also open many new perspectives for the general understanding of this legal system belonging to the civil law. Apart from family law, which has undergone rapid changes in most countries since 1945, the law of liability is an area where many important developments have taken place. Even a superficial look at the index of any of the ninety volumes of the official collection of civil cases decided by the Federal Supreme Court will suffice to confirm this impression: the number of reported cases on problems of civil liability is remarkable. Many of them have given rise to vivid discussion in German legal literature, thus confronting the courts with new ideas. This had led to a fruitful exchange of ideas between bench and scholars unknown in most of the other legal systems. The care with which the Federal Supreme Court considers critical views put forward against its opinions is sufficient evidence of this. The importance of the law of liability and its special value for academic teaching in the Federal Republic of Germany is further stressed by the somewhat complicated interaction of contract and tort which has reached the point where the boundaries between these two areas of the law have become blurred. The different approaches taken by the German Civil Code in regard to vicarious liability in contractual relations on the one hand, and in the law of tort on the other, have certainly contributed much to the tendency to enlarge the field of contractual liability, thus filling gaps found to exist in the law of tort. However, the much disputed § 831 of the Civil Code dealing with the responsibility of employers for tortious acts committed by their employees in the course of employment which used to be a stumbling-block for plaintiffs in former times has lost much of its significance in actual legal practice, because increasingly the courts have shifted the emphasis on the basic rule contained in § 823 I Civil Code. This means that they will look into the relevant business

xx  Foreword to the First Edition organisation rather than try to establish the employer’s fault in the selection or supervision of an individual, thereby depriving the employer of the chance to exculpate himself. The burning problem nowadays is whether purely economic loss must be made good in ordinary negligence cases, where the parties have not been in contractual relations stricto sensu. Liability for negligent misstatements is but one group of cases in which this problem has arisen. Here as elsewhere in this book Dr Markesinis has succeeded completely in selecting those cases which are most instructive. Therefore the reader obtains all the information he needs in order to find out how the law stands in such important fields as, for instance, products liability, medical malpractice, and traffic accidents. However, it is the thorough, comparative discussion accompanying each group of cases that makes reading this book a great pleasure even for one already familiar with the material. Although this book was written for students belonging to the Anglo-American legal family I would, therefore, like to recommend it to students of other legal backgrounds as well, because the problems dealt with are of a universal nature in the sense that each developed legal system has to deal with them. Prof. Dr. Werner Lorenz University of Munich

‘What is striking and mysterious in comparing two legal systems is the ways they are similar and the ways they are different. Much of what follows will be of immediate use to [common] lawyers only in so far as the contrasts between German and [common] law make them more sharply aware of the fundamental character of their own legal system. By seeing how another … advanced culture can make entirely different arrangements for things they have always supposed to be matters of course – things that obviously must be this way and not the other – they also may gain a critical outlook and an expanded capacity for adapting their own system’s traditional institutions to the practical needs of real life as they evolve. On the other hand, much in this book addresses problems that are virtually identical in both systems. Recognising and solving a problem becomes remarkably easier when it shows up wearing a peculiar foreign costume’.1

1 Karl N Llewellyn, The Case Law System in America, English edition by P Gewirtz and M Ausaldi (1989) 1. (In Llewellyn’s original the word used in the first bracket is ‘German’ and in the second is ‘American’.)

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TABLE OF CONTENTS Foreword to the Fifth Edition���������������������������������������������������������������������������������������������������� vii Foreword to the Fourth Edition�������������������������������������������������������������������������������������������������� xi Foreword to the Fourth Edition������������������������������������������������������������������������������������������������xiii Foreword to the Third Edition��������������������������������������������������������������������������������������������������� xv Foreword to the Second Edition����������������������������������������������������������������������������������������������� xvii Foreword to the First Edition���������������������������������������������������������������������������������������������������� xix Abbreviations�������������������������������������������������������������������������������������������������������������������������� xxix Books Cited by Names of their Authors��������������������������������������������������������������������������������� xxxv List of Cases Reproduced in this Book and their Translators��������������������������������������������� xxxvii Table of Cases���������������������������������������������������������������������������������������������������������������������������xliii Table of Legislation������������������������������������������������������������������������������������������������������������������� lxix 1. Introduction�����������������������������������������������������������������������������������������������������������������������������1 I. A Bird’s Eye View of the Organisation of the German Courts in Civil Matters���������������������������������������������������������������������������������������������������������������1 Bibliography����������������������������������������������������������������������������������������������������������������� 6 II. Style, Form and Content of Argument in the Judgments of the German Supreme Court������������������������������������������������������������������������������������6 A. History������������������������������������������������������������������������������������������������������������������10 B. Legal Education���������������������������������������������������������������������������������������������������11 C. The Codal Background���������������������������������������������������������������������������������������12 III. Some Preliminary Observations on the BGB in General and the Delict Provisions in Particular���������������������������������������������������������������������13 Bibliography��������������������������������������������������������������������������������������������������������������� 18 IV. The Constitutionalisation of Private Law�����������������������������������������������������������������19 V. Amending the Civil Code�������������������������������������������������������������������������������������������24 VI. Bibliographical Survey������������������������������������������������������������������������������������������������25 2. Breach of Protected Interests (§ 823 I BGB)����������������������������������������������������������������������29 I. Introductory Remarks�������������������������������������������������������������������������������������������������29 II. The Rights and Interests Protected by § 823 I BGB�������������������������������������������������30 A. Life�������������������������������������������������������������������������������������������������������������������������30 B. Body and Health��������������������������������������������������������������������������������������������������31 Bibliography��������������������������������������������������������������������������������������������������������������� 34 C. Freedom����������������������������������������������������������������������������������������������������������������35 D. Property����������������������������������������������������������������������������������������������������������������35 i. Ownership���������������������������������������������������������������������������������������������������35 ii. Possession����������������������������������������������������������������������������������������������������37

xxiv  Table of Contents E. Other Rights���������������������������������������������������������������������������������������������������������38 i. Generally�����������������������������������������������������������������������������������������������������38 ii. Delictual Protection of Family Relationships�����������������������������������������39 iii. The Right of an Established and Operating Business����������������������������39 iv. The General Right to One’s Personality���������������������������������������������������43 III. Unlawfulness and Fault�����������������������������������������������������������������������������������������������49 A. Unlawfulness��������������������������������������������������������������������������������������������������������49 B. Fault�����������������������������������������������������������������������������������������������������������������������53 Bibliography��������������������������������������������������������������������������������������������������������������� 55 IV. The Duties of Care�������������������������������������������������������������������������������������������������������55 A. Generally���������������������������������������������������������������������������������������������������������������55 B. Traffic Safety on Highways and Places Open to the Public Including Dangerous Premises��������������������������������������������������������������������������������������������56 C. Good Samaritans�������������������������������������������������������������������������������������������������60 V. Causation����������������������������������������������������������������������������������������������������������������������60 A. Conditions and Causes���������������������������������������������������������������������������������������60 B. Legal Cause�����������������������������������������������������������������������������������������������������������64 C. Some Special Problem Areas������������������������������������������������������������������������������67 i. Fault of the Injured Party��������������������������������������������������������������������������67 ii. Rescue Cases�����������������������������������������������������������������������������������������������68 iii. Predispositions�������������������������������������������������������������������������������������������68 D. Comparative Conclusions����������������������������������������������������������������������������������70 3. Breach of Legislative Protective Norm (§ 823 II BGB) and Intentional Harm (§ 826 BGB)�����������������������������������������������������������������������������������������������������������������72 I. Liability for Breach of a Legislative Protective Norm (§ 823 II BGB)�������������������72 Bibliography��������������������������������������������������������������������������������������������������������������� 72 A. Is this Liability Based on Fault?�������������������������������������������������������������������������73 B. Is a Norm Protective of Individual Interests?��������������������������������������������������74 C. Personal Scope�����������������������������������������������������������������������������������������������������74 D. Material Scope�����������������������������������������������������������������������������������������������������76 E. Modal Scope���������������������������������������������������������������������������������������������������������77 II. Intentional Harm (§ 826 BGB)����������������������������������������������������������������������������������78 Bibliography��������������������������������������������������������������������������������������������������������������� 78 A. Introduction���������������������������������������������������������������������������������������������������������78 B. Good Morals��������������������������������������������������������������������������������������������������������80 C. Intention���������������������������������������������������������������������������������������������������������������81 D. Causation��������������������������������������������������������������������������������������������������������������82 E. Comparison����������������������������������������������������������������������������������������������������������82 i. Fraud������������������������������������������������������������������������������������������������������������82 ii. Abuse of Legal Process������������������������������������������������������������������������������84 iii. Causing Loss by Unlawful Means and Pursuing Unlawful Ends��������������������������������������������������������������������������������������������������������������84 a. Unlawful Means����������������������������������������������������������������������������������84 b. Unlawful Ends�������������������������������������������������������������������������������������85 iv. Abuse of Rights or Power��������������������������������������������������������������������������85

Table of Contents  xxv 4. Specific Areas of Liability Under the Code: Economic Loss and Products��������������������87 I. Economic Loss�������������������������������������������������������������������������������������������������������������87 Bibliography��������������������������������������������������������������������������������������������������������������� 87 A. Introduction���������������������������������������������������������������������������������������������������������88 B. Arguments against Liability for Pure Economic Loss������������������������������������89 i. Indeterminate Liability������������������������������������������������������������������������������89 ii. Free Self-Determination����������������������������������������������������������������������������89 iii. The Internal Logic of the Code�����������������������������������������������������������������90 iv. Insurance Considerations�������������������������������������������������������������������������90 v. The Role of Contract����������������������������������������������������������������������������������91 C. The Specificity of German Law��������������������������������������������������������������������������91 i. History of German Law�����������������������������������������������������������������������������91 ii. German Alternatives to Delictual Liability for Economic Loss�����������91 D. Categories of Liability for Economic Loss��������������������������������������������������������93 i. Interference with an Established and Operating Business��������������������93 ii. Cable Cases�������������������������������������������������������������������������������������������������93 iii. Loss of Use���������������������������������������������������������������������������������������������������94 iv. Damage Caused to the Product����������������������������������������������������������������94 v. Economic Loss as a Result of Negligent Misstatements������������������������94 vi. Negligent Performance of Professional Services������������������������������������96 E. Economic Loss at the Borderline of Contract and Tort���������������������������������97 II. Liability for Untrue Statements Under § 824 BGB������������������������������������������������105 III. Delictual Liability for Products��������������������������������������������������������������������������������106 Bibliography������������������������������������������������������������������������������������������������������������� 106 A. Introduction�������������������������������������������������������������������������������������������������������106 B. History����������������������������������������������������������������������������������������������������������������107 C. Contractual or Quasi-Contractual Solutions to the Problem?��������������������108 IV. Strict Liability?�����������������������������������������������������������������������������������������������������������110 V. The Fowl Pest Decision of 1968 and the Move from Contract to Delict�������������111 VI. The Various Forms of Product Liability������������������������������������������������������������������113 A. The Producer’s Liability for Defects in Manufacture������������������������������������113 B. The Producer’s Liability for Defective Design�����������������������������������������������113 C. The Producer’s Liability for Defective Instructions��������������������������������������115 D. The Producer’s Liability for Development Risks�������������������������������������������115 5. Liability for Others��������������������������������������������������������������������������������������������������������������117 Bibliography������������������������������������������������������������������������������������������������������������� 117 I. The Tortious Liability for ‘Employees’: §§ 831, 278 BGB�������������������������������������117 A. General Observations���������������������������������������������������������������������������������������117 B. Employer–Employee Relationship������������������������������������������������������������������119 C. The Damage Must have been Inflicted by the Employee ‘in the Exercise of the Function Assigned to Him’����������������������������������������������������121 D. ‘Unlawful’ Damage��������������������������������������������������������������������������������������������123 E. The Employer’s Exculpatory Proof������������������������������������������������������������������125 F. Methods Developed in Order to Avoid the Effect of § 831 BGB����������������126 II. The Escape into Contract: § 278 BGB���������������������������������������������������������������������128

xxvi  Table of Contents III. Liability Regimes in Labour Law�����������������������������������������������������������������������������131 IV. Liability for those in Need of Supervision, Especially Children: § 832 BGB�����133 6. Medical Liability�������������������������������������������������������������������������������������������������������������������136 Colm McGrath Bibliography������������������������������������������������������������������������������������������������������������� 136 I. Introduction���������������������������������������������������������������������������������������������������������������136 II. The Doctrinal Basis of Medical Liability Claims���������������������������������������������������137 III. Types of Claim������������������������������������������������������������������������������������������������������������138 A. Treatment Malpractice��������������������������������������������������������������������������������������138 i. The Primacy of the Behandlungsfehler���������������������������������������������������138 ii. Expert Evidence and the Role of Professional Guidelines������������������139 iii. The Normative Assessment of Medical Behaviour������������������������������139 iv. Setting an Objective Standard����������������������������������������������������������������140 v. Alternative Medicine�������������������������������������������������������������������������������141 B. Disclosure Malpractice�������������������������������������������������������������������������������������141 i. The Importance of the Patient’s Consent����������������������������������������������142 ii. The Burden of Proof and ‘Hypothetical Consent’��������������������������������142 iii. What Must be Disclosed?������������������������������������������������������������������������142 iv. A Subjective Standard for Risk Disclosure��������������������������������������������143 v. Disclosing Alternative Available Treatments����������������������������������������144 vi. Implementing Disclosure in Practice����������������������������������������������������144 IV. Procedural Indulgences���������������������������������������������������������������������������������������������145 A. Fully Controllable Risks������������������������������������������������������������������������������������145 B. Gross Treatment Errors������������������������������������������������������������������������������������145 V. Extra-Judicial Alternatives����������������������������������������������������������������������������������������146 7. No-Fault Liability�����������������������������������������������������������������������������������������������������������������147 Bibliography�����������������������������������������������������������������������������������������������������������������147 I. German Approaches to No-Fault Liability�������������������������������������������������������������147 A. General Observations���������������������������������������������������������������������������������������147 B. The German Approach to Strict Liability�������������������������������������������������������149 C. Some General Characteristics Shared by All or Most Strict Liability Enactments���������������������������������������������������������������������������������������������������������150 i. Similar or Analogous Clauses�����������������������������������������������������������������150 ii. Monetary Maxima Imposed on Compensation Paid Under these Statutes���������������������������������������������������������������������������������������������151 iii. The Courts’ Role in Defining the Precise Ambit of the Statutes��������153 iv. Is Analogical Extension of the Statutory Rules Possible?��������������������156 v. A Critical Epilogue�����������������������������������������������������������������������������������156 II. Five Specific Areas of Strict Liability�����������������������������������������������������������������������157 A. The Strict Liability Act 1978�����������������������������������������������������������������������������157 B. Accidents at Work and Social Security Legislation in Modern German Law�������������������������������������������������������������������������������������������������������159 C. The Road Traffic Act 1952��������������������������������������������������������������������������������162 i. General Observations������������������������������������������������������������������������������162

Table of Contents  xxvii ii. Increasing Protection Through Statutory Interventions���������������������163 iii. The Salient Features of the Road Traffic Act 1952�������������������������������166 a. Motor Vehicle������������������������������������������������������������������������������������166 b. Keeper������������������������������������������������������������������������������������������������166 c. Damage Caused in the Course of the Operation (Running) of the Car�������������������������������������������������������������������������������������������167 iv. A Comparative Epilogue�������������������������������������������������������������������������169 D. Statutory Liability for Products�����������������������������������������������������������������������170 Bibliography��������������������������������������������������������������������������������������������������������170 E. Other Statutory Provisions for Products��������������������������������������������������������173 8. The Liability of Public Authorities�������������������������������������������������������������������������������������174 Bibliography�����������������������������������������������������������������������������������������������������������������174 I. Liability Under § 839 BGB and Article 34 GG������������������������������������������������������175 A. The Principles of Liability of Public Bodies and Liability of Officials�����������������������������������������������������������������������������������������������������������176 i. An Official�������������������������������������������������������������������������������������������������177 ii. Culpability�������������������������������������������������������������������������������������������������178 iii. Official Duty����������������������������������������������������������������������������������������������179 iv. Duty Owed to the Claimant as a Third Party���������������������������������������179 B. Liability of Court Experts���������������������������������������������������������������������������������183 C. In What Way is this Different from English Law?�����������������������������������������184 II. No-Fault Liability of the Administration: Expropriation and Sacrificial Encroachment������������������������������������������������������������������������������������������������������������185 A. Introduction�������������������������������������������������������������������������������������������������������185 B. The Elements of the Right to Compensation�������������������������������������������������187 C. Compensation����������������������������������������������������������������������������������������������������188 D. Quasi-Expropriation (enteignungsgleicher Eingriff)��������������������������������������188 E. Sacrificial Encroachment (Aufopferungsanspruch)���������������������������������������189 9. The Law of Damages������������������������������������������������������������������������������������������������������������191 Bibliography�����������������������������������������������������������������������������������������������������������������191 I. Preliminary Observations�����������������������������������������������������������������������������������������191 II. Personal Injury (Pecuniary Losses)�������������������������������������������������������������������������194 Bibliography������������������������������������������������������������������������������������������������������������� 198 III. Personal Injury (Non-Pecuniary Losses)����������������������������������������������������������������198 Bibliography������������������������������������������������������������������������������������������������������������� 199 IV. Ricochet Damage in the Context of Accidents������������������������������������������������������199 Bibliography������������������������������������������������������������������������������������������������������������� 201 V. Interference with the General Right to One’s Personality������������������������������������201 VI. Damage to Property��������������������������������������������������������������������������������������������������201 Bibliography������������������������������������������������������������������������������������������������������������� 204 Appendix 1 (Codes and Statutes)�������������������������������������������������������������������������������������������� 205 Appendix 2 (Translated Cases)������������������������������������������������������������������������������������������������ 224 Index����������������������������������������������������������������������������������������������������������������������������������������� 625

xxviii

ABBREVIATIONS A

Atlantic Reports

ABGB

Austrian General Civil Code

AC

Law Reports, Appeal Cases

AcP

Archiv für die civilistische Praxis

AfP

Archiv für Privatrecht

AG

Amtsgericht (German District First Instance Court)

AGG

Allgemeines Gleichbehandlungsgesetz (German General Anti-Discrimination Law)

A J Comp L

American Journal of Comparative Law

ALJR

Australian Law Journal Reports

All ER

All England Law Reports

App Cas

Law Reports, Appeal Cases (1875–90)

ARS

Arbeitsrechtsammlung

BAG

Bundesarbeitsgericht (German Federal Labour Supreme Court)

BAGE

Entscheidungen des Bundesarbeitsgerichts

BayObLG

Bayerisches Oberstes Landesgericht (Bavarian Appeal Court)

Beck RS

Beck Rechtsprechung

BGB

Bürgerliches Gesetzbuch (German Civil Code)

BGBl

Bundesgesetzblatt (Government Gazette)

BGE

Entscheidungen des schweizerischen Bundesgerichtes (can also be referred to as ATF-Recueil officiel d’arrêts du Tribunal fédéral suisse)

BGH

Bundesgerichtshof (German Federal Supreme Court)

BGH LM

Das Nachschlagwerk des BGH in Zivilsachen

BGHZ

Entscheidungen des Bundesgerichtshofs in Zivilsachen

BRAO

Bundesrechtsanwaltsordnung (German Federal Advocates Code)

BSozG

Bundessozialgericht (German Federal Social Court)

BVerfG

Bundesverfassungsgericht (German Federal Constitutional Court)

xxx  Abbreviations BVerfGE

Entscheidungen des Bundesverfassungsgerichts

BVerfGG

Bundesverfassungsgerichtsgesetz (Act on the Federal Constitutional Court)

Cal L Rev

California Law Review

Cal App.3d

California Appeals Reports, 3rd series

Cal Rptr

California Reporter

Cal Rptr 3d

California Reporter, 3rd series

Cass

Cour de cassation (France)

CC

(French) Code civil

Ch

Law Reports, Chancery Division (from 1891)

Ch Civ

Cour de cassation, Chambre Civile

Ch Civ 2e

Cour de cassation (French Court of Cassation, 2nd civil chamber)

Ch Comm

Cour de cassation, Chambre Commerciale

Ch Crim

Cour de cassation, Chambre Criminelle

Ch D

Law Reports, Chancery Division (1875–90)

Ch Mixte

Cour de cassation, Chambre Mixte

Ch Req

Cour de cassation, Chambre des Requêtes

Ch Réun

Cour de cassation, Chambres Réunies

Cincinnati L Rev

Cincinnati Law Review

CLJ

Cambridge Law Journal

CLR

Commonwealth Law Reports (Australia)

Cornell L Rev

Cornell Law Review

D

Recueil Dalloz

DC

Dalloz, recueil critique de jurisprudence et de législation (1941–44)

De GM&G

De Gex, Macnaghten & Gordon’s Reports

DM

Deutsche Mark

DJZ

Deutsche Juristische Zeitung

DR

Deutsche Recht

DS

Recueil Dalloz et Sirey

Duke LJ

Duke Law Journal

DVBl

Deutsche Verwaltungsblätter

Abbreviations  xxxi ECHR

European Court of Human Rights/European Convention on Human Rights

EGBGB

Einführungsgesetz zum BGB (Introductory Law to the German BGB)

EinlALR

Einleitung zum Preußischen Allgemeinen Landrecht (Introduction to Prussian Civil Code 1794)

ERPL

European Review of Private Law

Ex D

Law Reports, Exchequer Division (1875–80)

FamRZ

Zeitschrift für das gesamte Familienrecht

F Supp

Federal Supplement (American law reports)

F 2d

Federal Reporter, 2nd series (American law reports)

FDPA

Federal Data Protection Act

GDR

German Democratic Republic

GG

Grundgesetz (German Basic Law)

GmbHG

Gesetz betreffend die Gesellschaften mit beschränkter Haftung (German Act relating to Private Companies)

GRUR

Gewerblicher Rechtsschutz und Urheberrecht

GVG

Gerichtsverfassungsgesetz (German Courts Constitution Act)

HaftPflG

Haftpflichtgesetz (German Liability Act)

HGB

Handelsgesetzbuch (German Commercial Code)

ICLQ

International and Comparative Law Quarterly

JA

Juristische Arbeitsblätter

JCP

Juris-Classeur Périodique (also referred to as SJ (La Semaine juridique))

JuS

Juristische Schulung

Jura

Juristische Ausbildung

JW

Juristische Wochenschrift (from 1872 to 1939)

JZ

Juristenzeitung

KB

Law Reports, King’s Bench (1901–52)

KG

Kammergericht (Court of Appeal of Berlin)

KUG

Gesetz betreffend das Urheberrecht an Werken der bildenden Künste und der Photographie (German Act on Artistic Creations)

La L Rev

Louisiana Law Review

LG

Landgericht (German Regional First Instance Court)

xxxii  Abbreviations LMCLQ

Lloyds Maritime and Commercial Law Quarterly

LQR

Law Quarterly Review

LR Ch App

Law Reports, Chancery Appeal Cases (1865–75)

LRCP

Law Reports, Common Pleas Cases (1865–75)

LR Ex

Law Reports, Exchequer Cases (1965–75)

LRHL

Law Reports, English and Irish Appeals (1866–75)

LRQB

Law Reports, Queen’s Bench (1865–75)

Mass

Massachusetts Reporter

MedR

Medizin und Recht

MDR

Monatsschrift für Deutsches Recht

Minn

Minissota Reporter

MLR

Modern Law Review

MMR

MultiMedia und Recht

NE

North Eastern Reporter (American law reports)

NJ

Neue Justiz

NJ

New Jersey Reporter (American Reports)

NJOZ

Neue Juristische Online Zeitschrift

NJW

Neue Juristische Wochenschrift

NJW-RR

Neue Juristische Wochenschrift-Rechtsprechungs-Report Zivilrecht

NW

North Western Reporter (American law reports)

NY

New York Reports

NYS 2d

New York State Reports, 2nd series

NZA

Neue Zeitschrift für Arbeitsrecht

NZV

Neue Zeitschrift für Verkehrsrecht

OGH

Oberster Gerichtshof (Austrian Supreme Court)

OLG

Oberlandesgericht (German Court of Appeal)

Oxford J L Studies

Oxford Journal of Legal Studies

OWiG

Gesetz über Ordnungswidrigkeiten (German Act on Public Order)

Abbreviations  xxxiii P

Law Reports, Probate Division (1891–)

P 2d

Pacific Reporter, 2nd series (American law reports)

PatRG

Patientenrechtegesetz (German Patients Rights Act)

PfVG

Pflichtversicherungsgesetz (German Act ­concerning Compulsory Insurance)

ProdHG

Produkthaftungsgesetz (German Product Liability Act)

QB

Law Reports, Queen’s Bench (1891–1900; 1952–)

QBD

Law Reports, Queen’s Bench Division (1875–90)

RabelsZ

Rabels Zeitschrift für ausländisches und internationales Recht

RdA

Recht der Arbeit

RDG

Rechtsdepesche für das Gesundheitswesen

Rev int d. comp

Revue international de droit comparé

Rev trim dr civ

Revue trimestrielle de droit civil

RG

Reichsgericht (German Imperial Court)

RGBl

Reichsgesetzblatt (Government Gazette)

RGLZ

Reichsgericht Leitsätze in Zivilsachen

RGSt

Amtliche Sammlung der Entscheidungen des Reichsgerichts in Strafsachen

RGZ

Entscheidungen des Reichsgerichts in Zivilsachen

RM

Reichsmark

RNotZ

Rheinische Notar-Zeitschrift

RVO

Reichsversicherungsordnung (German Imperial Insurance Act)

S

Recueil Sirey

San D L Rev

San Diego Law Review

S Ct

Supreme Court Reporter (US)

SCR

Supreme Court Reports (Canada)

SGB

Sozialgesetzbuch (German Social Code)

So

Southern Reporter (American law reports)

So 2d

Southern Reporter, 2nd series (American law reports)

So Cal L Rev

Southern California Law Review

Stan L Rev

Stanford Law Review

xxxiv  Abbreviations StGB

Strafgesetzbuch (German Criminal Code)

StVG

Straßenverkehrsgesetz (German Road Traffic Act)

TA

Teleservices Act

Trib Civ

Tribunal Civil

Tulane L Rev

Tulane Law Review

UKHL

United Kingdom House of Lords Reports

UKSC

United Kingdom Supreme Court Reports

US

United States Supreme Court Reporter

UWG

Gesetz gegen den unlauteren Wettbe­werb (German Unfair Competition Law)

VersR

Versicherungsrecht

VerwRspr

Verwaltungsrechtsprechung

VuR

Verbraucher und Recht

WHG

Wasserhaushaltsgesetz (GermanWater Preservation Act)

WLR

Weekly Law Reports

WM

Wertpapier-Mitteilungen

WpHG

Wertpaperhandelsgesetz (German Securities Trading Act)

ZEuP

Zeitschrift für Europäisches Privatrecht

ZfRvgl

Zeitschrift für Rechtsvergleichung, Internationales Privatrecht und Europarecht

ZfS

Zeitschrift für Schadensrecht

ZJS

Zeitschrift für das Juristische Studium

ZHR

Zeitschrift für das gesamte Handelsrecht und Wirtschaftsrecht

ZGS

Zeitschrift für das gesamte Schuldrecht

ZPO

Zivilprozessordnung (Civil Procedure Code)

ZRP

Zeitschrift für Rechtspolitik

BOOKS CITED BY NAMES OF THEIR AUTHORS IN GERMAN Kötz/Wagner: H Kötz, G Wagner, Deliktsrecht (13th edn, 2016) Münchener Kommentar: Münchener Kommentar zum BGB (7th edn, 2016–18) with names of editors to follow (Wagner, Papier/Shivari, Oetker, and others) IN ENGLISH Markesinis/Deakin: BS Markesinis and SF Deakin, Tort Law (by S Deakin, A Johnston and BS Markesinis, 7th edn, 2013) Markesinis/Unberath/Johnston: BS Markesinis, H Unberath and A Johnston, The German Law of Contract (2nd edn, 2006) Zweigert/Kötz: K Zweigert and H Kötz, An Introduction to Comparative Law (3rd edn, 1998) (English translation by Tony Weir)

xxxvi

LIST OF CASES REPRODUCED IN THIS BOOK AND THEIR TRANSLATORS Case Number Court and Date

Reference

Translator

Page

Chapter 2 Breach of Protected Interests 1

BGH 11 May 1971

BGHZ 56, 163

Tony Weir

224

2

BGH 4 April 1989

NJW 1989, 2317

Jo Shaw

228

3

RG 21 September 1931 RGZ 133, 270

Kurt Lipstein

233

4

BGH 18 January 1983

BGHZ 86, 240

Raymond Youngs

237

5

BGH 16 November 1993

BGHZ 124, 128

Irene Snook

244

6

BVerfG 12 November 1997

BVerfGE 96, 375

Raymond Youngs

251

7

BGH 21 June 2016

NJW-RR 2017, 219

Rebecca Halbach 260

8

RG 27 February 1904

RGZ 58, 24

FH Lawson & BS Markesinis

9

BGH 15 May 2012

NJW 2012, 2579

Rebecca Halbach 267

10

BGH 10 December 2002

NJW 2003, 1040

Rebecca Halbach 272

11

BVerG 15 January 1958 (Lüth)

BVerfGE 7, 198

Tony Weir

275

12

BGH 25 May 1954

BGHZ 13, 334

FH Lawson & BS Markesinis

284

13

BGH 14 February 1958 BGHZ 26, 349 (Herrenreiter)

FH Lawson & BS Markesinis

287

14

BVerfG 5 June 1973 (Lebach)

BVerfGE 35, 202

FH Lawson & BS Markesinis

292

15

BGH 19 March 2013

NJW 2013, 1681

Rebecca Halbach 297

263

xxxviii  List of Cases Reproduced in this Book and their Translators 16

BGH 10 June 2008 (Esra)

NJW 2008, 2587

Rebecca Halbach 302

17

BGH 14 May 2013

NJW 2013, 2348

Rebecca Halbach 306

18

BGH 23 June 2009

NJW 2009, 2888

Rebecca Halbach 311

19

BGH 19 December 1995

BGHZ 131, 332

Irene Snooks

316

20

BVerfG 15 December 1999

BVerfGE 101, 361

Raymond Youngs

322

21

BGH 27 October 2009

NJW 2010, 537

Rebecca Halbach 337

22

BGH 9 June 1967

JZ 1968, 103

Kurt Lipstein

23

BGH 17 June 2014

NJW 2014, 2493

Rebecca Halbach 342

24

BGH 19 February 1991 NJW 1991, 2340

Tony Weir

346

25

RG 13 October 1922

RGZ 105, 264

FH Lawson & BS Markesinis

352

26

BGH 23 October 1951

BGHZ 3, 261

FH Lawson & BS Markesinis

353

27

BGH 12 March 1996

BGHZ 132, 164

Raymond Youngs 357

340

Chapter 3 Breach of Legislative Protective Norm and Intentional Harm 28

BGH 8 June 1976

BGHZ 66, 388

FH Lawson & BS Markesinis

365

29

BGH 27 May 1963

BGHZ 39, 358

Tony Weir

368

30

BGH 12 November 1957

BGHZ 26, 42

Kurt Lipstein

369

31

BGH 16 December 1958

BGHZ 29, 100

Kurt Lipstein

373

32

BGH 19 February 2008 NJW 2008, 1734

Rebecca Halbach 376

33

BGH 13 April 1994

NJW 1994, 1801

Rebecca Halbach 379

34

BGH 15 October 2013

NJW 2014, 1380

Rebecca Halbach 384

Chapter 4 Economic Loss and Product Liability 35

BGH 9 December 1958 BGHZ 29, 65 (Stromkabel)

FH Lawson & BS Markesinis

387

36

BGH 12 July 1977

Tony Weir

393

NJW 1977, 2208

List of Cases Reproduced in this Book and their Translators  xxxix 37

BGH 21 December 1970

BGHZ 55, 153

Kurt Lipstein

397

38

BGH 9 April 1984

NJW 1984, 2569

Tony Weir

400

39

BGH 23 April 1981

NJW 1981, 1779

Kurt Lipstein

402

40

BGH 4 November 1997

BGHZ 137, 89

Raymond Youngs

404

41

BGH 12 February 1979 NJW 1979, 1595

FH Lawson & BS Markesinis

413

42

BGH 28 August 1982

NJW 1982, 2431

Kurt Lipstein

416

43

BGH 10 November 1994

BGHZ 127, 378

Irene Snook

419

44

BGH 2 April 1998

BGHZ 138, 257

Raymond Youngs

422

45

BGH 10 May 1984

NJW 1985, 2411

Hans Unberath

427

46

BGH 25 November 1971

VersR 1972, 274

Hans Unberath

428

47

BGH 19 January 1977

NJW 1977, 2073

Tony Weir

436

48

BGH 26 November 1968 (Fowl Pest)

BGHZ 51, 91

FH Lawson & BS Markesinis

439

49

BGH 7 June 1988

BGHZ 104, 323

Jo Shaw

448

50

BGH 19 November 1991

BGHZ 116, 104

Tony Weir

455

51

BGH 9 May 1995

BGHZ 129, 353

Tony Weir

460

52

BGH 2 December 2000 NJW 2001, 964

Raymond Youngs

465

53

BGH 24 November 1976

BGHZ 67, 359

FH Lawson & BS Markesinis

470

54

BGH 14 May 1985 (Kompressor)

NJW 1985, 2420

Tony Weir

474

55

BGH 30 May 1963

BGHZ 39, 366

Tony Weir

477

Chapter 5 Liability for Others 56

BGH 7 October 1975

NJW 1976, 46

Kurt Lipstein

481

57

BGH 30 October 1967

BGHZ 49, 19

Kurt Lipstein

485

58

BGH 14 January 1954

BGHZ 12, 94

Kurt Lipstein

488

xl  List of Cases Reproduced in this Book and their Translators 59

BGH 10 July 1954

NJW 1956, 1106

Kurt Lipstein

491

60

BGH 20 April 1971

NJW 1971, 1313

Kurt Lipstein

494

61

BGH 30 June 1966

BGHZ 45, 311

A von Mehren & 497 J Gordley

62

BGH 18 February 1969 VersR 1969, 518

A von Mehren & 497 J Gordley

63

BGH 25 January 1966

VersR 1966, 364

A von Mehren & 498 J Gordley

64

BGH 25 October 1951

BGHZ 4, 1

A von Mehren & 499 J Gordley

65

BGH 11 November 1956

MDR 1957, 214

A von Mehren & 501 J Gordley

66

BGH 4 March 1957

BGHZ 24, 21

FH Lawson & BS Markesinis

503

67

BAG 12 June 1992

BAGE 70, 337

FH Lawson & BS Markesinis

507

68

RG 7 December 1911

RGZ 78, 239

FH Lawson & B S Markesinis

513

69

BGH 28 January 1976

BGHZ 66, 51

FH Lawson & BS Markesinis

514

70

RG 3 June 1921

RGZ 102, 232

Tony Weir

517

71

BGH 11 April 1951

BGHZ 1, 383

Tony Weir

519

72

BGH 17 January 2012

NZV 2012, 226

Rebecca Halbach 521

73

LG München 19 June 2008

MMR 2008, 619

Rebecca Halbach 525

74

BGH 10 July 1984

NJW 1984, 2574

Rebecca Halbach 529

75

BGH 13 December 2012

NJW 2013, 1233

Rebecca Halbach 534

BGHZ 90, 96

None given

537

Chapter 6 Medical Liability 76

BGH 7 February 1984

77

BGH 9 December 1958 BGHZ 29, 46

Kurt Lipstein

541

78

BGH 21 November 1995

Raymond Youngs

547

79

BGH 15 February 2000 BGHZ 144, 1

Raymond Youngs

549

NJW 1996, 776

List of Cases Reproduced in this Book and their Translators  xli Chapter 7 Strict Liability 80

BGH 9 December 1959 BGHZ 29, 163

FH Lawson & BS Markesinis

555

81

BGH 23 November 1955

BGHZ 19, 114

Kurt Lipstein

559

82

BGH 27 May 1975

NJW 1975, 1886

Kurt Lipstein

565

83

BGH 6 June 1989

BGHZ 107, 359

Jo Shaw

568

84

BGH 13 April 1956

BGHZ 20, 259

Tony Weir

573

85

BGH 16 June 1959

BGHZ 30, 203

Tony Weir

575

86

RG 11 January 1912

RGZ 78, 171

FH Lawson & BS Markesinis

580

Chapter 8 Public Liability 87

BGH 30 April 1953

LM § 839

Raymond Youngs

583

88

BGH 10 July 1980

NJW 1980, 2194

Raymond Youngs

586

89

BGH 28 March 1996

NJW 1996, 2373

Raymond Youngs

589

90

BGH 16 October 1997

NJW 1998, 751

Raymond Youngs

591

91

OLG Oldenburg 20 May 1988

VersR 1991, 306

Raymond Youngs

593

92

OLG Hamm 15 July 1992

NJW-RR 1994, 394

Raymond Youngs

597

93

OLG Hamm 20 November 1996

ZFJ 1997, 433

Raymond Youngs

602

94

OLG Hamm 23 March 1990

Unreported

Raymond Youngs

606

Chapter 9 Damages 95

BGH 6 July 1955

BGHZ 18, 149

Kurt Lipstein

611

96

BGH 11 November 1995

BGHZ 128, 1

Irene Snook

621

xlii

TABLE OF CASES Germany AG Ahrensbök DJZ 1920, 596 ����������������������������������������������������������������������������������������������������������������������������������318 AG Lahr NZV 1990, 356 ���������������������������������������������������������������������������������������������������������������������������������203 ArbG Plauen ARS 29, 62 ����������������������������������������������������������������������������������������������������������������������������������������132 BAG BAGE 1 185 �������������������������������������������������������������������������������������������������������������������������������������� 281, 283 258 ������������������������������������������������������������������������������������������������������������������������������������������������20 BAGE 4, 240 ���������������������������������������������������������������������������������������������������������������������������������������20 BAGE 4,274 ����������������������������������������������������������������������������������������������������������������������������������������20 BAGE 5,1 ������������������������������������������������������������������������������������������������������������������������������������������132 BAGE 47, 363 �����������������������������������������������������������������������������������������������������������������������������������281 BAGE 48, 122 �������������������������������������������������������������������������������������������������������������������������������������20 BAGE 70, 337 ��������������������������������������������������������������������������������������������������������� 53, 131–32, 507–12 BAGE 90, 148 �����������������������������������������������������������������������������������������������������������������������������������133 NJW 1957, 1688 �������������������������������������������������������������������������������������������������������������������������������276 NJW 1983, 135 �����������������������������������������������������������������������������������������������������������������������������������85 NJW 1988, 2816 �������������������������������������������������������������������������������������������������������������������������������131 NJW 1999, 164 �����������������������������������������������������������������������������������������������������������������������������������38 NZA 1986, 91 �����������������������������������������������������������������������������������������������������������������������������������132 BayObLG NJW 1972, 1085 �������������������������������������������������������������������������������������������������������������������������������397 BGH BGHZ, 89, 95 �����������������������������������������������������������������������������������������������������������������������������������246 BGHZ 1 17 ������������������������������������������������������������������������������������������������������������������������������������������������155 245 ����������������������������������������������������������������������������������������������������������������������������������������������561 383 �������������������������������������������������������������������������������������������������������������������������� 99, 130, 519–21 BGHZ 2 355 ����������������������������������������������������������������������������������������������������������������������������������������������151 397 ��������������������������������������������������������������������������������������������������������������������������������������������������5 BGHZ 3 94 ������������������������������������������������������������������������������������������������������������������������������������������������176 261 ���������������������������������������������������������������������������������������������������������������� 8, 60, 65, 353–57, 363 270 ������������������������������������������������������������������������������������������������������������������������������������������������23 BGHZ 4 1 ����������������������������������������������������������������������������������������������������������������������������������126, 499–501 355 ����������������������������������������������������������������������������������������������������������������������������������������������226

xliv  Table of Cases BGHZ 5, 378 �������������������������������������������������������������������������������������������������������������������������������� 59, 99 BGHZ 6 270 ����������������������������������������������������������������������������������������������������������������������������������������������187 319 ����������������������������������������������������������������������������������������������������������������������������������������573–74 360 ������������������������������������������������������������������������������������������������������������������������������������������������39 BGHZ 7 30 ������������������������������������������������������������������������������������������������������������������������������������������������273 338 ����������������������������������������������������������������������������������������������������������������������������������������������159 BGHZ 8 97 ������������������������������������������������������������������������������������������������������������������������������������������������369 138 ����������������������������������������������������������������������������������������������������������������������������������������������140 243 ������������������������������������������������������������������������������������������������������������������������������������������������34 330 ����������������������������������������������������������������������������������������������������������������������������������������561–63 BGHZ 9 83 ������������������������������������������������������������������������������������������������������������������������������������������������189 316 ����������������������������������������������������������������������������������������������������������������������������������������������343 390 ����������������������������������������������������������������������������������������������������������������������������������������������474 BGHZ 10 6 ��������������������������������������������������������������������������������������������������������������������������������������62–63, 196 18 ��������������������������������������������������������������������������������������������������������������������������������������������������68 BGHZ 11 34 ��������������������������������������������������������������������������������������������������������������������������������������������21–22 151 ����������������������������������������������������������������������������������������������������������������������������������������������122 170 ����������������������������������������������������������������������������������������������������������������������������������������������563 175 ������������������������������������������������������������������������������������������������������������������������������������������������59 BGHZ 12 94 ������������������������������������������������������������������������������������������������������������������ 124, 196, 488–90, 555 213 ���������������������������������������������������������������������������������������������������������������������� 227, 232, 562, 577 308 ������������������������������������������������������������������������������������������������������������������������������������������������86 BGHZ 13 25 ������������������������������������������������������������������������������������������������������������������������������������������535–36 254 ����������������������������������������������������������������������������������������������������������������������������������������������166 334 ������������������������������������������������������������������������������������������������������������ 44, 284–87, 289, 333–34 360 ����������������������������������������������������������������������������������������������������������������������������������������������564 BGHZ 15 123 ����������������������������������������������������������������������������������������������������������������������������������������������578 224 �������������������������������������������������������������������������������������������������������������������������������������� 395, 440 249 ���������������������������������������������������������������������������������������������������������������������������������������� 45, 334 BGHZ 17 214 �������������������������������������������������������������������������������������������������������������������������������������� 127, 577 327 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Table of Cases  xlv BGHZ 23 90 ������������������������������������������������������������������������������������������������������������������������������������������������339 215 ������������������������������������������������������������������������������������������������������������������������������������������������39 279 ������������������������������������������������������������������������������������������������������������������������������������������������39 BGHZ 24 12 ������������������������������������������������������������������������������������������������������������������������������������������������289 21 ������������������������������������������������������������������������������������������������������������������ 8, 51, 124, 445, 503–7 72 ������������������������������������������������������������������������������������������������������������������������������������ 45, 48, 334 200 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394, 437 BGHZ 57 229 ������������������������������������������������������������������������������������������������������������������������������������������������39 359 ����������������������������������������������������������������������������������������������������������������������������������������187–88 BGHZ 58 40 ������������������������������������������������������������������������������������������������������������������������������������������������338 48 ��������������������������������������������������������������������������������������������������������������������������������������������������34 BGHZ 59 30 ��������������������������������������������������������������������������������������������������������������������������������������42, 405–8 172 ����������������������������������������������������������������������������������������������������������������������������������������������470 BGHZ 61, 227 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Table of Cases  xlvii 220 ����������������������������������������������������������������������������������������������������������������������������������������������188 355 ����������������������������������������������������������������������������������������������������������������������������������������������474 BGHZ 66 51 �������������������������������������������������������������������������������������������������� 57–58, 98, 129–30, 437, 514–17 388 ����������������������������������������������������������������������������� 75, 77, 273, 365–67, 378, 381, 393, 397, 411 BGHZ 67 48 ������������������������������������������������������������������������������������������������������������������������������������������������247 119 ����������������������������������������������������������������������������������������������������������������������������������������������196 359 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����������������������������������������������������������������������������������������������������������������������������������378 BGHZ 85, 64 ����������������������������������������������������������������������������������������������������������������������������������������9 BGHZ 86 128 ����������������������������������������������������������������������������������������������������������������������������������������������204 152 �������������������������������������������������������������������������������������������������������������������������������������� 262, 273 212 ����������������������������������������������������������������������������������������������������������������������������������������������459 240 ������������������������������������������������������������������������������������������������������������ 34, 237–43, 246, 257–59 256 ������������������������������������������������������������������������������������������������������������������������������ 114, 458, 476 BGHZ 87, 133 ����������������������������������������������������������������������������������������������������������������������������������166 BGHZ 89 60 ������������������������������������������������������������������������������������������������������������������������������������������������204 95 ���������������������������������������������������������������������������������������������������������������������������������������� 247, 250 383 ���������������������������������������������������������������������������������������������������������������������������������������� 42, 408 BGHZ 90 96 �������������������������������������������������������������������������������������������������������������������� 142–43, 537–41, 553 103 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xlviii  Table of Cases 351 �������������������������������������������������������������������������������������������������������������������������������������� 231, 236 BGHZ 95, 199 ����������������������������������������������������������������������������������������������������������������������������������246 BGHZ 97, 14 ���������������������������������������������������������������������������������������������������������������������������� 195, 203 BGHZ 98 94 ������������������������������������������������������������������������������������������������������������������������������������������������335 212 �������������������������������������������������������������������������������������������������������������������������������������� 204, 249 BGHZ 100 335 ����������������������������������������������������������������������������������������������������������������������������������������������188 363 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������������������������������������������������������������������������������������������������������������������������������������������������46 BGHZ 108, 134 ��������������������������������������������������������������������������������������������������������������������������������383 BGHZ 109, 297 ��������������������������������������������������������������������������������������������������������������������������������382 BGHZ 111, 168 ����������������������������������������������������������������������������������������������������������������������������������39 BGHZ 112, 54 ������������������������������������������������������������������������������������������������������������������������������������84 BGHZ 115, 364 ��������������������������������������������������������������������������������������������������������������������������������203 BGHZ 116 60 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BGHZ 137, 89 ��������������������������������������������������������������������������������������������������������������������263, 404–12 BGHZ 138 257 ������������������������������������������������������������������������������������������������������ 96, 98, 422–27, 431, 434–35 311 ����������������������������������������������������������������������������������������������������������������������������������������������270 BGHZ 142, 345 ��������������������������������������������������������������������������������������������������������������������������377–78 BGHZ 143, 199 ��������������������������������������������������������������������������������������������������������������������������������299 BGHZ 144, 1 ����������������������������������������������������������������������������������������������������������������������143, 549–55 BGHZ 154, 316 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Table of Cases  xlix BGHZ 183, 353 ������������������������������������������������������������������������������������������������������������������������ 270, 299 BGHZ 184, 313 ��������������������������������������������������������������������������������������������������������������������������������308 BGHZ 185, 29 ����������������������������������������������������������������������������������������������������������������������������������310 BGHZ 190, 52 ����������������������������������������������������������������������������������������������������������������������������������299 BGHZ 191, 219 ��������������������������������������������������������������������������������������������������������������������������������311 BGHZ 196, 207 ����������������������������������������������������������������������������������������������������������������������������������39 BGHZ 201, 263 ����������������������������������������������������������������������������������������������������������������������������������66 DB 1956, 592 ������������������������������������������������������������������������������������������������������������������������������������107 DVBl. 1971, 464 �������������������������������������������������������������������������������������������������������������������������������187 FamRZ 1984, 1211 ���������������������������������������������������������������������������������������������������������������������������181 GRUR 1962, 211 ������������������������������������������������������������������������������������������������������������������������������319 GRUR 1974, 794 ��������������������������������������������������������������������������������������������������������������������������������49 JR 1989, 60 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�������������������������������������������������������������������������������������������������������������������������������335 BVerfGE 25 157 ������������������������������������������������������������������������������������������������������������������������������������������������21 256 ���������������������������������������������������������������������������������������������������������������������������������������� 41, 284 267 ������������������������������������������������������������������������������������������������������������������������������������������������41

Table of Cases  lix BVerfGE 27, 1 �����������������������������������������������������������������������������������������������������������������������������������318 BVerfGE 30, 173 ��������������������������������������������������������������������������������������������������������� 49, 283, 304, 334 BVerfGE 34 238 ����������������������������������������������������������������������������������������������������������������������������������������������318 269 ���������������������������������������������������������������������������������������������������������7, 22, 44, 47, 318, 320, 334 BVerfGE 35, 202 ����������������������������������������������������7, 36, 46–47, 283, 292–97, 299–300, 318, 335, 337 BVerfGE 42 143 ���������������������������������������������������������������������������������������������������������������������������������������� 47, 283 163 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lx  Table of Cases KG JW 1928, 363 ������������������������������������������������������������������������������������������������������������������������������������318 NJW 1967, 1089 �������������������������������������������������������������������������������������������������������������������������������200 KG Berlin NJW 1971, 142 ���������������������������������������������������������������������������������������������������������������������������������202 VersR 1999, 504 ��������������������������������������������������������������������������������������������������������������������������������232 LG Düsseldorf NJW 1994, 805 ���������������������������������������������������������������������������������������������������������������������������������258 LG Frankfurt BeckRS 2011, 21493 �������������������������������������������������������������������������������������������������������������������������190 NJW 1969, 2286 ���������������������������������������������������������������������������������������������������������������������������������33 LG Hamburg NJW 1969, 615 �����������������������������������������������������������������������������������������������������������������������������������33 LG Hildesheim VersR 1970, 720 ����������������������������������������������������������������������������������������������������������������������������������33 LG Köln AfP 1994, 166 �����������������������������������������������������������������������������������������������������������������������������������319 LG Magdeburg BeckRS 2010, 05957 ���������������������������������������������������������������������������������������������������������������������������60 LG Mannheim MMR 2007, 267 �������������������������������������������������������������������������������������������������������������������������������528 LG München I GRUR-RR 2004, 92 ��������������������������������������������������������������������������������������������������������������������������303 MMR 2008, 619 ��������������������������������������������������������������������������������������������������������� 135, 525–29, 537 LG Stuttgart VersR 1973, 648 ����������������������������������������������������������������������������������������������������������������������������������33 LG Tübingen NJW 1968, 1187 ���������������������������������������������������������������������������������������������������������������������������������33 OLG Bamberg VersR 1994, 814 ��������������������������������������������������������������������������������������������������������������������������������137 OLG Brandenburg NJW 2004, 2103 ���������������������������������������������������������������������������������������������������������������������������������58 OLG Celle DAR 1973, 183, 187 �������������������������������������������������������������������������������������������������������������������������167 NJW 1965, 1719 �������������������������������������������������������������������������������������������������������������������������������167 NJW 1983, 1065 ���������������������������������������������������������������������������������������������������������������������������������86 VersR 2009, 1236 ������������������������������������������������������������������������������������������������������������������������������337 OLG Düsseldorf BeckRS 2013, 18320 ���������������������������������������������������������������������������������������������������������������������������30 NJW 1994, 1598 �������������������������������������������������������������������������������������������������������������������������������141 NJW 1995, 788 ���������������������������������������������������������������������������������������������������������������������������������258 NZV 1996, 236 ���������������������������������������������������������������������������������������������������������������������������������338 OLG Frankfurt BeckRS 2016, 04880 ���������������������������������������������������������������������������������������������������������������������������69 MDR 2011, 725 ����������������������������������������������������������������������������������������������������������������������������������59 NJW 1982, 648 ���������������������������������������������������������������������������������������������������������������������������������335 NJW 1985, 1649 �������������������������������������������������������������������������������������������������������������������������������335 VersR 1982, 151 ��������������������������������������������������������������������������������������������������������������������������������457 VersR 1985, 890 ��������������������������������������������������������������������������������������������������������������������������������450

Table of Cases  lxi OLG Freiburg JZ 1953, 705 �������������������������������������������������������������������������������������������������������������������������������������224 OLG Hamburg AfP 1970, 94 ���������������������������������������������������������������������������������������������������������������������������������������48 AfP 1992, 376 �����������������������������������������������������������������������������������������������������������������������������������320 GRUR-RR 2009, 438 ��������������������������������������������������������������������������������������������������������������������������48 NJOZ 2007, 5761 �����������������������������������������������������������������������������������������������������������������������������526 NJW 1970, 1325 �������������������������������������������������������������������������������������������������������������������45, 318–19 NJW 1996, 2870 �������������������������������������������������������������������������������������������������������������������������������624 UFITA 78 [1977] 252 �����������������������������������������������������������������������������������������������������������������318–19 UFITA 81 [1978], 278 ����������������������������������������������������������������������������������������������������������������318–19 OLG Hamm AZ: 11 U 108/89 (not published) ���������������������������������������������������������������������������������������������606–10 NJW 1973, 760 ���������������������������������������������������������������������������������������������������������������������92, 396–97 NJW 1982, 458 �����������������������������������������������������������������������������������������������������������������������������������46 NJW-RR 1994, 394 ������������������������������������������������������������������������������������������������������������������597–602 NJW-RR 2013, 25 ������������������������������������������������������������������������������������������������������������������������������58 VersR 1981, 68 ����������������������������������������������������������������������������������������������������������������������������������554 VersR 1995, 103 ��������������������������������������������������������������������������������������������������������������������������������460 ZFJ 1997, 433 �����������������������������������������������������������������������������������������������������������������������179, 602–6 OLG Karlsruhe NJW 1956, 913 ���������������������������������������������������������������������������������������������������������������������������������477 VersR 1956, 260 ��������������������������������������������������������������������������������������������������������������������������������557 VersR 1985, 599 ��������������������������������������������������������������������������������������������������������������������������������135 OLG Koblenz NJW-RR 2012, 227 ����������������������������������������������������������������������������������������������������������������������������59 VersR 2014, 251 ��������������������������������������������������������������������������������������������������������������������������������172 OLG Köln 12 July 2016 ����������������������������������������������������������������������������������������������������������������������������������������48 NJW 1987, 2682 ���������������������������������������������������������������������������������������������������������������������������������46 NJW-RR 1990, 414 ��������������������������������������������������������������������������������������������������������������������������114 NJW-RR 1991, 285 ��������������������������������������������������������������������������������������������������������������������������114 NJW-RR 1994, 1372 ������������������������������������������������������������������������������������������������������������������������338 OLG München NJOZ 2005, 4343 �����������������������������������������������������������������������������������������������������������������������������303 NJW 1956, 1769 �������������������������������������������������������������������������������������������������������������������������������390 UFITA 41 [1964] 322 �����������������������������������������������������������������������������������������������������������������318–19 OLG Oldenburg VersR 1991, 306 ������������������������������������������������������������������������������������������������������������������179, 593–97 OLG Saarbrücken NJW 1997, 1376 ���������������������������������������������������������������������������������������������������������������������������������47 VersR 1976, 176 ��������������������������������������������������������������������������������������������������������������������������������397 OLG Stuttgart OLGE 2, 440 �������������������������������������������������������������������������������������������������������������������������������������197 VersR 1988, 1187 ��������������������������������������������������������������������������������������������������������������������������������33 VersR 2001, 465 ����������������������������������������������������������������������������������������������������������������������������������31 OLG Zweibrücken NJW 1998, 995 ���������������������������������������������������������������������������������������������������������������������������������181 NJW-RR 1997, 666 ��������������������������������������������������������������������������������������������������������������������������258

lxii  Table of Cases RG DJZ 11, 1316 ������������������������������������������������������������������������������������������������������������������������������������156 DJZ 1905, 697 ������������������������������������������������������������������������������������������������������������������������������������83 DJZ 1908, 448 ������������������������������������������������������������������������������������������������������������������������������������83 DJZ 1930, 589 ����������������������������������������������������������������������������������������������������������������������������������123 DR 1940 163 ����������������������������������������������������������������������������������������������������������������������������������������������226 1779 ��������������������������������������������������������������������������������������������������������������������������������������������564 DR 1944, 287 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Table of Cases  lxiii RGZ 72, 175 �������������������������������������������������������������������������������������������������������������������������������������286 RGZ 75 169 ����������������������������������������������������������������������������������������������������������������������������������������������102 213 ������������������������������������������������������������������������������������������������������������������������������������������������84 RGZ 76 110 ������������������������������������������������������������������������������������������������������������������������������������������������84 318 ������������������������������������������������������������������������������������������������������������������������������������������������82 RGZ 78 14 ��������������������������������������������������������������������������������������������������������������������������������������������������85 171 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Other Jurisdictions Australia Caltex Oil (Australia) pty v The Dredge ‘Willemstad’ (1976) 11 ALR 227 ����������������������������������������396 F v R (1983) 33 South Australia State Reports 189 �����������������������������������������������������������������������������553 Gianarelli v Wraith (1988) 165 CLR 543 ���������������������������������������������������������������������������������������������438

Table of Cases  lxv Canada Canadian National Railway Co v Norsk Pacific Steamship [1992] 1 SCR 1021 ����������������������������������90 Norsk Pacific Steamship Co Ltd v Canadian National Railway Co [1992] 1 SCR 1021 ��������������������396

European Union Brasserie du Pêcheur SA v Germany Case 46/93 [1996] ECR I-1029 ������������������������������������������������183 Commission v France Case C-52/00 > [2002] ECR I-3827 ����������������������������������������������������������������170 Commission v Greece Case C-154/00 [2002] ECR I-3879 �����������������������������������������������������������������170 Francovich v Italy Joined Cases C-6 and 9/90 [1991] ECR I-5357 �����������������������������������������������������183 Google France v Louis Vuitton Joined Cases C-236/08 to C-238/08, NJW 2010, 2029 ��������������������310 Köbler v Austria Case C-224/01, [2003] ECR I-10239 ������������������������������������������������������������������������183

France Cass Civ Bulletin des arrêts Chambres civiles, no 98, 67 – Farah Diba �������������������������������������������������������321 JCP 1966 II 14567 ����������������������������������������������������������������������������������������������������������������������������537 Colmar, D 1956, 723 ����������������������������������������������������������������������������������������������������������������������� 92, 199 Tribunal de grande instance de Paris, D 1977, Jur, 364 ff – Caroline de Monaco �����������������������������321

International ECtHR NJW 2004, 2647 ���������������������������������������������������������������������������������������������������������������������������������46 NJW 2012, 1058 ���������������������������������������������������������������������������������������������������������������������������������46 Von Hannover v Germany (59320/00) (2005) 40 EHRR 1 �����������������������������������������������������������335 Von Hannover v Germany (No 2) (40660/08 and 60641/08) (2012) 55 EHRR 15 ����������������������335

New Zealand Rees v Sinclair [1974] 1 NZLR 180 ������������������������������������������������������������������������������������������������������438

United Kingdom Albazero, The [1977] AC 774 ���������������������������������������������������������������������������������������������������������������103 Alcock v Chief Constable of South Yorkshire [1992] 1 AC 310 ��������������������������������������������231–32, 236 Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518 �����������������������������������������������104 Aliakmon, The [1985] QB 350 ������������������������������������������������������������������������������������������� 90, 103–4, 435 Allen v Flood [1898] AC 1 �������������������������������������������������������������������������������������������������������������� 78, 386 Anns v Merton London Borough Council, [1978] AC 728 ������������������������������������������������������������������41 Arthur JS Hall & Co v Simons [2002] 1 AC 615 ����������������������������������������������������������������������������������438 Atkinson v Newcastle Waterworks (1877) LR 2 Ex 441 ����������������������������������������������������������������������367 Attia v British Gas plc [1988] QB 304 ��������������������������������������������������������������������������������������������������231 Attorney-General v Blake [2001] 1 AC 268 �������������������������������������������������������������������������������������������85 B (A Minor) (Wardship: Sterilization), Re [1988] AC 199 �����������������������������������������������������������������553 Bolam v Friern Hospital Management Committee [1957] 1 WLR 582 �������������������������������139–40, 553

lxvi  Table of Cases Bolitho v City and Hackney Health Authority [1998] AC 232 ��������������������������������������������������� 140, 553 Bourhill v Young [1943] AC 92 ������������������������������������������������������������������������������������������������������������236 Bradford Corporation v Pickles [1895] AC 587 ������������������������������������������������������������������������������ 78, 85 British Railways Board v Herrington [1972] AC 877 ����������������������������������������������������������������������������58 Burgess v Florence Nightingale Hospital for Gentlewomen [1955] 1 QB 349 ����������������������������������275 Caldwell v Maguire and Fitzgerald [2001] EWCA Civ 1054 ���������������������������������������������������������������340 Campbell v MGN Ltd [2004] 2 AC 457 ��������������������������������������������������������������������������������� 85, 280, 335 Caparo v Dickman Industries plc [1990] 2 AC 605 �������������������������������������������� 83, 91, 96, 181, 433–35 Carmarthen County Council v Lewis [1955] AC 549 �������������������������������������������������������������������������536 Catholic Child Welfare Society v Various Claimants and the Institute of the Brothers of Christian Schools [2012] UKSC 56 �����������������������������������������������������������������524 Chatterton v Gerson [1981] QB 432 ����������������������������������������������������������������������������������������������������142 Close v Steel Co of Wales Ltd [1962] AC 367 �������������������������������������������������������������������������������� 66, 383 Coco v AN Clark (Engineers) Ltd (1969) RPC 41 ������������������������������������������������������������������������������335 Commissioner for Rly v McDermott [1967] 1 AC 169 �������������������������������������������������������������������������59 Contra Selvanayagam v University of the West Indies [1983] 1 All ER 824 ����������������������������������������68 Cunningham v Harrison [1973] QB 942 ������������������������������������������������������������������������������������� 196, 351 Daly v Liverpool Corp [1939] 1 KB 394 ������������������������������������������������������������������������������������������������68 Derry v Peek (1887) 14 App Cas 337 �����������������������������������������������������������������������������������������������������83 Dorset Yacht Co v Home Office [1970] AC 1004 ������������������������������������������������������������������������ 181, 536 Douglas v Hello! (No 3) [2005] EWCA Civ 106; [2007] UKHL 21 ����������������������������������������������������624 Dunton v Dover DC (1977) 76 LGR 87 �����������������������������������������������������������������������������������������������536 Elguzoli-Daf v Commissioner of Police of the Metropolis [1995] QB 335 ���������������������������������������184 F (Mental Patient), In re [1990] 2 AC 1 �����������������������������������������������������������������������������������������������555 F (Mental Patient Sterilization), Re [1990] 2 AC 1 ������������������������������������������������������������������������������553 Freeman v Home Office [1983] 3 All ER 589 ��������������������������������������������������������������������������������������552 Froom v Butcher [1976] QB 286 ����������������������������������������������������������������������������������������������������������346 Gorris v Scott (1874) LR 9 Ex 125 ����������������������������������������������������������������������������������������������������������66 Gorris v Scott (1874) LR 9 Exch 125 ����������������������������������������������������������������������������������������������������383 Gough v Thorne [1966] 1 WLR 1387 ����������������������������������������������������������������������������������������������������68 Gravil v Carroll and Redruth Rugby Football Club [2008] EWCA Civ 689 ��������������������������������������340 Hambrook v Stokes Bros [1925] 1 KB �����������������������������������������������������������������������������������������������9–10 Harrison v West of Scotland Kart Club 2004 SC 615 ��������������������������������������������������������������������������127 Harris v Brights Asphalt Contractors Ltd [1953] 1 QB 617 ���������������������������������������������������������������195 Hay (Bourhill) v Young [1943] AC 92 ���������������������������������������������������������������������������������������������������71 Hedley Byrne v Heller [1964] AC 465 ���������������������������������������������������83, 95–96, 98, 101, 105, 432, 438 Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 �������������������������������������������������������������������������92 Hinz v Berry [1970] 2 QB 40 ����������������������������������������������������������������������������������������������������������������231 Home Office v Dorset Yacht Co Ltd [1970] AC 1004 ����������������������������������������������������������������������������90 HRH Prince of Wales v Associated Newspapers Ltd [2008] Ch 57 ����������������������������������������������������335 Hua Lien, The ([1991] 1 Lloyd’s Rep 309 ����������������������������������������������������������������������������������������������31 Hunt v Severs [1994] 2 AC 350 ������������������������������������������������������������������������������������������������������������351 Iveson v Moore, (1699) 1 Ld Raym 486 �����������������������������������������������������������������������������������������������411 Junior Books v Veitchi [1983] 1 AC 520 ������������������������������������������������������������������������������������������98–99 Land Securities plc v Fladgate Fielder [2010] Ch 467 �������������������������������������������������������������������������275 Leatherland v Edwards, High Court unreported 1998 ������������������������������������������������������������������������340 Lister v Hesley Hall [2001] UKHL 22; [2002] 1 AC 215 ������������������������������������������������������������� 122, 524 Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 �����������������������������������������������������������������������195 Lumley v Wagner (1852) 1 De GM & G 604 ��������������������������������������������������������������������������������� 85, 411 McKay v Essex Health Authority and Another [1982] QB 1166 ������������������������������������������������ 241, 258

Table of Cases  lxvii McLoughlin v O’Brian [1983] 1 AC 410 ����������������������������������������������������������������������������������������������236 Mersey Docks and Harbour Board v Coggins & Griffiths (Liverpool) Ltd [1947] AC 1 ������������������120 Mogul v McGregor, Gow & Co [1892] AC 25 ���������������������������������������������������������������������������������������78 Montgomery v Lanarkshire Health Board [2015] UKSC 11; [2015] AC 1430 ������������������ 140, 143, 553 Mosley v News Group [2008] EWHC 687 ���������������������������������������������������������������������������������������������46 Murphy v Brentwood DC [1991] 1 AC 398 �������������������������������������������������������������������������������������������91 Nettleship v Weston [1971] 2 QB 691 ����������������������������������������������������������������������������������������������������54 Northampton Regional Livestock Centre Ltd v Cowell and Lawrence [2015] EWCA Civ 615 ���������������������������������������������������������������������������������������������������������������������������������624 OBG v Allan [2008] 1 AC 1 ������������������������������������������������������������������������������������������������������������ 84, 387 One Step (Support) Ltd v Morris-Garner [2018] UKSC 20 ���������������������������������������������������������������624 Page v Smith [1996] 1 AC 155 ������������������������������������������������������������������������������������������������������ 231, 236 Payton v Brooks [1974] 1 Lloyd’s Rep 241 �������������������������������������������������������������������������������������������202 Phelps v Hillingdon LBC [2001] 2 AC 619 ������������������������������������������������������������������������������������������185 Pitcher v Huddersfield Town Football Club [2001] All ER (D) 223 ��������������������������������������������������340 Polemis, Re [1921] 3 KB 560 ���������������������������������������������������������������������������������������������������������� 64, 363 Prince Albert v Strange (1849) 1 De G & Sm 652 �������������������������������������������������������������������������������335 Quartz Hill Consolidated Gold Mining Co v Eyre (1883) 11 QBD 674 ��������������������������������������������275 Ratcliff v McConnell [1999] 1 WLR 670 �����������������������������������������������������������������������������������������������58 Reibl v Hughes [1980] 2 SCR 880 ��������������������������������������������������������������������������������������������������������553 Richardson v Davies [2006] 1 Current Law 405 ����������������������������������������������������������������������������������340 Richardson v Redpath, Brown & Co [1944] AC 62 �������������������������������������������������������������������������������68 Richard v BBC [2018] EWHC 1837 �����������������������������������������������������������������������������������������������������624 Roberts v Ramsbottom [1980] 1 WLR 823 �����������������������������������������������������������������������������������������346 Robinson v Chief Constable of West Yorkshire [2018] UKSC 4 ��������������������������������������������������������185 Roe v Minister [1954] 2 QB 66 �������������������������������������������������������������������������������������������������������������139 Rose v Miles (1815) 4 M and S 101; 105 ER 773 ���������������������������������������������������������������������������410–11 Rylands v Fletcher (1868) LR 3 HL 330 �����������������������������������������������������������������������������������������������149 Saltpetre, Case in (1607) 12 Co Rep 12 ������������������������������������������������������������������������������������������������185 Smith v Eric S Bush; Harris v Wyre Forest District Council [1990] 1 AC 831 ������������������������������������96 South Australia Asset Management Corp v York Montague [1997] AC 191 ���������������������������������������65 South Australian Asset Management Corp v York Montague [1997] AC 191 �����������������������������������433 Spartan Steel v Martin and Co [1973] 1 QB 27 �����������������������������������������������������������������������������395–96 Spring v Guardian Assurance Ltd [1995] 2 AC 296 ������������������������������������������������������������������������������83 Steele v Robert George & Co [1942] AC 497 �����������������������������������������������������������������������������������������68 Stovin v Wise and Norfolk County Council [1996] AC 923 ��������������������������������������������������������� 59, 184 S v McC; W v W [1972] AC 29 �������������������������������������������������������������������������������������������������������������552 Thake v Maurice [1986] QB 644 ����������������������������������������������������������������������������������������������������������137 Tomlinson v Congleton BC [2004] 1 AC 46 ������������������������������������������������������������������������������������������58 Udale v Bloomsbury Area Health Authority [1983] 1 WLR 1098 ������������������������������������������������������259 Various Claimants v Catholic Children’s Welfare Society [2012] UKSC 56; [2013] 2 AC 1 ����������������������������������������������������������������������������������������������������������������������������������120 Viasystems (Tyneside) Ltd v Thermal Transfers (Northern) Ltd [2005] EWCA 1151; [2006] QB 510) �������������������������������������������������������������������������������������������������������������������������������120 Victorian Railways Commissioners v Coultas (1888) LR 13 App Cas 222 ����������������������������������������235 Vidal-Hall v Google Inc [2016] QB 1003 ��������������������������������������������������������������������������������������������335 Wagon Mound I, The [1961] AC 388 ��������������������������������������������������������������������������������������������� 65, 363 Wagon Mound II, The [1967] 1 AC 617 ������������������������������������������������������������������������������������������ 65, 70 Wainwright v Home Office [2004] 2 AC 406 ��������������������������������������������������������������������������������������335 Ward v James [1966] 1 QB 273 ������������������������������������������������������������������������������������������������������������192

lxviii  Table of Cases Ward v Tesco Stores Ltd [1976] 1 WLR 810 ������������������������������������������������������������������������������������������58 Weller and Co v Foot and Mouth Disease Research Institute [1966] 1 QB 569 ��������������������������������411 Wheat v E Lacon & Co Ltd [1966] 1 QB 355 �����������������������������������������������������������������������������������������59 Whitehouse v Jordan [1980] 1 All ER 650 �������������������������������������������������������������������������������������������553 White v Blackmore [1972] 2 QB 651 �����������������������������������������������������������������������������������������������������59 White v Chief Constable of South Yorkshire [1999] 2 AC 455 �����������������������������������������������������������236 White v Jones [1995] 2 AC 207 ���������������������������������������������������������������������������������������� 98–99, 104, 439 Wilsher v Essex Area Health Authority [1987] QB 730 �������������������������������������������������������������� 140, 145 With v O’Flanaghan [1936] Ch 575 �������������������������������������������������������������������������������������������������������83 X v Bedfordshire [1995] 2 AC 633 �������������������������������������������������������������������������������������������������184–85

United States Amaya v Home Ice, Fuel & Supply Co 59 Cal 2d 295 (1963) �������������������������������������������������������������236 Anderson v Minneapolis, St P and S.MRY Co 146 Minn 430, 179 NW 45 (1920) �����������������������������63 Beck v FMC Corporation 385 NYS 2d 956; aff ’d, 369 NE 2d 10 (1977) ��������������������������������������������395 Berman v Allan 404 A 2d 8 ���������������������������������������������������������������������������������������������������������������������19 Biakanja v Irving 49 Cal 2d 647, 320 P 2d 16 (1958) ��������������������������������������������������������������������������439 Curlender v Bio-Science (1980) 165 Cal 477 ���������������������������������������������������������������������������������������241 Curlender v Bio-Science Laboratories 106 Cal App 3d 811, 165 Cal Rptr 477 (1980) ����������������������258 De Franceschi v Storrier (1989) 85 ACTR 1 ����������������������������������������������������������������������������������������231 Dillon v Legg 68 Cal 2d 728 (1968) ������������������������������������������������������������������������������������������������������236 Escola v Coca-Cola Bottling Co of Fresno 150 P 2d 436 (Cal1944) ���������������������������������������������������468 Glanzer v Shepard 233 NY 236, 135 NE 275 (1922) �����������������������������������������������������������������������������95 Heyer v Flaig 74 Cal Rptr 225; 449 P 2d 161 (1969) ���������������������������������������������������������������������������439 Howard v Lecher 366 NE (2d) 64 (1977) ���������������������������������������������������������������������������������������������240 HR Moch Co v Rensselaer Water Co 247 NY 160, 159 NE 896 (1928) ����������������������������������������������396 J’Aire Corp v Gregory 24 Cal 3rd 799, 598 P 2d 60 (1979) �������������������������������������������������������������98–99 Katz v United States 389 Supreme Court (1967) 347 ��������������������������������������������������������������������������318 Konigsberg v State Bar 366 US 36, 61 (1961) ����������������������������������������������������������������������������������������13 NAACP v Claiborne Hardware Co 458 US 886 (1982) �����������������������������������������������������������������������283 New York Times Co v Sullivan 376 US 254, 84 S Ct 710 (1964) �����������������������������������������������������������19 NLRB v Retail Store Employees Union Local 1001 447 US 607 (1980) �����������������������������������������������42 Novosel v Nationwide Insurance Company 721 F 2d 894 (1983) ������������������������������������������������������283 Palsgraf v Long Island Ry Co 248 NY 339, 162 NE 99 (1928) ��������������������������������������������������������������71 Procanik v Cillo 97 NJ 339, 478 A 2d 755 (1984) �������������������������������������������������������������������� 19, 34, 259 Roe v Wade 410 US 113, 93 S Ct 705 (1973) �����������������������������������������������������������������������������������������19 Strait v Hale Constr Co 103 Cal Rptr 487 (1972) ��������������������������������������������������������������������������������120 Toms v McConnell 45 Mich App 647, 207 NW 2d 140 (1973) �����������������������������������������������������������231 Ultramares Corp v Touche 255 NY 170, 174; NE 441, 444 (1931) �������������������������������������������������������89 Ultramares Marine Corp v Touche 255 NY 170, 174 NE 441 (1931) ���������������������������������������������������95 Viccaro v Milunsky 406 Mass 777; 551 NE 2d 10 n 3 �������������������������������������������������������������������������259

TABLE OF LEGISLATION Germany Accident Insurance Act (Unfallversicherungsgesetz) ��������������������������������������������������������������������������149 Accountants’ Regulations ���������������������������������������������������������������������������������������������������������������������435 Act against Restrictions of Competition (Gesetz gegen Wettbewerbsbeschränkungen)�������������������372 Act Concerning Compulsory Insurance (Pflichtversicherungsgesetz)������������������������������� 152, 164, 569 § 1 �����������������������������������������������������������������������������������������������������������������������������������������������������569 § 3 ������������������������������������������������������������������������������������������������������������������������������� 164–65, 569, 572 § 3 1 ������������������������������������������������������������������������������������������������������������������������������������������ 569, 572 § 6 �����������������������������������������������������������������������������������������������������������������������������������������������������164 Act Concerning Legal Equality of Men and Women in Matters of Private Law (Allgemeines Gleichbehandlungsgesetz)�������������������������������������������������������������������� 21, 25, 192, 231 Act on Artistic Creations (Kunsturheberrechtsgesetz)������������������������������������������������������������ 38, 45, 291 § 22 ��������������������������������������������������������������������������217, 288–92, 297, 317, 324, 328–29, 331–32, 336 § 23 ���������������������������������������������������������������� 217, 292, 294, 297, 317–19, 321, 324, 328–30, 332, 336 § 24 ���������������������������������������������������������������������������������������������������������������������������������������������������293 § 35 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����������������������������������������������������������������166–68, 220, 234–35, 343, 556–59, 566–69, 572, 576–77 § 7 I ������������������������������������������������������������������������������������������������������������� 153, 557, 559, 566–67, 572 § 7 II �������������������������������������������������������������������������������������������������������������������������������������������������151 § 7 II 2 ����������������������������������������������������������������������������������������������������������������������������������������������168 § 7 III ������������������������������������������������������������������������������������������������������������������������������������������165–66 § 8 ������������������������������������������������������������������������������������������������������������������������������������� 166, 220, 574 § 8a ���������������������������������������������������������������������������������������������������������������������������������������������������220 § 9 ������������������������������������������������������������������������������������������������������������������������������������� 168, 220, 343 § 9 V �������������������������������������������������������������������������������������������������������������������������������������������������167 §§ 9–13 ���������������������������������������������������������������������������������������������������������������������������������������������192 § 10 �������������������������������������������������������������������������������������������������������������������������������������168, 220–21 §§ 10–12 �������������������������������������������������������������������������������������������������������������������������������������������574 §§ 10–13 �������������������������������������������������������������������������������������������������������������������������������������������195 § 11 ����������������������������������������������������������������������������������������������������������������������������������� 168, 572, 576 § 12 ��������������������������������������������������������������������������������������������������������������������������� 168, 195, 221, 619 § 12 I �������������������������������������������������������������������������������������������������������������������������������������������������152 § 12a �������������������������������������������������������������������������������������������������������������������������������������������������222 § 12b �������������������������������������������������������������������������������������������������������������������������������������������������222 § 13 ���������������������������������������������������������������������������������������������������������������������������������������������������222

lxx  Table of Legislation § 14 ���������������������������������������������������������������������������������������������������������������������������������������������������222 § 15 ���������������������������������������������������������������������������������������������������������������������������������������������222–23 § 16 ����������������������������������������������������������������������������������������������������������������������������������� 151, 168, 223 § 17 ����������������������������������������������������������������������������������167, 223, 556, 559–60, 562, 574–75, 577–79 § 17 I �������������������������������������������������������������������������������������������������������������������������������������������������168 § 17 I 1 ����������������������������������������������������������������������������������������������������������������������������������������574–75 § 18 ������������������������������������������������������������������������������������������������������166, 223, 343, 569, 572, 576–77 § 18 I �������������������������������������������������������������������������������������������������������������������������������������������������572 § 20 ���������������������������������������������������������������������������������������������������������������������������������������������������223 Act on Passenger Transport (Personenbeförderungsgesetz) ������������������������������������������������� 77, 370, 372 Act on Telegraph Lines, § 12 III������������������������������������������������������������������������������������������������������������489 Act on the extended admission of claims for damages arising from service and industrial accidents ������������������������������������������������������������������������������������������������������������������562 Act on Unfair Competition (Wettbewerbsgesetz) �������������������������������������������������������������������������������266 Administrative Offence Act (Gesetz über Ordnungswidrigkeiten) �������������������������������������� 77, 380, 383 § 130 �������������������������������������������������������������������������������������������������������������������������������������77, 380–83 § 130 I �����������������������������������������������������������������������������������������������������������������������������������������380–81 § 130 II ���������������������������������������������������������������������������������������������������������������������������������������������381 § 130 II 1 ������������������������������������������������������������������������������������������������������������������������������������������380 Adoption Placement Act (Adoptionsvermittlungsgesetz)�������������������������������������������������������������������598 § 1 �������������������������������������������������������������������������������������������������������������������������������������������������������59 § 2 I 1 ������������������������������������������������������������������������������������������������������������������������������������������������598 § 2 I 2 ������������������������������������������������������������������������������������������������������������������������������������������������598 § 5 I ���������������������������������������������������������������������������������������������������������������������������������������������������598 § 7 I ���������������������������������������������������������������������������������������������������������������������������������������������������599 § 7 I 1 ������������������������������������������������������������������������������������������������������������������������������������������������598 § 7 II �������������������������������������������������������������������������������������������������������������������������������������������������599 § 9 I ���������������������������������������������������������������������������������������������������������������������������������������������������599 Air Traffic Act (Luftverkehrsgesetz) �����������������������������������������������������������������������������������������������������150 § 23 ���������������������������������������������������������������������������������������������������������������������������������������������������619 § 33 ���������������������������������������������������������������������������������������������������������������������������������������������������150 § 37 ���������������������������������������������������������������������������������������������������������������������������������������������������152 AKB (Allgemeine Bedingungen für die Kraftverkehrsversicherung) § 10 I �������������������������������������������������������������������������������������������������������������������������������������������������569 § 10 I d ���������������������������������������������������������������������������������������������������������������������������������������������572 Aktiengesetz (Stock Corporation Act) �������������������������������������������������������������������������������������������������382 Allgemeines Landrecht für die Preußischen Staaten (Prussian Code) ������������������14, 147, 174, 614, 618 Baden Act concerning the effects in private law of crimes �����������������������������������������������������������������614 Baden-Württemberg Building Regulations ������������������������������������������������������������������� 75, 365, 367, 393 Basic Law (GG) ����������������������������������������������������������������������� 2, 12, 19–22, 36, 78, 80–81, 174, 189, 219, 252–55, 275, 277, 279, 281–82, 286, 290–91, 293–94, 296–97, 299, 322, 324, 328–29, 331, 333, 366, 370, 372, 587 Art 1 ����������������������������������������� 34, 44, 49, 217, 248, 282, 286, 289, 292, 294, 297, 299, 308, 333, 622 Art 1 I ���������������������������������������������������������������������141, 246, 250, 252, 255–57, 281, 292–93, 298–99, 316, 322, 324–25, 327–28, 332–33, 336–37 Art 1 III ������������������������������������������������������������������������������������������������������������������������������������ 277, 282 Arts 1–19 ������������������������������������������������������������������������������������������������������������������������ 20, 43, 280–81 Art 2 ���������������������������������������������34, 44, 89, 217, 286, 289, 294, 298–99, 308–10, 318, 333, 337, 596 Art 2 I �������������������������������������44, 47, 49, 254, 281, 292–93, 297, 322, 324, 327–28, 336, 510–12, 622 Art 2 II �������������������������������������������������������������������������������������������������������������������������������������� 141, 542

Table of Legislation  lxxi Art 3 ����������������������������������������������������������������������������������������������������������������������������������������� 217, 280 Art 3 II ������������������������������������������������������������������������������������������������������������������������������������������ 20, 22 Art 3 III ��������������������������������������������������������������������������������������������������������������������������������������������282 Art 4 ������������������������������������������������������������������������������������������������������������������������������������������� 49, 218 Art 5 ������������������������������������������������������������������������������������������������41–42, 84, 218, 278, 280, 318, 336 Art 5 I ���������������������������������������� 46–47, 49, 85, 292–93, 297, 299, 309, 314–15, 317, 336, 405, 408–9 Art 5 I 1 ������������������������������������������������������������������������������������������������������������������������������275–76, 279 Art 5 I 2 ���������������������������������������������������������������������������������������������������������������������������� 292, 322, 329 Art 5 II �������������������������������������������������������������������������������������������������������������������������� 49, 278–79, 294 Art 5 III ����������������������������������������������������������������������������������������������������������������������������������������������48 Art 5 III 1 �����������������������������������������������������������������������������������������������������������������������������������������304 Art 6 ��������������������������������������������������������������������������������������������������������������������������������� 218, 328, 333 Art 6 I ��������������������������������������������������������������������������������������������������������������������������������������� 255, 328 Art 6 II �������������������������������������������������������������������������������������������������������������������������������������� 255, 328 Art 6 V ������������������������������������������������������������������������������������������������������������������������������������������������21 Art 8 ������������������������������������������������������������������������������������������������������������������� 42, 218, 405–6, 408–9 Art 8 I �����������������������������������������������������������������������������������������������������������������������������������������������409 Art 9 �������������������������������������������������������������������������������������������������������������������������������������������������218 Art 9 III �������������������������������������������������������������������������������������������������������������������������������������� 85, 282 Art 9 III 2 �������������������������������������������������������������������������������������������������������������������������������������������20 Art 10 �����������������������������������������������������������������������������������������������������������������������������������������������219 Art 11 �����������������������������������������������������������������������������������������������������������������������������������������������219 Art 12 ������������������������������������������������������������������������������������������������������������������������������� 219, 370, 372 Art 12 I ����������������������������������������������������������������������������������������������������������������������� 254, 371–72, 510 Art 12 I 2 ������������������������������������������������������������������������������������������������������������������������������������511–12 Art 12 II ��������������������������������������������������������������������������������������������������������������������������������������������372 Art 14 ����������������������������������������������������������������������������������������������36, 175, 186–87, 189, 219, 309–10 Art 14 III ����������������������������������������������������������������������������������������������������������������������������185–86, 189 Art 16 I ���������������������������������������������������������������������������������������������������������������������������������������������282 Art 19 �����������������������������������������������������������������������������������������������������������������������������������������������219 Art 19 II ��������������������������������������������������������������������������������������������������������������������������������������������371 Art 20 ������������������������������������������������������������������������������������������������������������������������������� 253, 280, 299 Art 20 I ���������������������������������������������������������������������������������������������������������������������������������������������511 Art 20 II ������������������������������������������������������������������������������������������������������������������������������������ 185, 252 Art 20 III �������������������������������������������������������������������������������������������������������������������� 252–53, 508, 559 Art 21 II ��������������������������������������������������������������������������������������������������������������������������������������������283 Art 34 ������������������������������������������������������� 59, 135, 174–79, 181, 183, 189–90, 369, 398, 479, 534–35, 583, 586, 594, 597–98, 603, 607, 609 Art 72 I ���������������������������������������������������������������������������������������������������������������������������������������������366 Art 74 I ���������������������������������������������������������������������������������������������������������������������������������������������366 Art 90 �������������������������������������������������������������������������������������������������������������������������������������������������59 Art 93 ���������������������������������������������������������������������������������������������������������������������������������������������������2 Art 93 I 4a ������������������������������������������������������������������������������������������������������������������������������������������20 Art 94 ���������������������������������������������������������������������������������������������������������������������������������������������������2 Art 95 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lxxii  Table of Legislation § 12 ��������������������������������������������������������������������������������������������������������������������������������������� 38, 43, 335 § 30 ���������������������������������������������������������������������������������������������������������������������������������������������������489 § 31 ���������������������������������������������������������������������������������112, 118–19, 126, 177–78, 205, 382, 398–99, 466, 486–87, 489, 494–95, 497, 523 § 31a �������������������������������������������������������������������������������������������������������������������������������������������������127 § 31b �������������������������������������������������������������������������������������������������������������������������������������������������127 § 89 ��������������������������������������������������������������������������������������������������������������������� 126, 178, 398–99, 489 § 90 �����������������������������������������������������������������������������������������������������������������������������������������������������32 § 90a ���������������������������������������������������������������������������������������������������������������������������������������������������32 § 94 ���������������������������������������������������������������������������������������������������������������������������������������������������401 § 95 ���������������������������������������������������������������������������������������������������������������������������������������������������401 § 122 ����������������������������������������������������������������������������������������������������������������������������������������� 111, 443 § 123 ���������������������������������������������������������������������������������������������������������������������������������������������������83 § 133 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������������������������������������������������������������������������������������65–66, 195, 202–3, 206, 252–53, 375, 508 § 249 I ������������������������������������������������������������������������������������������������������������������������������� 192, 195, 201 § 249 II 1 �������������������������������������������������������������������������������������������������������������������������� 195, 201, 203 § 249 II 2 ������������������������������������������������������������������������������������������������������������������������������������������202 §§ 249–52 �����������������������������������������������������������������������������������������������������������������������������������������201 §§ 249–53 �����������������������������������������������������������������������������������������������������������������������������������������194 §§ 249–54 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Table of Legislation  lxxiii § 252 ��������������������������������������������������������������������������������������������������������������������������������� 201, 203, 207 § 253 ����������������������������������������������������������������������25, 44, 130, 151, 171, 207, 226, 233, 240, 252, 254, 290, 337, 523, 538, 569, 594, 603 § 253 I ����������������������������������������������������������������������������������������������������������������������������������� 30, 44, 203 § 253 II ����������������������������������������������������������������������������44, 130, 197–98, 254, 456, 521, 611, 622–23 § 254 ������������������������������������������������������������132, 151, 168, 186, 194, 200, 207, 220, 226–27, 267, 343, 359, 362–64, 421, 509–10, 512, 574–79, 589 § 254 I ������������������������������������������������������������������������������������������������������������17, 67, 343, 361, 602, 610 § 254 II ��������������������������������������������������������������������������������������������������������������������������������������� 67, 203 § 255 �������������������������������������������������������������������������������������������������������������������������������������������������207 § 267 I �����������������������������������������������������������������������������������������������������������������������������������������������405 § 275 �������������������������������������������������������������������������������������������������������������������������������������������������494 § 276 ������������������������������������������������������������������������������������ 51, 139, 207, 252, 338, 416, 508, 521, 581 § 276 I �����������������������������������������������������������������������������������������������������������������������������������������������339 § 276 I 2 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lxxiv  Table of Legislation § 434 �������������������������������������������������������������������������������������������������������������������������������������������������172 § 438 �������������������������������������������������������������������������������������������������������������������������������������������������471 § 438 I 3 �������������������������������������������������������������������������������������������������������������������������������������� 94, 480 § 438 II ���������������������������������������������������������������������������������������������������������������������������������������������480 § 446 �������������������������������������������������������������������������������������������������������������������������������������������������102 § 447 ���������������������������������������������������������������������������������������������������������������������������������������������101–2 §§ 450ff 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�������������������������������������������������������������������������������������������������������������������������������������������139 §§ 630a–630h ��������������������������������������������������������������������������������������������������������������� 15, 50, 136, 537 §§ 630a ff ��������������������������������������������������������������������������������������������������������������������������������������������25 § 630b �����������������������������������������������������������������������������������������������������������������������������������������������209 § 630c �����������������������������������������������������������������������������������������������������������������������������������������������209 § 630c III ������������������������������������������������������������������������������������������������������������������������������������������144 § 630d ��������������������������������������������������������������������������������������������������������������������������������������� 143, 209 § 630d I ��������������������������������������������������������������������������������������������������������������������������������������������554 § 630e ��������������������������������������������������������������������������������������������������������������������������������������� 143, 210 § 630e I ���������������������������������������������������������������������������������������������������������������������������������������������143 § 630e II �������������������������������������������������������������������������������������������������������������������������������������������144 § 630h ������������������������������������������������������������������������������������������������������������������������������� 142, 145, 210 § 630h I ��������������������������������������������������������������������������������������������������������������������������������������������145 § 630h II �������������������������������������������������������������������������������������������������������������������������������������������142 § 630h V �������������������������������������������������������������������������������������������������������������������������������������������145 § 631 ����������������������������������������������������������������������������������������������������������������������������������������� 401, 420 §§ 631ff ����������������������������������������������������������������������������������������������������������������������������������������������15 § 633 �������������������������������������������������������������������������������������������������������������������������������������������������420 §§ 633–39 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����������������������������������������������������������������������������������������������������������������������������������������� 401, 410 § 670 �������������������������������������������������������������������������������������������������������������������������������������������������481

Table of Legislation  lxxv § 675 �������������������������������������������������������������������������������������������������������������������������������������������������211 § 675 II ���������������������������������������������������������������������������������������������������������������������������������������������430 § 677 ����������������������������������������������������������������������������������������������������������������������������������������� 196, 481 §§ 677ff ���������������������������������������������������������������������������������������������������������������������������������������� 15, 97 § 683 ����������������������������������������������������������������������������������������������������������������������������������������� 196, 481 § 704 I �������������������������������������������������������������������������������������������������������������������������������������������������16 § 760 �������������������������������������������������������������������������������������������������������������������������������������������������197 §§ 812–22 ����������������������������������������������������������������������������������������������������������������������������������� 15, 289 § 823 ����������������������������������������������������������������������20, 24, 51, 67, 81, 87, 106, 118, 126, 129, 138, 151, 170–71, 178, 211, 229, 234, 242, 286, 298, 350–51, 444–45, 458, 485, 488–91, 497, 501–2, 504, 521, 523, 536, 556, 570, 572, 576, 580 § 823 I �������������������������������������������������������������12, 16–17, 29–73, 76, 78–79, 82, 84–85, 88–89, 92–94, 96, 106, 111–12, 121–23, 125, 127–28, 130, 137–38, 142, 152–53, 155, 162, 168, 170–72, 176, 191, 200, 224, 226, 228–30, 232, 234, 252, 261–63, 265–69, 274, 280, 289, 308–9, 338–39, 347, 349, 352, 358–59, 367, 378, 388–94, 397–401, 405–6, 409–12, 429–30, 432, 444–45, 456, 459, 466, 469, 472–74, 477–79, 481–82, 494–96, 500, 504–6, 522–23, 538, 552, 555, 569–71, 580 § 823 I 2 ��������������������������������������������������������������������������������������������������������������������������������������������200 § 823 II ����������������������������������������������� 16–17, 29, 35, 42–44, 55, 60, 72–86, 88, 106, 111–12, 152–53, 168, 176, 183, 261, 266, 285, 288, 313, 335, 339, 365–84, 393, 397–98, 409, 430, 432, 434, 445, 456, 459, 477–78, 565, 569, 572 §§ 823–25 �����������������������������������������������������������������������������������������������������������������������������������������506 §§ 823ff ��������������������������������������������������������������������������������������� 17, 176, 442, 469, 504, 520, 536, 569 § 824 ���������������������������������������������� 16–17, 25, 40–41, 87–88, 90, 105–6, 211, 266, 274, 285, 430, 432 §§ 824–26 �������������������������������������������������������������������������������������������������������������������������������������������16 § 825 ����������������������������������������������������������������������������������������������������������������������������� 16, 25, 211, 231 § 826 ����������������������������������������������������������������������16, 20, 24, 29, 38, 40–41, 43, 54, 66, 72, 76, 78–86, 88–90, 92, 96, 211, 265–66, 274, 276–77, 280, 375–76, 378–79, 383–87, 392, 430, 432 §§ 826–29 �������������������������������������������������������������������������������������������������������������������������������������������25 § 827 ����������������������������������������������������������������������������������������������������������������������������������������� 134, 211 §§ 827–28 �����������������������������������������������������������������������������������������������������������������������������������������135 § 828 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������������������������������������������������������������������������������������������������������������������������ 407–8, 412, 576 § 830 II ���������������������������������������������������������������������������������������������������������������������������������407–8, 412 §§ 830–38 �������������������������������������������������������������������������������������������������������������������������������������������25 § 831 ��������������������������������������������������������������������� 16–17, 77, 98, 109, 112–13, 117–31, 157, 160, 166, 177–78, 212, 234–35, 382, 386, 388, 429, 442, 444, 446, 456, 466, 481–515, 521–24, 538, 580 § 831 I ������������������������������������������������������������������������������������������������������������������������������� 382, 504, 507 § 831 I 2 ��������������������������������������������������������������������������������������������������������������������������������������������507 § 831 II ������������������������������������������������������������������������������������������������������������������������������������� 382, 507

lxxvi  Table of Legislation § 832 ����������������������������������������������������������������������������������������16, 118, 133–35, 181, 212, 446, 525–37 § 832 I ��������������������������������������������������������������������������������������������������������������������������������������� 527, 537 § 832 I 1 ��������������������������������������������������������������������������������������������������������������������������������������527–28 § 832 I 2 ������������������������������������������������������������������������������������������������������������������������������������ 528, 533 § 832 II ���������������������������������������������������������������������������������������������������������������������������������������������530 § 833 ��������������������������������������������������������������������������������������16, 148, 151, 154, 212, 446, 535–36, 580 § 833 II �����������������������������������������������������������������������������������������������������������������������������������������������55 § 834 ��������������������������������������������������������������������������������������������������������������������������� 16, 176, 213, 446 § 835 ���������������������������������������������������������������������������������������������������������������������������������������������������15 § 836 ��������������������������������������������������������������������������������������������������������16, 55, 58, 213, 447, 490, 536 §§ 836–38 ����������������������������������������������������������������������������������������������������������������������������� 16, 58, 446 § 837 �������������������������������������������������������������������������������������������������������������������������������������������������213 § 838 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���������������������������������������������������������������������������������������������������������������������������� 177, 180, 535 § 839a ��������������������������������������������������������������������������������������������������������������� 16, 25, 98, 183–84, 214 § 839a I ���������������������������������������������������������������������������������������������������������������������������������������������183 § 840 ����������������������������������������������������������������������������������������������������162, 214, 227, 466, 576–77, 579 § 840 I ���������������������������������������������������������������������������������������������������������������������������������527, 576–77 §§ 840–54 �������������������������������������������������������������������������������������������������������������������������������������������25 § 841 �������������������������������������������������������������������������������������������������������������������������������������������������214 § 842 ��������������������������������������������������������������������������������������������������������������������������������� 200, 214, 574 §§ 842–46 �����������������������������������������������������������������������������������������������������������������������������������������192 § 843 ������������������������������������������������������������������������������������������������������������������������� 196, 214, 349, 619 § 843 I �����������������������������������������������������������������������������������������������������������������������������������������������197 § 843 II ���������������������������������������������������������������������������������������������������������������������������������������������197 § 843 III ��������������������������������������������������������������������������������������������������������������������������������������������197 § 843 IV ��������������������������������������������������������������������������������������������������������������������������������������������256 §§ 843–44 ��������������������������������������������������������������������������������������������������������������������������������� 232, 351 §§ 843–46 �����������������������������������������������������������������������������������������������������������������������������������������351 §§ 843ff ��������������������������������������������������������������������������������������������������������������������������������������������351 § 844 ������������������������������������������������������������������������������30, 199–200, 214, 226, 228–29, 234, 273, 348 § 844 I �������������������������������������������������������������������������������������������������������������������������������199–200, 230 § 844 II ����������������������������������������������������������������������������������������������������������������� 30–31, 197, 199–200 § 844 III ������������������������������������������������������������������������������������������������������������������������ 25, 30, 200, 231 §§ 844–45 �����������������������������������������������������������������������������������������������������������������������������������������199 §§ 844–46 ����������������������������������������������������������������������������������������������������������������������������������� 30, 201 § 845 ���������������������������������������������������������������������������� 197, 200, 215, 226, 228–30, 234, 273, 348, 574 § 846 ������������������������������������������������������������������������������������������������������������� 200, 215, 226–27, 232–33 § 847 (old) ���������������������������������������������������������������� 15, 25, 30, 130, 137, 226, 240, 252, 254, 290–91, 337, 456, 521, 538, 569, 574, 594, 603, 611–20, 622–23 § 848 �������������������������������������������������������������������������������������������������������������������������������������������������215 §§ 848–51 �����������������������������������������������������������������������������������������������������������������������������������������192 §§ 848ff ��������������������������������������������������������������������������������������������������������������������������������������������201 § 849 �������������������������������������������������������������������������������������������������������������������������������������������������215

Table of Legislation  lxxvii § 850 �������������������������������������������������������������������������������������������������������������������������������������������������215 § 851 �������������������������������������������������������������������������������������������������������������������������������������������������215 § 852 ������������������������������������������������������������������������������������������������������������������� 215–16, 465, 467, 515 § 852 I �����������������������������������������������������������������������������������������������������������������������������������������466–67 § 853 �������������������������������������������������������������������������������������������������������������������������������������������������216 § 854 ���������������������������������������������������������������������������������������������������������������������������������������������������37 § 854 I �������������������������������������������������������������������������������������������������������������������������������������������������37 §§ 854ff ����������������������������������������������������������������������������������������������������������������������������������������������18 § 859 ��������������������������������������������������������������������������������������������������������������������������������������������� 37, 50 § 859 I �������������������������������������������������������������������������������������������������������������������������������������������������37 § 859 III ����������������������������������������������������������������������������������������������������������������������������������������������37 § 861 ���������������������������������������������������������������������������������������������������������������������������������������������������37 § 868 ���������������������������������������������������������������������������������������������������������������������������������������������������37 § 903 ���������������������������������������������������������������������������������������������������������������������������������������������������37 §§ 903ff ����������������������������������������������������������������������������������������������������������������������������������������������35 § 904 ����������������������������������������������������������������������������������������������������������������������������� 17, 50, 216, 555 § 906 ����������������������������������������������������������������������������������������������������������������������������������� 36, 188, 216 § 906 II �����������������������������������������������������������������������������������������������������������������������������������������������36 § 907 �������������������������������������������������������������������������������������������������������������������������������������������������216 § 946 �������������������������������������������������������������������������������������������������������������������������������������������������401 § 985 ���������������������������������������������������������������������������������������������������������������������������������������������������36 §§ 989ff ����������������������������������������������������������������������������������������������������������������������������������������������35 § 1004 ����������������������������������������������������������������������������������������36, 39, 45, 191, 216, 308–10, 314, 316 § 1004 I ���������������������������������������������������������������������������������������������������������������������������������������������268 § 1004 I 2 ���������������������������������������������������������������������������������������������������������������������������������� 298, 301 §§ 1018ff ��������������������������������������������������������������������������������������������������������������������������������������������38 § 1029 �������������������������������������������������������������������������������������������������������������������������������������������������50 §§ 1030ff ��������������������������������������������������������������������������������������������������������������������������������������������38 § 1246 ��������������������������������������������������������������������������������������������������������������������������������������� 612, 618 § 1300 ���������������������������������������������������������������������������������������������������������������������������������612–13, 618 § 1354 �������������������������������������������������������������������������������������������������������������������������������������������������21 § 1360 ��������������������������������������������������������������������������������������������������������������������������������� 30, 199, 251 § 1361 ����������������������������������������������������������������������������������������������������������������������������������������� 31, 200 § 1387 �������������������������������������������������������������������������������������������������������������������������������������������������21 §§ 1569ff ������������������������������������������������������������������������������������������������������������������������������������ 31, 200 § 1601 �������������������������������������������������������������������������������������������������������������������������������������������������30 §§ 1601ff ������������������������������������������������������������������������������������������������������������������������������������������256 § 1602 �������������������������������������������������������������������������������������������������������������������������������������������������30 § 1602 II �������������������������������������������������������������������������������������������������������������������������������������������256 § 1606 II 2 ����������������������������������������������������������������������������������������������������������������������������������������251 § 1619 �����������������������������������������������������������������������������������������������������������������������������������������������200 § 1626 �����������������������������������������������������������������������������������������������������������������������������������������������552 § 1626 I ���������������������������������������������������������������������������������������������������������������������������������������������134 §§ 1626ff ���������������������������������������������������������������������������������������������������������������������������������� 527, 550 § 1627 (old) ����������������������������������������������������������������������������������������������������������������������������������������21 § 1631 �����������������������������������������������������������������������������������������������������������������������������������������������552 § 1631 I ������������������������������������������������������������������������������������������������������������������������������������� 134, 605 § 1666 �������������������������������������������������������������������������������������������������������������������������������������������604–5 § 1666a �����������������������������������������������������������������������������������������������������������������������������������������604–5 §§ 1671ff ������������������������������������������������������������������������������������������������������������������������������������������527

lxxviii  Table of Legislation § 1754 �����������������������������������������������������������������������������������������������������������������������������������������������200 § 1755 I 2 ������������������������������������������������������������������������������������������������������������������������������������������256 § 1757 �����������������������������������������������������������������������������������������������������������������������������������������������527 § 1765 �����������������������������������������������������������������������������������������������������������������������������������������������527 § 1766 �����������������������������������������������������������������������������������������������������������������������������������������������199 § 1793 �����������������������������������������������������������������������������������������������������������������������������������������������134 § 1800 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������������������������������������������������������������14 Binnenschifffahrsgesetz (Inland Waterways Shipping Act) �������������������������������������������������������� 261, 401 Bundesnotarordnung (Federal Notiaral Code) �����������������������������������������������������������������������������������177 Bundesrechtsanwaltsordnung (Federal Lawyers’ Act) �������������������������������������������������������������������������438 Bundesseuchengesetz (Federal Pest Control Act) ����������������������������������������������������������������������� 189, 550 Bundesverfassungsgerichtgesetz (Federal Constitutional Court Act) ������������������������������������������������257 Compensation for Measures related to Criminal Prosecution Act (Gesetz über die Entschädigung für Strafverfolgungsmaßnahmen) ��������������������������������������������591 Constitution of the Land of North Rhine-Westphalia (Verfassung für das Land Nordrhein-Westfalen) ���������������������������������������������������������������������������������������������������������������������610 Copyright Act (Urheberrechtsgesetz) § 1 �����������������������������������������������������������������������������������������������������������������������������������������������������285 § 10 ���������������������������������������������������������������������������������������������������������������������������������������������������526 § 16 ���������������������������������������������������������������������������������������������������������������������������������������������������526 § 16 I �������������������������������������������������������������������������������������������������������������������������������������������������526 § 19a �������������������������������������������������������������������������������������������������������������������������������������������������526 § 72 I �������������������������������������������������������������������������������������������������������������������������������������������������526 § 97 ���������������������������������������������������������������������������������������������������������������������������������������������������335 § 97 I �������������������������������������������������������������������������������������������������������������������������������������������������526 § 141 5 ����������������������������������������������������������������������������������������������������������������������������������������������294 Criminal Code (Strafgesetzbuch) ������������������������������������������������������������������������������������������������������� 7, 35 § 34 �����������������������������������������������������������������������������������������������������������������������������������������������������50 § 154 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�������������������������������������������������������������������������������������������������������������������������������������������������239 §§ 218ff ��������������������������������������������������������������������������������������������������������������������������������������238–39 § 222 ���������������������������������������������������������������������������������������������������������������������������������������������������64 § 229 ���������������������������������������������������������������������������������������������������������������������������������������������������64 § 230 �������������������������������������������������������������������������������������������������������������������������������������������������456 § 240 I �����������������������������������������������������������������������������������������������������������������������������������������������406 § 263 �����������������������������������������������������������������������������������������������������������������������������������375–76, 380 § 266 ����������������������������������������������������������������������������������������������������������������������������������������� 380, 591 § 315 �������������������������������������������������������������������������������������������������������������������������������������������������565 § 316 �������������������������������������������������������������������������������������������������������������������������������������������������565

Table of Legislation  lxxix § 317 �������������������������������������������������������������������������������������������������������������������������������������������������395 § 323c ������������������������������������������������������������������������������������������������������������������������������������� 17, 60, 68 § 330 �������������������������������������������������������������������������������������������������������������������������������������������477–78 § 356 �������������������������������������������������������������������������������������������������������������������������������������������������439 § 367 15 ��������������������������������������������������������������������������������������������������������������������������������������������477 § 367 I 14 ������������������������������������������������������������������������������������������������������������������������������������������478 § 367 I 15 ������������������������������������������������������������������������������������������������������������������������������������477–78 Criminal Procedure Code (Strafprozessordnung) § 52 I �������������������������������������������������������������������������������������������������������������������������������������������������209 § 112 I 1 ��������������������������������������������������������������������������������������������������������������������������������������������591 § 152 II ���������������������������������������������������������������������������������������������������������������������������������������������585 FDPA (Federal Data Protection Act/Bundesdatenschutzgesetz) ��������������������������������������������������313–15 § 3 �����������������������������������������������������������������������������������������������������������������������������������������������������314 § 4 �����������������������������������������������������������������������������������������������������������������������������������������������������313 § 4 I ���������������������������������������������������������������������������������������������������������������������������������������������������314 § 28 I 3 ����������������������������������������������������������������������������������������������������������������������������������������������314 § 29 ���������������������������������������������������������������������������������������������������������������������������������������������������315 § 29 II �����������������������������������������������������������������������������������������������������������������������������������������314–15 § 35 II 2 ��������������������������������������������������������������������������������������������������������������������������������������������314 Federal Highways Act (Bundesfernstraßengesetz) ������������������������������������������������������������������������������587 Food Act (Lebensmittelgesetz) ��������������������������������������������������������������������������������������������� 445, 456, 459 Gentechnikgesetz (Gene Technology Act) �������������������������������������������������������������������������������������������173 German Democratic Republic State Liability Law ������������������������������������������������������������������������������186 Gesetz über die Angelegenheiten der freiwilligen Gerichtsbarkeit (Act on Voluntary Jurisdiction)������������������������������������������������������������������������������������������������������604 Gesetz zur Neuordnung des Kinder-und Jugendhilferechts (KJHG) ���������������������������������������������603–6 Gewerbeordnung (Trade Regulation Act) �������������������������������������������������������������������������������������������266 GmbHG (Act relating to Private Companies) ������������������������������������������������������������������������������� 72, 375 § 43 I �������������������������������������������������������������������������������������������������������������������������������������������������382 § 64 ���������������������������������������������������������������������������������������������������������������������������������������������373–75 § 64 I �������������������������������������������������������������������������������������������������������������������������������������������373–76 § 64 II �����������������������������������������������������������������������������������������������������������������������������������������������373 § 84 I �������������������������������������������������������������������������������������������������������������������������������������������������374 GVG (Law Concerning Judicial Organisation) ����������������������������������������������������������������������������������� 3, 6 § 23 2 ����������������������������������������������������������������������������������������������������������������������������������������������������3 § 23 I �����������������������������������������������������������������������������������������������������������������������������������������������������3 § 75 �������������������������������������������������������������������������������������������������������������������������������������������������������4 § 132 IV ����������������������������������������������������������������������������������������������������������������������������������������������21 § 137 �������������������������������������������������������������������������������������������������������������������������������������������������504 § 198 �������������������������������������������������������������������������������������������������������������������������������������������������185 Hamburg Road Cleaning Ordinance ���������������������������������������������������������������������������������������������������501 HGB (Commercial Code) ��������������������������������������������������������������������������������������������������������������� 14, 434 § 37 �����������������������������������������������������������������������������������������������������������������������������������������������������38 § 54 ���������������������������������������������������������������������������������������������������������������������������������������������������513 § 74 �����������������������������������������������������������������������������������������������������������������������������������������������������85 §§ 316ff ��������������������������������������������������������������������������������������������������������������������������������������������422 § 320 II 2 ������������������������������������������������������������������������������������������������������������������������������������������423 § 322 ����������������������������������������������������������������������������������������������������������������������������������������� 422, 425 § 323 ��������������������������������������������������������������������������������������������������������������������� 423–24, 427, 433–34 § 323 I ��������������������������������������������������������������������������������������������������������������������������������������� 424, 434

lxxx  Table of Legislation § 323 I 1 ��������������������������������������������������������������������������������������������������������������������������������������������423 § 323 I 3 ��������������������������������������������������������������������������������������������������������������������������������������423–24 §§ 377ff ��������������������������������������������������������������������������������������������������������������������������������������������473 § 421 I 2 ��������������������������������������������������������������������������������������������������������������������������������101–2, 435 § 421 I 3 ��������������������������������������������������������������������������������������������������������������������������������������������435 § 736 �������������������������������������������������������������������������������������������������������������������������������������������������578 § 736 I �����������������������������������������������������������������������������������������������������������������������������������������������578 Imperial Act on Liability (Reichshaftpflichtgesetz) �������������������������������� 118, 149–51, 155–56, 158, 163, 503, 559, 564–65, 580 Implementation of Punishment Act (Strafvollzugsgesetz) �����������������������������������������������������������������597 Infektionsschutzgesetz (Infection Protection Act) ���������������������������������������������������������������������� 189, 550 Insolvency Act (Insolvenzordnung) § 60 ���������������������������������������������������������������������������������������������������������������������������������������������������184 § 214 �������������������������������������������������������������������������������������������������������������������������������������������������384 Insurance Contracts Act (Versicherungsvertragsgesetz) ���������������������������������������������������������������������165 Kraftfahrzeug-Pflichtversicherungsverordnung ����������������������������������������������������������������������������������165 Labour Courts Act (Arbeitsgerichtgesetz)��������������������������������������������������������������������������������������������508 Law on the Documents of the State Security of the former GDR ������������������������������������������������������271 Machinery Protection Act (Maschinenschutzgesetz) ��������������������������������������������������������������������������112 Motor Vehicles Act (Kraftfahrzeuggesetz)������������������������������������������������������������������������������������ 163, 573 New Order for Railways Act (Eisenbahnneuordnungsgesetz)�������������������������������������������������������������522 Niedersächsisches Beamtengesetz (NdsBG) ����������������������������������������������������������������������������������������358 Niedersächsisches Gesetz über Hilfen und Schutzmaßnahmen für psychisch Kranke ���������������594–97 Niedersächsisches Straßengesetz ����������������������������������������������������������������������������������������������������������586 Nuclear Energy Act (Atomgesetz) ��������������������������������������������������������������������������������������������������������149 § 25 ���������������������������������������������������������������������������������������������������������������������������������������������������157 §§ 25 ff ���������������������������������������������������������������������������������������������������������������������������������������������149 § 27 ���������������������������������������������������������������������������������������������������������������������������������������������������151 § 30 ���������������������������������������������������������������������������������������������������������������������������������������������������152 § 31 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������������������������������������������������������������������������������������������������������189 Press Act (Pressegesetz) ���������������������������������������������������������������������������������������������������������������� 284, 287 § 11 ���������������������������������������������������������������������������������������������������������������������������������������������284–85 Preußisches Polizeiverwaltungsgesetz ��������������������������������������������������������������������������������������������������583 Product Liability Act (Produkthaftungsgesetz) �������������������������������16, 24–25, 106–8, 113–16, 127, 150, 170–73, 458, 461–62, 469 § 1 ��������������������������������������������������������������������������������������������������������������������������������������������� 461, 464 § 1 I ���������������������������������������������������������������������������������������������������������������������������������������������171–72 § 1 I 1 ������������������������������������������������������������������������������������������������������������������������������������������461–62 § 1 II 2 ����������������������������������������������������������������������������������������������������������������������������������������������461 § 1 II 4 ����������������������������������������������������������������������������������������������������������������������������������������������114 § 1 II 5 ��������������������������������������������������������������������������������������������������������������������������������116, 461–62 § 1 IV 2 ���������������������������������������������������������������������������������������������������������������������������������������������461 § 2 �����������������������������������������������������������������������������������������������������������������������������������������������171–72

Table of Legislation  lxxxi § 3 ��������������������������������������������������������������������������������������������������������������������������������������������� 172, 464 § 3 I ���������������������������������������������������������������������������������������������������������������������������������������������������461 § 4 �����������������������������������������������������������������������������������������������������������������������������������������������������172 § 4 I ���������������������������������������������������������������������������������������������������������������������������������������������������172 § 4 III ������������������������������������������������������������������������������������������������������������������������������������������������172 § 5 �����������������������������������������������������������������������������������������������������������������������������������������������������172 §§ 6–11 ���������������������������������������������������������������������������������������������������������������������������������������������192 § 7 �����������������������������������������������������������������������������������������������������������������������������������������������������171 § 7 II �������������������������������������������������������������������������������������������������������������������������������������������������172 § 10 ���������������������������������������������������������������������������������������������������������������������������������������������������171 § 10 I �������������������������������������������������������������������������������������������������������������������������������������������������464 § 11 ���������������������������������������������������������������������������������������������������������������������������������������������������171 § 15 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������������������������������������������ 267, 271 Road Traffic Licences Order (Straßenverkehrszulassungs-Ordnung) ������������������������������������������������597 RVO (Imperial Public Insurance Act) ��������������������������������������������������������������������������������������������563–64 § 543 �������������������������������������������������������������������������������������������������������������������������������������������������561 § 898 �������������������������������������������������������������������������������������������������������������������������������������������560–63 § 899 �������������������������������������������������������������������������������������������������������������������������������������������560–63 § 901 �������������������������������������������������������������������������������������������������������������������������������������������������560 § 903 �������������������������������������������������������������������������������������������������������������������������������������������562–64 § 905 �������������������������������������������������������������������������������������������������������������������������������������������������564 § 906 �������������������������������������������������������������������������������������������������������������������������������������������������564 § 1542 ���������������������������������������������������������������������������������������������������������������������������������559, 563–64 Saxon Civil Code �����������������������������������������������������������������������������������������������������������������������������������618 Schulpflichtgesetz Nordrhein-Westfalen �����������������������������������������������������������������������������������������607–8 SGB (Sozialgesetzbuch) VII § 8 �����������������������������������������������������������������������������������������������������������������������������������������������������159 § 85 ���������������������������������������������������������������������������������������������������������������������������������������������������161 § 87 ���������������������������������������������������������������������������������������������������������������������������������������������������161 § 104 ����������������������������������������������������������������������������������������������������������������������������������������� 160, 162 § 105 �������������������������������������������������������������������������������������������������������������������������������������������������160 § 110 �������������������������������������������������������������������������������������������������������������������������������������������������161 § 116 �������������������������������������������������������������������������������������������������������������������������������������������������161 SGB (Sozialgesetzbuch) X, § 116 ����������������������������������������������������������������������������������������������������������193 Sickness Insurance Act (Krankenversicherungsgesetz) �����������������������������������������������������������������������149 Strict Liability Act (Haftpflichtgesetz) �������������������������������������������������������������������� 16, 125, 149–50, 155, 157–59, 559, 580 § 1 ��������������������������������������������������������������������������������������������������������������������������������������������� 153, 158 § 2 ��������������������������������������������������������������������������������������������������������������������������������������������� 152, 157 § 3 ����������������������������������������������������������������������������������������������������������������������������������������������� 16, 159 § 4 ��������������������������������������������������������������������������������������������������������������������������������������������� 151, 159 §§ 5–10 ���������������������������������������������������������������������������������������������������������������������������������������������192 § 6 �����������������������������������������������������������������������������������������������������������������������������������������������������152

lxxxii  Table of Legislation § 7a ���������������������������������������������������������������������������������������������������������������������������������������������������619 § 9 �����������������������������������������������������������������������������������������������������������������������������������������������������152 § 10 ���������������������������������������������������������������������������������������������������������������������������������������������������152 § 12 ���������������������������������������������������������������������������������������������������������������������������������������������������151 StVO (Road Traffic Regulations) ��������������������������������������������������������������������������������������������342, 570–72 Teleservices Act (Telemediengesetz) �����������������������������������������������������������������������������������������������������314 § 7 I ���������������������������������������������������������������������������������������������������������������������������������������������������309 §§ 8 to 10 ������������������������������������������������������������������������������������������������������������������������������������������309 § 10 ������������������������������������������������������������������������������������������������������������������������������������������� 309, 314 Teleservices Data Protection Act (Teledienstdatenschutzgesetz) ��������������������������������������������������������313 § 4 VI ������������������������������������������������������������������������������������������������������������������������������������������������315 §§ 12 ff ���������������������������������������������������������������������������������������������������������������������������������������������315 UWG (Law on Unfair Competition) ��������������������������������������������������������������������������������������������� 80, 106 § 11 ���������������������������������������������������������������������������������������������������������������������������������������������������106 Water Supply Act (Wasserhaushaltsgesetz) ������������������������������������������������������������������������� 151, 154, 157 § 22 �������������������������������������������������������������������������������������������������������������������������������������157, 481–82 § 22 I �������������������������������������������������������������������������������������������������������������������������������������������481–82 § 22 II �����������������������������������������������������������������������������������������������������������������������������������������������482 § 34 II 1 ��������������������������������������������������������������������������������������������������������������������������������������������484 WpHG (Securities Trading Act) ����������������������������������������������������������������������������������������� 74, 76, 377–79 § 31 ���������������������������������������������������������������������������������������������������������������������������������������������377–78 §§ 31ff ����������������������������������������������������������������������������������������������������������������������������������������������377 § 32 ��������������������������������������������������������������������������������������������������������������������������������������������� 76, 377 § 32 II 1 ��������������������������������������������������������������������������������������������������������������������������������������377–78 Württemberg Act concerning the effects in private law of crimes and penalties ������������������������������614 ZPO (Zivilprozessordnung/Code of Civil Procedure) ����������������������������������������������������������������������������6 § 32 ���������������������������������������������������������������������������������������������������������������������������������������������������307 § 78 ���������������������������������������������������������������������������������������������������������������������������������������������������3–4 § 139 �������������������������������������������������������������������������������������������������������������������������������������������������533 § 141 �������������������������������������������������������������������������������������������������������������������������������������������������605 § 264 �������������������������������������������������������������������������������������������������������������������������������������������������565 § 287 ����������������������������������������������������������������������������������������������������������� 202, 291, 348–50, 601, 606 § 323 �������������������������������������������������������������������������������������������������������������������������������������������������620 § 348 �����������������������������������������������������������������������������������������������������������������������������������������������������4 § 348a ���������������������������������������������������������������������������������������������������������������������������������������������������4 § 511 �������������������������������������������������������������������������������������������������������������������������������������������������3–4 § 529 �����������������������������������������������������������������������������������������������������������������������������������������������������4 § 531 �����������������������������������������������������������������������������������������������������������������������������������������������������4 § 543 I ���������������������������������������������������������������������������������������������������������������������������������������������������5 § 543 II �������������������������������������������������������������������������������������������������������������������������������������������������5 § 544 II 1 ������������������������������������������������������������������������������������������������������������������������������������������272 § 544 II 2 ������������������������������������������������������������������������������������������������������������������������������������������272 § 544 II 3 ������������������������������������������������������������������������������������������������������������������������������������������272 § 559 I �����������������������������������������������������������������������������������������������������������������������������������������������306 § 563 �������������������������������������������������������������������������������������������������������������������������������������������������569 § 563 III ��������������������������������������������������������������������������������������������������������������������������������������������345 § 565 III 1 �����������������������������������������������������������������������������������������������������������������������������������������363 § 565a �����������������������������������������������������������������������������������������������������������������������������������������������592 § 566 �����������������������������������������������������������������������������������������������������������������������������������������������������4 § 721 ���������������������������������������������������������������������������������������������������������������������������������������������������37 § 765a �������������������������������������������������������������������������������������������������������������������������������������������������37

Table of Legislation  lxxxiii Other Jurisdictions European Union Antitrust Damages Claims Directive 2014/104/EU �������������������������������������������������������������������������������25 Consumer Rights Directive 2011/83/EU �����������������������������������������������������������������������������������������������24 Consumer Sales Directive 1999/44/EC ��������������������������������������������������������������������������������������������������24 E-Commerce Directive 2000/31/EC �����������������������������������������������������������������������������������������������������310 Statutory Audits Directive 2014/56 EU ������������������������������������������������������������������������������������������������435 EC Treaty, Art 177 ���������������������������������������������������������������������������������������������������������������������������������462 Product Liability Directive 85/374/EEC ���������������������������������������������������� 115–16, 170–72, 462–63, 469

France Civil Code ������������������������������������������������������������������������������������������������������������������������������������������ 14, 17 Art 9 �������������������������������������������������������������������������������������������������������������������������������������������������321 Arts 1240–45 ��������������������������������������������������������������������������������������������������������������������������������������15 Art 1242 ����������������������������������������������������������������������������������������������������������������������������������� 149, 536 Art 1382 (old) ������������������������������������������������������������������������������������������������������������������������������������16 Arts 1641ff ���������������������������������������������������������������������������������������������������������������������������������������128

International European Convention on Compulsory Insurance against Civil Liability in Respect of Motor Vehicles ����������������������������������������������������������������������������������������������������������164 European Convention on Human Rights ���������������������������������������19, 35, 46–47, 189–90, 299, 309, 335 European Convention on the International Carriage of Dangerous Goods by Road �����������������������222 United Nations Convention on Contracts for the International Sale of Goods (CISG) ���������������������24

United Kingdom Animals Act 1971 ����������������������������������������������������������������������������������������������������������������������������������154 Carriage of Goods by Sea Act 1992 ������������������������������������������������������������������������������������������������������103 Consumer Protection Act 1987 ������������������������������������������������������������������������������������������������������������170 Contracts (Rights of Third Parties) Act 1999 ������������������������������������������������������������������ 91, 97, 397, 432 Damages Act ������������������������������������������������������������������������������������������������������������������������������������������197 Factories Act 1961 �����������������������������������������������������������������������������������������������������������������������������������66 Family Law Reform Act 1969 ���������������������������������������������������������������������������������������������������������������553 Fatal Accidents Act 1976 �����������������������������������������������������������������������������������������������������������������������232 Financial Services and Markets Act 2000 ���������������������������������������������������������������������������������������������384 Human Rights Act 1998 ���������������������������������������������������������������������������������������������������� 23, 279–80, 335

United States Constitution, First Amendment �������������������������������������������������������������������������������������������������������������12 Restatement (Second) of Torts, § 432.2 �������������������������������������������������������������������������������������������������63 Restatement (Third) of Agency (2006) ������������������������������������������������������������������������������������������������120 Restatement (Third) of Torts �����������������������������������������������������������������������������������������������������������������95

lxxxiv

1 Introduction I.  A Bird’s Eye View of the Organisation of the German Courts in Civil Matters The idea of a German Supreme Court can be traced back to at least the end of the fifteenth century and the creation in 1495 of the Reichskammergericht of the Holy Roman Empire, which originally sat in Frankfurt am Main. The prevailing political fragmentation, however, prevented it from exercising any effective influence, especially in the area of the unification of the law, and even the Emperor himself held his own court in Vienna which often competed with the Reichskammergericht. A truly central Supreme Court had thus to await the unification of Germany which was eventually realised under Bismarck’s strong hand in 1871. This occurred when the Second German Reich (1871–1918) came into being, embracing Prussia (which retained a special status and dominated the new federal state), the kingdoms of Bavaria, Saxony and Wurttemberg. Also incorporated were 18 ‘lesser’ states, the three ‘free’ cities of Hamburg, Bremen and Lübeck, and the so-called Reichsland (imperial territory) of Alsace-Lorraine which was ceded to the Empire by the Treaty of Frankfurt of 10 May 1871 but which for some time thereafter retained a special status (indeed was until 1879 administered directly from Bismarck’s office). This was a complicated constitutional arrangement, as were many that had preceded it. But before a British lawyer hurriedly condemns it as ‘typically’ German, he should pause for a moment and reflect on the difficulties faced by his continental counterparts trying to comprehend the equally complex constitutional arrangements between England and Wales, Scotland, and Northern Ireland, not to mention the special status of the Channel Islands. Here then, again, history provides, if not a convincing justification, at least an explanation for the existing complications. We need not reflect here on the extent to which this unification can, nearly 150 years later, be judged as satisfactory or, even, complete. Certainly, those who know Germany well will be quick to mention both substantial differences in the language (there are over 100 dialects, however increasingly disappearing) and lingering mutual suspicions between the various states (Länder) that form the Federation (Bund). Yet again, however, the English lawyer (who has also assumed the role of speaking for the Welshman while ignoring the historically more cosmopolitan Scot or his counterpart from Northern Ireland) can easily overstate the cohesiveness (especially since the reunification of the two Germanies on 3 October 1990) or understate it if he is – subconsciously perhaps – concerned about the size and power of the new state. The Germans, themselves, seem to share this ambivalence, so it is fortunate that tort lawyers need not explore these fascinating questions any further. For present purposes it will suffice merely to say that the political union, which was forged in the 1870s made inevitable the legal union, that followed. Indeed, if a common reason often invoked for codification is the need for ‘simplification, clarification and unification’,

2  Introduction the German Civil Code of 1900 satisfied all three. (On the other hand, as van Gerven and others have been quick to point out, ‘the codification movement on the European Continent has done a lot to undo the ius commune which previously existed’. (See van Gerven, Cases, Materials and Text on National, Supranational and International Tort Law (2nd edn, 2000) 9.) Even then, it was some years before the Reichsgericht (RG) came into being on 1 October 1879, this time, however, sitting in Leipzig. This was truly the first Supreme Court for the whole of Germany, and though other high federal courts subsequently saw the light of day, jurisdiction at the highest level was never divided. Indeed, the personnel who staffed these administrative and financial courts were not, until the coming into force of the Basic Law of 24 May 1949 (known as Grundgesetz and abbreviated as GG), given the rank and tenure of ‘ordinary’ judges. (See Bell, Judiciaries in Europe (2006) ch 3.) The RG thus survived until the end of the Second World War in 1945. During the next few years, while Germany lay in ruins and under foreign occupation, there was no Federal Supreme Court, and as a result there followed an immediate and disturbing fragmentation of the law administered in the different parts of the country. The first attempts to re-establish some semblance of unity were made in 1947 in the British-occupied zone when a special Court of Justice was entrusted with this task. However, it was not until 1 October 1950, a year after the enactment of the Basic Law, that the Bundesgerichtshof (BGH) was established for West Germany, this time in Karlsruhe. The scene was thus set for a ‘judicial recovery’ from the traumatic years of the Nazi period and the post-war chaos – a recovery which, in some respects, is as admirable as the more publicised ‘economic miracle’ (­Wirtschaftswunder) of the 1950s which so symbolises the tenacity and determination of the people in West Germany. Though in most respects modelled on the RG, the BGH was no longer accepted as the unique, supreme federal court. The desire for increased specialisation, which is an important characteristic of the contemporary German judicial structure, meant that along with the BGH, which became the Supreme Court for civil and criminal matters, four other Supreme Courts (the Bundesverwaltungsgericht, Bundesfinanzhof, Bundesarbeitsgericht and the Bundessozialgericht) also came into being. Each was placed at the head of a separate set of courts with its own organisation and personnel and dealt with, respectively, administrative law, financial matters, labour matters and social legislation (Article 95 GG). Alongside these, the Federal Constitutional Court (Bundesverfassungsgericht, BVerfG) was entrusted with the task of ensuring the preservation of the new GG and the control of the constitutionality of legislation (Articles 93, 94 GG). These six courts, and the Federal Patent Court (Bundespatentgericht) (which, however, acts and ranks as a court of appeal) are federal courts; all other courts are state courts (ie, equipped and maintained by the now (since reunification) sixteen states). Two differences thus spring to mind with the United States (US) where a federal structure has been adopted by the Constitution. First, in Germany unlike the US, the federal government maintains no federal courts at the first and second level (the Patent Court, mentioned above, being the only exception). Secondly, however, in Germany and unlike the US, each state has its own constitutional court, which is meant to ensure that the state constitution is observed. The patterns of federalism are thus truly almost endless, and if we ever have to tow with the notion ourselves we must not commit the error of having the US alone before our eyes.

A Bird’s Eye View of the Organisation of the German Courts in Civil Matters  3 This proliferation of supreme courts in Germany has brought with it the possibility of jurisdictional conflicts, positive or negative in nature (eg, two or more courts asserting or denying jurisdiction over the same dispute, now largely regulated by the Law Concerning Judicial Organisation (Gerichtsverfassungsgesetz, GVG)). There is, as well, the likelihood of a diverging case law on matters of substance. To resolve this latter conflict, and in order to ensure the unity of the federal law, the original version of Article 95 GG provided for the creation of a highest federal court (Oberstes Bundesgericht). This, however, never came into being, and a constitutional amendment, effected by means of a special statute on 18 June 1968 provided, instead, for a ‘Common Senate’ (Gemeinsamer Senat) composed of judges from the other five Supreme Courts (see now Article 95 III GG). The task of this Common Senate is to rule whenever one of the Supreme Courts ‘consciously’ departs (or proposes to depart) from the case law of another Supreme Court or a holding of the Common Senate. This body, which meets on average twice a year, does not seem to see its task as being one to force a compromise but to come up with the most appropriate­ solution, so often it has sided with one rivalling court or the other (see, eg, Common Senate, BGHZ 60, 392.) Since in this work the emphasis will be on the civil law, the remaining observations will be devoted to the organisation of the civil courts and the civil side of the BGH. In Germany this is known as the ‘ordinary jurisdiction’ (ordentliche Gerichtsbarkeit) so as to distinguish it from the jurisdiction of the other courts (labour, administrative, tax etc). The lowest court on civil matters is the Amtsgericht (AG) of which there are a large number (639 in the reunited Germany settled 952,413 lawsuits in 2017 – a figure which excludes the family side of their business). They sit as single judge courts and have limited and specifically ascribed jurisdiction which includes disputes up to the value of €5,000 (§ 23 no 1 GVG). The average time of an AG for settling the case 4.9 months (2017). In addition and irrespective of the value of the matter in dispute they deal among others with such varied matters as disputes between landlords and tenants; between travellers and providers of food or lodging, carriers, shippers or passage brokers at ports of embarkation concerning bills for food or lodging; and the handling of various registers including the all-important land register (see § 23 no 2 GVG). Since 1977 all family matters, especially those associated with divorce proceedings, matrimonial property, alimony, etc, are heard by a special division of the Court, the Familiengericht, and from there an appeal lies directly to the appropriate Oberlandesgericht. Appeals from all other decisions of an AG can be filed with the appropriate Landgericht (Regional First Instance Court, LG). (Provided the amount in dispute exceeds €600 or if the case concerns questions of fundamental importance, see § 511 Zivilprozessordnung, ZPO). Though hierarchically inferior courts (and, in some respects, analogous to the English county court), the Amtsgerichte are courts of singular importance to the average citizen who in his lifetime is usually spared the agony and the cost of the more prolonged or difficult type of litigation. These are also courts where legal representation according to § 78 ZPO is not obligatory (though in the vast majority of cases parties are represented by lawyers). It is in the LG, however, that one finds the equivalent of the English High Court, and their large number (115) brings out clearly the second important characteristic of the German judicial organisation, namely the considerable decentralisation in the administration of justice. The LG is a court of general jurisdiction and sits as either a trial court (328,096 settled lawsuits as trial court in 2017, average time for

4  Introduction settlement: 10.0 months) or a court of review from any AG in its district (49,198 settled lawsuits as court of appeal in 2017, average time for settlement: 6.9 months) – legal representation by a lawyer (­Rechtsanwalt) being, in this case, obligatory (see § 78 ZPO). The LG is usually divided into sections (or chambers) each of which includes a presiding judge and two associates (all three being professional and academically trained judges: see § 75  GVG)  – even though the bulk of this court’s work is heard before a ‘single judge’ now (see §§ 348, 348a ZPO). Lay representation only exists in the Kammer für Handelssachen (the commercial division) which is composed of one professional judge (acting as president) and two laymen, experienced in commercial matters. The threejudge panel will sit only if the legal issues involved are highly complex or of fundamental importance. Not only but especially the Landgerichte have a high work load resulting in a backlog of work which, in Germany as elsewhere, is the subject of periodic complaints and talk of reform. From these courts an appeal (Berufung) lies to one of the 24 courts of appeal which is called the Oberlandesgericht (OLG) except for the one that sits in Berlin, which has always been known as the Kammergericht (KG). Again, the amount in dispute must exceed €600; in other cases an appeal may be allowed if it concerns questions of fundamental importance (see § 511 ZPO). Some Länder (namely Bremen, Hamburg, Hessen, Saarland, and Schleswig-Holstein) have only one Court of Appeal; others (eg, Bavaria and North Rhine-Westphalia) have more. Bavaria, in fact, also has an Oberstes Landesgericht (ObLG) which handles applications for revision related to state law. In 2017, the Oberlandesgerichte settled 47,390 lawsuits within an average time of 9.5 months. Exceptionally, a Court of Appeal can be bypassed and an appeal against a decision of the Landgericht can be lodged directly with the BGH provided that leave to appeal is granted. This, however, is likely to occur only where the facts of the case are not in dispute and both parties, desirous of an early solution to their dispute, are willing to utilise this leapfrogging procedure (Sprungrevision) (see § 566 ZPO). The right to Berufung does not mean that the litigants can effectively have a complete second trial. The parties must present all available evidence on time, namely before the court of first instance. If they do not, they will normally be precluded from arguing points of fact on appeal (see § 531 ZPO). This means also that the appeal court (Berufungsgericht) will, to a great extent, be bound by the findings of the court of first instance (see § 529 ZPO). Only exceptionally, where the findings are inconsistent or give rise to doubt, or new evidence can be admitted in accordance with § 531 ZPO, will the appeal court be able to make its own findings. The BGH stands, as already stated, at the apex of the judicial hierarchy in civil and criminal matters, hearing cases from all German courts. It is divided into 12 Civil Senates (or Divisions) and five Criminal Senates and has as already mentioned its seat in Karlsruhe. Each Senate specialises in different matters. The Sixth Civil Senate, for example, deals with problems of delictual liability; the Seventh Civil Senate with various types of contract and cases of unjust enrichment; the Eighth Civil Senate handles disputes related to sales of goods, leases, etc. When deciding a case each Senate is composed of one presiding judge and four other Supreme Court judges of that Senate, and the entire BGH is now staffed by over 128  Supreme Court judges (besides the President of the BGH) who are aided by specialist staff. The Supreme Court judges are nominated by a special committee (­Richterwahlausschuss), composed of the Ministers of Justice of the Länder and an equal number of members of the Lower House (Bundestag). This committee is convened by the

A Bird’s Eye View of the Organisation of the German Courts in Civil Matters  5 Federal Minister of Justice (Bundesjustizministerium), who does not have the right to vote, but whose consent is n ­ ecessary before a nomination, decided by a majority of this committee, can be passed on to the Federal President (Bundespräsident) to make the appointment. The large number of Senates makes it once again necessary to provide for a mechanism, which will solve potential conflicts between them and ensure the unity of the case law at the highest level. This task is entrusted to the Great Senate (Großer Senat für Zivilsachen) and there is also a Great Senate for criminal matters, which performs a similar function for the five Criminal Senates. The Great Senate is composed of the President of the entire Court and eight other judges and is seized of a dispute whenever one of the Civil Senates wishes to depart from the case law of another Civil Senate or the case law of the Great Civil Senate itself. Before this happens, however, the Senate about to embark on a different course will enquire of the other Senate whether the latter wishes to abide by its jurisprudence. If it does not, then there is no reason to convene the Great Senate; but if the other Senate does not wish to alter its case law, then the Great Civil Senate becomes seized of the dispute. The Great Civil Senate may also become involved in a case even where there is no dispute in a narrow sense between various Senates of the court, but one of them is anxious that the Great Civil Senate pronounce its opinion on a matter of particular significance. Conflicts between one of the Civil Senates and one of the Criminal Senates (or between one of them and the Supreme Civil Senate of the other branch) are resolved by the Combined Great Senate (Vereinigte Große Senate) which includes judges from both civil and criminal sections of the Court. The decision to take a case to the BGH can be taken by both litigants. However if both of them are content with or acquiesce in the result reached by the OLG the case can never reach the BGH (even where a gross and obvious error of law has been made at the lower level). But though the parties decide whether they will take their case to a higher level the decision whether their appeal will be admissible does not rest with them. There is a right of appeal (or, more technically, of a revision) only if the case was for technical reasons deemed inadmissible by the OLG. The reason for this exception is to ensure that all parties have at least two chances of having their case heard by a court of law. Review is also available as of right where the OLG has departed from a decision of the BGH or of the Common Senate of the highest courts. Otherwise, a distinction used to be made between pecuniary and non-pecuniary disputes. An appeal on questions of law (Revision) to the BGH can only be lodged if leave to appeal has been granted by the appeal court according to § 543 I ZPO. Leave to appeal must be granted if the legal issues involved are of fundamental importance or the appeal is necessary to ensure the conformity and consistency of the case law (§ 543 II ZPO). The decision denying leave to appeal can itself be appealed (§ 544 ZPO). If the appeal is of fundamental importance (or necessary to ensure the conformity and consistency of the case law), the review will take place, and a reasoned judgment will be delivered either rejecting the appeal, or accepting it and remitting the case to the lower court for retrial or, finally, substituting the court’s own judgment in the place of the decision that is quashed. What is a matter of fundamental importance has never been authoritatively defined. In one of its early decisions (BGH, BGHZ 2, 397) the BGH talked in terms of the matter being of general not particular importance (‘allgemeine Bedeutung des Rechtsstreits, nicht bloß den Einzelfall berührend’). In a later decision (BGH, NJW 1979, 219) it clarified that the (potential) appellant’s own interest was never, on its own, sufficient to give the appeal

6  Introduction this characteristic however great it may be. On the whole, therefore, the vagueness of the terms has enabled the OLG to act out efficiently their roles as gatekeepers. One should conclude this section by stating that the doctrine of binding precedent is, in principle, not known to German law. We shall again refer briefly to this point in the next section when discussing how this may affect the style and form of a judgment. But it must be mentioned here, as well, since a ‘right’ to take a case before the BGH may arise if one of the exceptional rules of binding precedent has been violated. For present purposes, the most important instances where decisions can be binding on other courts are the following. First, a decision of the BVerfG is binding on the constitutional organs of the federal and state government. Secondly, a decision of one Senate of the BGH departing from an earlier ruling of another Senate of the same court, if it has obtained a special ruling by the Great Senate (on civil or criminal matters, as the case may be). Thirdly, if, after an appeal on a point of law, the BGH has reversed a decision of an OLG or LG and sent the case for retrial before a lower court. This latter court is then bound by the ruling of the BGH on the matter of law, which was before it.

Bibliography Many of the points made in this section are also discussed in greater detail in the standard textbooks or commentaries on the ZPO and the GVG. See for a more detailed discussion Adolphsen, Zivilprozessrecht (5th edn, 2016); Grunsky/Jacoby, Zivilprozessrecht (15th edn, 2016); Kissel/Mayer, Gerichtsverfassungsgesetz. Kommentar (9th edn, 2018); Schilken, Gerichtsverfassungsrecht (3rd edn, 2007); Thomas/Putzo, ZPO. Kommentar (40th edn, 2019).

II.  Style, Form and Content of Argument in the Judgments of the German Supreme Court A judgment of the BGH presents some marked differences both in style and form from the judgments of, say, the House of Lords (or now the Supreme Court of the United Kingdom) or the French Cour de cassation. In terms of length, the contrast is greater with the French decisions (especially of the Cour de cassation), which are unparalleled in terseness and peculiarity of grammatical style. For example, a typical German judgment dealing with a contractual or delictual matter will run to about 2,000–2,500 words – in a minority of cases reaching the 5,000 – word range (judgments of the BVerfG tend to be much longer). In length they thus tend to be closer to the average American decision than to the longer judgments of the House of Lords respectively Supreme Court of the United Kingdom. One also acquires the impression that the average decision of the RG was shorter during the nineteenth century and the earlier part of the twentieth century than it has been since the end of the Second World War. If that is true, there is a parallel here with modern English practice which is also producing longer judgments than it did in the past. The trend, if a trend it is, is understandable, not least if one takes into account the growing volume of authority that the courts have to take into account. Whether it is all c­ ommendable is another matter.

Style, Form and Content of Argument in the Judgments  7 Like the French decisions, but unlike the Anglo-American equivalents, the decisions of the BGH are unanimous decisions of the entire Court. Clearly this does not mean that there are never any disagreements between the judges trying a particular case; but it does mean that in the published decision there are no open dissents. The BGH decides by simple majority (judges voting in inverted order of seniority, the presiding judge voting last). Thus, on occasion, the phrasing of the judgment requires very careful drafting in order to express the compromise formula agreed upon by the members of the Court. By contrast, dissenting judgments are allowed in the BVerfG and the judges there make frequent use of this right. Typically the report of a judgment will commence with a couple of paragraphs (Leitsätze) containing in abstract form the propositions of the law supported by the decision. This section of the report forms no part of the decision and in the translations reproduced in this book it has, consequently, been omitted. These paragraphs will be followed by references to the provisions of the Civil or Criminal Code (or other enactments) that had to be construed and applied in the case. The section of the court that had to decide the case will then be given and this will be followed by the date on which the trial was concluded. The initials of the parties to the action will also be given but never their names, famous cases thus becoming known through some other attribution, for example, ‘the Fowl Pest case’ (case 48), ‘the Herrenreiter case’ (case 13). Exceptions to this rule are found more often in the case law of the BVerfG and in unfair competition and intellectual property cases decided by the BGH. (See for instance, the Lüth case (case 11), the Soraya case, (BVerfGE 34, 269, case 38 in the previous edition) and the Lebach case (case 14).) The above is the form adopted in the semi-official reports quoted as BGHZ (Entscheidungen des Bundesgerichtshofs in Zivilsachen) and followed by the number of the volume and the page on which the decision is reproduced. It should be noted that judgments of the BGH after the year 2000 are accessible free of charge at the website of the BGH (see: juris.bundesgerichtshof.de/ cgi-bin/rechtsprechung/list.py?Gericht=bgh&Art=en&Datum=Aktuell&Sort=12288). Other reports – the NJW (Neue Juristische Wochenschrift), or the JZ (Juristenzeitung) for example – follow a slightly different order of presentation. An important case, reported in various journals, will usually be cited by giving all its references. But the text in the official report will usually be given first. The facts of the case will then usually follow an abbreviated form of the judgment of the OLG. Quite frequently, sections of the legal reasoning of the OLG will also be reproduced and the BGH will then indicate whether it agrees or disagrees with the reasoning and/or the result. It will then proceed to consider the grounds for appeal advanced by the appellant and give its own reasons for its conclusions. The extent to which the facts will be given in detail will vary from case to case. Sometimes the BGH merely states them, as found by the lower court. It then gives its opinion on the question of law and finally, refers the case back to the lower courts to discover the relevant facts in the light of the law as stated by the court. But the statement of facts is rarely as detailed as it is in English (or US-American) judgments and never as colourfully presented. German courts are not obliged to attempt the detailed consideration of material which is necessary in the common law whose courts must decide whether the case under ­consideration is covered by earlier authority or whether, on the contrary, it is materially different and thus distinguishable from earlier precedents. The legal arguments that follow are presented in an abstract manner, which is not always easy for foreign lawyers to follow or even to translate accurately. First, the tone of the

8  Introduction argument can be highly conceptual, even metaphysical. Sections of the judgments dealing with the protection of human personality (see cases 11–20) are just that, and they will, in turn, generate academic literature which can reach heights of abstraction un-thought of in the common law. The discussion of the notion of ‘unlawfulness’ in the decision of the Great Senate (see case 66) provides yet another example of this phenomenon (though this controversial judgment is now, for all practical intents and purposes, obsolete). Clearly, on its face, the decision is incomprehensible (even to a young German lawyer) and some explanation of the problem and the disputes it has generated must precede any study of the problem with which it is concerned. Another difference – especially from English decisions – is the detailed consideration of the views of contemporary (and past) German academic writers dealing with the subject before the court. In particular, what is usually referred to as the ‘dominant opinion’ (­herrschende Meinung), which is the opinion on a certain matter as reflected in the majority of writings and decisions, will enjoy strong persuasive authority. Sometimes judgments contain more than a mere reference to academic literature. When this happens, one may end up with an admirably lucid summary of the views of the academic world. On some occasions, the court may, however, add – one suspects with a tinge of despair – that the solution to the problem should, in the end, depend on common sense and not theoretical constructions, however admirable they may be. One of the leading judgments on legal cause (case 26) – a subject that has greatly attracted the German legal mind – offers an excellent illustration, and should act as a caution for those who over-stress the Germanic tendency towards conceptualism and abstraction. The Fowl Pest case (case 48) furnishes yet another example of the court’s willingness to take into account the views of academic writers, if only to reject them at the end and then offer its own solution. This judgment is, in fact, a teacher’s dream in so far as it offers an excellent springboard from which to consider the various theories behind modern product liability law. Moreover, the interesting thing about this dialogue between court and academics is that it helps perpetuate this interaction from which, apparently, both branches of the profession stand to gain. For writers will respond to such judicial criticism and often come up with new theories or modifications of existing theories, which may later be accepted by the court. The overall impression that one gets is one of mutual respect and reciprocal influence and it is not uncommon to find the court expressly adopting the views of a certain writer on a particular problem. Thus, to give but one example, the whole doctrine of contract with protective effects towards third parties (the so-called Vertrag mit Schutzwirkung zugunsten Dritter as a variant of the classical contract in favour of third parties – Vertrag zugunsten Dritter – regulated in §§ 328 BGB ff) was largely taken over by the courts from the teachings of the late Professor Karl Larenz. (See more details regarding Larenz’s dubious role in Nazi Germany: Jakobs, ‘Karl Larenz und der Nationalsozialismus’ JZ 1993, 805 ff; Frassek, ‘Karl Larenz (1903–1993) – Privatrechtler im Nationalsozialismus und Nachkriegsdeutschland’ JuS 1998, 296 ff; La Torre, A National-Socialist Jurist on Crime and Punishment – Karl Larenz and the So-Called ‘Deutsche Rechtserneuerung’ (1992).) Another example of this close cooperation between academic writers and the courts can be found in the judicial development of § 242 BGB, the central good faith provision (Treu und Glauben) which is discussed in greater detail in the first volume of this work. The previous case law – especially of the BGH itself – is also considered and quoted in the judgments but again in a manner quite different from that adopted by the Anglo-American

Style, Form and Content of Argument in the Judgments  9 courts. Rarely will a quote be given in order to distinguish one case before the court from the previous one. More often, it will be given to show what the established practice of the court is on a particular matter and to reinforce the present argument. Many of the differences with Anglo-American law are obviously due to the doctrine of stare decisis which, subject to the rather few special occasions already alluded to in the previous section, is not known to German law. This is not to say, of course, that an inferior court will easily depart from the line taken by the BGH – especially if there is a series of decisions (­ständige Rechtsprechung) substantially to the same effect. Also, the BGH has repeatedly stressed that it will overrule a long-lasting and steady adjudication concerning a certain legal issue only if overpowering reasons compel it to do so. (See, eg, BGH, BGHZ 85, 64. For an overview: Bydlinski, ‘Richterrecht über Richterrecht’ in Festgabe 50 Jahre Bundesgerichtshof, Vol 1 (2000) 1.) Statute and custom are, therefore, technically the only true sources of law (though unlike England (until recent times) published preparatory works have always been used in order to discover the intention of the legislator – historische Auslegung). On the other hand, it is not unknown for the various courts of appeal to ‘rebel’ against a particular decision of the BGH. Sometimes – as in the case of the recognition of the general right to one’s personality (allgemeines Persönlichkeitsrecht) – the rebellion will be short-lived and within a relatively short period of time the BGH will manage to assert its will. In other instances, however, the reaction of the OLG may be stronger and more persistent, which can then force the BGH to reconsider its own decision on this matter. In the wrongful life/birth cases we face yet another ‘peculiarity’ of German law: the BVerfG saying one thing and then inviting the ordinary courts to take its views into account. This, they do courteously, but if the opinion of the BVerfG does not refer to the constitutionality of a particular decision, the ordinary courts may and do abide by their own case law. To a common lawyer, the resulting ‘conflict’ is troublesome; and it becomes positively irritating when judges of the BVerfG, itself, are unable to agree on a common position. (We shall encounter further on one or two instances of this phenomenon, eg, in the case of claims for wrongful birth.) The history of the BVerfG accounts for this peculiarity; but to foreign eyes, at least, it is hardly justified. German judges (and lawyers generally) could be accused of leaving nothing to the imagination. Certainly the elegance, humour and high literary style achieved by some English and American judges are often sacrificed at the altar of accuracy and thoroughness (and the strongly felt need to keep humour out of official business.) For example, the Lord Denning type of presentation of facts, with the judge in the middle of the human drama rather than in the role of an impersonal adjudicator, is unknown in Germany. Equally, the desire to express in accurate and impersonal terminology a particular problem can deprive the judgment of elegance, even of life. An excellent illustration of this can be found by comparing two nervous shock cases – one German case and one common law case. The German case 3 below is laconic in its account of the grief of a mother at the injury caused by a motor vehicle to her; ‘the OLG found that the emotional excitement on hearing of her child’s death caused the claimant wife’s nervous breakdown’. By contrast Atkin LJ had a more elegant style: [O]n the morning in question, May 1, 1923, Mrs Hambrook had escorted her children, two boys and a girl Mabel aged ten, to the pavement in Dover Street, where they joined other children on their way to school. The group of children proceeded on their way, turning a corner of Dover Street within a few yeards of leaving Mrs Hambrook and so passing out of her sight. They had

10  Introduction hardly turned the corner when the derelict motor lorry coming down the street, ricocheting from one side of the road to the other, dashed into the children, inflicting serious injuries to the child Mabel (Hambrook v Stokes Bros [1925] 1 KB at p 153).

The problem and the solution proposed are identical, but the style of judgment is different. Like all generalisations, however, the above observations must be treated with some caution. For the contact with ‘reality’ and the true forces that shape the law can often be found in the short but clear references to various policy factors that the judges are increasingly making. The fear of ‘innumerable claims’, if negligently inflicted economic loss were to become compensatable, is clearly voiced in some of the ‘cable’ cases (cases 35 and 36). If this is read in conjunction with the writings of modern commentators on this subject, one realises that this policy factor (and others, such as insurance) lie behind the refusal to compensate cases of negligently inflicted economic loss. All of a sudden, the impressive conceptual armoury used by the courts to deny the claimant’s claim becomes a façade; the concepts are nothing but devices that formulate the conclusions of the judges but do not really explain them. It is sometimes said that all German judgments contain two reasons for their results: the published ones and the real ones. The realisation that the true reasons for a decision may lie elsewhere is an important one for it will accustom the comparatist to take his research beyond the text of a judgment to other sources such as preparatory works and, of course, academic commentaries. Only when this task has been performed fully and properly will the real similarities between the different legal systems begin to be understood. The ‘contact’ with the real world and its sufferings is also seen in many contract cases. The hyperinflation cases of the early 1920s reveal the German judges at their boldest and most human (and for some the most controversial). Incidentally, this is not only one of the most remarkable areas of judge-made law in a country of codes (which is now codified in § 313 BGB after the Schuldrechtsreform of 2002, the reform of the law of obligations). It also offers the interested student excellent material for an excursus into sociology, politics and economics and an opportunity to see how law is shaped by the changing demands of social life. In one of these leading cases the RG thus stressed that: ‘The first and noblest task of the judge is … to satisfy in his decisions the imperative demands of life and to allow himself in this respect to be guided by the experience of life’ (see RG, RGZ 100, 129). Finally, a few words must be added about the form the arguments take and the reasons behind them. This is particularly important given the recent tendency of contemporary British judges to give elaborate, often sophisticated, accounts of the policy reasons, which have dictated their conclusions. This is rarely obvious in the judgments of the BGH. A judgment of the BGH reveals much about German legal history, the kind of education German judges receive at University, the impact that a largely codified system has on the way German judges perceive their job, and much else besides. Let us look briefly at these points under three different headings: history, legal education, and the existence of a codal text.

A. History The original versions of the German judgments reproduced in this book show that reference to earlier decisional law is smaller than is the case with Anglo-American judgments. In Germany the frequency with which a court will make use of earlier judicial work is, in

Style, Form and Content of Argument in the Judgments  11 fact, even less significant than these figures suggest. This becomes obvious when, through careful reading of the judgments, one realises that the earlier case law is either quoted as an illustration of a particular view or as an example of an established practice. Rarely if ever, though, is this case law scrutinised in the way an English court would consider its earlier decisional law. There is thus little or no evidence of the previous cases having been used as building blocks for the new decision. The reason for this different treatment is, of course, to be found on the combined impact that the three factors – history, legal education, and codal background – have had on the nature of German judicial work. Equally important is the fact that for the German judge the primary building block is the code that has to be applied, followed only by the academic exegesis to which this enactment has been subjected. Incidentally, we refer to the code as the primary building block for two reasons. The first, and better known to English lawyers, is the fact that the judge’s reasoning process starts by reference to a particular provision or provisions in the code and proceeds deductively to the facts before him. But the second, less noticed yet crucial for present purposes, reason, is the fact that the codal text often spares the German judge the trouble of having to do and formulate some of the basic thinking that his English colleague has to do for himself. The arguments, for example, that militate (or seem to militate) against the recognition of a tort action to recover pure economic loss need not be mentioned by the judge since they were considered when the code was being drafted and the basic decision not to ‘recognise’ pure economic loss was taken by the legislator. Likewise, if we move to another topic, the tortious liability of statutory bodies, the decisions of principle – should the government be liable; should the negligent official, himself, be liable – were discussed by the drafting committee of the code and their decisions on these topics are reflected in their § 839 BGB.

B.  Legal Education The education received at law school is also different and, thus, both the result and the cause of the above-mentioned difference in the finished product. For at law school, especially the so-called academic phase of his training which will culminate with the First State Exam, the aspiring German judge will be taught how to use the codes, learn how to interlink their various parts (and then combine the codes with one another) and – to begin at least – to apply the texts he has been taught deductively. In all this, he will be expected to make as logical and as consistent a use as he can of the many concepts that will be drummed into his head during a period of at least six to seven – if one includes the preparation for the Second State Exam – years of training. Though references to cases figure increasingly in lectures – and appear even more frequently in the so-called privately financed repetitoria which are attended by most German students – the constant refining and re-defining of earlier case law, with the frequent use of the untested hypothesis, is absent from the legal training which is otherwise both long and very thorough. Thus, once again, the German judgment reflects this difference which merges very much with that mentioned under the previous sub-heading. For the same two reasons German judgments, as a rule, also make greater use of academic literature than their English counterparts. (For figures and an interesting discussion see Kötz, ‘Scholarship and the Courts: A Comparative Survey’ in Essays in Honour of Henry Merryman on his Seventieth Birthday (1990) 190 ff.)

12  Introduction

C.  The Codal Background As stated under section A above, the Code – and we are here concerned with the Civil Code (the Bürgerliches Gesetzbuch, BGB) – and its preparatory works has, in most cases at least, provided for the German judge some of the decisions of principle. § 823 I BGB as the core provision of German tort law (in conjunction with §§ 249 ff. BGB) has thus told him that pure economic loss is not included among the list of protected interests. As stated, the German judge thus does not have to search for wider – we could call them policy – reasons ‘of principle’ that will lead him, as they lead his English counterpart, to the conclusion to ‘strike out a claim’ for pure economic loss. The wider issues concerning floodgates, insurability, and the like will thus not be invoked (or even hinted at) in the German judgment whereas they will play a major part in the common law counterpart. It is only when the German judge feels that circumstances require a deviation from the basic codal text that he will feel the need to start being inventive. Sticking with the same subject – pure economic loss – we thus see this where recovery has, despite the general rule, been allowed. This has necessitated either the creation of a new protected interest – for example, the right to an established and operating business (Recht am eingerichteten und ausgeübten Gewerbebetrieb) – or an ingenious (or ingenuous) use of some other concept in order to cover the perceived legal gap. (Such as that of Weiterfresserschaden, Vertrag mit Schutzwirkung zugunsten Dritter or Drittschadensliquidation which are all discussed later in this volume.) It should be noted, however, that Drittschadensliquidation is one of the rare instances where the legislator left it to, or even encouraged, the courts to fill the gap (see Mugdan, Materialien zum BGB, Vol 2 (1899) reprinted 1979, 517–18). Incidentally, the Law Commission in its Law Com No 242 (1996) arrived at a similar conclusion in respect of the promisee’s remedy to recover damages on behalf of a third party. That is what Drittschadensliquidation is all about, and the relevant passage of the Law Commission paper reads almost as a word for word translation of the German Materialien: ‘Our recommendation is that this is a matter at present better left to the evolving common law. Certainly we would not wish to forestall further judicial development of this area of the law of damages’ (para 5.15). In the end, therefore, devices such as these have allowed ‘deviations’ from the original position of the BGB. Characteristically, however, these innovations have not come about painlessly but, on the contrary, have caused much discussion and dispute in German academic and judicial in circles. (See, for instance, the reaction that followed by BGH, case 53. Thus, Hager, ‘Zum Schutzbereich der Produzentenhaftung’ 184 AcP (1984) 413. But cf Steffen, ‘Die Bedeutung der “Stoffgleichheit” mit dem “Mangelunwert” für die Herstellerhaftung aus Weiterfresserschäden’ VersR 1988, 977.) Likewise, background differences – such as different history and different constitutional texts – largely explain the differences that exist between German and US-American law when it comes to the clash of free speech and reputation and privacy. In Germany, the statutory regime – the Basic Law and the different codes – have here encouraged the judge to seek an ad hoc reconciliation of the competing values and only occasionally has it given textually a hint as to which value should prevail. By contrast, the American Constitution has, in its First Amendment, decided for all subsequent judges by giving a predominant,

Some Preliminary Observations on the BGB in General  13 some would say, exaggerated preference to the value of free speech and, effectively, deprived them of the opportunity even to attempt any balancing of values. Thus in Konigsberg v State Bar 366 US 36, 61 (1961) Mr Justice Black said: I believe that the First Amendment’s unequivocal command that there shall be no abridgement of the rights of free speech and assembly shows that the men who drafted our Bill of Rights did all the ‘balancing’ that was to be done in this field (italics added.)

Finally, to return to one last illustration, the same is true in the German cases that deal with the liability of statutory bodies (see cases 87–94). Much of the discussion about the desirability of the courts second-guessing other parts of the administration or weighing the economic consequences of a liability rule, which appears in the comparable English (and US-American judgments), in Germany was mainly done by the legislator himself. (For instance, Protokolle, vol 2, 662, about the value of the ‘economic-consequences argument’ as a reason for not imposing liability or, more recently, when its revision was planned. (Thus, see, Zur Reform des S­ taatshaftungsrechts (1976) 5, 71.) The result of all this is that much of what appears in the English judicial opinion will not figure (and does not have to figure) in a comparable German judgment. But, as already suggested, this does not mean that the issues that have occupied the English judges have escaped the attention of their German legal establishment. What it does mean is that consideration of some of those issues has almost certainly taken place in a different forum and must be searched for in different texts. For those involved in the comparative examination of legal systems, this undoubtedly adds both an intellectual challenge and considerable complexity to their work. The scholar who studies a foreign legal system, though advised to start his research in a narrow and focused manner, is thus eventually forced to cast his research net more widely than he originally thought was necessary if he is to obtain a decent understanding of the foreign system. How he does that is something that is acquired through reading and experience and no easy short cuts can be recommended.

III.  Some Preliminary Observations on the BGB in General and the Delict Provisions in Particular The German Parliament (Reichstag) passed the BGB on 1 July 1896, and it was promulgated by the Emperor on 18 August of the same year. Its coming into force on 1 January 1900 not only marked the end of the long codification process which had commenced with the appointment of the first Commission on 2 July 1874, but more importantly it also completed the unification of the modern German State. This ‘unification process’ was tortuous and convoluted. But the landmark dates are three. First, is 1843, when the German Customs Union abolished the ‘internal’ customs regulations between the various German states while, at the same time, erecting a common tariff wall to protect the ‘internal’ economy from foreign competition. Then comes 1871, when the German Empire was founded under the strong hand of Bismarck. The last stage (as far as the civil law is concerned) is 1900, the year when the BGB came into force ending the fragmentation of the legal system that existed until that date.

14  Introduction The extent to which German law was fragmented prior to the codification is rarely fully appreciated. A glance at contemporary maps of Germany would give one an approximate idea of the different systems applicable in Germany on the eve of codification. In reality, however, even this picture would be misleading for two reasons. First because it would convey the impression that there were five legal ‘systems’ vying for superiority whereas, in fact, alongside these there were – according to a memorandum submitted to the ­Reichstag – a multitude of other ‘systems’, mostly hybrids of sorts. Secondly, maps showing the component parts of the German Empire might convey the impression that each ‘system’ was limited to a particular ‘state’ or locality, which was not the case. For example, the Prussian Code (Allgemeines Landrecht für die Preußischen Staaten) – enacted in 1794 – applied to only seven of the 11 provinces of Prussia, but was also in force in some parts of Bavaria and other localities of Germany linked with the Kingdom of Prussia. In fact in 1896, out of an estimated population of 42 million, 18 million lived under the Prussian Code. A further 14 million were subject to the common (mainly Roman) German law. Seven and a half million inhabitants were subjected to the Napoleonic Code, which was adopted in the Prussian Rhine Province, the Rhenish part of the Grand Duchy of Hesse, and the Bavarian Palatinate. Two and a half million lived under a Code enacted by the State of Saxony in 1863, and, finally, half a million more were subject to Scandinavian law. Voltaire’s quip, that in his time in France one changed one’s law as often as, when travelling, a man changed his horses, thus applied to Germany as well. The enactment of the BGB thus put an end to a confusing diversity of local law (Landesrecht, eg, the Bavarian and Prussian Codes); municipal law (Stadtrecht, eg, Lübeck); customary law (Gewohnheitsrecht); French Code civil (applicable to the territories lying on the west side of the Rhine and Baden); and Gemeines Recht which was the Roman law in those areas that had ‘received’ it. The picture of diversity was partly mitigated by the enactment, prior to codification, of a number of statutes, which applied to all the states. The Bill of Exchange Act (­Allgemeine Deutsche Wechselordnung) was the first such Act enacted by various states between 1848 and 1850 (following the Customs Union of 1848). Others, dealing with such matters as ­criminal law, bankruptcy law, and commercial law (Allgemeines Deutsches ­Handelsgesetzbuch of 1861, replaced in 1900 by the Commercial Code (­Handelsgesetzbuch, HGB), many times updated and adapted since) followed and were later re-enacted as Imperial laws of the Reich. An account of German legal history and of the emergence of the West German State lies clearly outside the scope of this work. German legal history is usually taught either as part of constitutional history – usually called Deutsche Rechtsgeschichte – or focuses more on the institutions of private law and is called Deutsches Privatrecht. See on on the subject, for example, Coing, Epochen der Rechtsgeschichte in Deutschland (4th edn, 1981); ­Eisenhardt, Deutsche Rechtsgeschichte (7th edn, 2019); Köbler, Deutsche Rechtsgeschichte (6th edn, 2005); Kroeschell, Deutsche Rechtsgeschichte (Vol I, 13th edn, 2008; Vol II, 9th edn, 2007; Vol III, 5th edn, 2008); Laufs, Rechtsentwicklungen in Deutschland (6th edn, 2006); Schlosser, Grundzüge der neueren Privatrechtsgeschichte (10th edn, 2005); and last but by no means least the excellent work by Wieacker, Privatrechtsgeschichte der Neuzeit unter besonderer Berücksichtigung der deutschen Entwicklung (3rd edn, 2016). There is an excellent translation of an earlier edition by Tony Weir: Wieacker, A History of Private Law (1996).

Some Preliminary Observations on the BGB in General  15 A more than adequate and very readable account in English of the development of modern ­European law can be found in von Mehren/Gordley, The Civil Law System (2nd edn, 1977) 3–96. For a more detailed account see JP Dawson’s classic The Oracles of the Law (1968). English accounts of the history of the codification can also be found in Michael John’s excellent P ­ olitics and the Law in Late Nineteenth-Century Germany (1989). This last work, however, may prove heavy going for those students who know little about nineteenthcentury German history. Mary Fulbrook’s A Concise History of Germany (1990) offers to all ‘beginners’ a most readable and informed introduction. For further references see also Duve, ‘German Legal History: National Traditions and Transnational Perspectives’ (2014) 22 Rechtsgeschichte: Legal History 16; Zweigert/Kötz, 132, para 10. The BGB consists of 2,385 articles or, as they are usually referred to, paragraphs. The BGB devotes 30 paragraphs (not including §§ 835 and 847 BGB which were repealed) to the law of torts – and they form the twenty-seventh title of the second book dealing with obligations. The term unerlaubte Handlungen is often used to cover the domain that Anglo-American lawyers would ascribe to ‘torts’ but the term used precisely is best understood to cover faulty conduct (Verschuldenshaftung). The wider term Deliktsrecht probably covers better liability that is both based on fault (proved or presumed) and is strict. Contractual obligations, on the other hand, are covered by §§ 241–811 BGB of which §§ 241–432 BGB refer to problems common to all obligations like, for example, damages under §§ 249 BGB ff. The remainder deal with specific contracts. They include, for example, sale (§§ 433–78 BGB); donation (§§ 516–34 BGB which, in the civil law systems, is regarded as a contract); lease (§§ 535–97 BGB); basic rules of labour law (§§ 611–30 BGB); treatment contract (§§ 630a–630h BGB); and contract of labour and services (§§ 631 BGB ff) and others. The law of negotiorum gestio (Geschäftsführung ohne Auftrag) follows in §§ 677 BGB ff while unjustified enrichment (ungerechtfertigte Bereicherung) is regulated by §§ 812 BGB ff. The paragraphs devoted to the law of tort represent a marked difference from the five articles devoted to this matter by the French Civil Code (Articles 1382–86, now­ Articles 1240–45 of the current Code civil). This more systematic treatment of a subject is symptomatic of the more exhaustive approach taken by German lawyers. It also reflects the fact that between 1804 – the year of the enactment of the French Code – and 1900 – the year when the BGB came into force – legal science had made great forward strides and had considered in detail problems which were non-existent or relatively unimportant during the early part of the nineteenth century. The treatment offered by the two Codes on other matters, besides torts, supports the accuracy of this observation. Unjustified enrichment, for example, receives no particular treatment in the French Code civil, but, as stated, has 11 articles dedicated to it by the BGB (§§ 812–22 BGB). Similarly, until the reforms of 2016, the problems of offer and acceptance have, in France, been worked out by the courts without any legislative guidance beyond the requirement that there be consent. The BGB by contrast devotes (cross-references not included) 13 articles to this subject (§§ 145–57 BGB) though, naturally, the case law has added considerable flesh to these bones. The fairly detailed regulation of tort law in Germany, however, also represents a compromise to a dispute, which divided the members of the codifying Commission. For the authors of the first draft had reached the conclusion that widely drafted provisions were necessary

16  Introduction in order to achieve full protection against tortious conduct. The first draft of the BGB thus contained in its § 704 I a general clause, which in substance if not in its number of words came very close to the original general provision of Article 1382 of the French Code civil. (This article was still different from its French predecessor in so far as it made use of the notion of ‘unlawfulness’ which German law had inherited from the Roman law notion of iniuria.) Indeed, both the Prussian and Austrian Codes contained such general clauses so the technique was far from unknown to the German jurists. On the other hand, the more casuistic approach to tort law – well known to common lawyers – was also the method adopted by Roman law and this, it must be recalled, formed part of the legal heritage of most of Germany. In addition, many felt that a general clause type of regulation of the matter would only transfer the burden from the shoulders of the legislator to those of the judges. This was disliked. But even more suspect was the open-ended case law that could be found in France and which was treated with great scepticism by the Germans. In the end, therefore, the BGB finally opted for a compromise, adopting three general provisions – §§ 823 I, 823 II and 826 BGB – and some specific provisions, which dealt with a number of rather narrowly defined tortious situations. Thus § 824 BGB deals with cases where untrue statements damage one’s credit. § 825 BGB imposes an obligation to pay compensation on anyone who has indecently induced another person to have sexual intercourse with him. § 834 BGB deals with the liability of animal supervision; and § 836 BGB deals with liability to ruinous buildings; § 839 BGB with the liability of public officials, etc. Such a mixture of the general with the particular was thus deemed the best compromise between the manifesto provisions of the French Code civil and the pigeonhole approach derived from the English writ system. A different and, perhaps, more meaningful way of dividing these tort provisions of the BGB is as follows. One should first mention the provisions, which impose liability for fault. §§ 823 I and II, 824–26, 830, 839 and 839a BGB come under this category and it should be stated immediately that (subject to the minor reservations given below) the BGB system of liability is a system of fault-based liability. Then one should mention the provisions of the BGB, which make liability depend on a rebuttable presumption of fault. §§ 831, 832, 833 (second sentence), 834, 836–38 BGB belong here. Thirdly, one should mention liability for created risks, independent of fault. A number of independent statutes deal with these situations, the most important being certain sections of the Product Liability Act (Produkthaftungsgesetz), the Strict Liability Act (Haftpflichtgesetz) and the Road Traffic Act (Straßenverkehrsgesetz). Finally, in some cases one person is liable strictly but for some other person’s fault. In the Common law of vicarious liability we find the best example. As we shall see, German law does not take this view. Certain provisions of strict liability statutes (eg, § 3 of the Strict Liability Act) also fall into this category. Three further preliminary points must also be made at this stage. First, it must be stressed that the BGB is a typical product of the Pandectist scholarship, abstract, conceptual and meticulous in the extreme. It is a code which addresses itself to lawyers – if not university professors – and thus lacks the vivacity and style of the classical French or Swiss Codes, though it is certainly superior to its French competitor when it comes to fullness, accuracy and consistency in the use of terms. Its influence has thus been felt in countries as far apart as Greece and Japan (to mention just two countries). This impact was largely because of the BGB’s intellectual power rather than to its immediate

Some Preliminary Observations on the BGB in General  17 appeal to the people whose lives it is meant to regulate. But there were also other reasons. In Greece, for instance, the Roman law origins of the law were common to other countries; and that was reinforced, in the nineteenth century, since the Bavarian Royal family had provided the first Kings of Greece. The BGB’s abstract conceptualism is immediately obvious in the first delict provision – § 823 I BGB – where the cardinal notion of unlawfulness (Rechtswidrigkeit) has provoked rivers of ink to flow in an attempt to give it a precise meaning (see below, chapter two, section III). In fairness, however, one must equally state that the common law notion of ‘duty of care’ and the French notion of ‘faute’ have given rise to similar difficulties in their respective countries. Later on, we shall thus stress that for the purposes of comparison these concepts should be downplayed, where possible, and the lawyer should, instead, look for the functions they wish to fulfil. Second, §§ 823 BGB ff are not independent and self-sufficient provisions of the BGB but must often be read in conjunction with other parts of it, particularly the general part of the law of obligations. Numerous such cross-references will be encountered in the pages that follow, but some illustrations can be given at this stage. The question of contributory negligence of the victim, which was the subject of considerable controversy in French law during the 1970s and 1980s (in particular the faute de la victime in the context of the original Article 1384 Code civil) is, essentially, regulated by § 254 I BGB. This makes the obligation to compensate the negligent claimant depend on how far the injury has been caused predominantly by one or the other party (claimant/ defendant). Also the question of how the damages are actually calculated (eg, loss of profits, absence of punitive elements etc) are not answered by §§ 823 BGB ff but by the provisions in the general part of the law of obligations (see §§ 249 BGB ff). Another illustration of this trend can be found in the interpretation of the troublesome concept of unlawfulness. This, according to one school of thought (see below, chapter two, section III) is satisfied whenever one of the interests enumerated by § 823 I BGB has been infringed in the absence of a legally recognised defence (Rechtfertigungsgrund). But to determine this one must, inter alia, look at §§ 227–31, 904 BGB and their interpretation by the case law. Finally, to complete this very brief list of illustrations, mention should be made of § 278 BGB which has been closely linked with many attempts to circumvent the unfortunate provision of § 831 BGB (discussed in detail in chapter five, section II). The final preliminary point is really a warning to the common lawyer not to expect to find in the law of tort all the material included in his own tort courses. Defamation, for example, is primarily a crime, though it may also have tort consequences if used in conjunction with § 823 II BGB or if the defamation results in a violation of a personality right under § 823 I BGB (see also the rather limited provision in § 824 BGB). Liability for failure to act to save another person who is in danger appears primarily in the law of crimes (§ 323c StGB but serves more of an ‘educational function’ than any real need in everyday life). More importantly, perhaps, trespass to land and nuisance are not normally included in the German law of tort, but in the German law of property – though they may also attract the operation of the law of tort. History can explain this difference. Roman law – from which most of the Western European systems derive – was, as is well known, a system based on a set of actions and

18  Introduction conveyances. But with the progress of time – certainly by the middle of the third century ad – the emphasis shifted steadily from the form of action to the cause of action and from there to the right which the claimant was wishing to enforce. As actions became subservient to the rights they were designed to enforce, they inevitably started to move away from the law of actions into the law of property or obligations. The law relating to the formation and extinction of contracts and the law of delict easily slid into the law of obligations. The actions that helped assert proprietary rights caused more difficulties. Yet there was no doubt that in the end these actions, having shed their substantive content and, as a law of mere procedure, being thrust outside the BGB, would go with property rather than obligations. Thus, when the civilians, and above all the natural lawyers, began to tackle the work of classifying the law, many parts of it went into quite different pigeonholes from those which are familiar to common lawyers with their forms of action abolished only the day before yesterday. Common lawyers must thus be prepared to find much of their law of torts in the civil law of property; the same is also true of the extensions (by analogy) of the proprietary actions dealing with matters which a common lawyer would expect to find in his law of tort. The tort of nuisance is one such example. Rei vindicatio was the Roman form of action that helped to establish property rights. That its progenies in modern German (and French) law would be regarded as incidental to ownership and thus be dealt with in the property sections of the Codes (the third book of the BGB, §§ 854 BGB ff) is easy to comprehend. The same is true of the actio confessoria which helped protect rights less than ownership such as easements and life interests, and the actio negatoria which was given to an owner who wished to assert the freedom of his land from an easement. But then came the extension in the medieval and modern law. For suppose your neighbour does not walk across your land under a claim to an easement, but merely sends fumes across your land or makes life unbearable by noise. Can he not then be said to be really claiming something in the nature of an easement to these things even though no such easement would be recognised by the law? On that fictitious reasoning you can claim the freedom of your land from his encroachment as if it had been an easement, and your action will be an actio quasi-negatoria, which will sound in property and not in delict. From the substantive point of view, what will be in issue will be the ambit of ownership, not the personal duty of your neighbour not to commit a delict of encroachment. Incidentally, this attitude of mind led German law and some of its derivatives to restrict the remedy, if no fault were proved in the neighbour, to a declaration or injunction. French and Swiss law, on the other hand, which do not take their classifications so seriously, have found it possible to award damages as well. But to common lawyers this is the tort of nuisance and hence a tort, for we think instinctively, even now that we have got rid of the forms of actions, of the wrong rather than the right. To the common lawyer, therefore, the civilian classification is not always easy to understand and one of his first tasks will be to learn how to jump over the barriers of classification, which his own system has adopted.

Bibliography For further details see Lawson/Markesinis, Tortious Liability for Unintentional Harm in the Common Law and the Civil Law, Vol 1 (1982) 36–41; and above all, Lawson, A Common Lawyer Looks at the Civil Law (1955).

The Constitutionalisation of Private Law  19

IV.  The Constitutionalisation of Private Law Traditional comparatists have, on the whole, underplayed the importance of public law compared with private law. For at least half of the last century this may have been understandable as far as the English comparatists are concerned. For they, like the rest of the English lawyers, were under the pervading influence of Dicey who, through his misunderstanding of the French scene, had stunted all interest in administrative law during the first half of the twentieth century. Yet, paradoxically, even the French comparatists were (and still are) primarily privatistes and one explanation for this must surely be found in the dominant belief of the day that the study of the civil codes lay at the core of the legal formation. In recent times, however, interest in comparative public law has grown; and the impact that the constitutional law background has had on the development of private law is also attracting increased attention. The phenomenon is not limited to Germany. For example, students of US-American law are aware of the fact that in New York Times Co v Sullivan (376 US 254, 84 S Ct 710 (1964)) the American common law of defamation yielded much ground to the constitutional requirement that free speech be safeguarded. (Attempts to extend these ideas to the area of product liability, for example, defectively written manuals, have so far failed; but they are nonetheless indicative of the US-American tendency to constitutionalise much of the private law. On this see: Note, ‘Products Liability and the First Amendment’ (1984) 59 Indiana LJ 503.) Similarly, Roe v Wade (410 US 113, 93 S Ct 705 (1973)), by accepting that women had a constitutional right to choose to terminate their pregnancy, had an impact in other areas of tort law, for example, actions for wrongful birth (Berman v Allan 404 A 2d 8; Procanik v Cillo 97 NJ 339, 478 A 2d 755 (1984)). For a doctor’s negligent failure to warn a pregnant woman of the fact that, say, she was infected by rubella during the critical months of pregnancy, deprived her of her right to abort. In turn, this justified the award of damages (initially for emotional suffering only) in an action for wrongful birth. The constitutionalisation of the civil law has, if anything, been even more dramatic and influential in Germany also and especially in the area of tort law. The development of the general right to one’s personality (Allgemeines Persönlichkeitsrecht) and the right to an established and operating business (Recht am eingerichteten und ausgeübten Gewerbebetrieb) which will both be discussed later in this book, are prime examples for the constitutionalisation of tort law and show the great importance of the GG for the civil law. (See for the development of the general right to one’s personality in Germany Janssen, Präventive Gewinnabschöpfung (2017) 438 ff.) Without the of the GG impact these two protected rights are just incomprehensible. Albeit not further discussed here, the growing impact of the European Convention on Human Rights (ECHR) on German private law in general and tort law in particular needs to be mentioned. The ECHR adds a ‘second constitutional layer’ besides the GG to the BGB and provides for a further constitutionalisation of German civil law. (See for more details Ellger, ‘Die EMRK und deutsches Privatrecht’ (1999) 63 RabelsZ 625 ff; Rehbahn, ‘Zivilrecht und Europäische Menschenrechtskonvention’ 210 AcP (2010) 489 ff.) A principal aim of the GG was (and still is) to establish unequivocally the liberal, social, democratic order of the new state based on the principle of legality (Rechtsstaat). The memory of the national-socialist background, with its many attempts to discover

20  Introduction and revive traditional Germanic values, had affected the law in almost all its aspects and was still alive well into the middle of the last century. So the framers of the GG departing from the Weimar model, deliberately placed at the head of the constitutional text 19 articles dealing with fundamental human rights (Grundrechte). (For the Nazi period see: Laufs, Rechtsentwicklungen in Deutschland (6th edn, 2006); Weinkauf/Wagner, Die deutsche Justiz und der Nationalsozialismus (1968)). Articles 1–19 GG primarily protect the citizen in his various dealings with the state. To what extent do they also regulate the relations between individuals? This is the problem of the so-called (unmittelbare and mittelbare) Drittwirkung der Grundrechte and some authors (including some courts as, eg, the Federal Labour Court, the Bundesarbeitsgericht or BAG) have originally favoured the direct application of these constitutionally proclaimed rights in the area of private law (beyond Article 9 III 2 GG which is the only Grundgesetz provision which clearly foresees a direct applicability as agreements which restrict or seek to impair the right to form associations shall be null and void.) (See, eg, the decision of the BAG of 23 March 1957 in BAGE 4, 240 (employees have constitutionally protected rights of free speech against employers). Likewise, the decisions of the BAG of 15 January 1955 in BAGE 1, 258 (labour agreements providing for lower wages for women may be invalidated), and of 10 May 1957 in BAGE 4, 274 (agreement which gives the employer the right to terminate contract on marriage of his employee may be invalidated). The BAG had originally in its earlier decisions maintained this stance despite the Lüth decision of the BVerfG (the Lüth decision is reproduced below as case 11) which, as is explained in the text, refused to follow the ‘direct applicability’ theory primarily expounded by the author and judge Hans Carl Nipperdey. However, later it also followed the BVerfG’s refusal of a direct applicability of the GG (see, eg, BAG, BAGE 48, 122). Hence, the prevailing view in Germany, espoused by the BVerfG has opted for a theory of indirect influence first strongly advocated by the distinguished constitutional lawyer Günter Dürig in ‘Grundrechte und Zivilrechtsprechung’ Festschrift zum 75. Geburtstag von Hans Nawiasky (1956) 158 ff. According to this, the basic rights form an ‘objective system of values’ (objektive Werteordnung). This, via the medium of the general clauses of the BGB as §§ 134, 138, 242, 823, 826 (used and abused by the Nazis: Hedemann, Die Flucht in die Generalklauseln (1933); Adami, ‘Das Programm der NSDAP und die Rechtsprechung’ DR 1939, 486), influences the private law. Thus, an injured party may, irrespective of nationality, by means of a constitutional appeal (Verfassungsbeschwerde wegen Grundrechtsverletzungen; Article 93 I no 4a GG), complain of any direct and actual (unmittelbar und gegenwärtig) violation of his rights. Such a complaint will be received by the BVerfG only after all other remedies have been exhausted; and, if successful, it will lead to the annulment of the offending law, decree, or judgment. During the almost 70 years of the Court’s life over 220,000 ‘requests’ have been considered, the vast majority complaining about violations of fundamental rights. Where, then, did this constitutionalisation of private law first manifest itself? The answer must surely be first in the area of family law and then in a narrow but no less spectacular way in the creation of a general right of privacy. The latter creation will be considered in more detail in later sections of this book, so at this stage a few general observations will suffice. What brought about the court revolution of the 1950s in the area of family law was the neglect of Article 117 GG. This proclaimed that all legal norms (including those in the BGB) that were incompatible with the newly proclaimed equality of sexes (Article 3 II GG) would

The Constitutionalisation of Private Law  21 have to be abolished by 31 March 1953. (On this see: Nipperdey, ‘Gleicher Lohn der Frau für gleiche Leistung. Ein Beitrag zur Auslegung der Grundrechte’ RdA 1950, 121 ff.) This, however, did not happen since – in Professor Rheinstein’s words, the politically dominant group [in the ruling Christian-Democratic party included] both Catholic and Protestant [believers] who tend[ed] to identify the Christian pattern of family and society with the ancient pattern of the patriarchal family and general male dominance. [And] they were not overly zealous to implement a command that happened to find expression in the Constitution (Rheinstein, ‘The Law of Family and Succession’ in A Yiannopoulos (ed), Civil Law in the Modern World (1965) 25–57).

The combined action of the BVerfG (BVerfG, BVerfGE 3, 225) and the BGH (in its earlier advisory opinion of 6 September 1953, BGHZ 11, 34) were the catalysts to this change. For these courts declared § 1354 BGB (the final word on all matters concerning marriage, including residence and domicile, belongs to the husband except where he is abusing this right) to be incompatible with the idea of equality between the sexes. They took the same view with regard to § 1387 BGB (husband bears certain litigation costs during marriage). Having ‘tasted blood’ the courts went further and, in a manner which is unique in the modern civil law systems, they pushed the entire law of marriage into a state of legislative vacuum in which, one by one, they fashioned the rules that they deemed compatible with the GG. This first phase did not come to an end until the Gleichberechtigungsgesetz of 18 June 1957, BGBl 1, 609 (Act Concerning Legal Equality of Men and Women in Matters of Private Law) came into force. Yet old attitudes die slowly and even though the new Act improved, among other things, the property rights of women after divorce by introducing the system of ‘community of acquired benefits’ (Zugewinngemeinschaft), it left untouched other aspects of male predominance. For instance, the father’s pre-eminent powers in the context of parental authority (old § 1627 BGB) still remained alive. But the BVerfG having won the first round of battles with the parliament (Bundestag), again forced a change in the law, this time through its decision of 29 July 1959 (BVerfG, BVerfGE 10, 59). This process of rejuvenation of German family law was, in a sense, completed by the decision of 29 January 1969 (BVerfGE 25, 157) where the complete equality of legitimate and illegitimate children was established. If anything, this was an even more remarkable result than the previous ones since in this case there was no time limit imposed by the GG on legislative reform, as there had been by Article 117 GG in the case of equality of the sexes. The intervention was, however, constitutionally inspired, based on Article 6 V GG, which required that legislation be passed to that effect. A sketch of great judicial developments even as brief and as inadequate as the above, is bound to be crass. Yet it suffices to support the following statements. First, it shows that accounts (both by English and continental European lawyers) concerning case law in continental Europe and its significance in the development of the law hardly do justice to the subject. At best, they convey to a common law reader a diminished picture of the role of the courts in the civil law system and confirm – tacitly at least – his misconception of civil law judges as law bureaucrats mechanically applying the codes. Bureaucrats (in the sense of civil servants) they may be; automata deprived of will and vision they are not. Indeed, ­Article 132 IV GVG expressly confers upon German judges a substantial power of judicial development of the law (richterliche Rechtsfortbildung) which is not (openly) matched in France and has hitherto received insufficient attention in the common law world.

22  Introduction Secondly, the study of the case law itself gives the lie to the statement that the courts are not a creative source of law. Of course, this does not mean that the judge can create law by giving effect to his own personal views or considerations of expediency. Things, however, are different where the constitutional legislator has established a general and enforceable guiding principle (ie, that of equality) as it did in Article 3 II GG. (Contrast with this, Article 109 of the Weimar Constitution.) In this case the legislator has, in effect, ‘transferred part of the law to be regulated by judicial decision’ (BGH, BGHZ 11, 34). This is perfectly possible according to the GG which, though it gives the legislature a dominant position in the making of laws, it does not treat it as an exclusive one. According to the same decision ‘the doctrine of separation of powers which is constitutionally guaranteed is not violated whenever the judge is left to find the law within the parameters of a general norm’ (such as that contained in Article 3 II GG). Indeed, the decision goes on, Article 117 I GG assumes that ‘as of 1 April 1953 the judge, through the gradual development of judge-formulated and accepted customary law, will progressively transform the general norms about equality into a more precise and generally binding set of rules’. And the BGH concludes this part of the judgment by openly admitting that the combined effect of the aforementioned articles of the GG is to ‘entrust it with the task of bringing about the [constitutionally desired] equality of sexes by means of a judge-made law in the AngloSaxon fashion’. These are bold words and the BGH itself, has on different occasions tried to disguise somewhat its creative role. But the disguise is thin at best, as the following statement of the BVerfG (taken from the development of the right of privacy) itself shows: Occasionally, the law can be found outside the positive legal rules erected by the state; this is law which emanates from the entire constitutional order and which has as its purpose the ‘correction’ of written law. It is for the judge to ‘discover’ this law and through his opinions give it concrete effect. The Constitution does not restrict judges to apply statutes in their literary sense when deciding cases put before them. Such an approach assumes a basic completeness of statutory rules which is not attainable in practice … The insight of the judge may bring to light certain values of society … which are implicitly accepted by the constitutional order but which have received an insufficient expression in statutory texts. The judge’s decision can help realise such ideas and give effect to such values (BVerfG, 14 February 1973, BVerfGE 34, 269).

Thirdly, the product of these judicial interventions was original. In fact it was more than that. For many of the ideas are transplantable and, in some cases, have expressly been followed by legislative attempts to reform other systems which, like the English, have shown themselves to have been more conservative in matters of family law. In English, good accounts of the constitutional background can be found in Koch, A Constitutional History of Germany (1984); Kommers, The Constitutional Jurisprudence of the Federal Republic of Germany (3rd  edn, 2012); and Currie, The German Constitution (1995). A basic introduction (in English) to the Drittwirkung doctrine can be found in Markesinis, ‘Privacy, Freedom of Speech and the Horizontality of the Human Rights Bill’ 1998 Wilberforce Lecture (1999) 115 LQR 47–88. See, also, Markesinis/Enchelmaier, ‘The Applicability of Human Rights as Between Individuals under German Constitutional Law’ in Markesinis (ed), Protecting Privacy (1998). (The English literature on Drittwirkung is growing with the passion which one finds in newly discovered pleasures.) Yet, though impressively good at analysing the

The Constitutionalisation of Private Law  23 wording of the Human Rights Act of 1998 (on which any attempts to introduce the idea in English law will have to depend) this literature seems to be text-orientated and doctrinally poor when compared with the German. What, in particular, is missing from the contemporary English discussions is any theoretical consideration of the need to abandon the traditional conception of human rights as binding only on the state and extending human rights to regulate the activity of ‘others’ who wield excessive power such as trade unions, multinational corporations and the press. Also lacking all discussion is consideration of the dangers which the abandonment of the traditional doctrine of human rights could have for other basic principles of the law such as freedom of contract. But if this discussion has been poor in England, this is not the case in other ‘common law/mixed systems’ such as that of the modern State of Israel where the Germanic ideas and even language have made great inroads. But family law was not the only area of private law that succumbed to constitutional dictates. The law of defamation and the development of the protection for human privacy offer further evidence of the encroaching cohabitation. We need do no more than mention them here for two reasons. The first and most important is because these topics will receive detailed attention later on in this book (see below, chapter two). But there is a second reason why the subject need not detain us further at this stage and that is easy to state. For though reputation and privacy are protected in private law against offending or invading speech, they both form part of the wider notion of human dignity; and dignity like speech belong primarily to the constitutional sphere. Seen in this light, the invasion of constitutional ideas into the sphere of private law seems less brutal. But, later in the next chapter we shall encounter a new right – the right of an established and operating business – which the German courts created from the early part of the twentieth century in order to offer greater protection to the proper and efficient functioning of commercial enterprises. Or more capitalist and private law concern there thus could not be. And when later, the German courts discovered that protecting the economic life of the enterprise could mean curtailing the expression rights of those who criticised it, they opted, as is their style, for a balancing exercise of competing interests that was in strict adherence to the purest dictates of the proportionality principle. (See the Konstanz decision of the BGH, BGHZ 3, 270.) Yet this approach changed and the constitutional idea of free speech began to gain momentum from the time the ‘Hellfire’ decision of the BGH was handed down in 1966. (BGH, BGHZ 45, 296.) Longer translated extracts of the case are reproduced in van Gerven, Cases, Materials and Text on National, Supranational and ­International Tort Law, (2nd edn, 2000) 190–91. Here suffice to state one statement only where the BGH tersely stated that ‘the protection of personal legal interests must sometimes give way in order to secure the free discussion of important social issues’. The Court was thus taking a stand here, in the area of commercial interests, as it was later to take the same stand in the area of personality rights. (See the Greenpeace decision of the BGH, NJW 1994, 124.) And the position of principle was simply: ‘There was a presumption that speech prevailed if it represented a contribution to the free discussion of important social issues’. Many of the cases later in this book are thus replete with such statements giving the lie to those who argue that because Germany has an effective law of privacy it has downplayed speech rights. The result is a happy one; and we owe it to the cohabitation of private and public law.

24  Introduction

V.  Amending the Civil Code Legal systems which adopt codes, especially codifications of private law, treat them with great respect. Hierarchically, a code stands below the country’s constitution but no higher than any other piece of ordinary legislation. But in the national psyche it occupies a special place, and can even be seen as one of the country’s symbols. There are many reasons for this. First, a code is the product of wide consultation and, invariably, a long – or very long as is the case with the BGB – period of gestation. It is thus not seen as an embodiment of the party political will of the government that enacted it. Secondly, it attempts to provide a comprehensive regulation of the area of the law that it is codifying and, usually, this demands much effort to achieve consistency among its various parts. This was certainly true in the case of the BGB and, in turn, made it difficult to tamper with one part of it without affecting others. In this book we shall thus encounter many situations where the tort answers are interrelated with positions adopted in other parts of the BGB (such as its General Part or its Family or Property law) or even with different codes such as, for example, the Produkthaftungsgesetz or the Strafgesetzbuch. Thirdly, through its language the code should be able to perceive and address problems in a broad way, thus making judicial development and adaptation of its text possible. Again, we shall encounter in the chapters that follow examples of this even though at times the interpretation of a text borders upon a complete rejection of what the draftsmen had in mind. Fourthly, the BGB also facilitated its organic growth through its general clauses – such as the famous §§ 134, 138, 242, 823 or 826 BGB – which gave judges even more room for creative work than the bulk of its provisions normally allow. All these attributes have enabled the BGB to withstand fairly successfully the enormous social, political and economic challenges that confronted it throughout the last almost 120 years. This, however, does not mean that legislative amendments to its text did not also take place. The majority of recent legislative changes took (besides of course the family law part) place in the general part of the BGB, the general part of the law of obligations and the provisions concerning particularly regulated contracts as, for example, the sales contract. Often the implementation of EU directives forces the German legislator to modify the BGB and which leads to a ‘Europeanised’ Civil Code. This was, for example, the case for the most important reform of the BGB ever: the Reform of the German Law of Obligations (Schuldrechtsreform) of 1 January 2002. The main impetus here was Consumer Sales Directive 1999/44/EC. The consumer law was introduced into the BGB (to avoid further defragmentation of private law due to separate consumer law statutes); the limitation periods were changed (most importantly for sales law from six months to two years); and the general and special law of impairment of performance of an obligation (Leistungsstörungsrecht) was remodelled mainly after the United Nations Convention on Contracts for the International Sale of Goods (CISG). (See for more details: Huber and Faust, Schuldrechtsmodernisierung (2002); Lorenz/Riehm, Lehrbuch zum neuen S­ chuldrecht (2002); Otto, ‘Die Grundstrukturen des neuen Leistungsstörungsrechts’ Jura 2002, 1; Canaris, ‘Die Reform des Rechts der Leistungsstörungen’ JZ 2001, 499.) The implementation of the Consumer Rights Directive 2011/83/EU in June 2014 brought further important changes to the BGB. (See Tonner, ‘Das Gesetz zur Umsetzung der Verbraucherrechterichtlinie: unionsrechtlicher Hintergrund und Überblick’ VuR 2013, 443.) However, not all recent changes of the BGB are caused by EU legislation as the introduction of the

Bibliographical Survey  25 treatment contract provisions (see § 630a BGB ff) in 2013 shows. (See Katzenmeier, ‘Der Behandlungsvertrag: Neuer Vertragstypus im BGB’ NJW 2013, 817; Rehborn, ‘Das Patientenrechtegesetz’ Gesundheitsrecht 2013, 257). For German tort law these reforms were only of minor importance and did not affect it directly. That does not mean that tort law is not undergoing any important changes at all, but these changes (often required by EU directives as, eg, the Antitrust Damages Claims Directive 2014/104/EU or the numerous Anti-discrimitation directives) normally take place outside the BGB (eg, the Allgemeines Gleichbehandlungsgesetz, Gesetz gegen ­Wettbewerbsbeschränkungen, or the Gesetz gegen den unlauteren Wettbewerb). The German legislator is trying to keep the core of the BGB tort law provisions as far as possible ‘untouched’ (and unaffected by EU law). One of the few exceptions (however not stipulated by EU law) was the Reform of the German Law of Damages (Schadensersatzrechtsreform) of 1 August 2002 which not only introduced the liability of court-appointed experts in § 839a BGB, but also led to the abolition of the famous § 847 BGB (but see now § 253 BGB). (See for more details Ady, ‘Die Schadensersatzrechtsreform’ ZGS 2002, 237.) Another exception is the introduction of reasonable compensation (angemessene Entschädigung) for the pain and suffering of the deceased’s dependants in the newly introduced § 844 III BGB. (See Gesetz zur Einführung eines Anspruchs auf ­Hinterbliebenengeld vom 17.07.2017 (BGBl. I S 2421).)

VI.  Bibliographical Survey The literature of the German law of torts is vast and growing faster than ever. For present purposes we can ignore references to classic works such as Enneccerus/Lehmann, Recht der Schuldverhältnisse (15th edn, 1958). However, for the sake of relative completeness some standard treatises must be mentioned: Staudinger’s multi-volume Kommentar zum ­Bürgerlichen Gesetzbuch – Recht der Schuldverhältnisse II, §§ 823 BGB A–D (2017); §§ 823 BGB E–I, 824 BGB, 825 BGB (14th edn, 2010); §§ 826–29 BGB, Produkthaftungsgesetz (14th edn, 2013); §§ 830–38 BGB (14th edn, 2012); §§ 839, 839a BGB (2012); §§ 840–54 BGB (14th edn, 2014); Palandt, Bürgerliches Gesetzbuch (78th edn, 2019, due to the numerous abbreviations hard to read for foreigners), and the highly regarded Münchener Kommentar zum Bürgerlichen Gesetzbuch – Schuldrecht (Special part) 6, §§ 705–853 (7th edn, 2017). All these are, essentially, reference works which, because of their frequent citations of the case law, present a particular appeal to practitioners. A commentary which can be recommended especially to non-native German speakers is Schulze (ed), ­Handkommentar BGB (9th edn, 2016). More academically orientated, but by no means less authoritative, are the following excellent works: Brüggemeier, Haftungsrecht (2006); Canaris/Grigoleit, Lehrbuch des ­Schuldrechts I (General part, 15th edn, 2017); Larenz, Lehrbuch des Schuldrechts II (Special part, first vol, 13th edn, 1986; second volume containing the law of torts, continued by Canaris, in its 14th  edn, 1994); Lange/Schiemann, Schadensersatz (3rd edn, 2003); Esser/Schmidt, ­Schuldrecht (General part, first volume, 8th edn, 1995; second volume, 8th edn, 2000); Esser/ Weyers, Schuldrecht (Special part, first volume, 8th edn 1998; second volume containing the law of torts, 8th edn, 2000); and Deutsch, Allgemeines Haftungsrecht (2nd edn, 1996).

26  Introduction Larenz’s book is the classic post-war work on the subject, and its author, whose ­ ethodenlehre der Rechtswissenschaft (6th edn, 1991) can also be usefully consulted, has M justly enjoyed a great reputation in Germany. Esser and Weyers’ work is no less erudite than Larenz’s and often gives a different approach to problems of tortious liability; but, to foreign readers at any rate, it may appear more difficult to follow. Deutsch’s book is a comparative work in this class of books and had considerable impact on both the academic and judicial world. It contains in particular excellent accounts of such topics as ‘unlawfulness’ and ‘culpability’ on which the author had earlier written a notable Habilitation (Fahrlässigkeit und erforderliche Sorgfalt, 1963). The same author has entered the short textbook market also with his informative Unerlaubte Handlungen, Schadensersatz und Schmerzensgeld (6th edn, 2014). Because of their smaller size Medicus and Lorenz’s Schuldrecht II (Special part, 18th edn, 2017), and Kötz and Wagners’s Deliktsrecht (13th edn, 2016) would probably be described by an US-American readership as ‘small-horn’ books. Their size, however, should in no way detract from their great value; nor does it hide the indisputable scholarship of their authors. Medicus and Lorenz’s work is a master-work of conciseness which, despite its size, does not eschew difficult or controversial points and often gives the authors’ own trenchant criticisms of the law. Multum in parvo aptly describes this work. Kötz and Wagner’s book is equally informative, and for a foreign reader even more readable than that of Medicus and Lorenz. Moreover, the authors often use their considerable comparative (and law and economics) expertise to criticise the positive law in a stimulating and policy-orientated manner. The present work has been greatly influenced both in content and arrangement of material by these two excellent short books. Another good book to be mentioned in the category of smaller size books is Deutsch/Ahrens, Deliktsrecht (6th edn, 2014). Finally, from the growing literature that adopts the economic analysis of law, see: Adams, ­Ökonomische Analyse der Gefährdungs- und Verschuldenshaftung (1985); Eidenmüller, Effizienz als R ­ echtsprinzip (4th  edn, 2015); and Schäfer/Ott, Lehrbuch der ökonomischen Analyse des Zivilrechts (5th edn, 2012). The periodic literature on the subject is enormous and references to it as well as to leading monographs will appear at the head of various sections of this book as well as in its footnotes. However, one work in particular must be singled out even though it is not a recent one: it is von Caemmerer’s ‘Wandlungen des Deliktsrechts’ in Hundert Jahre deutsches ­Rechtsleben, Festschrift zum hundertjährigen Bestehen des Deutschen Juristentages, 1860–1960 (1960) 49  ff, reprinted in his Gesammelte Schriften (Collected Works) (1968) 452  ff. A long article rather than a book, this masterly account of the changes in the law of delict brought about by the courts gives a general view of the whole law of civil responsibility. Von ­Caemmerer’s influence on German delict law is probably unparalleled in our times and, in a sense, it is all the more remarkable since it has been exercised through learned articles rather than a f­ ully-fledged treatise – a form of writing so appreciated by the German legal mind. Actual English translations of the most important German statutes (including the BGB and many more) are accessible easily and free of charge at www.gesetze-im-internet.de. The (regularly updated) translations are provided by the German Ministery of Justice and Consumer Protection (Bundesministerium für Justiz und für Verbraucherschutz) and in general of a good quality. Also the website of the German Law Archive (accessible at: germanlawarchive.iuscomp.org/) has a number of (basically the same) translated German statutes but contains some additional information such as translated German cases, a ­newsletter

Bibliographical Survey  27 and some online literature. Another good and reliable internet source for German law is the German Law Journal (accessible at: www.germanlawjournal.com/). However, the website neither exclusively focuses on German (private) law nor has it translated statutes. The reader of this book can find the most important provisions for his benefit in an annex at the end of this volume. For the English-speaking readers who would like to get a full picture of the German law the following books can be recommended: Foster’s comprehensive German Law and Legal System (4th edn, 2010) has grown over the last editions and now has 720 pages; Fisher’s latest edition of his German Legal System and Legal Language (6th edn, 2015) now has 904 pages and also provides the reader with a good comprehensive overview; and Zekoll/ Reiman, Introduction to German Law (2nd edn, 2005) with its 480 pages is a collection of 15 different chapters on German law written by different scholars. At 288 pages considerably shorter is Robbers, An Introduction to German Law (6th edn, 2016), but it still manages to give a brief but good introduction to the entire German legal system. The English-speaking readers who exclusively want to focus on German private law only (or more precisely on the German law of obligations) should draw their attention to Zimmermann’s short (270 pages) but excellent The New German Law of Obligations (2005) or to the volume The German Law of Contract (2nd edn, 2006) by Markesinis/Unberath/Johnston. A good and compact overview of German tort law is provided by Spindler/Rieckers with their Tort Law in Germany (2nd edn, 2015). More specialised literature in English on German law is referred to in various sections of this book. At a more comparative law level mention should be made of the following works. First and foremost is vol XI/1 (1982) and XI/2 (1986) of the International Encyclopaedia of Comparative Law edited by Professor A Tunc. Some of the leading authorities on the subject have collaborated to produce a book which, though its parts are uneven in some respects, represents a work of great erudition and a veritable mine of information, though it is becoming out of date. The second work that must be singled out here is still Zweigert/Kötz, An Introduction to Comparative Law (3rd edn, 1998). Superbly translated into English by Tony Weir, it achieves a closely knit exposition of the American, English, French and German law of contract and tort and is indisputably one of the masterpieces of comparative law literature. Unfortunately, an impressive work like this one is also ageing as it is celebrating its twentieth anniversary already. Van Dam’s European Tort Law (2nd edn, 2014) should also be added to this section of the bibliography. It does not only cover the legal situation in France, Germany and England but also describes the latest developments in legislation, legal literature and the case law of the European Court of Human Rights and the Court of Justice of the European Union in the tort law area. Hence, contrary to most of the traditional textbooks as, for example, Zweigert and Kötz, it also analyses the status quo of tort law in the acquis communautaire. Youngs’ English, French & German Comparative Law (3rd edn, 2014) is another significant, and with 774 pages, impressive work in this field. It differs from Van Dam’s book in so far as it does not only cover tort law but also other areas of English, French and German private and public law. Nonetheless, Youngs’ chapter 5 dealing with tort law is, with almost 180 pages, quite comprehensive and a nice read. A ‘newcomer’ in this category is the Comparative Tort Law: Global Perspectives (2015) edited by Bussani/Sebok. The book examines in 20 chapters, written by tort law experts, tort law theories and cultures

28  Introduction through a comparative methodology. It does not only look at general classical issues such as causation, economic and non-economic damages, product and professional liability, but it also contains case studies analysing specific features of selected tort systems in Europe, the US, Latin America, East Asia, and sub-Saharan Africa. Van Gerven’s Cases, Materials and Text on National, Supranational and International Tort Law (2nd edn, 2000) must also be mentioned here. As the title suggests, this is a casebook, accompanied by lengthy and often perceptive annotations. The unusual feature of this book is that it does not limit its scope to German law but includes approximately an equal number of references to French law and a somewhat smaller number of extracts to other European systems. Finally, we must also mention von Bar’s massive Common European Law of Tort, 2 volumes (English text, 1999 and 2000). This remarkable work, the fruit of a collective research effort under the guidance and leadership of Professor von Bar, is likely to be of more use as a reference work than a classroom tool.

2 Breach of Protected Interests (§ 823 I BGB) I.  Introductory Remarks Among the three general provisions of the BGB – §§ 823 I, 823 II and 826 – § 823 I BGB has, traditionally, been accorded a special pre-eminence even though we shall see that § 823 II BGB is nowadays considered as a close rival. Compared with § 826 BGB, § 823 I BGB is both wider and narrower. It is ‘objectively’ narrower, in so far as it can be invoked only if one of the enumerated interests (discussed below) has been violated, whereas there is no such limitation with § 826 BGB. In practical terms, the ‘kind of harm’ which is not protected by § 823 I BGB is economic loss (unless it results from the violation of the interests and rights protected by § 823 I BGB; ie, unless it is consequential upon physical damage or it follows from the violation of intellectual property rights, the right to free movement etc), whereas claims for economic loss are the most usual claims brought under § 826 BGB. § 823 I BGB is, however, ‘subjectively’ wider than § 826 BGB in so far as it covers intention as well as negligence (see § 276 II BGB for a legal definition of negligence), whereas § 826 BGB is limited to intentional activities which, in addition, must be contra bonos mores (gegen die guten Sitten). On the other hand, the ambit of § 823 II BGB is made to depend on the notion of ‘protective law’ (Schutzgesetz). Its effect is to give rise to civil liability in the event of a violation of some statute or other enactment – Often of a criminal nature – if this enactment is a ‘protective law’ in the sense that will be explained in chapter three of this book. The only additional requirement introduced by this section is that if the protective law in question imposes liability irrespective of fault, additional civil liability will not be engendered unless the defendant was also guilty of fault. For an action to be based on § 823 I BGB the following requirements must be satisfied. First there must be a violation through human conduct of one of the enumerated rights (Rechte) or interests (Rechtsgüter), namely, life, body, health, freedom, property, or any ‘other right’ (sonstiges Recht). The use of these concepts allows German law to restrict liability from the very outset in a clear and manageable manner. In essence, therefore, this approach does for German law what the notion of duty of care does for the common law though it is done in a predetermined (and thus arguably clearer) manner. Secondly, this interference must be unlawful (rechtswidrig). Thirdly, it must be culpable (intentional or negligent). Finally, there must be a causal link between the defendant’s conduct (which can be an act or an omission) and the claimant’s harm as defined by this paragraph. We shall examine these four elements in turn.

30 

Breach of Protected Interests (§ 823 I BGB)

II.  The Rights and Interests Protected by § 823 I BGB A. Life Interference with ‘life’ here means killing a person, in which case the claim for compensation rests with third parties, their claim being based on §§ 844–46 BGB. This, of course, is principally the action which an English common lawyer would describe as the fatal accident action and American lawyers would consider under their Wrongful Death Statutes. It is, in other words, the new action given by statute both in Anglo-American law (since it was never recognised by the common law) and the German Code (§ 844 BGB) to the ‘dependants’ (even if the newly introduced § 844 III BGB is wider: ‘person … who at the time of the injury was in a particularly close personal relationship to the deceased’) of the deceased (primary) victim for their loss of dependency. (Reimbursement of funeral expenses (Beerdigungskosten) by whomsoever has legally incurred them is also available.) The ­question of the deceased’s own action – to be brought by his estate – is, of course, another matter and one which – in the civil law systems in general – is related to the part of the law which deals with succession or the administration of the estates. However, one provision of the general part of the law of obligations needs to be mentioned in this respect: which is § 253 II BGB. § 253 II BGB principally deals with monetary compensation for pain and suffering for living claimants (and thus forms a clear legislative exception to the restrictive § 253 I BGB) – a topic which was as before the Schadensersatzrechtsreform of 2002 mainly regulated in § 847 BGB. But it also allows such a claim to be brought by the claimant’s estate for the deceased’s pain and suffering, suffered between accident and death (­Vererblichkeit von Schmerzensgeld). But, unlike other systems (eg, Dutch law, French law, the US under the headings of loss of consortium etc), until recently German law gave no damages for solatium, bereavement, or other forms of pain and suffering to the deceased’s dependants. However, the lack of this Angehörigenschmerzensgeld or Hinterbliebenengeld was increasingly criticised by academics (see Janssen, ‘Das Angehörigenschmerzensgeld in Europa und dessen Entwicklung – Verpasst Deutschland den Anschluss?’ ZRP 2003, 156 ff) and courts are more and more willing to ‘invent’ pain and suffering of the deceased between accident and death. (See, eg, the decision of OLG Düsseldorf, BeckRS 2013, 18320: €10,000 for 10 seconds fear of death in a plane accident.) The Gesetzes zur Einführung eines Anspruchs auf Hinterbliebenengeld (the Law on Surivorship Claims) of 2017 provides a reasonable compensation (angemessene Entschädigung) for the pain and suffering of those persons who were at the time of the injury in a particularly close personal relationship to the deceased in a new § 844 III BGB. (See also Wagner, ‘Schadensersatz in Todesfällen – Das neue Hinterbliebenengeld’ NJW 2017, 2641.) §§ 844–46 BGB deal, as stated, with the new action given to the victim’s ‘dependants’. They are discussed in greater detail in chapter nine, below. The reader is urged to read this material at an early stage so that the (relevant) points made in this section are understood in a more satisfactory way. For present purposes, it will suffice to note that § 844 II BGB specifies the ‘dependants’ by reference to those persons whom the deceased would have been ‘obliged to support by law’ (kraft Gesetzes unterhaltspflichtig). Who these people are can be found in the Family law section of the BGB. They, obviously, include spouses and minor children (§§ 1360, 1602 BGB), all ascendants in the direct line (§ 1601 BGB) and

The Rights and Interests Protected by § 823 I BGB  31 (in certain circumstances) even separated (§ 1361 BGB) and divorced spouses (§§ 1569 BGB ff), subject always to the detailed provisions contained in the family law book of the BGB. In his meticulousness, the German legislator has also provided at the end of § 844 II BGB that a child conceived but unborn at the time of the injury is not excluded as a p ­ otential claimant.

B.  Body and Health These headings cover any adverse interference with the person without consent (see more details below under the heading unlawfulness.). Terminological precision has, again, dictated the use of two words – the first signifying any interference with the body (Körper) of the claimant, such as severing his finger, breaking his leg, external abrasions of the kind typically found in car accident cases, circumcisions, cutting hair or tattoos. Even a medically indicated surgery which has been conducted lege artis is, according to the leading opinion in Germany, an interference with the body (which however can be justified if consent is given) (see Kötz/Wagner, nos 137 and 205–08). Interference with the claimant’s health (Gesundheit), on the other hand, refers to externally provoked malfunctions of his inner body. Internal infections, gastroenteritis, bacterial infection, inhalation of poisonous fumes (controversial: passive smoking), etc would come in this category, as might in appropriate circumstances, loss of sleep. (On this possibility see BGH, MDR 1971, 37: noise from neighbouring land preventing claimant from sleeping.) Psychological disturbances that we would classify under the heading of psychiatric harm would also be brought under this heading (see, eg, OLG Stuttgart, VersR 2001, 465, 468: provocation of a person with high blood pressure leads to a stroke) though not, of course, mere pain, grief and suffering. Under this heading, the BGH has also held that the transmission of the AIDS virus constitutes an injury to health even when it has not yet developed into AIDS. Rendering the claimant HIV positive is thus actionable under the heading of interference with health even though the infection has ‘not apparently affected the claimant’s physical condition’. ‘For the contamination of blood with HIV is known to have devastating consequences for the person affected and those who come in close contact with him’ (BGH, NJW 1991, 1948; see also BGH, NJW 2005, 2614). In all these instances, the interference must emanate from a source external to the claimant. Nevertheless, even when this requirement is satisfied, the full extent of the claimant’s hurt may be partly attributable to the external factors and partly linked with his own constitution or predisposition as, for example, some kind of dormant cancer. Whether this result, as well, can be attributed to the defendant’s conduct is a question of legal cause and will be discussed below. In German law (as in other systems) physical injury is widely compensated. In The Hua Lien ([1991] 1 Lloyd’s Rep 309, 328–29) Lord Brandon maintained that in most claims in respect of physical damage to property [and, one might add, personal injury] the question of the existence of a duty of care does not give rise to any problem, because it is selfevident that such a duty exists and the contrary view is unarguable.

This ‘duty’ language may not be entirely appropriate to German law, but the general idea expressed by the statement is as true of German law as it is of English and American law. In this spirit of generosity, the BGH has since 1993 also treated the accidental destruction of

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frozen sperm deposited in a ‘sperm bank’ as amounting to physical harm. It thus awarded to the donor who had deposited the sperm in the bank in the light of his impending sterility damages worth DM 25,000 (= €12,500) for pain and suffering (BGH, NJW 1994, 127.) The judgment held that parts of a human body, once detached from it, can normally be treated for the purposes of tort law as a ‘thing’ under § 90 BGB. (Animals are not things, but are legally treated as a thing, § 90a BGB.) But if they are destined to be ‘re-introduced into the body’ (eg, an explanted egg cell for later implantation) or perform a function typically ascribed to the human body, then interference with them should be treated as interference with the human body for the purposes of § 823 I BGB. Understandably, the decision, reversing a contrary decision of the Court of Appeal, has not passed ­without comment. (See: Laufs, ‘Schmerzensgeld wegen schuldhafter Vernichtung deponierten Spermas?’ NJW 1994, 775; Schnorbus, ‘Schmerzensgeld wegen schuldhafter Vernichtung von Sperma’ JuS 1994, 830.) Nonetheless, it is a remarkable proof of judicial inventiveness when faced with the problems that result from new medical technology. (The case is translated in van Gerven, Cases, Materials and Text on National, Supranational and International Tort Law (2nd edn, 2000) 147–49.) Notwithstanding the general generosity that the legal system adopts towards physical injury, there do exist (in German as well in Anglo-American law) three ‘types’ of physical injury which have given rise to considerable difficulties. These situations involve n ­ ervous shock, pre-natal injuries (including pre-conception injuries) and claims for ‘wrongful birth and wrongful life’. To these last claims, one must also add an interesting variant – the so-called wrongful conception (and failed sterilisation) cases. Nervous shock (Schockschäden), or as it is nowadays more accurately called ‘psychiatric illness’, is one kind of interference with a person’s health which has given rise to many difficulties in German law, as well as English and American law. It should be noted at the outset that in Germany private or social insurance schemes will often take care of the matter. Shock may be the result of fear generated for one’s own safety and personal integrity or it may be the result of witnessing some gruesome accident. Should recovery here be limited only to nervous shock suffered by close relatives of the victim or to persons who only saw or heard the accident with their own unaided senses (but not to those who some time after the accident became aware of its consequences, perhaps through hearsay)? And should well-intended rescuers, who come to the accident scene to offer their services and are subject to horrifying sights, be all allowed to claim damages for their shock? Three cases dealing with these matters are reproduced below (cases 1–3) and should be read in conjunction with their annotations in order to obtain a fuller picture of German law. (Here suffice it to say that psychiatric injury is, clearly, injury to health in the sense of § 823 I BGB, so long as it entails medically recognisable physical or psychological consequences which would not have been suffered by the ordinary, not over-sensitive, citizen.) The decision of the BGH of 11 May 1971 (case 1), though not w ­ ithout its critics (see, eg, Kötz/Wagner, nos 138–39), is still good law. It illustrates, especially when read in conjunction with other similar decisions, the strong emphasis that German courts put on the seriousness and extraordinary nature of the shock before they treat it as compensatable (for another confirmation see case 2). The expression often used is that the shock must be an ‘appropriate’ and ‘understandable’ (verständliche) consequence of witnessing (see BGH, NJW 2015, 1451) or being told of the accident. (See case 3).

The Rights and Interests Protected by § 823 I BGB  33 The italicised words suggest an area of difference with Anglo-American law; otherwise, however, the terms used imply flexible standards which, more often than not, do not seem to work in favour of claimants. Thus, shock suffered as a result of being told that one’s car was damaged has not been allowed. (LG Hildesheim,VersR 1970, 720). Likewise, no compensation was given for shock suffered by the claimant when he was told that the police were investigating a close relative (LG Hamburg, NJW 1969, 615.) A shock resulting from eyewitnessing a beloved dog killed by a tractor is according to the BGH not an appropriate and understandable consequence of such a quality (BGH, NJW 2012, 1730). Further, though a close family relationship with the primary victim will, typically, make it easier for the claimant to obtain damages for his nervous shock, it is by no means obvious that this is seen as a rigid, additional condition for recovery. The issue has not been decided by the BGH. However, in OLG Stuttgart, VersR 1988, 1187 the Court restricted the scope of claims based on distant shock to relatives. See also BGH, VersR 2007, 1093 (nervous shock of a policeman after eyewitnessing an accident): the Court required that recovery can only be granted if the victim (here the policeman) was actually involved in the accident (­unmittelbarer Unfallbeteiligter). However, if the husband is eyewitnessing the death of his wife in a car accident the BGH sees no obstacles to granting the husband compensation for his nervous shock (BGH, NJW 2015, 1451). Non-relatives of the primary victim have often been denied recovery (LG Tübingen, NJW 1968, 1187; LG Stuttgart, VersR 1973, 648). But an accompanying fiancée has succeeded; and, in similar circumstances, so might a ­partner in a ‘serious love relationship’ (LG Frankfurt, NJW 1969, 2286). If the shock leads to a premature birth, the nasciturus may also be entitled to sue for any damages that he may have suffered (BGH, NJW 1985, 1391). Can one draw any preliminary conclusions from such a brief sketch? Three, perhaps, can be put forward here, though somewhat tentatively since cases can only serve as indications of how a court might decide a case. First, German law is in general more generous than the common law in cases of distant shock; this may be due in part to the absence of juries and a smaller and more closely monitored medical profession which reduces the chances of ‘faked’ medical evidence. It is also potentially more open-minded towards claims brought by non-relatives. Secondly, in other contexts the greater ‘generosity’ of German law may be more apparent than real. This seems reasonable enough to infer from the fact that (a) many claims which would be unacceptable to the common law are also rejected by the German courts and (b) that damages awarded under this heading to successful claimants seem are quite modest. (See,  eg, BGH, NJW 2015, 1451: €4,000 for a husband eyewitnessing the death of his wife in a car accident.) Finally, and from a purely conceptual point of view, it may be worth noting that German courts tend to approach problems of nervous shock in terms of causation (rather than duty). This issue is often discussed under the question of the objektive ­Zurechnung [der Rechtsgutsverletzung]. Increasingly, however, German writers are recognising that the demarcation line really depends on policy considerations and that causative language merely provides the technical device to draw these lines rather than explaining why some claimants fall on their wrong side. (See more detailed discussion below in section V of this chapter.) Pre-natal injuries are the second kind of ‘physical’ injury that have given rise to considerable difficulties both in German law and common law systems. There are a number of reasons why this is so. First, the nasciturus – as the child still in the womb is often called

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in the civil law systems – though a ‘living entity’ (and therefore enjoys projection under Articles 1 and 2 GG) is not a person under German Civil Law (see § 1 BGB). If it is to be accorded legal rights, these may be in conflict with those of the mother (eg, the right to live and to abort). Secondly, it may be thought proper to vest some of these rights immediately (eg, after a certain period, usually the twenty-fourth week of pregnancy, you may not kill the embryo) while others will mature upon live birth. The right to inherit belongs to this category (§ 1923 II BGB). As we shall observe in the notes to cases 6–9, German and English law adopt the same position with regard to the right to sue for injuries sustained while in utero: the rights of the nasciturus vest only upon live birth. (See also BGH, BGHZ 58, 48: mother dies in car accident while nasciturus gets injured in utero.) On the other hand, some (but not all) American courts do not require ‘live birth’ and are willing to grant tort actions to persons who were merely ‘viable’ at the time of the injury (even if there was subsequently no live birth). This solution can accentuate the third difficulty that these cases create namely, difficulties with causation and proof. The protection afforded by German law goes beyond this point as the decision of the BGH of 20 December 1952 in BGHZ 8, 243 (reproduced as case 5 in the previous edition of this book) clearly shows. In chronological terms this is an interesting decision, allowing even an action to a child born with impairments as a result of a tortious act which took place prior to conception (here hospital is giving infected blood to mother prior to conception; the later child is born handicapped). In the main, the common law solutions in this context are similar to the German. The third and last category of ‘physical’ injury cases which have given trouble to the courts (both in common law and civil law jurisdictions) involve three kinds of action. These include the so-called ‘wrongful life’ and ‘wrongful birth’ cases (involving the birth of impaired children) and the ‘wrongful conception’ cases (involving birth of healthy (but sometimes also impaired) children following a failed sterilisation operation). (See for more details Kötz/Wagner, nos 140–42.) All these are claims more modern in origin and raise profound philosophical questions as well as difficult questions of evaluation of damages. This time, developments in this field started in the US and later spread to European systems. Case 4 and the decision of the Supreme Court of New Jersey in Procanik v Cillo 97 NJ 339 (1984)) bring out very clearly most of the relevant points. Here suffice it to say that German law has produced a rich and not always easily reconcilable case law. The German picture is further confused by the existence of two important decisions of the BVerfG, which have given diametrically different opinions on this issue. In fact, the first of these (BVerfG, BVerfGE 88, 203) left the BGH singularly unimpressed (case 5). On the other hand, the second decision of the BVerfG generally sided with the traditional liberal view that allowed such claims. (see case 6).

Bibliography For nervous shock in German law see, inter alia, Thora, ‘Schockschaden durch Unfalltod naher Angehöriger – Anmerkung zum Urteil des BGH vom 27.01.2015’ NJW 2015, 1451; Zwickel, ‘Schockschaden und Angehörigenschmerzensgeld: Neues vom BGH und vom Gesetzgeber’ NZV 2015, 214.

The Rights and Interests Protected by § 823 I BGB  35 For ‘wrongful life’ etc claims, especially in the light of the clash between constitutional and ordinary courts, see Markesinis, ‘Reading Through a Foreign Judgment’ in Cane and Stapleton (eds), The Law of Obligations, Essays in Celebration of John Fleming (1998) 261–83.

C. Freedom Any interference with the person’s liberty and freedom of movement (körperliche Fortbewegungsfreiheit) will (if the other elements of § 823 I BGB are satisfied) give rise to a civil claim (often also § 823 II BGB in conjunction with a Criminal Code provision will be applicable) and, often, a criminal action as well. Torts like that of false imprisonment (Einsperrung) and even threats with menaces are covered by this heading as are instances of false information given to the police in order to have the claimant arrested. However, freedom of religion or speech are not covered by this term nor, more generally, freedom to act (see: Fikentscher, Schuldrecht (9th edn, 1997) § 103, I, 3; Kötz/Wagner, no 143; contra Leinemann, Der Begriff Freiheit nach § 823 I BGB (1969)). Overall, therefore, the notion of freedom in § 823 I BGB is generally interpreted restrictively (Kötz/Wagner, no 143; Staudinger in Handkommentar BGB (9th edn, 2016) § 823 BGB no 11) and its field of application seems analogous to that of Article 5 ECHR.

D. Property i. Ownership Ownership, the cardinal property right (Eigentum) regulated by §§ 903 BGB ff is, of course, completely protected by § 823 I BGB against culpable interferences. (However, § 823 I BGB is only applicable if there is no owner – possessor – relationship between claimant and defendant (Eigentümer-Besitzer-Verhältnis or EBV) under §§ 989 BGB ff.) The interference with the substance of a Sache, a ‘thing’ (whether movable or immovable; Intellectual Property Rights are no things but ‘other rights’ under § 823 I BGB), of the type that one would encounter in, say, a traffic accident case (eg, destroyed car), would thus form the typical kind of interference under this heading. Likewise, preventing an owner from using his property (eg, defendant is stealing something from the claimant) will amount to an actionable interference, certainly if the deprivation of use is total (BGH, NJW 1977, 2264). Likewise, the contamination of animal foods by pharmaceutical products which then makes the herd that eat them impossible to sell, will also be actionable under this heading (BGH, MDR 1989, 244). Removing the property from where its owner wished it to be may also be actionable under this heading, as would any defacement or denigration of it, for instance, by means of graffiti. Even the use of a thing without the permission of its owner, would be actionable as an interference with property, although it did not entail its destruction or damage (eg, unauthorised parking at another person’s parking site; see Kötz/Wagner, no 145 and BGH, NJW 2009, 2530 with a slightly different legal approach). Dropping the claimant’s engagement ring in the river, or grazing one’s animals on the claimant’s land without his permission, would thus also be covered by this provision.

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Breach of Protected Interests (§ 823 I BGB)

The reverse, ie, deprivation of use by the owner, may also be actionable under this heading, even though such interference is not with the substance of the property (eg, defendant blocks the entrance to claimant’s property making it impossible for the latter to use his car) and really leads to pure economic loss according to common law standards being the only harm suffered by the owner. It seemed that the German courts initially allowed such actions under this heading only if the deprivation of use was total (BGH, BGHZ 55, 153, case 14 in the previous edition) and prolonged (BGH, NJW 1977, 2264, case 15 in the previous edition). However, recently the BGH (case 7) emphasised only the first requirement: as long the deprivation is total there is no need that the deprivation is also prolonged. According to this latest decision the intensity of the deprivation also justifies damages. One test that has been considered is whether the property, as a consequence of the interference with its use, is worth less. In case 14 and case 7 the value of the ship that was trapped in the harbour certainly declined, while a ship outside the harbour kept its value (see also the cases in chapter four on economic loss). But if such actions can succeed, the theoretical explanation is disputed in academic literature (cf Brüggemeier, Haftungsrecht (2006) 341 ff, 388–90). They are also treated as ‘exceptional’ in the sense that they have never been extended to cover economic losses suffered by car owners trapped in traffic jams. Also actionable under the heading of property is damage caused to a car by dust emanating from a neighbouring factory, though here the German courts are careful to merge the provisions of tort law and property law and not to impose liability if the substantive requirements of § 906 II BGB are not met (see BGH, NJW 1985, 47, translated in van Gerven, Cases, Materials and Text on National, Supranational and International Tort Law (2nd edn, 2000), 192–95). All the above, varied instances involve some kind of physical interference with the property. But physical interference is not always necessary. Legal interference with the right of ownership will also be actionable under the same rules (BGH, MDR 1994, 254: borrower selling loaned item). Incidentally, this right for compensation could arise only if the other elements of § 823 I BGB (and particularly the requirement of fault) were satisfied. (Though cf BGH, NJW 1985, 47.) In the absence of fault, the owner would have to rely on the remedies given to him in the third book of the BGB dealing with the law of property. Thus, § 985 BGB gives him a real action for dispossession; or § 1004 BGB which provides a remedy for interferences which do not amount to dispossession (right to demand a cessation of the interference and/or an injunction for the future); or the remedy given by § 906 BGB which is analogous to the common law injunctions in nuisance cases. Ownership is also protected by the GG (see Article 14 GG), which contains special provisions concerning expropriation for the ‘public good’; but this topic lies outside the ambit of this book). Two famous and to every German lawyer well-known categories of case also need to be mentioned here. These are, on the one hand, the cable cases (Kabelbruchfälle or Kabelfälle) and on the other, those cases in which damages are caused to the product itself and are exceptionally recoverable (Weiterfressermangel or Weiterfresserschaden). For the German legal system (especially for the courts) these categories are ownership cases under § 823 I BGB and are further examples for the extensive interpretation of the notion of ownership in Germany. However, as under common law both categories are discussed under ‘economic loss’ we will deal with the cable cases and the Weiterfresserschaden in chapter four.

The Rights and Interests Protected by § 823 I BGB  37 The illustrations given above demonstrate that a wide – by common law standards almost excessive interpretation – given to the term ‘ownership’ may in part be prompted by the desire to escape the rigidly phrased rule that pure economic loss is not actionable under § 823 I BGB. This thought prompts another and related one. The judicial creation of the Recht am eingerichteten und ausgeübten Gewerbebetrieb (discussed below) may also have been prompted by this desire; and these two developments taken together may illustrate the difficulties that flow from any written attempts to exclude the compensation of pure economic loss through tort actions. By contrast, the common law’s supple way of achieving this result through the notion of duty of care has avoided such ‘debatable’ extensions though done so at the cost of the uncertainty that accompanies the notion of duty of care. In the end, therefore, all one can say is that there are different ways in which one may pursue the same policy, each with its own merits and drawbacks.

ii. Possession Difficulties have arisen with regard to the concept of possession (Besitz), which the Code treats more as a physical relation to a thing than a right. § 854 I BGB thus states that ‘possession of a thing is acquired by obtaining actual power of control over the thing’. Possession is thus, clearly, not ‘ownership’; but could it be regarded as sufficiently akin to this latter notion to receive protection under the words ‘or other rights’ (sonstiges Recht) of § 823 I BGB? The paragraphs that follow § 854 BGB make clear that possession is given special protection by the law regardless of the possessor’s title and this, partly because the law wishes to discourage – within certain limits (see § 859 BGB) – self-redress, but also because possession is often in practice the outward manifestation of ownership. But does a possessor, whose physical relationship with a thing has been disturbed, also have the right to claim monetary compensation under § 823 I BGB? Professor Medicus and Professor Lorenz (Schuldrecht II (18th edn, 2018) § 74) give the following illustration using, incidentally, the statutory notion of ‘indirect possession’. This is defined by § 868 BGB and deals with a person exercising factual control over a thing but in pursuance to a contract with another person (the mediate or indirect possessor). The typical example is a lease. Now suppose that a lessee fails to vacate an apartment that has been leased from the lessor who has given him legal notice to terminate the contract. If the lessor forcibly ejects the lessee, the latter’s remedies set out in §§ 859, I, III and 861 BGB include a limited right of self-help as well as the right to demand the return of possession. But can he also demand damages, for example, to cover his expenses for staying in a hotel, under § 823 I BGB? As stated, the position of possessors is, in this respect, not entirely clear, but according to Medicus and Lorenz (no 607) the answer should depend upon whether the possessor is in a position similar to that of an owner, ie, he has the ‘negative’ advantage usually associated with ownership (eg, the right to stop others from interfering), but also the ‘positive’ advantages, namely the right to use and exploit the thing (§ 903 BGB). This would include all lawful possessors but also a bona fide possessor during pending litigation. The solution to the hypothetical example, therefore, should be that the lessee could obtain damages for his loss sustained for the period during which – in accordance with the rules of civil procedure (§§ 721, 765a ZPO) – he might have obtained a reprieve from the

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Breach of Protected Interests (§ 823 I BGB)

eviction. (For rich references to case law on this and related matters see Deutsch in JZ 1984, 308; JZ 1990, 733; and JZ 2005, 27.) Similarly, other limited property rights like servitudes (§§ 1018 BGB ff) and usufruct (§§ 1030 BGB ff) should also receive protection by being included under the heading ‘other [absolute] rights’ of § 823 I BGB.

E.  Other Rights i. Generally The term ‘other rights’ sounds and is open ended giving judges a relatively free hand in the determination of its scope and that is why some German authors (Fuchs, Pauker and Baumgärtner, Delikts- und Schadensersatzrecht (9th edn, 2017) 35) refer to it as a mini-general clause (kleine Generalklausel). But this judicial freedom is relative in the sense that it has always been understood that the rights and interests protected by this formulation must be absolute rights, ie, rights which can be interfered with by everyone and which can be asserted against everyone. We have thus seen how possession can – in certain circumstances – be covered by § 823 I BGB (and, incidentally, asserted even against the rightful owner) (BGH, VersR 1976, 943; BGH, VersR 1981, 161); and the same goes for other ‘real’ rights (dingliche Rechte) such as servitudes (Dienstbarkeit), pledges (Sachpfandrecht) and mortgages (Hypothek) (BGH, NJW 1991, 695; BGH, NJW-RR 2012, 1048.) Other absolute rights are patents (§ 48 Patent Law); copyrights, trademarks (§§ 14, 15 Trademark Law); and also the name of a physical or legal (commercial) person (§§ 12 BGB and 37 HGB). The right to one’s image (or picture) (Recht am eigenen Bilde = §§ 22 ff of the Act on Artistic Creations, the Gesetz betreffend das Urheberrecht an Werken der bildenden Künste und der Photographie (KUG)) is also included under this heading. As ‘special personality rights’ (besondere Persönlichkeitsrechte) the name of a person and the right to one’s image or picture are considered to be a part of the general right to one’s personality (Allgemeines Persönlichkeitsrecht) which will be discussed below. But not every attempt to create new entitlements will succeed under this heading. The (BAG, NJW 1999, 164), for instance, refused to hold that there was a ‘right to one’s employment’ that could be brought under this rubric. More importantly, relative rights, such as rights arising under a contract and owed by one contractor to the other, are not included in this article. The breach of an obligation, which arises only from a contract (eg, failure to repay a debt) and does not also amount to the commission of a tort (eg, dentist negligently removing the wrong tooth) will not be actionable in tort. But if the same set of facts amounts to a breach of contract and a tort, the claimant is free to choose the type of action which is more favourable to him. For German law – unlike French law – does not have the rule against accumulation of actions, in German known as Anspruchskonkurrenz (RG, RGZ 88, 433, 434–35; BGH, BGHZ 55, 392, 395). Equally, as already stated, if one person induces another person to break his contractual obligations towards a third party, he will not be liable under § 823 I BGB towards this third party for his economic loss. He may, however, be liable to him under § 826 BGB if the other conditions of liability in this paragraph are satisfied (for more details see chapter three).

The Rights and Interests Protected by § 823 I BGB  39 Three types of situation have given rise to considerable literature and case law and they must now be examined separately. The first is related to the possible use of § 823 I BGB within the context of family relations; the second deals with the right of an established and operating business; and the third with the general right to one’s personality and privacy. The last two ‘rights’ are very important judicial creations and seventeen decisions dealing with them are reproduced in the previous edition (cases 32–49).

ii.  Delictual Protection of Family Relationships It is by no means clear to what extent a person’s family status and his legal rights thereunder are protected by § 823 I BGB (as ‘other rights’). In some cases, the answer seems clearer than in others. ‘Parental power’ (elterliche Sorge) is, generally, regarded as an ‘other’ right. Thus, if in the course of his divorce proceedings, a father has lost the right to exercise those powers and refuses to hand the child over to the mother, he may be held liable under § 823 I BGB, for example, for the necessary cost of a detective to find the child (BGH, BGHZ 111, 168). But do spouses have an absolute right erga omnes to demand the respect of their marital bond? Though in some cases the BGH has given a positive answer to the above question, the attitude of the Court now is, on the whole, quite negative (BGH, BGHZ 196, 207). (See for the exception of violation of the ‘räumlich-gegenständlichen Ehebereich’ (the usage of the marital home to conduct adultery) BGH, BGHZ 6, 360 (1952)). However, according to the BGH the other spouse can only claim for injunction under § 1004 BGB but not for damages.) Thus, the ‘marital intruder’ (Ehestörer) will not be liable to the husband in tort for enticing his wife away and then causing the husband the cost of instituting adultery and divorce proceedings (BGH, BGHZ 23, 279). Neither will the wife be liable to the husband on this ground (BGH, BGHZ 23, 215; BGH, NJW 1990, 706). Though this solution has not passed without criticism, it does appear to be correct (Kötz/ Wagner, no 162). As the BGH itself remarked in the above decisions, vis-a-vis the parties in the marriage there is no reason for the law of delict to operate, their relationship being the exclusive concern of the provisions of the family law section of the Code. Equally, the third party should not be held liable for causing the breach of the marriage, since marital fidelity is something that concerns the spouses and them alone. This approach, that marriage as an institution is subject to its own rules and lies outside the protective ambit of the rules of the law of tort, has also been adopted by even more recent decisions of the BGH (eg, see BGH, BGHZ 196, 207). However, not all lawyers are convinced by this kind of reasoning (see, eg, Gernhuber and Coester-Waltjen, Familienrecht (6th edn 2010) § 17 no 24 ff) so the debate cannot be regarded as being closed. Nevertheless, it should be made clear that those academics who argue against the established view are only arguing for a limited extension of § 823 I BGB so as to allow certain claims. What, more precisely, they have in mind are the costs of divorce, delivery of a child born of an adulterous relationship, litigation for illegitimisation proceedings (BGH, BGHZ 57, 229), and maintenance of the child (see also Kötz/ Wagner, no 161).

iii.  The Right of an Established and Operating Business This is a judge-made right (see case 8) which came into existence soon after the Code came into effect (1 January 1900) and gradually developed its present

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Breach of Protected Interests (§ 823 I BGB)

contours. (Instructive for the development of this right Kötz/Wagner, nos 431–34.) Like the next right (on human personality), it has developed into a kind of important general clause intended to protect commercial enterprises against the infliction of certain types of rather vaguely defined interferences with their economic interests. These include such varied topics as area of operations, customers, commercial rights not already covered by patent or copyright law, boycotts etc. Its emergence may be due to certain gaps that were found to exist in the delictual provisions of the Code, the system of private law as a whole and the discrimination of economic losses by German tort law in particular. The will of the courts to extend the existing tort law system to cover at least some cases of economic loss is highly visible. Nonetheless, it is remarkable not only as a judicial creation but also because in a free enterprise economy, where free competition is both the justification and the result of the system, the protection afforded to business entities cannot be as extensive as that given to property. This is why the contours of the right are rather vague and have to be determined with caution by the courts. As stated, the development of this right began only four years after the BGB had come into force when the RGC (see case 8) realised that the protection given by the new tort law in cases of pure economic loss was very limited: § 826 BGB only caught intentional activities which were contrary to public policy; § 824 BGB caught only untrue statements damaging the credit of another person; and § 823 I BGB was not of any help in many instances either. The first cases were mainly concerned with one type of conduct, which hindered the business activities of a competing enterprise. The harmful activity typically took the form of the defendant claiming unjustifiably that the claimant had no right to use a particular industrial property right (patent, registered design) held by him (the defendant). If the claimant ceased his activities, thereby suffering economic loss, but subsequently discovered that the defendant’s claim was groundless and also was made in a careless manner, then he should be and was allowed to claim his loss (cases of unberechtiger ­Schutzrechtsverwarnung (unjustified warning of intellectual property infringement) or broader now u ­ nberechtiger ­Verfahrenseinleitung (unjustified commencement of proceedings)). From the very beginn­ing, therefore, it was made clear, and was subsequently repeatedly confirmed, that this kind of protection could only avail business or commercial enterprises and not, for example, a legal partnership or a trade union or club. This distinction, which has not passed ­without criticism, was perhaps explained by the desire of the courts to keep the newly created right within reasonable bounds. For a long time courts were hesitant to make this right ­applicable also to professional workers. While the BGH in case 10 left this question still unanswered (for one part of a professional figure skating team), the judges granted recently also professional workers (here: professional sports trainer) the right of an established and operating business (case 9). The latter judgment shows clearly that even after more than 100 years of its existence this right is still progressing. Three decisions are reproduced below (cases 8–10) to illustrate the development of this right and the accompanying annotations show that the literature to which it has given rise is considerable. (To these three cases one should add two of the cable cases (cases 35 and 36) which also contain clear evidence of the initial desire of the courts not to extend unduly the ambit of the right. This is obvious also from: BGH, JZ 1983, 857. However, see also the above case BGH, NJW 2012, 2579.)

The Rights and Interests Protected by § 823 I BGB  41 The doubts expressed about this right are understandable, not only in view of the fact that court-made rights are typically followed by an expression of concern by the judges that the new right (or tort) be kept within reasonable bounds. (cf the debates, especially among academics, after the decision of the House of Lords in Anns v Merton London Borough Council [1978] AC 728.) These doubts are also explicable by the fact that the right was soon expanded to cover cases where issues (like freedom of expression) were involved alongside the right of a business enterprise to safeguard its financial interests. This was the case with the extension of the right in order to protect entrepreneurs against criticisms that adversely affected their business but which were not caught by either §§ 824 or 826 BGB. For example, organising boycotts of the claimant’s business or making factually true statements about it which the defendant culpably knew would severely affect the claimant but which he had no legitimate interest to make (see a call for a boycott in a commercial setting: BGH, NJW 1999, 279 (case 35 of the previous edition of this book); see for a harsh critique of the claimant’s business by the defendant: BGH, NJW 2015, 773). As stated, the danger of inhibiting free speech (a right protected by Article 5 GG) in these cases is considerable; and the need to ‘balance’ the competing interests before giving judgment is also very great. (This balancing is, incidentally, a feature of the rights that are brought under the heading of sonstige Rechte. For interference with them does not, unlike the other mentioned rights, automatically satisfy the requirement of unlawfulness; it must be weighed against competing rights before the element of unlawfulness is satisfied.) Not every call for an economic boycott will be censured (instructive here is Münchener Kommentar/Wagner, § 823 BGB, no 351 ff). The famous Lüth decision (case 11) shows that the motives of the boycott caller (defendant in that ensuing action) may save him from censure and give protection to his speech. But the Blinkfüer case (BVerfG, BVerfGE 25, 256) also demonstrates the limits of this immunity. The litigation was born of the Cold War, which was intensified when the Berlin wall was erected in 1961. An important publishing group – the Axel Springer group  – instructed its dealers and distributors not to handle journals which contained information about television programmes made in what used to be East Germany. Dealers who refused to comply with this instruction would, in future, be barred from selling Springer newspapers. The letter was mainly directed against Blinkfüer, a small, left-wing publication. It immediately sued Springer, relying on § 823 I BGB and claiming that the call for a boycott was ‘unlawful’ under that paragraph of the Civil Code which protects its rights as an established and operating business and was causing it a 10 per cent reduction in its trade. Springer’s defence was that the call for the boycott was constitutionally protected along the lines of the Lüth decision. But the argument was turned down since Springer’s call for a boycott was different from Lüth’s in so far as the latter ‘was simply an appeal to the moral and political responsibility of his audience’.1 (BVerfG, BVerfGE 25, 267, translation is taken from Kommers, The Constitutional Jurisprudence of the Federal Republic of Germany, 3rd edn (2012) 374.) Moreover, Lüth’s call for a boycott was incapable of directly and effectively restricting the human and artistic freedom of … Harlan [the claimant in that earlier action who complained of the call to boycott his work] for Lüth [unlike Axel Springer, the defendant in the second action] had no means of coercion at his disposal.

1 The translation is taken from Kommers, The Constitutional Jurisprudence of the Federal Republic of Germany, 3rd edn (2012) 374.

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In the end, therefore, Springer’s economic might, its ‘financial grip’ over its distributors, and the threatening tone in which the letter calling for a boycott was written, all weighed against them. The Court thus treated the call for boycott as a self-seeking speech worthy of no protection in law. But the BVerfG, true to its self-appointed task of weighing each case separately, refused to go as far as saying that all calls for economic boycott were worthy of constitutional protection. ‘The Constitution’, reasoned the Court in some interesting obiter dicta, ‘does not bar the economically more powerful from engaging in the intellectual struggle of opinion … provided that the means employed by the person who calls for a boycott [are] constitutionally acceptable’. This would have been the case, for instance, had Springer called for a ‘reader’ boycott rather than trying to exploit the economic dependence of the subjects of the boycott. Once again, the reasoning is nuanced and the result not that different from that reached in the US where, for instance, courts have held that picketing aimed at encouraging consumers to boycott a secondary business does not enjoy First Amendment protection (cf NLRB v Retail Store Employees Union Local 1001 447 US 607 (1980)). In this context, one should also look at case 18 in the previous edition (BGH, NJW 1978, 377) in which the German court came to a very similar conclusion. In that case, a blockade by protesters (who sought to exercise their rights under Articles 5 and 8 Basic Law) was, somewhat unusually, not dealt with under the heading of the right of an established and operating business (as in BGH, BGHZ 59, 30; BGH, BGHZ 63, 124; BGH, BGHZ 89, 383). The balancing of interests thus took place in respect of the right to possession of the equipment which the contractors brought on to the proposed industrial park. One should also note that the general desire of the courts to keep the right of an established and operating business within manageable bounds (but see more recently case 9, BGH, NJW 2012, 2579) has also been expressed in the form of an imperative that the interference with the established and operating business is ‘direct’ before it can become actionable under this heading. The notion of directness, however, as common lawyers know only too well from their experience with the ‘remoteness’ cases, is an invitation to the judge to hide his own value judgement behind an apparently unimpeachable concept. Not surprisingly, perhaps, it also gave rise to numerous other attempts to discover the right test. Perhaps the most often quoted test is in fact one given by the BGH itself. Thus, for the Court the conduct of the defendant will constitute an invasion of the claimant’s right if it is ‘businessconnected’. According to the BGH, this means that it must be ‘in some way directed against the business as such … and must not simply affect rights and interests which are separable from the business as a functioning unit’ (see for the so-called betriebsbezogenen Eingriff, BGH, BGHZ 29, 65, 74 (case 35) and recently BGH, VersR 2015, 717; BGH, NJW 2015, 1174; BGH, VersR 2009, 1633: spam emails as a ‘business-connected’ invasion of the claimant’s right). This formula, as many academics have admitted quite bluntly, is nothing but an empty shell of words, and perhaps the courts should attempt more openly to weigh the reciprocal interests rather than to indulge in the creation of opaque formulae. Finally, since the element of ‘unlawfulness’ (on which see below III.A in this chapter) has to be positively established in each single case (Güter- und Interessenabwägung). The result is that the right of an established and operating business has to receive its precise content by continuous judicial activity, balancing the rights of the claimant and the defendant. The right of an operating and established business is further restricted by the subsidiary nature of the right (Subsidiarität) which means that the right can only be invoked in the absence of any other relevant provision as, for example, ownership under § 823 I BGB or § 823 II BGB

The Rights and Interests Protected by § 823 I BGB  43 in conjunction with a protective law (on which, see, eg, BGH, BGHZ 38, 204; BGH, NJW 2003, 1041.)

iv.  The General Right to One’s Personality In Germany, as indeed in the US (see Warren and Brandeis ‘The Right to Privacy’ (1890) 4 Harvard Law Review 193), the first attempts to recognise a general right of privacy (and, more generally, a wider protection of the human personality) were made by distinguished academics towards the end of the nineteenth century. (Thus, Kohler ‘Das Recht an ­Briefen’ Archiv für bürgerliches Recht VII, 94 ff; Gierke, Deutsches Privatrecht I (1895) 707; III (1895) 887. For more details see Janssen, Präventive Gewinnabschöpfung (2017) 428 ff; Kötz/Wagner, nos 365 ff.) On a more regional basis, however, one must note the Civil Code of Saxony of 1863 – greatly admired at the time – gave judges the discretion to award damages in cases involving the ‘dissemination of untrue statements about a person’s life, personal abilities, conduct of office, established business, or other relations’. Of course, the emphasis on untrue statements brings this provision closer to defamation than privacy. This caveat, however, does not really affect the pioneering nature of the Code given the feeling, widely accepted at that time, that interferences with honour, reputation and other such personal interests should not be vindicated through an action for damages. (See, eg, various obiter: RG, RGZ 7, 295, which reflects the view taken by most German courts.) This sceptical attitude towards a general right to one’s personality was, however, also adopted by the Committee which was entrusted with the task of drafting the BGB. Indeed, in its Report, it expressed its doubts in uncompromising (and socially divisive) terms when it stated that it [would be] repugnant to the dominant opinion among the population to place non-material values on the same level as property interests and to make good with money interferences with non-material interests. The Code [which was being drafted at the time] …

continued the Report, should not ignore this view, especially prevalent among the better circles of society [sic]. Only the worst elements [of society] would try to take advantage [of such a provision]. Pursuit of profit, selfishness, and covetousness would be promoted and wrongful proceedings, started from ulterior motives, would be encouraged (Protokolle der Kommission für die Zweite Lesung des Entwurfs des Bürgerlichen Gesetzbuchs, vol I (1897) 622–23).

Clearly, the times were not yet ripe for the recognition of any wide-ranging rights of personality; and the ‘toughness’ of living conditions at that time made the average citizen quite indifferent towards such ‘lesser’ interferences with his daily life. Inevitably, therefore, German law opted for a more gradual extension of the protection of the various aspects of the human personality (eg, a person’s name under § 12 BGB, § 823 II BGB in conjunction with § 185 ff of the Criminal Code as protective law or § 826 BGB). It was not until the Nazi Holocaust demonstrated its utter disregard for human beings, their life and their dignity, that the need for a greater legal protection began to be felt. Even then it was strongly resisted by sections of the press which managed to scupper all legislative attempts to deal with this problem. The next move was thus facilitated by the post-war climate, the newly sanctioned Bill of Rights (contained in the first 19 articles of the GG), and the growing w ­ illingness to entertain the possibility that human rights provisions could be applied

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Breach of Protected Interests (§ 823 I BGB)

not only vertically (to control the state) but also horizontally affecting (but not directly regulating, so-called mittelbare Drittwirkung von Grundrechten) the relations of private citizens (for more details see Janssen, Präventive Gewinnabschöpfung (2017) 440 ff). What happened next is explained in the translated cases and their annotations – more than usually detailed. The reasons therefore are manifold: first, the general right to one’s personality is pure judgemade law and without knowing the leading cases impossible to understand. Secondly, it is legally speaking probably the most dynamic part of § 823 I BGB with hundreds of new cases every year. And finally, the German law of privacy holds some interesting lessons for the English common law. Therefore, only some general observations will be made here. The development of the general right to one’s personality was prompted by the Basic Law’s protection of the human personality (Articles 1 and 2 GG). That these constitutional provisions should be given material effect on the civil law plane was desirable and necessary after the Second World War. Less straightforward, however, was the method of the courts of widening the remedies available to the aggrieved claimant in order to make this protection complete. Thus, in the first decision of the BGH that recognised the general right to one’s personality – the Schacht case (case 12) – the Court decreed, and the claimant was content to demand, reparation in specie (correction of statement published in a newspaper but no financial compensation). In the second important judgment – the Herrenreiter case (case 13) – the Court argued in favour of the analogical extension of the old § 847 BGB (now § 253 II BGB) and granted damages for the first time, while in the G ­ insengwurzel case (BGH, BGHZ 35, 363, previous edition case 41) the Court decided to base the award of monetary compensation on § 253 BGB (now § 253 I BGB) in conjunction with Article 1 GG. In the Caroline von Monaco I decision (case 95) the BGH found this final reasoning for the admission of monetary compensation for personality rights infringements: the right to claim damages in that case is a remedy sui generis (Rechtsbehelf eigener Art) and derives directly from Articles 1, 2 I GG. To stress the particularities of this right the BGH now usually uses the term ‘Entschädigung’ instead of ‘Schadensersatz’ or ‘Schmerzensgeld’ (see for the latter the Schmerzensgeld discussion in chapter nine), for cases of personality rights infringement. § 253 BGB needs to be interpreted contra legem to allow that kind of monetary compensation. The constitutional text, in its express desire to protect human dignity and personality (Articles 1, 2 I GG), makes this extension of this civil remedy (damages) both desirable and necessary. This last part of the reasoning may be doubtful as it is clearly against the wording of § 253 I, II BGB to grant damages for the infringement of the general right to one’s personality. But given the legislative inactivity in the field, the BGH has repeatedly upheld it; indeed, the BVerfG itself held in its famous Soraya decision (BVerfG, BVerfGE 34, 269) that this ‘extension’ in no way violated the constitutional order (Article 20 III GG). One must further stress that the absence (until the Schacht decision of 1954) of a general right of personality did not mean that the protection afforded by German law (at any rate while the democratic order was respected) was completely inadequate, let alone nonexistent. Nonetheless, the way the courts managed to afford protection was, at times, achieved in a somewhat crude legal manner and, in some respects, the current casuistic method of the English courts. When, for example, in 1899 the defendants broke into Bismarck’s death chamber and photographed his corpse, public resentment was such that the court that had to hear the case against the photographers had to discover a way to deny the offenders the financial advantages of their conduct. In the event, the defendants were forced to hand over to the claimants the negatives of the photographs. The actual decision, however, is more complicated than this summary suggests, since it had to be decided according to the old

The Rights and Interests Protected by § 823 I BGB  45 Gemeines Recht – ie, the usus modernus Pandectarum (which was still applicable law in some parts of Germany before 1900) – and was related to a bankruptcy question (since the defendants were insolvent): were the negatives part of their estate? (RG, RGZ 45, 170). By 1907 this rather primitive protection was further extended by the Act on Artistic Creations which, in §§ 22 ff, still prohibits the publication of a person’s picture without his consent unless he is a ‘public figure’. The unauthorised publication of private letters was also increasingly restricted, though in the beginning the protection afforded to the ‘author’ (or, more typically, his heirs wishing to prevent publication of letters that were in their possession) depended upon whether the letters in question could be considered as ‘literary works’. This move started with an RG decision (RG 7, RGZ 69, 401) where it demonstrated great ingenuity when Nietzsche’s sole heiress sought to prevent the publication of letters written by the philosopher, which the heirs of the addressee wished to publish. In the absence of a general right of personality, the court reasoned that the ownership in the letters had passed to the addressee (and to his heirs). But if the letters could be regarded as ‘artistic creations’, they could then be given copyright protection. Thus, to start with the publication of private facts, lying outside the range of fiduciary relations, received little or no publicity. Fifty years later, however, the BGH in the second Wagner case (BGH, BGHZ 15, 249), which involved the private diaries of Cosima Wagner written during her marriage to the great composer, held that the publication of private notes or records could be enjoined on privacy grounds. This was so, even if they fell short of the standards of ‘literary merit’ that would ensure them protection under copyright laws. The general right to one’s personality covers invasions of privacy of human beings and even legal entities (for the latter so-called Unternehmenspersönlichkeitsrecht see ­Cronemeyer, ‘Das Unternehmenspersönlichkeitsrecht in der gerichtlichen Praxis’ AfP 2014, 111); but it also goes well beyond what the common law understands as privacy rights. Thus, in German law, damages or removal (eg, of a libellous online-statements of fact) and injunction (Beseitigungs- und Unterlassungsanspruch, §§ 1004, 823 I BGB analogue), have been granted for varied violations of personality rights. They include among others the following: ‘Appropriation of likeness’ (BGH, BGHZ 26, 349 (case 13); BGH, NJW 1992, 2084; BGH, NJW 1990, 1106); the unlawful release of an insured person’s medical records (BGH, BGHZ 24, 72); keeping intimate pictures of an ex-partner (BGH, VersR 2016, 1999); ‘mobbing’ (LAG Erfurt, VersR 2004, 1468; LAG Thüringen, BB 2001, 1358); ‘neighbour snooping’ or more general ‘stalking’ (BGH, NJW 2004, 762); sending unsolicited advertisements in any form (BGH, MMR 2010, 183; BGH, VersR 2009, 1633; BGH, NJW 2006, 3781); or unnecessary publicity about an impending divorce of a member of the aristocracy (OLG Hamburg, NJW 1970, 1325). Since that case involved a member of the Hohenzollern family the Court carefully considered (and, in this case rejected as inapplicable) the possible (statutory) exception which applies to ‘persons of contemporary history’ (Personen der Zeitgeschichte, see § 23 I no 1 Act on Artistic Creations). An injunction against publication was thus granted to the claimant. If the ‘private’ information is already in the public domain, the courts will be reluctant to accord privacy protection. Yet even in such cases the courts will investigate whether a full identification of the complainant is n ­ ecessary or, in effect, is part of a gold-digging operation on the part of the defendant/publisher. Thus, see, BGH, JZ 1965, 411; BGH, NJW 1988, 1984. (But cf BGH, NJW 1980, 1790.) The publication (by Der Stern magazine) of an unlawfully recorded telephone conversation (made by persons unknown) between two leading politicians shows the detailed balancing of privacy rights versus

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Breach of Protected Interests (§ 823 I BGB)

speech rights by the BGH (BGH, BGHZ 73, 120). The conversation was between Helmut Kohl (then party leader of the CDU) and Kurt Biedenkopf (then Secretary-General of the party). The false signing of a painting with the name of a famous, contemporary German painter (BGH, BGHZ 107, 384). The false and thereby damaging attribution of a statement to an important contemporary personality (BGH, NJW 1959, 1269; BGH, NJW 1961, 2059; BVerfG, NJW 1980, 2070). The unauthorised opening of sealed mail (BGH, VersR 1990, 531. The opening of the sealed letter violates the personality rights of both sender and receiver). The unauthorised imitation of the voice (of a recently deceased actor) for the sake of advertising a product (OLG Hamburg, NJW 1990, 1995). Paparazzi pictures of public figures in public are normally not a violation of their personality rights (see the case of a former politician: BGH, NJW 2008, 3134), unless particular circumstances exist (see the instructive decision, BGH, NJW 1996, 1128 (third Caroline case, case 19); BGH, NJW 2008, 3138). The BGH further decided in a case of a German celebrity that it is not a violation of any personality rights to publish aerial photos of her house. However, this changes as soon as the defendant provides the readers with an additional detailed location plan of the house (see BGH NJW 2004, 762, the Sabine Christiansen case). In the Caroline’s Son case (BGH, BGH NJW 1996, 985) the BGH placed great emphasis on the defendant’s obvious commercial motives in the taking the photographs. That these results were achieved through an often bold reappraisal of codal provisions of the Civil Code which, in the event were found to be outdated, can only be seen as a sign of open-mindedness on the part of the German judiciary. Furthermore it needs to be noted that the general right to one’s personality ought to have been modelled on the interests of life, body, health and freedom under § 823 I BGB. If the Code were ever to be redrafted, the protection of personality should be added to the list of those interests with which it is more related, rather than be treated as another right analogous, perhaps, to that of ownership. However, such a redrafting of the BGB seems unlikely and the Schuldrechtsreform and the Schadensersatzrechtsreform of 2002 made clear that the legislator does not have any interest in regulating it. The reason t­ herefore is that the issues raised by the general right to one’s personality are highly sensitive. One must thus never forget that the right to be protected against an often irresponsible press must be counterbalanced by the equally important need to preserve the freedom of the press guaranteed by Article 5 I GG and Article 10 ECHR. Where the exact line is to be drawn depends on the circumstances of each case and the rich case law will, at best, provide useful guidelines but not binding rules. One also needs to bear in mind that the three courts in charge of that task (the BGH, the BVerfG and the ECHR) can have different stances (see, eg, ECHR, NJW 2004, 2647 and BGH, NJW 2007, 1997 in the Caroline von Hannover case) which further complicates things. The famous ‘Lebach decision’ (case 14), illustrates how difficult it can be to balance on the one hand the right to publish information and, on the other, ‘the right to anonymity’ as a facet of the general right to one’s personality. (The anonymity of criminals and, more, generally persons prosecuted for offences, has been discussed in numerous cases from different courts. Interesting dicta can be found, inter alia, in: BGH, VersR 2010, 359; BVerfG, NJW 1998, 2889; ECHR, NJW 2012, 1058; OLG Hamm, NJW 1982, 458; OLG Köln, NJW 1987, 2682.) For reports about possible criminal offences of an uncondemned person (so-called Verdachtsberichterstattung, eg, during criminal proceedings) see: case 15; BGH, NJW 2014, 2029; BGH NJW 2015, 778 and BGH, VersR 2016, 772; BGH NJW 2013, 790. (This case can be compared with Mosley v News Group [2008] EWHC 687.)

The Rights and Interests Protected by § 823 I BGB  47 It appears that the more active a person becomes in the ‘public domain’ the less he will be able to argue successfully that criticisms of his conduct amount to actionable invasions of his privacy. (See, for instance, BGH, NJW 1964, 1471.) In the light of the above, the German courts have adopted a much more nuanced approach. On an ad hoc basis they thus tend to take into account the following non-exclusive criteria, the rationality of which must be compared with the English tendency to stretch or adapt the parameters of old torts. Thus, in cases where the freedom of speech (Article 5 I GG, Article 10 ECHR) clashes with privacy (Article 2 I GG, Article 8 ECHR) German courts weigh such factors as: (a) the motives of the publisher. (Contrast BVerfGE 7, 198 (Lüth) (case 11) with BVerfGE 25, 256 (Blinkfüer).) In the context of privacy protection, this has been taken to mean that if the invasion was motivated by a wish to make money at the expense of the claimant, the judges take the tortfeasor’s ill-gotten profits into account when calculating the damages. (See especially BGH, BGHZ 128, 1.) This decision has generated much (and not always favourable) comment from academic commentators as some of them fear that the BGH has introduced punitive damages. (See, for instance, Stoll, Haftungsfolgen im bürgerlichen Recht (1993) 57–67, 79–82, 210 ff; Rosengarten, ‘Der Präventionsgedanke im Zivilrecht’ NJW 1996, 1935.) (b) The importance of the speech as such, for example, does it advance knowledge and public debate or merely benefit the speaker financially? (BVerfGE 7, 198, 219 (Lüth)). For more interesting pronouncements on this sensitive point see: BGH 12 October 1993, NJW 1994, 124, translated in van Gerven, Cases, Materials and Text on National, Supranational and International Tort Law (2nd edn, 2000) 179–82; Kötz/Wagner, nos 389–91. (c) The way in which the information about the claimant was obtained is of importance. This however does not mean that every illegally gained private piece of information is automatically a violation of privacy rights as can be seen in BGH, JZ 2015, 303. Here the BGH decided that the publication of private emails gained from a politician’s stolen private computer was not a violation of any personality rights if the public interest regarding the content of these emails prevails. The use of a telephoto lens can, but must not be an indicator for the claimant’s wish to be left alone. (See BGH 1995, BGHZ 131, 332 on the one hand, and ECHR, NJW 2014, 3291 on the other.) (d) The extent of the dissemination of the information is also a factor. (BVerfG, BVerfGE 35, 202 (Lebach); OLG Saarbrücken NJW 1997, 1376.) (e) The accuracy of the statement or whether it was fabricated by a news medium. (See:  BVerfG, BVerfGE 34, 269 (Soraya) (case 38 in the previous edition); BVerfG, BVerfGE 54, 208 (Böll); BGH, BGHZ 128, 1.) (f) The breadth of the restriction which the claimant wishes to place on the defendant’s speech rights must also be reviewed; unnecessary restrictions will be denied or cut down to size. (BVerfG, BVerfGE 42, 143.) (g) Other, wider societal objectives which may be involved in the dispute: case 14, BVerfG, BVerfGE 35, 202 (1973) (Lebach); BGH, NJW 1994, 124, and so on. BGH, NJW 1964, 1471 offers a good example of the position taken by German courts that not everything that interests the public can be published in the public interest. In that case, the defendant magazine, wrote an article about a criminal ­prosecution

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Breach of Protected Interests (§ 823 I BGB) brought against the claimant. In it it also referred to his repeatedly a­ dulterous life. The court stressed that, normally, such revelations will be treated as amounting to actionable instances of violated privacy. In this case, however, the revelation was left unpunished since the claimant had, in the past, held himself out as a moralist. The courts also take the view that a severe attack may justify an otherwise excessive counterattack. (The G ­ egenschlag theory of speech: BVerfG, BVerfGE 12, 113 (Schmid-Spiegel), reconfirmed by BVerfG, BVerfGE 54, 129 (1980) (Art critic).) Despite the abovementioned and, it is submitted supportable wide protection of different aspects of the human personality, the German courts – ordinary and constitutional – have stressed from the early days of this jurisprudence that the balancing process must be undertaken with care and that, if in doubt, there is a kind of presumption in favour of the right of freedom of expression and opinion. (See, for instance, BGH, BGHZ 24, 72; BGH, NJW 1994, 127.) It also needs to be underlined that the courts must not only counterbalance the general right to one’s personality by the freedom of the press, but also by other constitutionally guaranteed freedoms, especially the freedom of arts (Article 5 III GG). For this difficult process see BGH, NJW 2008, 2587, reproduced as case 16 and the accompanying comment.

A great challenge for the protection of personality rights is the rise of the internet. In principle the offline and the online world show, legally speaking, no difference regarding personality rights. However, the owner of an infringed personality right can hardly ever get hold of an internet tortfeasor: his identity is regularly difficult to detect and it might be necessary to sue the wrongdoer abroad. Therefore the victims often direct their claims to the infomediary instead (regulary to delete some internet content, but also for m ­ onetary compensation). The crucial question is whether the infomediaries are responsible for the unlawful content of third persons (see also Kötz/Wagner, no 392). Slightly different is the problem of Google’s liability for its autocomplete-function which shows notions that are violating the personality rights of the person you are searching for. The BGH held Google liable for its own content as the notions shown are created by their own software (case 17). Another internet-related problem is the liability of forum operators or more general of social media operators (eg, ‘Facebook’) for personality right infringements of their users. So far the BGH has rejected any kind of liability of the social media operators themselves (case 18 and BGH, NJW 2015, 489). The sums paid for the infringement of the general right to one’s personality of the press were for a long time very moderate. Until the Caroline von Monaco I decision of the BGH (case 95) of 1994 the average sums were between €7,000 and €8,000 with a maximum of €25,000 in the Prince Bernhard decision (OLG Hamburg, AfP 1970, 94). As the damages were too low for being a real incentive for the press to stop infringing personality rights (especially of celebrities) the decision changed this situation radically: the judges decided that the damages must be a real incentive to stop the press from violating personality rights and the profits gained by them need to be taken into account when calculating the amount of damages. Nowadays the awards for personality rights infringement by the mass media are considerably higher than in the past. The ‘blockbuster awards’ are at the moment the decision of the Oberlandesgericht Hamburg (OLG Hamburg, GRUR-RR 2009, 438) in the case of the Swedish Princess Madeleine with €400,000 and the Jörg Kachelmann decision of the Oberlandesgericht Köln with €395,000 (OLG Köln 12 July 2016, available at: www.justiz. nrw.de/nrwe/olgs/koeln/j2016/15_U_175_15_Urteil_20160712.html).

Unlawfulness and Fault  49 As for the right of an established and operating business the unlawfulness has to be positively established in each single case of a possible violation of the general right to one’s personality. Not every act which is affecting another person’s general right to one’s own personality is automatically an infringement of that right, but it is receiving its precise content by continuous judicial activity, balancing the rights of the claimant (deriving from Article 5 I, II GG (freedom of expression, arts and science) and sometimes Article 4 GG (freedom of faith and conscience)) and the defendant (Articles 1, 2 I GG as the legal basis of the general right to one’s personality). Finally, it should be noted that the general right to one’s personality does not end with the person’s death. The courts have rather developed a postmortem right to one’s personality (postmortales Persönlichkeitsrecht) to protect the reputation of the deceased (see, eg, the Mephisto case (BGH, NJW 1968, 1773) and the Emil Nolde case (BGH, NJW 1990, 1986)). However, the heirs cannot ask for monetary compensation in the form of damages but are limited to so-called Abwehransprüche which contain removal (eg, of an online defamation) and injunction only (BGH, GRUR 1974, 794). The rationale behind this restriction is that the heirs should not receive a windfall profit. This result has been criticised as the postmortales Persönlichkeitsrecht is insufficiently protected against violations. However for the commercial part of the general right to one’s personality (so-called kommerzielles Persönlichkeitsrecht, eg, picture, name etc of a deceased celebrity, but not for ‘normal persons’ as their personality generally does not have a commercial part) the BGH allowed the heirs to claim for damages (see the Marlene Dietrich case, BGH, NJW 2000, 2195 and the KlausKinski.de decision, BGH, NJW 2007, 684).

III.  Unlawfulness and Fault A. Unlawfulness Unlike French law, German law has kept the element of fault (Verschulden) separate from that of objective unlawfulness (Rechtswidrigkeit). The first is understood as an attitude (the attitude of a person who intentionally or negligently causes damage to another) while the second simply indicates the violation of a legal norm in the absence of a legally recognised excuse. How far these two concepts can actually be kept apart is a matter of considerable controversy and what follows is a bird’s eye view of one of the most hotly debated – but essentially – theoretical areas of the German law of torts. The traditional school of thought on the matter, which still enjoys much support with the courts, takes the view that the element of unlawfulness is automatically satisfied whenever one of the named rights or interests in § 823 I BGB has been violated. (Matters are, as we have seen, slightly more nuanced when one is talking of some of the new ­interests – the Recht am eingerichteten und ausgeübten Gewerbebetrieb and the Allgemeine ­Persönlichkeitsrecht – that have been brought under the term ‘other rights’.) For example, running over the claimant or damaging his property is an act, which brings about a consequence, which deserves the disapproval of the legal order. Unlawfulness, in other words, depends on the harmful result (Erfolgsunrecht). The only thing that can remove the ‘unlawfulness’ is the presence of a legally recognised defence (Rechtfertigungsgrund). Action taken

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in order to repel an actual unlawful act upon oneself or another person is, according to § 227 BGB, such a defence (Notwehr). Equally, the destruction of a thing belonging to another person will, according to § 228 BGB, also be a lawful defence, so long as it does not represent a disproportionate reaction to the threatened danger (Notstand). Various forms of self-help can, within limits, remove the element of unlawfulness in the defendant’s conduct (eg, § 228 BGB allows one to destroy the object from which the danger emanates; § 904 BGB allows one – in certain circumstances – to destroy an object other than the one which is the source of the danger). §§ 562, 859 and 1029 BGB contain specific applications of the same general rule in the context of possession and ownership. Another legally recognised defence is found in § 34 of the Criminal Code (necessity). Consent (Einwilligung des Geschädigten) can also have a bearing on the issue under consideration if it is lawfully given with full knowledge of all the facts and prior to the accomplishment of the activity complained of. How this works in the field of medical operations (where it is most relevant) is a matter of some dispute. While the legislator recently codified the respective contractual claims in §§ 630a–630h BGB under the Patients’ Rights Act of 20 February 2013 (Gesetz zur Verbesserung der Rechte von Patientinnen und Patienten), claims based on § 823 I BGB remain admissible. (For more details see ­chapter  six of this book.) For some academics, a properly performed medical operation forms part of the process of healing the claimant; it is an act done in his interest and, therefore, does not interfere with the patient’s corporal integrity but with the Persönlichkeitsrecht (cf Brüggemeier, Haftungsrecht, 491 ff). Case law takes the opposite view and regards every medical intervention as tantamount to an interference with a person’s corporal integrity (constant case law since BGH, BGHZ 29, 179). The patient’s consent will, however, remove the ‘unlawfulness’ of the interference but only if it was ‘informed’, ie, given after all the information necessary for him to decide has been provided by the doctor. The need to obtain consent in advance of the medical intervention is taken very seriously in Germany and so is the need that it be ‘informed’. Thus, if the risk of an impending operation is summarily or inaccurately described in the form signed by the patient, the paucity of the information on the form will not be compensated by the fact that the doctor gave the patient ample opportunity to question him about the risks (BGH, NJW 1994, 793). On the whole, if doubts are raised about the amount of information given to the patient, it is for the doctor to prove that he satisfied the appropriate standard. It goes without saying that in practice many difficulties can arise. This is especially true in cases of minors (who can give their own consent provided they are possessed of the required capacity of discernment) (BGH, BGHZ 29, 33). The same great care is taken in cases concerning the degree of information that the doctor has to supply to the patient (concerning the gravity of his illness) in order to obtain his consent (cases 76–79 deal with this problem). Clearly, other factors may come into play and the solution may, for instance, be affected by the likelihood of causing a neurotic claimant even greater injuries by revealing to him the full extent of his illness. All that can be said here is that these difficulties are in no way restricted to German law. (On problems of medical malpractice see in addition to chapter six the notes to cases 76–79; on problems of informed consent see Kern, ‘Fremdbestimmung bei der Einwilligung in ärztliche Eingriffe’ NJW 1994, 753 and Hesse, ‘Aufklärung und Einwilligung vor ärztlichen Eingriffen: Wer muss wen aufklären?’ RDG 2011, 258; for more recent developments see the articles by Spickhoff on the latest developments in medical law in NJW 2012, 1773; NJW 2013, 1714; NJW 2014, 1636; NJW 2015, 1728; NJW 2016, 1633; and Sommerfeld,

Unlawfulness and Fault  51 ‘Aktuelle Entwicklungen der Rechtsprechung der Obergerichte und des BGH im Arzthaftungsrecht’ VersR 2015, 661.) If the defendant produces no justification, and a protective interest or right has been shown to have been violated, the element of unlawfulness is satisfied. The claimant must then go on to prove the defendant’s fault, at least in those cases where the liability is not strict or based on presumed fault. The question whether the defendant acted intentionally or negligently becomes then the second phase of the enquiry and more about this will be said in chapter six. This approach was challenged in the late 1950s and 1960s by a host of distinguished academics like Nipperdey, von Caemmerer, Esser, and others. According to these authors, unlawfulness should be determined by looking not at the result of the conduct, but at the conduct itself (Handlungsunrecht). The mere violation of one of the enumerated interests of § 823 I BGB, if done unintentionally, does not necessarily satisfy the element of unlawfulness. According to this school of thought, something more is required to do this and the missing element can be supplied by proof that the defendant’s conduct has failed to measure up to the standard of conduct imposed by a particular imperative rule applicable to the occasion in question (Verhaltensnorm). Alternatively, it could be shown that the defendant’s conduct violated the general duty imposed upon all human beings to take care not to inflict injury on others. The need for such a duty is obvious in every civilised society. The scope and content of this general duty of care (allgemeine Sorgfaltspflicht) should be deduced from § 276 BGB, which imposes upon human beings the obligation to exercise in their ordinary daily affairs (im Verkehr) the care that the occasion demands. So, the ­objective approach will determine what the defendant’s behaviour should have been. Moreover, in determining this standard the social utility of the activity in question will have to be taken into account (Sozialadäquanz) which is a gateway for policy considerations. What is the difference between these two approaches? Theoretically, the answer is obvious. The first approach (the wrongful consequence approach) treats unlawfulness and fault separately; the latter will only be considered if the former has been satisfied. The wrongful conduct theory, on the other hand, is prepared to regard lack of reasonable care as being part of the concept of unlawfulness and to understand fault (Verschulden) more in the sense of imputability (Vorwerfbarkeit). In practical terms, however, these two theories will, in the vast majority of cases, produce the same result, for it makes little practical difference if one’s liability under § 823 I BGB is excluded for lack of fault or unlawfulness. As Kötz/Wagner have remarked the issue is in practice after all fairly ‘negligible’ (Kötz/Wagner, no 108). In view of this remark some attempt must be made to explain briefly the reasons for the controversy and (apparently) greater popularity of the alternative approach which, incidentally, has also received the approval of the BGH (see case 66). First, the alternative approach has no application to the intentional, direct interference with any of the enumerated interests, as they cannot be condonded by the legal order. This more subtle approach in determining the unlawfulness by the defendant’s activity seems, however, more appropriate for the two new rights – the right of the established and operating business, and the right to one’s privacy. Both are vague, and as indicated require this careful balancing of interests before their violation can be established (see, eg, Münchener Kommentar/Wagner, § 823 BGB, nos 324 and 364). In these instances, it makes little sense to attempt this weighing of conflicting interests at the later stage of the enquiry when the defendant’s fault is being considered, for without such weighing of interests the interference

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cannot be branded as unlawful in the first place. The traditional theory about unlawfulness may be suitable for the clearly defined and delineated rights and interests of § 823 I BGB, but it is less satisfactory in the case of the new rights created by the BGH. Instead, those cases require the positive establishment of unlawfulness. Secondly, this theory may even be appropriate in the case of the enumerated rights and interests of § 823 I BGB, for example, if the manufacture of certain goods is statistically bound to lead to the death or injury of people and/or damage to their property. Is such an activity to be branded as unlawful without more ado? In Germany more than 3,000 people were killed on the roads in 2018. It would be theoretically possible for every car manufacturer to calculate, by reference to his share of the car market, the number of deaths or injuries related to his cars. Since we are talking of positive acts (the manufacturing of the cars), leading to an interference with one of the protected rights or interests, the element of unlawfulness is fulfilled and the answer to our question must be positive: the activity is unlawful. This qualification is absurd; and in order to avoid going a step further and imposing liability on the manufacturer one is forced to deny fault or, even more artificially, deny ‘adequate causation’. This latter way of denying liability is clearly very artificial, for the result (death or injury) is neither an atypical nor an improbable consequence of the activity (the manufacturing of cars), so adequate causation must be there. What may render the manufacturer liable for the harmful consequence is not whether it is (or is not) adequately linked to his activity, but his violation (if that be the case) of one of the duties which the law imposes upon persons in comparable situations. Only if one of those duties has been violated should the manufacturer be held liable to the claimant. This idea can be generalised. The duty-based approach is the more appropriate approach in all cases involving a so-called indirect interference (mittelbare Schädigungshandlungen) with the interests protected in § 823 I BGB, while in cases of a direct interference with these interests, the unlawfulness of the conduct may be presumed (eg, Larenz/Canaris, Lehrbuch des Schuldrechts II (Special part, first vol, 13th edn, 1986; second volume containing the law of torts, continued by Canaris, in its 14th edn, 1994) § 75 II, 366). While this distinction between direct and indirect interference can be criticised for some measure of artificiality, courts and most academics have in the meanwhile accepted it and it is clearly a step in the right direction. The presumption of unlawfulness in § 823 I BGB does not only cease to be an adequate response to modern areas of tort law, it also contrasts unfavourably with the more flexible English duty of care concept. The theory of indirect interference requires the violation of a specific duty of care to establish unlawfulness. Moreover, in cases of presumed unlawfulness, a German lawyer will have to enquire whether there was a duty of care at the stage of determining negligence in the meaning of § 276 II BGB, for to establish fault a priori entails stating that a duty of care was breached. The nature of the enquiry is surely somewhat cumbersome. But if one looks at the substance rather than the form, the duty of care is just as much a central concept to German tort law as it is to the common law. The importance of the duty concept can be also seen from the significance given by German courts to the scope and purpose of the duty owed which for a long time now has replaced the criterion of adequate causation as the main controlling factor of causation. For further details, see section V on causation below. So the common lawyer should not be deterred by the apparent differences between § 823 I BGB and the table of content of any English textbook on tort.

Unlawfulness and Fault  53 Common lawyers, accustomed to dealing interchangeably with the same problems under different rubrics (duty, duty owed to the claimant, carelessness, or foreseeability), should not be surprised at this equivocation between the various concepts, nor dismayed by the fact that the same issues emerge for consideration under separate headings. If there is some advantage in considering some of these points under the heading of unlawfulness (or duty) instead of adequate causation (remoteness/foreseeability) it is, in Dean Prosser’s words, that it can ‘serve to direct attention to these policy issues which determine the extent of the original obligation and of its continuance, rather than to the mechanical sequence of events which goes to make up causation in fact’ (Law of Torts (4th edn, 1978) 244). Finally, one should, perhaps, add that this new approach, and the increased willingness to think in terms of duties of care, has had a considerable impact on the law relating to liability for omissions as will become clear from the discussion in the next section.

B. Fault A number of decisions are given below as illustrations. Generally speaking, however, and subject to one point only, the treatment which this topic receives in German law greatly resembles that found in common law textbooks. Establishing fault first requires the (regularly given) finding of the tortfeasor’s culpability. The difference which sets German law apart can be found in its tendency to analyse the problems of fault in a highly abstract manner and to categorise the various types of fault under five, arguably six, different headings. Thus, a distinction is drawn between: (i) dolus directus (direkter Vorsatz); (ii) dolus eventualis (bedingter Vorsatz); (iii) gross negligence (grobe Fahrlässigkeit); (iv) ordinary negligence (mittlere Fahrlässigkeit); and (v) light negligence (leichte Fahrlässigkeit). These categories can best be illustrated by means of specific examples. (Ordinary negligence is defined in § 276 II BGB and we shall return to it later. In addition to the above headings, recklessness may form a separate heading of fault.) i. Dolus directus. It can come in two forms, for example, I aim at a child standing behind a house window and I kill it. Alternatively, I set fire to a house in order to burn it knowing that a young child is inside and knowing (and accepting) that the inevitable result of my burning the house will be the death of the child. ii. Dolus eventualis. For instance, I hit a man on the head with the intention of injuring him; but I also realise that he may die as a result of the blow. Despite this knowledge, I persist with my action. iii. Negligence. The differences between the three types mentioned above is one of degree. In most tort cases the distinction between the various types of negligence (particularly light and average or normal negligence) is of little significance (though see case 67 as to liability regimes in labour law, discussed below in chapter five); but it is of some importance for contract law. A further distinction is made and it seems of particular importance to criminal law. This is between advertent negligence (luxuria) and inadvertent negligence (negligentia). Sometimes these terms are rendered into English as conscious and unconscious negligence. Advertent negligence comes close to intention (dolus eventualis) in the sense that the actor

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(­personally) foresaw the criminal consequences as likely to materialise. The difference, however, is that in the case of dolus the actor accepts the result whereas in the case of luxuria he does not. (Indeed, he goes ahead with his action in the belief that the criminal event will not materialise.) Inadvertent negligence, on the other hand, approximates the notion of casus. The difference is that negligentia (unlike casus) is a form of culpability since the actor could, had he applied himself, foreseen and avoided the consequences of his act. At the beginning of this section, the state of recklessness (Leichtfertigkeit) is suggested as an independent heading of fault. This is because many lawyers would find it difficult to say how it differs in practice from gross negligence. The theoretical answer often given is that recklessness is a slightly worse form of conduct than gross negligence, involving a higher degree of deviation from the accepted norm. In practice, however, non-German observers are likely to take the view that their German colleagues are, in this instance, splitting hairs. Additionally, one has the impression that recklessness is a term reserved more for the criminal law while gross negligence is used in the context of civil law – contract and tort (eg, § 826 BGB which requires dolus; the BGH, however, is content with recklessness: eg, BGH, NJW 2008, 2245). § 276 II BGB contains the definition of negligence. The person who fails to observe the ordinary care, which is required in everyday life, is guilty of negligence. This means doing what the reasonable man (or woman) would not have done or not doing what they would have done. As in English and American law, the standard of care is objective and the test – the bonus pater familias, as the man on the Clapham omnibus is sometimes called – is wide enough to allow plenty of room for judicial creativity. If the defendant belongs to a particular group or profession he will be judged against the standard expected to be attained by members of that profession. So a general medical practitioner will have to demonstrate the standard of care expected of general medical practitioners and not the standard of the specialised consultant. In our example, however, he will be negligent if he realises (or ought to realise) that a specialised second opinion on the state of the health of his patient ought to have been obtained but was in fact never obtained. In some cases, fault may be connected to the breach of a social rule. For example, footballers are at fault if they breach the rules of the game, such as by making a foul tackle (see case 21). Personal shortcomings of the defendant will not normally be taken into account and German writers often quote as an illustration of this the learner driver who commits the kind of error of judgement which his experienced colleagues would have avoided. The reasoning is similar to that given by Lord Denning MR in Nettleship v Weston ([1971] 2 QB 691) and it is clear that negligence in these cases does not necessarily involve any moral blameworthiness. One is also tempted to speculate that, as in Nettleship v Weston, compulsory motor car insurance may account for this very high (if not unattainable) standard of care. Certainly, one case reproduced below (case 22), which has French and English equivalents, suggests that negligent liability often is strict liability in everything but name. Having stressed the objective standard of the test, one must add that there is also room for certain subjective elements to enter into the equation. Thus, the defendant’s conduct will be measured against the conduct of the hypothetical reasonable man who was in the same external circumstances as the defendant. As stated, the reasonable man is nothing more than the anthropomorphic conception of justice. German judges, like their English, French and American counterparts, will thus formulate their value judgement in the light of such factors as the probability of harm,

The Duties of Care  55 the cost of avoidance, and the magnitude of danger if it is realised. German case law is very rich on this point and it really serves no purpose to provide further details since the examples and reasoning are very similar to those found in other systems. It is noteworthy, however, that mathematical formulae, which attempt to work out negligence on the basis of a yield–cost analysis, and which are so favoured by many American judges and academics, can also be found in German legal writings (see, eg, Baumann, ‘Ökonomie und Recht – Ökonomische Effizienzjurisprudenz’ RNotZ 2007, 297). It is unclear, however, whether this suggests that the German legal literature is ready for a more economic analysis of legal problems such as is found in American academic literature. In German case law this kind of thought plays hardly any role whatsoever. One should, perhaps, conclude this section by stating that the ‘objectivisation’ of negligence represents one of the inroads into the fault principle. The theoretical distinction between fault and risk-based liability is often very blurred in practice, especially where it is aided by a statutory (eg, §§ 836 and 833 II BGB) or case law-created (eg, § 823 II BGB) reversal of the onus of proof. The same is true whenever the notion of prima facie proof, which is analogous to our doctrine of res ipsa loquitur, can be invoked. This change has involved a transformation or even perversion of traditional doctrines and notions and may be largely due to the impact that the insurance factor has had on the modern law of torts.

Bibliography Jansen/Steel, The Structure of Tort Law (forthcoming); Jansen, Die Struktur des Haftungsrechts. Geschichte, Theorie und Dogmatik außervertraglicher Ansprüche auf Schadensersatz (2003).

IV.  The Duties of Care A. Generally It has already been noted how the duty concept has been introduced into the notion of unlawfulness. Acts, according to this view, which indirectly infringe one of the protected interests, are not automatically unlawful unless it can be shown that the defendant has failed to satisfy the standard of care demanded by society. (A good illustration is BGH, NJW 2010, 537 (serious injury during a football match caused by the defendant.) The decision is reproduced as case 21). This duty-orientated approach becomes even more obviously necessary in the case of liability for omissions. From Roman times to today, it has been well known that liability for an omission could be imposed if a previous duty to act could be discovered. In early times, statute and contract were the main progenitors for duties of affirmative action. Later, the area of liability for omissions was widened, even though technical administrative difficulties, as well as ideological objections (especially in the common law), strongly militated against such an extension. In German law, one of the most fertile sources of the development of liability for omissions and, indeed, of the whole law of tort, was the development of the idea that a preceding dangerous (or potentially dangerous) activity or state of

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affairs should give rise to a duty of care. From this idea, the courts slowly but steadily developed the famous Verkehrssicherungspflichten. The term Verkehrssicherungspflicht is not easy to translate. But its meaning could be summarised by saying that whoever by his activity or through his property establishes in everyday life a source of potential danger which is likely to affect the interests and rights of others, is obliged to ensure their protection against the risks thus created by him. It has been a matter of some dispute where these duties of care should be considered. Should they be examined under the heading of conduct or unlawfulness or even remoteness? For present purposes it is not necessary to enter into these disputes, not least because once again the final practical result is not so very different. However, the purpose of these duties of care must be made clear. They are there to delineate the range of relationships which will be protected by careless interference; they are also there to limit (more effectively than the theory of adequate cause can do) the range of persons who could be held liable for a particular harmful result. To put it differently, does the relationship between the parties put one of them under a duty to take care vis-a-vis the other? Whether this is so, as well as the precise content of the duty, is a matter of judicial policy. This will be largely determined, inter alia, by the kinds of factors we have already considered in the previous section, namely gravity of harm, probability of occurrence, cost of prevention and so on. As one would expect, the case law is extremely rich. And once one excludes theoretical disputes, the factual situations considered and the solutions given to the problems they raise are very similar in American, English and German law. The way the rich case law can be classified may vary. Situations giving rise to risks (and hence, duties) can be and are often classed alphabetically. Alternatively, the duties may be said to derive from family or business relationships, or where no relationship (in the usual sense of the word) exists, this last heading, for example, including a discussion of the problem of product liability. In this section one important group of cases dealing with safety on highways and premises will be examined, and a later section will discuss certain problems related to the law of product liability.

B.  Traffic Safety on Highways and Places Open to the Public Including Dangerous Premises Historically, this is the area where the duties of care made their first appearance and they cover a large number of different factual situations which have exact equivalents in both English and American law. Thus, claimants injured on public highways (or, indeed, smaller roads of all types), business premises, factories, shops, or homes may have a right of action against those who opened these facilities to the public or are in some way responsible for their upkeep. As the RG put it in its seminal judgment of 23 February 1903 ‘a person who makes his land available for use by the public is obliged to do so in a manner which accords with public safety’ (RG, RGZ 54, 53). The following are illustrations from the more recent case law; and they are noticeable for the fact that they have also figured in common law litigation. Thus, the president of a sports club who instructed a 14-year-old boy to mow the playing field with a self-propelled mower which, according to safety regulations should not be operated by anyone under 16 years of age, owes a duty of care to children injured nearby (BGH, NJW-RR 1991, 668). Likewise, the organiser of a hockey match owes a duty of care to his

The Duties of Care  57 spectators who are hit by the ball because he failed to protect them by interjecting a sheet of protective plexi-glass between them and the playing field (BGH, NJW 1984, 801). The proprietor of a restaurant should foresee that some of his customers may have difficulty with walking and should thus take appropriate measures to protect them against the dangers of a very slippery floor (BGH, NJW 1991, 921). Organisers of a mass spectacle are under a duty to ensure that the public is given safe ways to enter and exit the area where the event is being organised (BGH, NJW 1990, 905). A tour operator owes a duty of care to travellers for facilities at a hotel that were not advertised in the travel brochure but appeared to be part of the hotel complex from the traveller’s point of view (BGH, NJW 2006, 3268). The owner of a building is prima facie liable if one of its visitors is injured on its staircase (BGH, NJW 1994, 945; onus of proof reversed in favour of claimant). Examples such as these abound in the books; and, of course, it need not be repeated in detail here that all these are cases of fault-based liabilities. Such duties are owed towards all people and, therefore, are classified under the law of delict. But additional contractual liability is not excluded. As English common lawyers say when discussing their Occupiers Liability Act 1957, occupation of premises is a ground of liability not a reason for excluding other rules of liability. This can be the case, for example, where a customer is injured in a shop after he has concluded his purchases. Contractual and tortious duties may, in this case, coexist; but they do not overlap in the sense that each is subject to its own rules about limitation, measure of damages, proof, and responsibility for the unlawful conduct of other persons. Indeed, the tort remedies may, in this respect, be distinctly inferior to contractual remedies. This is why, as we shall see in chapter five, the German courts have expanded the contractual remedies to cover the time before the contract is concluded (in our case before the customer has agreed to buy the goods). Indeed, the expansion has gone further and even included third parties accompanying the potential purchaser (see below, case 69 concerning the daughter of a shopper who slipped on a vegetable leaf when helping her mother to pack up the shopping). The duty to take reasonable care to protect (lawful) entrants to premises (and their property) is primarily imposed on the owner of the premises but it may also be imposed upon a hirer or lessee, depending on their degree of control. The problems here and the solutions they receive from German courts are, essentially, no different from those encountered in Anglo-American law. Thus, for example, a contractual agreement between a landlord and his tenant, that only the latter will be responsible for the maintenance and safety of the premises and be liable to third parties, will have only limited effect vis-a-vis the injured third party. (But it may well be valid with regard to the internal relationship between owner– lessee: see RG, RGZ 95, 61.) Where the owner has delegated the performance of his duties to a third party, he remains answerable for his own fault in selecting and supervising the third party (BGH, NJW 2006, 3628). Sometimes express statutory law permits such delegation and grants immunity to the delegating person for the bad performance. This is often the case with local communities who, for example, are allowed to sub-contract to private companies their duty to clear snow from roads and spread salt in order to make them safer. In such cases their responsibility will, normally, be limited to careful selection and supervision (BGH, NJW 1985, 270). So far, the discussion has been limited to the owner’s general liability towards persons injured while on his premises. In principle, German law has not made the sharp distinction that the common law made between lawful visitors and trespassers, and even less has

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it opted for the irrational distinctions adopted by the old common law between different types of lawful visitors. These duties are owed towards all persons, the underlying idea being is that the ‘occupier’ of the land is, usually, in a better position to know the risk and prevent it from materialising, and also to insure against its occurrence. Thus, the ‘occupier’s’ liability towards a trespassing child will, invariably, be upheld, a result, which is increasingly accepted as fair in common law jurisdictions as well. But liability towards the more obnoxious types of intruders (such as burglars) can and will be limited in various ways. Thus the court may not protect such persons either on the ground that their presence was not foreseeable (causative grounds), or because they may be found guilty of contributory fault (contributory negligence or volenti in the common law). Alternatively, protection may be denied because the requisite standard of care has been satisfied by the defendant/occupier (cf the humanitarian duty in British Railways Board v Herrington [1972] AC 877). For ­example, in Tomlinson v Congleton BC [2004] 1 AC 46, an adult who dived into an ornamental lake despite warning signs that it was not for swimming. In Ratcliff v McConnell [1999] 1 WLR 670, an adult dived into the shallow end of a swimming pool on a winter’s night. Both suffered injuries and no breach of duty by the occupier was found. The liability of an occupier of premises may be engaged otherwise than by means of one of the duties of care. §§ 836–38 BGB are, in this respect, particularly noteworthy for two reasons. First, because they can be regarded as particular statutory expressions of the general principle discussed in this section. Quite simply, this is that anyone who exercises a sufficient degree of control over a particular thing (movable or immovable) which is likely to cause danger is under a duty to take reasonable care to ensure that this danger does not materialise. Secondly, and more importantly, because they contain rules of presumed fault. In such circumstances it is, therefore, for the defendant to exculpate himself and not – as is normal – for the claimant to prove the former’s fault. The overlap between these two sets of rules (§§ 836–38 BGB and the duties of care) is not complete. § 836 BGB deals with collapsing buildings or other structures attached to land. Collapsing walls or scaffolding, falling tiles, windowpanes that become detached from their frames, are all included under this heading. But snow falling off rooftops, tree branches being broken off, or even a falling gravestone which injures a passer-by would be covered not by the aforementioned paragraph of the Code, but by the duties of care. As stated, the precise content of those duties would vary from case to case. The measures necessary to prevent a ‘roof avalanche’ would depend on a variety of local factors, such as frequency and volume of the snowfalls, the slope of the roof, the frequency of such accidents, and so on (BGH, NJW 1955, 300; OLG Hamm, NJW-RR 2013, 25). Damage from collapsing trees or branches might entail liability if proper checks on the state of the health of the trees were not carried out at the correct intervals (BGH, NJW 1965, 815). Irregularly maintained gravestones could render liable not only the owners of the burial plots so long as they have control over them (BGH, NJW 1971, 2308), but also the cemetery authorities who open this area to the general public (BGH, BGHZ 34, 206; OLG Brandenburg, NJW 2004, 2103). Other instances from the very rich case law, which can in every way be matched by Anglo-American cases, include the following. A self-service store may be liable to a customer (or potential customer) who slips on a vegetable leaf or other slippery substance (BGH, NJW 1976, 712; (reproduced as case 69) cf Ward v Tesco Stores Ltd [1976] 1 WLR 810). In contrast, a florist has not been held liable to a customer who slipped on a single leaf, as one cannot reasonably expect a florist to immediately

The Duties of Care  59 pick up all leaves (OLG Koblenz, NJW-RR 2012, 227). Liability thus depends on the kind of business. The organisers of a motorcar race who failed to take the necessary precautions in order to prevent spectators from being injured can be liable (BGH, NJW 1975, 533; cf White v Blackmore [1972] 2 QB 651). The same may be true of organisers of any other major event, such as football matches (OLG Frankfurt am Main, MDR 2011, 725). A house owner has been held liable to his visitor who is injured by defective banisters (BGH, BGHZ 5, 378; cf Wheat v E Lacon & Co Ltd [1966] 1 QB 355). Landowners can be liable to a claimant whose car was damaged by a train passing through an unfenced crossing on the defendant’s land (BGH, BGHZ 11, 175; cf Commissioner for Rly v McDermott [1967] 1 AC 169). The train operator, in turn, can be liable to a claimant who is injured on the platform or in the railway building before entering or after leaving the train (case 72). House owners are liable to persons injured because the steps leading to their home have not been cleared of ice and snow (RG 23 February 1903, RGZ 54, 53) or pavements not gritted (BGH, NJW 1987, 2671). While the burden of proof for the failure to grit the pavements is on the injured party, he may rely on a prima facie proof if he was injured in the time frame during which the tortfeasor was obliged to grit (BGH, NJW 2009, 3302). A local authority will be liable if it fails to trim a hedge which obstructs the view of users of a highway and leads to a car accident (BGH, NJW 1980, 2194; contrast Stovin v Wise and Norfolk County Council [1996] AC 923; the case is reproduced below as case 88). The local authority can, however, not be held liable for injuries caused by falling branches on the mere ground that a specific tree species is generally prone to branches falling off as long as the individual tree was not subject to any abnormalities (BGH, NJW 2014, 1588). One can practically match every case that exists in English tort books with a German equivalent. With regard to accidents happening on highways or federal roads, the actions will be directed against the authorities entrusted with their upkeep and maintenance. In the case of federal roads, this body is one of the states (Article 90 GG). Local towns or districts are responsible for the smaller roads. Less clear are the legal grounds of liability. Theoretically, this can be justified either by reference to § 823 I or § 839 BGB. The latter, in conjunction with Article 34 GG, makes the state (or other public authority) liable for breaches of official duties. In this respect, matters are simplified whenever statute expressly designates such duties imposed on the state as public law duties, for in such cases the state is liable under Article 34 GG in conjunction with § 839 BGB (which is discussed in chapter eight). By contrast, the situation can become more obscure whenever the nature of the duties has not been expressly designated. (For further details see Münchener Kommentar/Papier/Shirvani, § 839 BGB, no 143 ff. See, also BGH, BGHZ 68, 217 and the discussion below, chapter eight.) From the state’s point of view, the second method by reference to § 839 BGB is preferable since § 839 I 2 BGB provides that in cases of negligence the official (and the state) will only be liable if the injured party is unable to obtain compensation from elsewhere. But liability under § 839 BGB is not avoided if the victim is entitled to any insurance funds and this irrespective of whether their source is a private or a public insurance (see Münchener Kommentar/Papier/ Shirvani, § 839 BGB, no 309; BGH, BGHZ 79, 26; BGH, NJW 1983, 2191). Equally, liability under § 839 BGB is not avoided if both the tortfeaser and the victim were part of the public traffic as all traffic participants are to be treated equally (Münchener Kommentar/Papier/ Shirvani, § 839 BGB, no 313).

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C.  Good Samaritans Nowhere is the difference between the individualistic English common law and the more socially impregnated civil law seen more clearly than in the area of potential liability for failure to come to the rescue of another human being. Nineteenth-century English philosophical thinking ensued that the medieval reasons for not punishing people for not being good but only making them pay damages when they were bad ensured the non-liability rule in England. For a time, America followed suit and thus the common law contrasted sharply with the civil law systems which, through varying formulations, adopted the ‘Good Samaritan’ precept and obliged persons to come to the aid of endangered strangers if they could so without danger to themselves. In ethical terms, the civilian solution was so obviously placed on high ground that, eventually, it even found support in some American states. And it is also true of English and German law. The latter has confined its § 323c of the Criminal Code to a state of an attractive ornament of only limited relevance to its courts. Actions under this provision are, in the first place, criminal actions. Where they succeed, they result either (and rarely) in prison sentences or in fines (for a prison sentence of nine months under § 323c of the Criminal Code see LG Magdeburg, BeckRS 2010, 05957). As § 323c of the Criminal Code is seen as a protective norm under § 823 II BGB, its violation may however also result in civil damages (BGH, NJW 2014, 64). For detailed accounts of the case law see the Strafgesetzbuch commentaries on § 323c StGB: Lackner and Kühl, Strafgesetzbuch (29th edn, 2018); Schönke and Schröder, Strafgesetzbuch (30th edn, 2019).

V. Causation French lawyers, paraphrasing Voltaire’s dictum about the existence of God, have often teased the Germans by saying that if causation did not exist as a subject it would have to be invented so that German lawyers would have something to exercise their minds. There is a great deal of truth in this statement though it could also convey a misleading picture in at least two respects. For, if one is thinking in terms of the volume of the legal literature, the Germans are not alone in having devoted a great deal of effort to this topic. The Americans, for instance, have rivalled this literature in size and, probably, in ingenuity. Secondly, the theoretical preoccupation of German scholars with this subject has not prevented their courts from stating more than once that the solution should, in the end, be one dictated by common sense and equity (see, eg, BGH, BGHZ 3, 261, 267; BGH, BGHZ 30, 154, etc).

A.  Conditions and Causes The Germans (like the Americans and the English but more clearly so than the French) adopt a bifurcated approach to problems of causation. This they do by insisting that the defendant’s conduct (or the event for which he is to be held responsible) cannot claim to be a legal ‘cause’ of the claimant’s hurt, unless it is previously established that it is at least a ‘condition’ (Bedingung) of that harm. This leads to a two-phased enquiry, the first being preoccupied with the question whether the defendant’s conduct played some role in

Causation  61 bringing about the claimant’s hurt, while the second seeks to discover which of the many conditions of the harm will also be treated as its legal cause. This first phase of the enquiry is strongly causative rather than normative in nature and hence American scholars often refer to it with some justification as the cause-in-fact stage of the enquiry. This labelling of this phase as factual or causative is correct, especially if it is compared with the second phase of the enquiry, which is more normative and policy-orientated. This does not mean, however, that it cannot involve issues of valuation and therefore acquire strong normative overtones as well. This becomes clear in those cases where the ‘standard’ test (to be discussed in the next paragraph) cannot be operated without serious injustice. The test used to determine whether a particular piece of conduct is a condition of the claimant’s hurt is that of the conditio sine qua non, better known to common lawyers as the ‘but-for’ test (also referred to as Äquivalenztheorie). Would the claimant’s harm have occurred but for the defendant’s conduct? If it would, then the defendant’s conduct is not a cause of the harm. A doctor who negligently examines (or treats) a patient who dies from another ailment will not be causally linked with (and hence will not be responsible for) that death. Equally, a chemist who negligently renews a prescription without previously consulting the patient’s doctor will not be liable once it is shown that the doctor, had he been asked, would certainly have continued the treatment with the same drug (RG, RGSt 15, 151; RG, RGSt 63, 211). The point need not be laboured, since it raises no issues which are not already known to a common law audience. Where the German thoroughness emerges quite clearly is in the effort to determine how the defendant’s conduct (or the event complained of) will be deemed to be or not to be a conditio sine qua non of the claimant’s harm. One possible solution is the method of elimination (Hinwegdenken) which assumes the notional elimination of the propositus from the scene while the other conditions remain exactly the same. It should be contrasted with a different method – that of substitution – which, far from eliminating the propositus from the scene, assumes, on the contrary, that he was there and acted lawfully, the other conditions remaining the same except in so far as they would have been altered by the lawful conduct of the person in question. The elimination theory seems more acceptable when the alleged cause is a positive act. What we have to do is to reconstruct the sequence of events, omitting the tortfeasor’s conduct. If, despite this, the sequence of events remains unaltered, then the conduct has no causal relation to subsequent events. If, on the other hand, the final result is changed as a consequence of the theoretical suppression of the tortfeasor’s act, then that act must have played an active and necessary part in producing the claimant’s harm. Thus, if A shoots B and A’s shot is eliminated, then B’s death goes also. In the case of omissions, however, the situation is more complex, for if the procedure of elimination without substitution is adopted an omission can never be qualified as a conditio sine qua non of an event. What is necessary here is the substitution of the act that the defendant omitted. Would the harmful result nevertheless have occurred? If it would, then the defendant’s omission is not the cause of the result. Let us look at an example often given by German textbooks to illustrate how the above works in practice. Suppose that a passenger ship is not properly equipped with lifebuoys and one of its passengers falls into the sea. If the shipowner’s wrongful omission is eliminated and the correct conduct is substituted, we must assume that adequate lifebuoys would have been provided. That, in itself, however, provides no solution to the question whether the ­drowning was connected with the absence of lifebuoys. A partial substitution of the wrongful conduct

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by lawful conduct is not enough. What we must further do, in addition to eliminating the wrongful omission is to assume that the ship’s crew could and would have used the lifebuoys promptly and that the passenger would have seized one in time. The answer to our question, therefore, can be provided only if we substitute the right for the wrong conduct and then enquire what further changes would have taken place in that event. In the case of omissions, therefore, total substitution (as the above process is sometimes referred to) is, in principle, necessary in order to produce a reasonable result (BGH, BGHZ 34, 206). Only if all the conditions mentioned above are satisfied, can the drowning be attributed to the absence of lifebuoys. A further difficulty occurs if the victim, himself, intervenes in the chain of causation. Normally one would assume that the application of the conditio sine qua non formula is at least problematic in such a case. ‘The general principle of the traditional doctrine is that the free deliberate and informed act or omission of a human being, intended to exploit the situation created by the defendant, negatives causal connection’ (emphasis original) (Hart and Honoré, Causation in the Law (2nd edn, 1985) 136). The BGH was, inter alia, confronted with the problem in a series of cases concerning police pursuits (see, eg, BGH, NJW 2012, 1951 and case 27). The Court, apparently, did not deny the causal nexus between the defendant’s flight and the injury of the policemen in the course of his pursuit (the but-for test is, on its face, fulfilled). However, liability is not imposed per se, but depends on whether the victim’s conduct was provoked by the defendant’s behaviour. The BGH prefers the somewhat open-textured principle of ‘objective attribution’ (objektive Zurechnung), probably in order to maintain a more flexible and policy-orientated approach. (See, also, next section (B) on legal cause.) However, the rationale of the latter decision clearly reflects that the butfor test does not provide – even prima facie – the solution to these cases in which the victim, himself, inflicts the injury. The above represents little more than a crass abridgement of the difficulties and diverging views that one can find on this subject. Perhaps, one could thus say that the choice between the elimination and the substitution theories is, in the end, one of policy. The former can lead to more extensive liability (especially in cases of hypothetical causes) and was, apparently, preferred by the RG (RG, RGZ 141, 365); the latter can reduce liability within narrow limits and has received the support of the BGH (BGH, NJW 2012, 850; BGH, BGHZ 10, 6). (For a more detailed analysis consult Honoré, International Encyclopaedia of Comparative Law XI, ch 7, 74–76, 79 ff.) In the examples given up to this point the conditio sine qua non rule has been able to produce acceptable results. But there are many instances where the test breaks down completely. This, for example, is the case whenever it can be shown that the event complained of could have been brought about in more than one way. Suppose, for example, that two motorcyclists simultaneously pass the claimant’s horse in a way that makes it bolt and it is subsequently proved that either of them alone could have caused the fright of the horse. Or imagine two chemical factories releasing independently of each other toxic liquids into a nearby river and thus affecting the riparian owner’s fishing rights. Or, finally, suppose that a garage sells a car which has defective brakes to the claimant who, at the critical moment, makes no attempt to apply them. Would the horse have bolted in our first example but for the conduct of the first motorcyclist? The answer is yes, because of the way the other motorcyclist rode quickly past it. The same reasoning can be applied to our other examples. It is thus clear that a strict application of the conditio sine qua non test would hold that neither

Causation  63 of the motorcyclists in the first example, nor the polluting factories in the second, nor the garage in the third, would be held liable since each of these acts was a sufficient cause of the claimant’s hurt. But, however impeccable the logic of this approach may be, the solution is patently unjust, and unless we hold liable each of the persons who has done enough to bring about the harmful result, the victim will remain uncompensated. The word ‘enough’ supplies the clue for one possible solution. This is found in the adoption of the ‘substantial factor’ formula which was first applied by the Minnesota court (Anderson v Minneapolis, St P and S.MRY Co 146 Minn 430, 179 NW 45 (1920)) a century ago and has been sanctioned by the American Restatement Second, Torts § 432.2. According to this theory, the defendant’s conduct is a cause of the claimant’s harm if it was a material element and a substantial factor in bringing it about. German courts, however, refuse to differentiate between more and less substantial factors (BGH NJW 2008, 1309). One is thus left with the impression that any ‘evaluation process’ will be attempted later and at this cause-in-fact stage of the process all activities will be retained as ‘conditions’ of the claimant’s harm. In the last three examples we have been faced with what have been termed ‘multiple sufficient causes’ in the sense that each is normally ‘sufficient’ to produce the harmful result. In the first two examples they have both operated simultaneously and have been positive in nature; in the third example, the second cause was negative in nature (ie, failure to apply the brakes). But the most fiercely debated of ‘multiple sufficient causes’ are the so-called ‘overtaking causes’ (see von Caemmerer, ‘Das Problem der überholenden Kausalität’ in Gesammelte Schriften I, 411). Examples include the case of the medical practitioner who blinds the patient who would, in any event, have subsequently become blind. Another is the case of a house which is damaged by a negligently caused explosion of gas but which would, in any event, have been destroyed by a subsequent bombing attack (see also BGH, BGHZ 29, 207, for damages where a building inspector unlawfully permitted the demolition of a building that would later have been destroyed in the Second World War). In these cases the second cause, ie, blindness, bomb attack (commonly referred to as the ‘overtaking’ cause but, in actual fact, the cause ‘overtaken’ by the ‘operative’ cause for which the tortfeasor is responsible), is sufficient by itself to produce the harmful result in question. In actual fact, however, it does not do so since the causal process initiated by the tortfeasor prevents, or has already prevented, this from happening. In such cases, can the propositus rely on the second sufficient cause and argue that he did not occasion the whole or part of the harm, or that if he did so, he ought for some other reason (causal or equitable) to be relieved from at least part of the liability? One can envisage a host of possible answers ranging between two extremes, namely, that of completely disregarding the overtaking cause (RG, RGZ 169, 117), and that according to which damages must always be assessed by taking into account events subsequent to the appearance of the cause of action but before trial (BGH, BGHZ 10, 6). Larenz’s solution occupies the middle ground (Larenz, Schuldrecht I, § 30, I, 481 ff). He distinguishes between the damage caused to the protected interest as such (ie, a chattel) (so-called Objektschaden) and consequential loss. As far as the Objektschaden is concerned the right of action accrues instantly and therefore the hypothetical cause cannot be taken into account, while in respect of consequential loss the hypothetical cause is relevant. Similarly, the BGH recently awarded damages for loss of earnings only until the victim would – hypothetically – in any way have been unable to work due to an illness (BGH, NJW 2016, 3785). All these issues, which are hotly debated in Germany, cannot be discussed in a book of this kind which has, as its primary aim, to introduce foreign readers to the mysteries of

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German law. But we shall glance briefly, at the end of this section, at one of these overtaking causes, namely the victim’s predispositions.

B.  Legal Cause The simplicity (or apparent simplicity) of the conditio sine qua non theory led some authors to consider extending its application to the domain of legal cause. Indeed, this is still the case in the area of criminal law since in that branch of the law the element of fault (invariably intention though there do exist criminal offences where negligence will suffice, eg, §§ 222, 229 of the Criminal Code) provides a good corrective device against the risk of extensive liability. But in the context of private law, where liability often does not depend on fault, this theory met with little success – German authors opting instead for one of the variants of the adequate causation theory. Notably, German authors make a distinction between causation giving rise to the violation of a protected interest (haftungsbegründende Kausalität) and what we would call remoteness of damage (haftungsausfüllende Kausalität) (see, eg, Müchnener Kommentar/Wagner, § 823 BGB, no 67). The adequate causation theory (Adäquanztheorie) is one extension to the sine qua non theory. This theory was first expounded by the German physiologist von Kries (Die Prinzipien der Wahrscheinlichkeitsrechnung; über den Begriff der objektiven Möglichkeit (1886)) and its central idea was simple enough. The defendant’s conduct (or specified event for which he is responsible), which must be a condition of the claimant’s hurt, will further qualify as an adequate cause of that harm if it is such that it significantly increases the risk of the type of harm which actually occurs. Theoretically, this approach tends to achieve a compromise between the extension of liability which the theory of direct consequences (known to common lawyers from the Re Polemis litigation) is capable of producing, and the greater restriction of liability which could result from the use of the foreseeability theory. For, it could be argued, the adequacy theory can set realistic limits of liability by relying on common sense notions of causal connection. Put differently, a ‘significantly increased probability’ is a test less vague than the notion of foreseeability. So, at least, runs the traditional argument for it was eventually realised that the real problem behind these notions is, essentially, one of responsibility and not of causality. A value judgement, foreign to the notion of causation, could and should in the end determine the difficult cases that reached the courts. This became obvious the moment one had to determine how the increased probability of the harm would have to be assessed. Academic writers were quick to offer their views. For von Kries – the originator of the theory – the valuation should be undertaken on the basis of all the circumstances which were known, or ought to have been known, to the originator of the condition at the time of its entry (ex ante) and also taking into account general practical knowledge (ex post) based on experience. Rümelin (‘Die Verwendung der Causalbegriff in Straf- und Civilrecht’ 90 AcP (1900) 171), on the other hand, advanced the theory of ‘objective hindsight’. For him consideration should be given to the whole empirical knowledge of mankind and all the circumstances anywhere to hand at the time the condition occurred, whether they were recognisable by the most superior discernment or had first become recognisable ex post from events following the condition in question.

Causation  65 Von Kries’s ‘individual foresight’ approach proved too narrow for private law cases of objective (no fault) liability and contractual liability; Rümelin’s ‘objective hindsight’ theory was, on the other hand, too wide to exclude with certainty the inequitable results of the condition theory. The Wagon Mound I ([1961] AC 388) litigation, for example, would have been decided differently if the objective hindsight test had been applied. For it will be remembered, that by the time of the second Wagon Mound II ([1967] 1 AC 617) trial, scientific opinion had changed with regard to the crucial factor which had led to the fire damage in that case (ie, possibility of oil igniting in water). So a compromise solution was proposed by yet another author – Traeger (Kausalbegriff im Zivil- und Strafrecht (1904) para 159) – and this came to be adopted by the courts. According to this view, an event is an adequate condition of a consequence if it has in a general and appreciable way enhanced the objective possibility of a consequence of the kind coming about. In deciding this, account is to be taken of (i) all the circumstances recognisable by an ‘optimal’ observer at the time the event occurred and, (ii) the additional circumstances known to the originator of the condition. The factual situation so established must be examined in the light of the whole human experience available at the time the decision is made, to see whether it appreciably favoured the occurrence of the damage-producing event. Case 26 shows that the case law is not clear and the problems of applying these tests in practice are not solved. In particular, how much knowledge should be credited to the ‘optimal’ observer? In view of this ambiguity, it is not surprising that court decisions have shown a marked inclination to state that the problem they have to solve is not ‘exactly one of causality but rather the discovery of a corrective device which can limit the purely logical consequences in the interests of equity’ (see BGH, BGHZ 3, 261 and also BGH, BGHZ 30, 154). Seen in this light, the adequacy theory has proved an inefficient controlling device. Von Caemmerer has thus argued that an exhaustive examination of the case law of the RG shows that only in a handful of cases was the Court able (or willing) to deny the existence of a causal link on the basis of this theory (‘Das Problem des Kausalzusammenhangs’ in Gesammelte Schriften I, 395, 403 ff). An effort to combine the adequate cause theory with a more normative theory of causation was thus inevitable; the development of the ‘scope of the rule’ theory was its result. This theory, first elaborated by Rabel (Das Recht des Warenkaufs (1936) 495 ff) in relation to breaches of contractual duties, and more recently, also adopted by tort lawyers, postulates that there should be no recovery if the harm in suit is not within the scope of the rule violated. This may be because the harm is not within the protective purpose of the rule in question (Schutzzweck der Norm) (ie, it is not the mischief the statute was designed to prevent) or, according to a variant, because it has not come about in an unlawful manner (Rechtswidrigkeitszusammenhang). Both terms are, arguably, in substance interchangeable (Münchener Kommentar/Oetker, § 249 BGB, no 121). Interestingly enough, Lord Hoffmann appears to have attempted to establish a similar approach in English law which is – like its German counterpart – founded on the purpose and scope of the duty owed. This is primarily in the field of tort law but it seems, as the German jurisprudence also demonstrates, that the test can be applied to both areas of the law of obligations (see, eg, BGH, NJW 2008, 3436 and BGH, NJW-RR 2007, 742). (For Lord Hoffmann’s views see his speech in South Australia Asset Management Corp v York Montague Ltd [1997] AC 191.) However, it has not

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yet been worked out how this approach fits in with the other traditional requirements of remoteness in English law. For more recent illustrations see BGH 26 February 2013, NJW 2013, 1679; BGH 20 May 2014, BGHZ 201, 263. Here one could add two English examples, which can illustrate the above propositions. In Gorris v Scott ((1874) LR 9 Ex 125) a statute provided that sheep carried as deck cargo should be enclosed in proper pens. They were not, and during rough weather they were washed overboard. The claimant’s claim for damages was dismissed on the ground that the purpose of the requirement of the fencing was to prevent the spreading of contagious disease among the animals and not to safeguard them against the perils of the sea. In other words, the mischief that occurred was not the one the statute wanted to prevent. Case 29, dealing with the duties of local authorities to inspect the foundations of buildings, also provides an illustration of how this normative theory of causation can be used to exclude compensation. In other instances the claimant may not belong to the class of people the statute intended to protect or, alternatively, the statute may have meant to protect only the general interest and not individual interests. This point is illustrated in the cable case reproduced below (case 35). Finally, the harm may have been inflicted in a manner not envisaged by the statute. In Close v Steel Co of Wales Ltd ([1962] AC 367), for example, the House of Lords was concerned with the proper construction of a section of the English Factories Act which provided for the ‘fencing in’ of dangerous machinery. The claimant was injured by material which ‘flew out’ of the machinery. The House of Lords took the view that he could not avail himself of this provision since it was designed to protect workmen from coming into contact with moving parts of the machinery and not to protect them from injury inflicted through fragments flying out of the machine itself. Examples such as these abound in German t­extbooks. (For more details see Staudinger/Schiemann (13th edn, 2017) § 249 BGB no 27 ff.) It would be futile to add that the ‘scope of the rule’ theory has not solved all problems or that it has led to the formulation of a number of variations. But one of its limitations must be stressed. Though this theory can work well whenever it is easy to assign a particular purpose to a particular rule, it breaks down almost completely when it is difficult or impossible to define with precision the scope of the rule in question. Thus, it works rather well in cases of tortious liability resulting from breach of statutes or subsidiary regulations, and also in the case of some ‘nominate torts’. But it becomes more imprecise in the cases of widely conceived tortious conduct (eg, liability contra bonos mores under § 826 BGB or even § 823 I BGB; see also the remarks of Kötz and Wagner on the latter in Kötz/Wagner, nos 195–202). Of course, it can be and has been argued that even in these cases the purpose of the rule that is violated can be discovered. For all rules of conduct, irrespective of whether they are the product of a legislative act or are a part of the fabric of the court-made law of negligence, exist for a purpose. They are designed to protect some persons under some circumstances against some risks (Malone, (1956–57) 9 Stan L Rev 50, 73).

Yet, as stated, where wrongful conduct is only vaguely defined or definable, it is well-nigh impossible to ascribe a specific purpose to the rule in question, and to invite a judge to do so is to invite him to fix the limits of recovery for himself. This may be desirable whenever reasons of expediency or of policy militate for or against the imposition of liability. In these cases, the ‘scope of the rule’ theory has the clear advantage of making the judge aware of

Causation  67 his quasi-legislative functions in deciding the kind of damage which shall be compensated. But this solution is more doubtful when the harm in suit is one which is clearly recognised but the manner of its infliction is dubious or unusual. Here recourse to the probability or explanatory theories may supply better guidance (contrast Münchener Kommentar/Wagner, § 823 BGB, no 70, who describes the adequate causation theory as ‘redundant’).

C.  Some Special Problem Areas It has been noted that causation theories do not really solve all problems. In particular, there are some factual situations which have given rise to considerable difficulties and, incidentally, have shown that these theories offer only a conceptual framework within which the judges express their value judgements. Three of these factual situations will be examined briefly in the remaining part of this chapter. The first deals with the fault of the injured party, the second with rescue cases, and the last with the predispositions of the victim/ claimant.

i.  Fault of the Injured Party It will be noticed that we are using here the continental term ‘fault of the injured party’ rather than the approximately equivalent common law term ‘contributory negligence’. This is because in modern civil law fault of the injured party is wider than contributory negligence in so far as it includes intentional activities on behalf of the victim. More importantly, fault of the injured party is often taken to include not only his fault in the production of his hurt but also his failure to minimise its consequences after the harmful result has occurred. The German Civil Code makes this distinction most clearly and regulates the fault of the injured party to mitigate his damage in § 254 II BGB. The distinction, however, is more the result of the wish to establish conceptual clarity rather than the desire to dictate a different treatment. Thus, in both cases the victim’s responsibility will be taken into account to reduce his damages. It will be noticed that the legislator leaves considerable freedom to the judge to determine how to work out the reduction in damages. Everything will depend on the circumstances of each case, though the Code does mention one particular factor, which must be carefully weighed by the judge: ‘How far the injury has been caused predominantly by the one or the other party’. The causative potency of the victim’s conduct in producing his hurt will thus be vital but not the unique factor to be taken into account. In assessing the injured party’s fault, courts may consider statutory duties as well as prevailing public opinion. For example, the BGH held in a recent decision that neither any statute nor prevailing public opinion on the reasonable standard of care in traffic in 2011 required a cyclist to wear a helmet. An injured cyclist’s claim against the tortfeasor is thus not to be reduced on this ground under § 254 I BGB (BGH, NJW 2014, 2493). This case is reproduced below (case 23) and should be read in conjunction with its annotation for a more detailed view on the expectations of the injured party under § 254 I BGB. Likewise, the victim’s failure to obtain psychological counselling after a nervous shock (BGH, NJW 2015, 2246), to submit to a medical operation (BGH, NJW 1994, 1592), or to accept a retraining job because he can no longer pursue his original calling (BGH, NJW 1991, 1412), will all have to be assessed from a point of view of fault. Only if the tortfeasor can show that the victim’s failure to pursue one

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of these courses and mitigate his loss was unreasonable, will the victim’s failure to minimise his loss be held against him. (Likewise in English law: Steele v Robert George & Co [1942] AC 497; Richardson v Redpath, Brown & Co [1944] AC 62. Contra Selvanayagam v University of the West Indies [1983] 1 All ER 824.) Notably, the BGH ultimately rejected fault of the injured party in all the four cases mentioned above. Incidentally, German law requires the tortfeasor to meet the reasonable costs of a retraining programme in order to give the victim the chance to minimise his loss of earnings (BGH, BGHZ 10, 18). Beyond stating these general rules, it is difficult to say how far the courts lean over backwards in order not to ‘discover’ contributory fault and thus give the victim his full compensation. It could be argued that they appear to be more eager to discover fault in defendants – especially where insurance is obligatory or prevalent – than they are to find it in claimants. If this ‘impressionistic’ reaction is correct, and there is some authority in England to support this (see, eg, Gough v Thorne [1966] 1 WLR 1387 and Daly v Liverpool Corp [1939] 1 KB 394), it would certainly be in tune with the more modern trend to disregard the victim’s own fault unless it is particularly flagrant or obnoxious, and to let him recover full compensation.

ii.  Rescue Cases If the victim is injured while attempting to avert or minimise harm to another he could be said to have brought about (caused) his own hurt or to be at fault. The problem of his compensation can thus be approached in terms of causation, fault or, for the common law system, duty of care: does the tortfeasor owe a duty not only to the immediate victim but also to the rescuer? How one approaches the problem is a matter of technique and legal tradition and, for present purposes, is less important. On the whole, German lawyers prefer the causative approach. The practical answer, however, is not in doubt: reasonable attempts to avert or minimise harm will not be treated as faults; or (which is another way of putting it) they will not interrupt the original chain of causation and hence the rescuer will be entitled to claim compensation. This can be justified slightly differently depending on which of the many causal theories one wishes to adopt – but the end result is not in doubt: unless entirely foolhardy, the rescue will not render the victim’s harm too remote (generally affirmed by BGH, BGHZ 172, 263). The fact that in § 323c of the Criminal Code the German legal system imposes a limited duty to come to the aid of others, only helps accentuate this greater willingness to be lenient towards rescuers, even where they are acting beyond the requirements of § 323c of the Criminal Code.

iii. Predispositions We spoke at the beginning of the section of overtaking causes which were described as additional causes capable of bringing about the harm in question which the tortfeasor’s conduct has actually produced. Some of them can be referred to as external overtaking causes. For example, A damages B’s car in a way that makes respraying necessary. Subsequently, C damages the car so that there would have to be a respraying even if there had been no previous collision. C, if sued, can argue that he caused no new damage and A, if sued, could rely on the but-for test and argue that he is not the cause of B’s damage for it would have occurred even if he (A) had not committed the tort. Other overtaking causes

Causation  69 can be described as internal and here one includes the claimant’s predispositions. We must, of course, hasten to add that here we are not talking of the state of the claimant’s health which is due to his own fault. The fact that he is an alcoholic, for example, may in some way increase the harm he has suffered. This, if at all relevant, will be discussed under the heading of contributory fault. But what if the injured party suffers from a hereditary abnormality (eg, he is a haemophiliac) which increases the extent of the injury inflicted by the defendant? Whether the susceptibility or defect of the injured party is latent, quiescent, or whatever, the general principle of German law (and, indeed, other systems as well, including the common law) is that the defendant must take his victim as he finds him (BGH, BGHZ 20, 137; BGH, NJW-RR 2005, 897). (See, for more examples, BGH, NJW 1982, 168 – man bitten by a dog in the stomach; war wound had resulted in an unusually thin abdominal wall which resulted in the bite having more serious consequences than otherwise would have been the case; court found for claimant and refused to hold him contributorily negligent for not wearing a protective belt or corset – and BGH, VersR 1986, 812.) This has been extended to include not only physical but also psychological weaknesses (BGH, OLG Frankfurt am Main BeckRS 2016, 04880) and, indeed, any further weaknesses caused by the accident. In a recent case, the court nonetheless limited a severely diseased victim’s damages for loss of earnings after an injury to the time the victim – despite his disease – would have expectedly been able to work but for the injury suffered (BGH, NJW 2016, 3785). Needless to say, various causal explanations have been advanced to support those conclusions but, clearly, they are all strained in the extreme and the explanation must be sought in the realm of policy – namely the consistent desire to afford the maximum possible protection to human health and life. An even more extreme application of this kind of reasoning can be found in BGH, NJW 1952, 1010 (case 82 in the previous edition). There the tortfeasor was held liable not only for the amputation of the claimant’s leg caused by the tortfeasor’s act, but also for the injury suffered by the victim 20 years later and due to the fact that he had never become accustomed to the artificial leg fitted after the first injury. These results are so obviously incompatible with all probability theories of causation that they put in question the whole policy decision to protect the victim. One wonders in other words whether, in some cases at least, it would not be sounder policy to oblige a person with a given weakness or predisposition to take greater care for himself rather than make the tortfeasor face the bill of even the remotest consequences of his conduct (see Stoll’s criticism in Kausalzusammenhang und Normzweck im Deliktsrecht (1968) 43). This willingness to ‘take the tortfeasor’s side’ and deny the victim all his demands is clearly visible in certain types of neurotic reactions which can follow an accident. Thus, the victim may suffer a neurotic fear, which may impede his return to work (accident neurosis). Or he may demonstrate a neurotic refusal to return to work, prompted by the desire to continue receiving periodical payments or damages (compensation neurosis). Or he may display similar symptoms, prompted by the anxiety caused by litigation (litigation neurosis). All these instances could easily be attributed to a pre-existing weak or even defective psychological state and could thus impose unacceptably far-reaching liability on the tortfeasor, besides giving a premium to the victim’s lack of personal effort to overcome these emotional reactions and return to work. Whenever this is particularly evident, the German courts will ignore causation theories and openly deny compensation (for a recent case see BGH, NJW 2012, 2964). In these cases one can even find an open allusion to policy which militates in favour of a denial of compensation in order to facilitate the victim’s ‘return’ to social life (see BGH, BGHZ 20, 137).

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What is true of the physical condition of the victim is to a great extent also true of his economic position. If the tortfeasor injures a man who happens to look like a tramp but is actually a skilled neurosurgeon he will have to pay more (though this is, strictly speaking, a rule of compensation and not a rule of remoteness of damage) since it is concerned with unexpected costs of expected consequences. This may, at first sight, sound unfair and it is, undoubtedly, a relic of a highly individualistic age. And it is ill at ease with social security systems, which limit disability benefits to ‘average’ earnings and, in the end, it may even be abandoned. But for the time being this is, with few exceptions, the position taken by most systems. The greater the economic strength of the victim, the greater the size of the compensation. But if the victim’s great economic robustness affects the quantum of his damages should not his weakness also be taken into account? The problem has arisen in cases which have to decide whether the victim should be allowed to claim a sum of money to buy a substitute for the property destroyed by the tortfeasor. Logically, the solution should be the same; the German courts have in fact allowed victims the cost of acquiring substitute property.

D.  Comparative Conclusions The common law reader of the preceding pages should have had no difficulty in following the exposition of the German law. True, some different solutions to specific problems can be found here and there; and the English common lawyer (but not the American) may find the German theoretical approach to be in stark contrast to his own pragmatic appraisal of the problems of causation. But, as already observed, even this difference can be overstated; and the similarities can be just as striking. Striking if not at times uncanny when, for example, one considers how, within a short space of time, Rabel in Berlin and Green in Texas could come up with more or less the same theory. Thus, this comparative excursus need not be too long. (For details see Honoré’s excellent contribution on this subject in the International Encyclopaedia of Comparative Law XI, ch 7; and for a more brief comparative discussion, Lawson and Markesinis, Tortious Liability for Unintentional Harm in the Common Law and the Civil Law, Vol 1 (1982) 106–41 both providing extensive bibliographical references.) The first thing to note is that the adequate causation theory has come to mean slightly different things to different people. But in its less expansive form (to be found, eg, in France) it tends to produce results very similar to those achieved by the foreseeability theory, which is favoured by the common law system. Indeed, one of France’s leading contemporary jurists, Professor Genviève Viney has suggested that the ‘necessary condition’ idea within the notion of ‘equivalence of conditions’ is more accurate than foreseeability (Viney, ­Jourdain and Carval, Les conditions de la responsabilité (4th edn, 2014) no 346). Nevertheless, the foreseeability test is primarily a test for remoteness of damage for the tort of negligence and – since the Wagon Mound II litigation – also for the tort of nuisance. The adequate cause theory, on the other hand, is applied to all forms of tort liability and is not limited to cases of liability based on fault. However, its practical value is limited since it does not effectively exclude problematic cases and imposes a very low threshold. As a result, yet another theory had to be created, based on protective purpose of the duty in question (Schutzzwecklehre). This approach is flexible, as it can react to the peculiarities of each case. More importantly, it very often makes it easy to import policy arguments while maintaining a legalistic tone

Causation  71 (this will be noted in greater detail when we discuss the examples of its application, eg, wrongful life, state liability). Secondly, the common law systems also possess an additional doctrine – that of the unforeseeable claimant. To put it differently, there is often a tendency to rephrase certain problems of legal or ‘proximate’ cause in terms of legal duty. Given that the same test (foreseeability) determines both the ‘remote claimant’ (illustrated by the leading cases of Palsgraf v Long Island Ry Co 248 NY 339, 162 NE 99 (1928); and Hay (Bourhill) v Young [1943] AC 92) and the ‘remote damage’, one wonders whether anything is gained by this ‘dichotomy’ of what is essentially one subject: the subject of remoteness. This, however, is essentially a problem of classification or, as Dean Prosser once observed (Law of Torts, 244), to opt for ‘duty’ rather than ‘proximate cause’ only restates the problem but does not solve it. The only conceivable advantage of opting for the ‘duty’ approach is that it can help – in Prosser’s words again – ‘direct attention to the policy issues which determine the extent of the original obligation and of its continuance, rather than to the mechanical sequence of events which goes to make up causation in fact’. Noting this difference is more important than trying to defend the common or civil law approach. For, as has been stated in the preceding pages, many problems such as nervous shock and rescue cases will in one system be treated in the causation section of some books and in the duty section of others. The comparatist will have to learn to jump over these artificial hurdles of classification and, in so doing, reflect once again on how policy and not concepts or theories determine the ultimate result.

3 Breach of Legislative Protective Norm (§ 823 II BGB) and Intentional Harm (§ 826 BGB) Apart from liability for breach of a protective interest, the BGB has two other major general clauses governing delictual liability. On the one hand, § 823 II BGB provides for liability where there has been fault in the breach of a norm designed to protect specific people or specific interests. On the other hand, § 826  BGB provides for liability for any deliberate harm caused to another, which is not limited in scope by reference to any category of person or harm. Both general clauses are capable of compensating for economic loss in a way which is not permitted under § 823 I BGB. The issue of economic loss will be discussed more fully in chapter four.

I.  Liability for Breach of a Legislative Protective Norm (§ 823 II BGB) Bibliography Buck-Heeb, ‘Schadensersatz nach § 823 II BGB – Insbesondere zur Schutzgesetzeigenschaft kapitalmarktrechtlicher Normen’ Ad Legendum 2011, 185; Canaris, ‘Schutzgesetze – Verkehrspflichten – Schutzpflichten’ in Festschrift Larenz (1983) 27; Canaris, ‘Die Haftung für fahrlässige Verletzung der Konkursantragspflicht nach § 64 GmbHG’ JZ 1993, 649; Coester-Waltjen, ‘Die Haftung nach § 823 II BGB’ Jura 2002, 102; Deutsch, ‘Schutzgesetze aus dem Strafrecht in § 823 Abs 2 BGB’ VersR 2004, 137; Dörner, ‘Zur Dogmatik der Schutzgesetzverletzung’ JuS 1987, 522; Karollus, Funktion, und Dogmatik der Haftung aus Schutzgesetzverletzung (1992); Peters, ‘Zur Gesetzestechnik des § 823 II BGB’ JZ 1983, 913; Deutsch, ‘Schutzgesetze aus dem Strafrecht in § 823 Abs. 2 BGB’ VersR 2004, 137; MaierReimer, ‘Schutzgesetze – Verhaltensnormen, Sanktionen und ihr Adressat’ NJW 2007 3157. A list of laws recognised as containing protective norms in the sense of this paragraph can be found in Münchener Kommentar/Wagner, § 823 BGB, nos 474–547. Many standards of unlawful interference with the interests of another are defined often in some detail by the legislator. § 823 II BGB is thus very important because it imposes an obligation to make amends on anyone who ‘infringes a statutory provision intended for the protection of others’. Whereas under § 823 I BGB unlawfulness is defined by reference to interference with the specifically enumerated interests, the Rechtsgüter,

Liability for Breach of a Legislative Protective Norm (§ 823 II BGB)  73 under § 823 II BGB liability depends upon the notion of a breach protective norm (Schutzgesetz). The term Gesetz, is taken here widely to refer to a wide range of legislative provisions: statutes (of private and public law), government decrees, local bylaws or ordinances (Verordnungen), and a wide range of regulations. Paragraph II of § 823  BGB contains the second of the small general clauses of the BGB. In its ambit, however, it is both wider and narrower than the first paragraph of the same provision. (Wider since it covers also economic loss but narrower since the illegality is defined by reference to the scope of the particular statute (which may be narrow) and not on the consequences of its breach.) Unlike, § 823 I BGB, this clause has no specific content, but effectively leaves it up to the legislator to decide which interests or harms are worthy of compensation (Münchener Kommentar/Wagner, § 823 BGB, nos 476–77). As in the common law tort of breach of a statutory duty, there are three basic questions to be asked: is the legislative provision designed to protect individuals or was it enacted simply to achieve a goal of general interest? Does the harm caused come within the scope of the provision? Does the way in which the harm was inflicted come within the scope of the provision? The common law approach starts from the intention of the legislator in each individual case (see Stanton et al, Statutory Torts (2003) paras 2.008–2.011; Buckley, The Law of Negligence and Nuisance (5th edn, 2011) para 16.07). The German approach is quite similar, but § 823 II BGB provides a starting point in favour of finding liability where a legislative prescription has been breached. Whether a norm is protective for the purposes of § 823 II BGB is a matter of interpretation of each individual provision and the core question here. All the same, scholarly writing has tried to identify some principles. In particular, it has tried to classify these various Schutzgesetze according to their purpose. Such statutes may wish (at least also besides other objectives) to protect one of three things. First, they may wish to protect the essential legal rights and values (eg, human freedom, corporeal integrity etc). Secondly, they may wish to prohibit dangerous behaviour (eg, dangerous driving). Finally, they may wish to protect (in a measured way) a person’s ‘estate’, including his economic interests, which, it will be recalled, are not covered by the first paragraph of § 823 BGB.

A.  Is this Liability Based on Fault? There is an overlap, to some extent, between the two sub-paragraphs of § 823 BGB. However, this does not mean that the requirements of liability are the same in all these cases. Unlike the statutory liability for road accidents (discussed in chapter six), liability under §§ 823 I and II BGB is fault-based liability. The second sentence of § 823 II BGB makes this abundantly clear by stating that where breach of a particular statute can engage liability irrespective of fault – something which often happens these days – additional civil liability under § 823 II BGB will be imposed only if some fault can be found in the wrongdoer. In this instance, however, the case law has reversed the onus of proof and placed it squarely on the defendant (Münchener Kommentar/Wagner, § 823 BGB, nos 363–64). So fault will be presumed from the fact of the breach of the requirements of the legislative provision unless the defendant can positively disprove any fault on his part (BGH, BGHZ 51, 91; BGH, NJW 1968, 1279). In this sense, therefore, § 823 II BGB is more favourable to the claimant. But, as stated, it is also more favourable in another respect as well, notably in its recognition of the compensability of purely economic loss. This explains why the claimants in the cable

74  Breach of Legislative Protective Norm (§ 823 II BGB) cases (discussed in chapter four, cases 35–37) tried to base their claims on § 823 II BGB. These observations, however, should not be taken to imply that claimants can, as a matter of course, base their claims on this paragraph of the BGB every time there has been a breach of some statute. The requirement that the breached statute is a protective norm provides the greatest obstacle and the most interesting condition of this provision of the Code. It is to this, therefore, that we must now turn our attention.

B.  Is a Norm Protective of Individual Interests? The civil remedy will be granted only if the breached norm was a protective statute. This means that the claimant must show that the mischief that occurred was in fact the one that the legislator wished to avoid. Moreover, he must show that he himself belongs to the class of persons to which the legislator intended to grant a civil remedy. Both of these propositions are quite simple to state, and they contain nothing that will surprise a common lawyer. But the answer to these questions is by no means easy to find; it invariably involves difficult questions of statutory construction, which varies from case to case. Wagner writes: In the mass of cases, the question whether a specific norm is protective does not come from the text whose interpretation provides the answer. Rather it comes from an independent assessment through the court for the purposes of delict law (Münchener Kommentar/Wagner, § 823 BGB, no 503).

So the mere existence of a criminal penalty for certain conduct is insufficient to justify the conclusion that the legislation contains a protective norm. The command or prohibition in the law should specify conduct that relates to the interests of another (Maier-Reimer, ‘Schutzgesetze – Verhaltensnormen, Sanktionen und ihr Adressat’ NJW 2007, 3157, 3158). In practice, it has given rise to a very rich case law. The detailed study of this case law presents little interest to any course of lectures or book that aims at introducing students to the study of foreign or comparative law so we shall limit ourselves to a few illustrations. (For further details see Peters, ‘Zur Gesetzestechnik des § 823 II BGB’ JZ 1983, 913.) The question of whether a legislative provision is intended to protect individual interests is sometimes clear from the legislation. For example, § 97 I Wertpaperhandelsgesetz (WpHG, the German Securities Trading Act) provides explicitly that those who engage in insider dealing are bound to compensate the victim. But very frequently, a provision may provide expressly for criminal or regulatory sanctions, but will be silent on the civil law consequences of a breach. German scholarly writing suggests that the enquiry about whether a provision is protective or not focuses on three elements: the personal scope of protection (does this norm protect a category of person to which the claimant belongs?); the material scope of protection (does this norm protect this category of harm?); and the modal scope of protection (does the norm protect harm caused in this kind of way?).

C.  Personal Scope When looking at the cases, the first thing one can note is the fact that a statute meant to protect the public at large does not necessarily mean that it was not also intended to include

Liability for Breach of a Legislative Protective Norm (§ 823 II BGB)  75 within its protective ambit a particular (legal or physical) person. For example, during the First World War the German government imposed stringent regulations concerning meat imports. Powers to control such imports, regulate their qualities and internal distribution (in order to avoid food shortages), and if necessary to confiscate illegally imported consignments of meat, were vested in a state-owned Central Purchasing Corporation. On one occasion, one of the Corporation’s employees, working near the Netherlands border, wrongfully authorised the import of an excessive quantity of meat which reached an accomplice of his and was subsequently sold to their mutual gain. The Corporation’s action for damages against both these persons was successfully based on § 823 II BGB in conjunction with the relevant government order that had created the Corporation and vested in it the powers described above (RG, RGZ 100, 142, 146. See, also, BGH, BGHZ 46, 23). As the RG said, the fact that the order creating the Corporation was issued for the protection of the common good did not prevent it from conferring a special right of action on the Corporation in accordance with § 823 II BGB. It would be wrong, however, to argue the reverse and say that all statutes passed in the interests of the public at large also automatically conferred rights on its individual members. This point was made very clear in one of the cable cases, in which the BGH articulated the idea of a special delictual assessment. In case 28, the question was whether a constructor’s failure to comply with § 18 III of the Baden-Württemberg Building Regulations created a right on the part of the victim to sue for losses resulting from the interruption to its electricity supply caused by that breach. The Court (BGH, BGHZ 66, 388, 390) stated: To be sure, in any human social order, state needs are not identified as valuable in themselves, but the so-called need of the community is always justified through the direct or indirect needs of the affected citizen, and the interests of the individual and the purpose of the rule cannot be allowed to go beyond the sum of individual needs. Thus no public law norm is conceivable which does not, at the very least in some general sense, affect or protect an individual. But it follows that, in so far as it corresponds to the intention of the legislator, the general protective function does not say anything about when a protective norm in the sense of § 823 II BGB arises and which interests it protects … It is of no use to consider legislative purpose in the abstract: nor has this been done so far by the BGH, despite some ambiguous formulations. In the last resort the question must be attacked directly, whether the creation of an individual claim for compensation appears meaningful, sensible, and tolerable in the light of the whole system of liability. Only by doing so can a development, rightly feared by the appellate court, be avoided, namely that the increasing tendency to base claims on § 823 II BGB might undermine Parliament’s ruling against a general liability for purely economic loss.

It may well be that patterns appear in legislation on particular areas, for example, traffic regulations are there to protect not only road users, but also the fabric of the highway. Thus, a lorry with an abnormal load which crashed into a bridge in breach of the regulation on the maximum height was held to be in breach of a protective norm (BGH, NJW 2005, 2423, 2424). Case 31 is our last example. In that case the claimant, an unsecured creditor of a company in liquidation, sued one of its directors alleging that in breach of statutory duty (§ 64 of the Companies Act, in the meantime revised) he had failed to commence liquidation proceedings at a given date. As a result of this inaction, the claimant had suffered financial loss by advancing credit to the company. The defendant’s argument, that the obligation to commence liquidation proceedings on time was solely meant to safeguard the public interest, was not accepted. The BGH took the view that the purpose of this enactment was also to safeguard the position of creditors of the company against precisely this type of risk.

76  Breach of Legislative Protective Norm (§ 823 II BGB) Moreover, this was true even for those creditors who had advanced credit after the date when the liquidation proceedings ought to have been commenced: The duty of the directors to start bankruptcy proceedings continues even after this date, as long as the company’s debts exceed the assets or the company is insolvent. No reason exists for restricting this continuous duty to apply to the court to the claims of old creditors, that is to say, creditors whose claims already existed at the time in which the delay occurred in making the application.

D.  Material Scope It is not enough for the claimant to prove that he belongs to the class of persons that the breached statute wished to protect; he must also show that the mischief that has occurred was the one that the statute wanted to avoid. Only if both these points are proved will the claimant be able to base his claim on § 823 II BGB. The liquidation case, mentioned in the previous paragraph, provides an illustration for this point as well. As we will see below in relation to economic loss, the judicial assessment of whether civil liability fits within the scheme of the law is particularly relevant in relation to economic loss. Given that there are other provisions of the Code, especially § 826 BGB, it may not be appropriate to find liability under § 823 II BGB. In case 32, the defendant provided advice to the claimant to purchase shares in a company which went bankrupt soon afterwards. The advice was given in breach of (the then) § 32 of the WpHG. Under this provision, it was prohibited for brokers to recommend investments which were not in the interests of the client. The client here wanted investments to serve as an investment for his retirement. The risky shares in question were clearly not appropriate to the interests of this specific client. But the BGH held that ‘(a)ccording to general principles of civil law, the liability of the agent in the context of special contractual relationship is limited to exceptional cases and subject to very high requirements. § 311 III BGB and § 826 BGB make this clear’ (see para 16 of case 32). The liability under § 32 WpHG could not arise where there had simply been carelessness in the performance of contractual obligations. Something more would be needed and that is demonstrated by the requirement of fraud in § 826 BGB. Liability for breach of a protective norm under § 823 II BGB is not exclusive and may overlap with liability arising from the breach of some other provision of the Code. For example, in the Fowl Pest case (below, case 48, the manufacturer of the defective vaccine that killed the claimant’s poultry was in breach of a special statute which was held by the court to be a protective statute in the sense of § 823 II BGB. However, readers will note from that case that his liability overlapped with liability based on § 823 I BGB and in fact it was this part of the judgment that made history). Sometimes the overlap may exist with the provisions of some other enactment. As already stated, a breach of the Road Traffic Act (or police regulations made pursuant to it) will often be treated as a breach of a protective norm. In such cases liability for a breach of the Road Traffic Act will coexist with liability based on § 823 II BGB. Indeed, liability may further be based on § 823 I BGB. § 823 II BGB is thus an additional cause of liability, not a reason for excluding liability that may arise from another legal source. A further question is whether the law was intended to protect individuals. In case 30 (BGH, BGHZ 26, 42), the defendant was granted a licence under statutory powers to operate a bus service, but was prohibited from operating a regular service between points A and B. Despite this express prohibition, he did operate that line and was sued by the

Liability for Breach of a Legislative Protective Norm (§ 823 II BGB)  77 Federal Railways. One of the questions before the Court was whether Federal Railways could base their claim under § 823 II BGB and the breach of the Act on Carriage of Persons on Land under which the original licence had been granted. The main question was connected with the proper construction of the law subjecting land transport to state licensing and regulation. In the Court’s view this was meant to protect the interests of the general public in the establishment of an orderly transport system which has always occupied a special position in the country’s transport policy. That entitled the Railways to be compensated for losses arising from unauthorised competition. The action by the Railways was thus accepted. Another and arguably better example can be found in one of the cases on manufacturers’ liability (case 29). In that case, a local authority was being sued because cracks appeared in a building, the foundations of which had not been properly inspected. No personal injury or damage to other property was pleaded and the claim was rejected. The Court took the view that the purpose of the statute imposing upon local authorities an obligation to inspect foundations was to prevent injury to human beings and damage to other property but not to safeguard potential buyers against the risk of paying an excessive price for a worthless building. (For another illustration see case 28; and also, Deutsch JZ 1984, 308, 311–12.)

E.  Modal Scope The question whether the legislative provision should lead to civil liability often arises in the cases of omission. For example, § 130 Ordnungswidrigkeitengesetz (OWiG) creates an obligation on the directors of a company to exercise oversight of its activities. In case 33, a woman was the director of a property administration company, but her husband was its principal representative. The claimant took the advice of the husband and on 6 December 1989, she invested DM 453,000. The husband was arrested for fraud on 7 August 1990 and the company went into liquidation on 17  August 1990. The claimant had received DM 132,590 in return for her investment, but the rest was lost. She sued the wife personally for DM 320,410 on the ground that she had failed to supervise the business activities of her husband as representative of the company as the legislation required. She should have identified the fraud and withdrawn his power to represent the company. Again referring to the approach enunciated in BGHZ  66, 388, 390 (as cited above), the BGH examined the whole scheme of liability. The director of a company is not the addressee of § 831 BGB, which creates liability for harm caused by employees, unless it is shown that there has been proper supervision and training. So she was not liable for the actions of the company’s employees – only the company itself is so liable. There was thus a gap when the company became insolvent and it made sense of the law as a whole that the directors should be liable for personally failing to supervise the conduct of the business. The legislative provision of § 130 OWiG is to prevent the risk to customers of a company from inadequate supervision of employees who are disloyal or fraudulent. Although the provision potentially creates liability, there was no liability on the facts as the wife with a very minority shareholding did not in fact have sufficient control over the affairs of the company.

78  Breach of Legislative Protective Norm (§ 823 II BGB)

II.  Intentional Harm (§ 826 BGB) Bibliography van Boom/Koziol/Witting (eds), Pure Economic Loss (2004); Förster, ‘Der Schwarze Ritter – § 826 BGB im Gesellschaftsrecht’ 209 AcP (2009) 398; Sack, ‘Der subjektive Tatbestand des 826 BGB’ NJW 2006, 945; Sack, ‘Das Anstandsgefühl aller billig und gerecht Denkenden und die Moral als Bestimmungsfaktoren der guten Sitten’ NJW 1985, 761; Teubner, Standards und Direktiven in Generalklauseln, Möglichkeiten und Grenzen der empirischen Sozialforschung bei der Präzisierung der Gute-Sitten-Klauseln im Privatrecht (1971); Wieacker, ‘Rechtsprechung und Sittengesetz’ JZ 1961, 337.

A. Introduction § 826 BGB best illustrates the difference in approach between German delict and the common law system of torts. Whereas § 826 BGB offers a single general, if limited, principle of liability for intentional wrongs, the common law has spawned a large number of very specific torts (or torticles, as Rudden has described them: see Rudden, ‘­Torticles’ (1991) 6/7 Tulane Civil Law Forum 105). Each of the common law torts has its own rules. The English common law did have the opportunity to develop a general principle of liability for intentional torts in the 1890s – just at the very time that the German Civil Code was being adopted. But the House of Lords rejected the idea in three cases (Mogul v McGregor, Gow & Co [1892] AC 25; Bradford Corporation v Pickles [1895] AC 587; and Allen v Flood [1898] AC 1). The two legal systems knowingly took a divergent path at this time. As the third and last general provision of the German Civil Code, § 826 BGB was, in fact, intended from the outset as an all-purpose residual provision, able to accommodate future expansion in the growth of the law of torts. As we will see below, as in the common law, this was seen as the principal way of providing a remedy for wrongfully caused economic loss. The drafting Commission for the BGB envisaged this provision as providing a limited protection for not only economic loss, but also interference with personality rights, neither of which were designated as protected interests within § 823 I BGB. In the event, however, the limitations built into this provision did not facilitate such growth. The result was that some of the most significant extensions of tort liability have been achieved through § 823 I BGB or the expansion of the law of contract (especially the pre-contractual liability) into what otherwise would properly be described as the province of the law of torts in common law. As we have already seen, particularly since the adoption of the Basic Law in 1949, personality rights are protected within § 823 I BGB. As we will see later (in chapter four), the courts also developed the protection of an established business within the ambit of § 823 I BGB. The result of these developments is that the contemporary place of § 826 BGB is very limited. Although it is not restricted in scope to identified protected interests and the remoteness test is easier to satisfy, it has stringent requirements as to the mental element which has to be demonstrated and there is a requirement that the wrongful conduct is ‘against good morals’ (sittenwidrig).

Intentional Harm (§ 826 BGB)  79 § 826 BGB is subjectively the narrowest of the three general provisions (§ 826 BGB, §  823  I BGB and § 823 II BGB), since it will be satisfied only if intention can be shown to exist. For present purposes, mere negligence is thus not an acceptable mens rea. Intention is taken to include both dolus directus (the consequences which were intended) and dolus eventualis (the consequences which actually happen). An example of the first can be found whenever the defendant knows the consequences of his conduct and wishes to bring them about; an illustration of the latter can be seen in those cases where the defendant is aware of the consequences of his conduct which he accepts as inevitable even though he may not specifically desire them. What must be intended is the damage in suit, though its full extent and the precise way it is brought about need not have been specifically anticipated. For example, in one decision (BGH, NJW 1987, 1758–59) the Court eased the fault requirement stating that (for the purposes of liability under § 826 BGB) it would suffice to show that it was conceivable that the accounts produced by the tax consultant might be used in connection with credit negotiations and that (if it were incorrect) it would cause harm to the relying creditor. Though subjectively narrow § 826 BGB is objectively wide – in fact the most general, indeed amorphous provision of the Code. In this instance the pervading notion of unlawfulness is not determined by reference to the breach of a carefully enumerated list of protected interests; nor is it linked with breaches of statutory provisions to be found outside the Code. Here, the determination of the element of unlawfulness is left to the judge to decide by reference to the flexible notion of gute Sitten (or boni mores). Though as we shall see this does not mean that the outcome depends on the personal views and predilections of the judge, in practice this formula does confer wide praetorian powers. It will have become obvious from the above that intentionally inflicted loss will not, of itself, bring § 826 BGB into operation. Economic competition – the basis of all modern free economies – often means that the economic ruin of one person is the price of success for the competitor. Though nowadays there is an increasing tendency to limit some of the excesses of capitalism, the fact remains that in all systems intentionally causing economic loss to another person will not alone suffice to create tortious liability. Thus, just as English law imposes the additional requirement that the loss be inflicted ‘unlawfully’, so does German law require that the activity be intentional and contra bonos mores. This, then, becomes the crucial notion: crucial and, one should also add, elusive. The difficulty of definition lies largely in the fact that because of historical reasons, German law chose to cover a multitude of wrongs under one broad and abstract formula instead of treating each factual situation as giving rise to different torts and requiring its own concepts and definitions. This separate pigeonhole approach which can be found in England did not commend itself to the Germans. Thus deceit, passing off, intimidation, procuring a breach of contract, unfair competition, malicious prosecution, etc, which are all actionable as separate torts in the common law, in German law are brought under one heading. Clearly, these wrongs are so disparate that if one formula is to cover them all it has to be a very wide one. This, as stated, accounts for the different approach and, indeed, has encouraged the abstract if not philosophical writings on the subject. A similar question about the right approach arises within the modern common law and diverging solutions are offered by different jurisdictions (see Weir, Economic Torts (1997); Carty, An Analysis of the Economic Torts (2nd edn, 2010). But whatever the merits or demerits of this different approach, the problems (and often the solutions) are quite similar in both systems.

80  Breach of Legislative Protective Norm (§ 823 II BGB)

B.  Good Morals But to return to the basic notion: when is an activity contra bonos mores? Apart from a brief interlude during the Nazi period (1933–45), when this provision of the Code (as so many others) was subverted to the cause of National Socialism (cf RG, RGZ 150, 1, 4), good morals have received a fairly constant definition. Thus ‘the sense of propriety of all good and right-thinking members of society’ (BGH, BGHZ 17, 327, 332) has often been quoted as the yardstick to be used in these cases. This is a flexible test, capable of accommodating change, for example, in the context of problem situations which arise within the context of family life. For example, an action brought by a widow was rejected when she sued a woman with whom her husband had lived in an adulterous relationship for 20 years and to whom he had left most of his property in his will (BGH, NJW 1962, 958). The clause in the will was not against good morals. But in a modern pluralistic and less homogeneous society, is it always possible to discover a prevailing morality, particularly in complex business relationships? The solution adopted in unfair competition is for the legislature to identify what it considers to be unacceptable business practices (the Gesetz gegen den unlauteren Wettbewerb, UWG). The first of these was enacted in 1909 (from 1896–1909: Gesetz zur Bekämpfung des unlauteren Wettbewerbs) and the current version dates from 2010. This removes the need for the courts to use their own judgement. But, in the absence of an enactment, how can the courts discern what is contrary to current ‘good morals’? Should the typical practice of businessmen (if the case at hand is a business-related case) be used as the model instead? This would be a more empirical approach and reflect actual social expectations. The courts would then be penalising abnormal behaviour. On the other hand, is it the role of the courts to be setting out higher standards than are reflected in actual business practice in order to ensure fairness to other social groups, such as consumers? As a halfway house between these extremes, should the standard be derived not from extra-legal rules of morality but from the various rules of the positive legal system, such as the Basic Law itself or general principles of law? The idea that good morals is a notion much more akin to the English concept of public policy or the French ordre public has gained support, and in turn, become the target for criticism. It is difficult – especially for a common lawyer looking at the German law – to say which of the many theories best explains the case law. It is safer to assert with some measure of confidence that (i) the notion of boni mores has undergone some change since the adoption of the Basic Law and, perhaps, (ii) that no one theory can be said to be able to cover the whole spectrum of disparate cases. To use Dean Prosser’s description of the tort of nuisance, this is not a tort but a field of tortious liability (Prosser, Handbook on the Law of Torts (3rd edn, 1964) 594). Perhaps, therefore, the best one can do is to give a series of examples from actual litigated cases and thus demonstrate to the common law world the amplitude of this provision. In a more recent decision of 2013 (see case 34) the BGH stated that ‘Conduct is contrary to good morals if its character taken as a whole, through an assessment of its content, motives and purpose, is contrary to the sense of propriety of all good and right-thinking members of society’. It went on to state that it was insufficient that the conduct led to a breach of contract or statute or caused economic loss. There needed to be something particularly reproachable about the means used or ends to be achieved in the light of contemporary standards.

Intentional Harm (§ 826 BGB)  81 This is the case where one person works with another knowingly to breach their contract or, as in this case, knowing it breaches a duty of loyalty arising within a company. So a bank can act in bad faith when it knows that assets are held in a fiduciary way (as a Treuhand) and yet ignores this when securing its own loan by contract. In this case, the claimants, two property investment funds, deposited funds with GHL, a property investment fund managed by SL. SL took out a loan of nearly €200,000 with the defendant bank secured on the assets of GHL, which she then used to invest in a company run by her son. The defendant bank was not held liable under § 826 BGB for acting contrary to good morals in causing GHL to contract in breach of their duty of loyalty to its purposes and its duty of loyalty to its investors. The lower court had not found either that the bank’s representative, K, had colluded with SL to make the contract or that K knew of the fiduciary duties of GHL in relation to its investors, the claimants. Apart from showing the difficulty of establishing that conduct is contrary to good morals, the case shows areas in which the common law might use another branch of law (here constructive trusts) in order to resolve a problem which is dealt with in Germany by the use of delict. Although many areas of unacceptable conduct are now governed by statute or by principles derived from the Basic Law, the general character of § 826 BGB enables the law to deal with new problems as they arise. For example, ‘domain grabbing’ is the technique of registering an internet address using a famous brand name, trademark or mark of origin and then persuading the owner of the brand name or mark to pay a large fee to obtain the internet address. This has been held to be contrary to good morals where there is an effort to bring undue pressure (Münchener Kommentar/Wagner, § 826 BGB, no 207). Misuse of the corporate form can also be conduct contrary to good morals. Normally directors and shareholders are protected by the corporate form from liability to creditors. But § 826 BGB can create liability where the directors recklessly fail to exercise due diligence to the detriment of creditors. In the Trihotel case (BGH, BGHZ 173, 246), the shareholder and manager allowed the hotel inventory to be used as security for a loan to her mother without adequate checks on creditworthiness of the transferee. The insolvency trustee was able to sue the shareholder for misconduct in handling company affairs leading to the destruction of the company. There may have been no direct intention to harm the creditor, but that harm was something which was quite probable. Professor Wagner (Münchener Kommentar/Wagner, § 826 BGB, no 22) suggests that the concept of ‘immorality’ has to be considered in relation to the purpose of the law. Does civil protection fit with the purpose of the law? To this extent, § 826 BGB is aligned to § 823  II BGB. In most cases, there will be no explicit statement about the consequences which should follow from immoral acts, just as statutes are often silent on their breaches. But the coherence of the legal regime will provide an answer.

C. Intention § 826 BGB is based on intention and not mere carelessness as in § 823 BGB. It is generally accepted that recklessness is equivalent to intention for these purposes. What does the intention need to cover? First, there must be an intention to cause the harm in question, though this need not extend to all the consequences. The conduct must be ‘known and willed’ (Sack, ‘Der subjektive Tatbestand des § 826 BGB’ NJW 2006, 945). Secondly, there need not be

82  Breach of Legislative Protective Norm (§ 823 II BGB) knowledge that the conduct is contrary to good morals, as long as the relevant conduct is intended. The infringement of good morals is an objective, not a subjective element of the delict. It suffices that the tortfeasor knows the direction in which his conduct is going to go and the manner in which the result will occur. But there must be an element of will. Thus in case 34, it was stated that the tortfeasor must know the circumstances which are relevant to intention, or at least foresee them, and must will them to happen. As the decision states, this involves knowledge and acceptance as inevitable, even if not very desirable: The person must have known or foreseen the circumstances to which the intention must relate and incorporated them into his will. The assumption of the only form of intention which can be considered here, ie, conditional intent, requires that the person at least considered the circumstances to be possible and was willing to accept them.

It is not sufficient that the facts were objectively available. There was no evidence that the bank’s representative knew the relevant facts or failed to ask obvious questions, thereby revealing recklessness.

D. Causation As in all torts, the loss must flow from the wrongful act. But, as in the common law, German law does not require foreseeability where the harm is intentionally caused. A clear example is where the defendant wrongfully denounced her housekeeper to the Nazi authorities for listening to enemy broadcasts and he was arrested on 9 December 1944. Because he was in jail, he was unable to rescue his property from destruction when the house was firebombed by the Allies on 24 December 1944. This was a known possibility at the time and the defendant was held liable for the loss (BGH, NJW 1951, 596).

E. Comparison For convenience sake these illustrations are grouped under four headings which try to correspond with English categories of economic torts. (For a comprehensive account of this very rich jurisprudence see Münchener Kommentar/Wagner, § 826 BGB, nos 64–241.)

i. Fraud At least in relation to intentionally wrong statements made in order to cause harm, legal systems are generally keen to compensate the victim at the expense of the wrongdoer. Fraud has no defence or excuse. In English law, fraud is now rarely used because of the ease of suing for negligent misstatement. German law has no easy route, so § 826 BGB together with breach of protective norms under statutes (§ 823 II BGB) as well as precontractual liability under § 311 BGB provide the normal way of providing compensation, not liability for negligence within § 823 I BGB. 1.

If a person gives in good faith false information and then subsequently becomes aware of its falsity he may, under certain circumstances, be under a duty to correct it and if he does not do so he will be liable to pay damages under § 826 BGB (RG, RGZ 76,

Intentional Harm (§ 826 BGB)  83 318; BGH, JZ 1979, 725). If the misleading information leads to a contract, that can be avoided under § 123 BGB where the failure to inform constitutes a breach of good faith and monies paid over can be recovered under the law on unjustified enrichment (§ 812 I 1 alternative BGB) (see BGH, NJW 1989, 763; Beale (ed), Cases, Materials and Text on Contract Law (3rd edn, 2019) 580–81). This is, of course, similar to With v O’Flanaghan [1936] Ch 575. 2. If the directors of a company produce what to their knowledge is a false balance sheet in order to attract a potential investor they will be liable under § 826 BGB (RG, DJZ 1908, 448). This is similar to Derry v Peek (1887) 14 App Cas 337. 3. If an employer intentionally gives to a third party an untrue reference about one of his employees he may be liable to the third party for the loss resulting therefrom (RG, DJZ 1905, 697; see also BGH, NJW 1970, 2291; BGH, BGHZ 74, 281). In English law, Spring v Guardian Assurance Ltd [1995] 2 AC 296 imposed on an employer a duty of care when preparing a reference, because of the obligations of mutual trust and confidence that arise between employer and employee. The House of Lords accepted therefore that there could be situations of liability for negligence, even where the requirements of the torts of defamation or malicious falsehood were not met. 4. If a person gives recklessly false information about the creditworthiness of a third person he may be liable to the recipient of this information under § 826 BGB (BGH, WM 1956, 1229; BGH, WM 1979, 428). In BGH, NJW 1987, 1758 (translated in van Gerven, Cases, Materials and Text on National, Supranational and International Tort Law (2nd edn, 2000) case 2 G 52, 234–35), a bank (C) allowed credit to its client to purchase shares in another company (V), based on the interim accounts produced by D. The certified statement was false. D was V’s tax adviser and had been contracted by M, the sole shareholder and manager of V, to produce the accounts. The lower courts found that D was aware that the accounts contained serious irregularities and knew a reliable balance sheet could not be produced, and so was at fault in certifying the interim accounts. The lower courts did not find an intention to harm within § 826 BGB unless D could be expected to know that the statement would reach C or another bank who would be approached for a loan. But the BGH held ‘for there to be intent, it is sufficient if it was conceivable on the part of the D that the statement could be used in negotiations with a provider of finance and could lead to that person taking a decision disadvantageous to him’. Furthermore ‘careless and unconscionable conduct’ would suffice to prove intention. There was evidence that the contract between M and D was designed to offer protection to a third party such as C, and so C could also sue under the contract for the provision of the accounts. Derry v Peek accepted recklessness could constitute deceit in English law. But, of course, since Hedley Byrne v Heller [1964] AC 465, negligent information may suffice if the relationship between the parties is sufficiently close. In Caparo v Dickman Industries plc [1990] 2 AC 605, it was held that the purpose of auditing a company’s annual accounts was to inform shareholders and not to provide (free) information to potential investors, and so no negligence liability arose. In that case, the claimant would have had to rely on the tort of deceit, as in Germany. 5. Failure to disclose relevant information in the course of a business transaction may be actionable under § 826 BGB, especially where the defendant’s conduct constitutes an abuse of his dominant economic position: BGH, NJW 1982, 2815. No such duty arises

84  Breach of Legislative Protective Norm (§ 823 II BGB) in English law, but it might in relation to EU law (or such law as is retained after Brexit) on liability for the abuse of dominant position (see Stanton et al, Statutory Torts, § 2.004.) 6. If a person recklessly issues fictitious receipts and collusively collaborates with the employee of the victim, he may be liable to the recipient of the receipt under § 826  BGB (BGH, NJW 2000, 2896). Here English law might well use equity to provide a remedy, since collaborating in a breach of trust or fiduciary duty is actionable (see notes below). 7. The common law covers this field particularly with the tort of deceit, but also the tort of injurious falsehood: (RG, RGZ 76, 110), or passing off: (RG, RGZ 144, 41, 45).

ii.  Abuse of Legal Process 1.

If a person perjures himself and thereby causes another to be condemned to pay a debt which that other has in fact already discharged, he will be liable to that person for the loss suffered thereby (RG, RGZ 46, 75). 2. A person who obtains a divorce by fraud can be liable under this paragraph (RG, RGZ 75, 213). 3. A person who executes a judgement which he knows to be wrong can be liable under § 826 BGB, though this heading and the conditions that have to be satisfied, require more than knowledge that the case is wrong, for example the use of unlawful means (BGH, NJW 2003, 1934; BGH, BGHZ 112, 54). 4. A person who causes a malicious prosecution or criminal process to be brought (BGH, BGHZ 17, 327; and see above BGH, NJW 1951, 596 (the Nazi prosecution case)).

iii.  Causing Loss by Unlawful Means and Pursuing Unlawful Ends English law distinguishes between intentional torts involving unlawful ends and those involving unlawful means. In the first, the tortfeasor is an intervener in an existing relationship. One of the parties to that relationship commits a wrong (eg, breaches a contract) and the tortfeasor is sued on the basis of secondary liability as an accomplice or inciter of the wrong. In the case of liability for the use of unlawful means, the tortfeasor is primarily liable to the victim (see Carty, An Analysis of the Economic Torts, chapters 2 and 8). In practice, English law continues to be more muddled, despite the House of Lords decision in OBG v Allan [2008] 1 AC 1. Liability under § 826 BGB may be incurred in the following situations: a.  Unlawful Means 1. Intimidation of employers by trade unions not to employ non-union members (RG, RGZ 104, 327). 2. Boycott (under certain circumstances) (RG, RGZ 60, 94, 104; 64, 57, 61; BGH, BGHZ 19, 72; BGH, NJW 1985, 60, 62). Boycotts may be unlawful under unfair competition law. On the other hand, they may be protected by freedom of expression under Article 5 GG, for example, where there is a political boycott of companies trading with a foreign regime. Boycotts certainly interfere with an established business and so can be the subject of liability under § 823 I BGB. So the scope for liability under § 826 BGB is limited.

Intentional Harm (§ 826 BGB)  85 3. Under certain circumstances, strikes can also be caught by this provision (RG, RGZ 130, 98) or a work to rule: BGH, BGHZ 70, 277. But, of course, the right to strike is protected by Article 9 III of the Basic Law, so it will only be wrongful strikes that give rise to liability. Given that a strike inevitably is an interference with an ongoing and established business of the employer, liability under § 823 I BGB is typically engaged. So § 826 BGB is more useful in relation to other persons affected by a strike. b.  Unlawful Ends 1.

Inducing breach of contract (RG, JW 1913, 866; RG, RGZ 78, 14, 17; RG, JW 1913, 326; BGH, NJW 1981, 2184; BGH, NJW 1994, 128; BGH, JZ 1996, 416). Mere ‘cooperation’ in the breach of a contract with a third party will not suffice (BGH, NJW 1969, 1293 ff). In reaching a decision all the surrounding circumstances must be considered (BGH, NJW 1981, 2184.) This has long been a category recognised in English law: Lumley v Wagner (1852) 1 De GM & G 604 where an opera singer had a contract to sing for a particular London theatre and was enticed by the defendant to sing for another in return for a higher fee. The owner of the first theatre was able to recover damages against him for his losses. 2. A person who induces a vendor of sold but undelivered goods to hand them over to him (rather than to their purchaser) (RG, JW 1931, 2238; BGH, BGHZ 70, 277). 3. Disclosing confidential information acquired during previous employment may be actionable in contract (§ 74 HGB and § 242 BGB) as well as being actionable under §  826 BGB (BAG, NJW 1983, 135). BGH, NJW 1981, 1089 (‘Wallraff’) is particularly noteworthy not only because of the public interest it attracted, but also because it discussed the position of § 826 BGB within the context of the wider constitutional order. In that case Wallraff, the second defendant, wrote a book, which was to be published by the first defendant, and in which he described how a well-known Hanover newspaper was run. This information he had acquired while working under a false name for the editor of this newspaper. The latter’s action – based, inter alia, on § 826 BGB – to prevent the publication of the said account was dismissed on the grounds that § 826 BGB in this instance had to give way to the constitutionally protected freedom of expression under Article 5 I GG (BVerfG, NJW 1984, 1741.) Because of the measure of damages, English lawyers would prefer to sue in contract: Attorney-General v Blake [2001] 1 AC 268. Where the confidential information is abused by a third party (eg, a media outlet) then tort might be used: Campbell v MGN Ltd [2004] 2 AC 457. The protection of privacy overlaps with this and has already been considered (see above chapter two, II.E.iv).

iv.  Abuse of Rights or Power As was noted earlier, English law rejected a general principle of prohibiting the abuse of rights in the 1890s. In particular, the House of Lords in Bradford Corporation v Pickles [1895] AC 587 took the view that a malicious motive did not make an otherwise lawful act (in that case extracting water on one’s own land) unlawful (see Markesinis/Deakin, 432).

86  Breach of Legislative Protective Norm (§ 823 II BGB) Instead, English law has a number of specific tort rules which sanction certain actions which are directed at harming another rather than being in the interests of the person committing the act. By contrast, the German Civil Code enacted as a general principle § 226 BGB: ‘The exercise of a right is not permitted if its only possible purpose consists in causing damage to another’. §§ 157 and 242 BGB implement this more specifically in relation to contract, and § 826 BGB in relation to delict. But § 226 BGB lies as a potential source of new liability, for example, in relation to ‘domain grabbing’. § 826 BGB has been used to ground liability for: 1. Abuse of rights (BGH, BGHZ 26, 391, 396). 2. Breach of duties of loyalty: for example, betraying secrets (BGH, NJW 1977, 1062; BGH, BGHZ 12, 308). 3. Malicious dissemination of personal information (even if it is correct), thus a butcher spread the information that the son of a competitor was suffering from foot and mouth disease (BGH, LM § 826 (Gb) no 3). 4. Wrongful use of monopoly power (RG, RGZ 132, 273; BGH, MDR 1980, 121). 5. Other underhand activities (OLG Celle, NJW 1983, 1065; BGH, WM 1984, 850 (touting)). 6. Rejected applications to join business or social ‘societies’ or ‘clubs’ can also under certain circumstances found actions on § 826 BGB (BGH, BGHZ 29, 344 ff; BGH, NJW 1969, 316 ff; BGH, NJW 1980, 186; BGH, BGHZ 93, 151).

4 Specific Areas of Liability Under the Code: Economic Loss and Products Delictual liability has grown up around a number of specific problem areas. In p ­ articular, road accidents, product liability, medical liability and economic loss have given rise to numerous scholarly debates and judicial decisions. The first three have (besides the liability under §  823 BGB spawned new legal bases for compensation which are to be found in specific legislation. These areas of law will be discussed in ­chapters  six and seven. Two specific areas are discussed here in relation to the BGB the first is economic loss and the second is product liability. In addition, the chapter is having a short glimpse at § 824 BGB, which is a distinct form of liability that protects economic interests where the loss has been caused by untrue statements.

I.  Economic Loss Bibliography The following is only a selection of the literature on the subject of (delictual) liability for pure economic loss and more generally the Vertrag mit Schutzwirkung zugunsten Dritter and Drittschadensliquidation: Banakas (ed), Civil Liability for Pure Economic Loss (1996) ch 3 (Erwin Deutsch); Bussani/Palmer, Pure Economic Loss in Europe (2003); von Bar, The Common E ­ uropean Law of Torts (1998) vol 1, §§ 44–49; Canaris, ‘Die Reichweite der Expertenhaftung gegenüber Dritten’ ZHR 163 (1999) 206; Canaris, ‘Schutzwirkungen zugunsten Dritter bei ‘­Gegenläufigkeit’ der Interessen’ JZ 1995, 441; van Dam, European Tort Law (2nd edn, 2013) 211–13; Hübner/Sagan, ‘Die Abgrenzung von Vertrag mit Schutzwirkung zugunsten ­Dritter und Drittschadensliquidation’ JA 2013, 741; Hübner/Sagan, ‘Einbeziehung Dritter in Schuldverhältnisse und Drittschadensliquidation’ ZJS 2012, 644; Keller, Anwendungsfälle der Drittschadensliquidation und des Vertrages mit Schutzwirkung zugunsten Dritter (2004); Palmer, ‘A Comparative Law Sketch of Pure Economic Loss’ in Bussani/Sebock, Comparative Tort Law. Global Perspectives (2015); Traugott, Das Verhältnis von Drittschadensliquidation und vertraglichem Drittschutz (1997).

88  Specific Areas of Liability Under the Code: Economic Loss and Products

A. Introduction As the late Tony Weir remarked: There are several good things in life, such as liberty, bodily integrity, land, possessions, reputation, wealth, privacy, dignity, perhaps even life itself. Lawyers call these goods ‘interests’. These interests are all good, but they are not all equally good … Because these interests are not equally good, the protection afforded to them by the law is not equal … As between health and wealth, the priority would seem to be clear: it is better to be healthy than wealthy (Weir, A Casebook on Tort (10th edn, 2004) 6.

It will have been noticed from chapter two that the protection of wealth (Vermögen) as such is not included in the list of enumerated interests of § 823 I BGB. This does not mean that economic losses will never be compensated. German law does not have a comprehensive regime of protection against interference with economic interests similar to the protection for bodily integrity or property under tort law (Kötz/Wagner, nos 430–39). Where economic interests are harmed as a consequence of the interference with another kind of interest, then German law readily offers compensation. A person who is injured and incurs medical expenses will receive monetary compensation both for his pain and suffering (in accordance with § 253 II BGB) as well as for his economic loss (in accordance with §§ 249 BGB ff, eg, medical expenses, lost earnings, etc). Equally, a person whose car has been damaged in a traffic accident will be able to claim compensation for it, which may also include the cost of hiring a substitute. Finally, to give one last illustration, if the defendant’s negligent activities lead to the severing of an electricity cable, thereby causing a power cut which affects the claimant’s electrically operated egg-hatching machines, the claimant will be able to claim both the value of the eggs and the profit he would have made on those eggs which would have hatched into chickens and then been sold (BGH, BGHZ 41, 123). In all these cases we are talking of economic loss immediately consequential to injury to the person or property and the only problem that the court will have to face will be one of remoteness: how much of the claimant’s loss to allocate to the defendant’s conduct. By contrast, when we move to pure economic loss (reiner Vermögensschaden) the difficulties experienced by German law are multiplied; in addition, they are experienced in areas which are well known to common lawyers. Indeed, it could be argued that in no other area of its law of torts does German law demonstrate such an ideological affinity with the common law as in its refusal to compensate pure economic loss through the medium of tort rules. As in the common law, instead of a general principle, the law offers a number of specific solutions. The principal protection is through § 826 BGB, which provides compensation for harm caused by intentional acts which are contrary to good morals. In addition, § 824 BGB creates a right to compensation where one person issues false statements which threaten the credit or livelihood of another. Furthermore, various statutory duties that protect economic interests will give rise to duties of compensation under § 823 II BGB, if not under the specific remedies provided for in the legislation. So it would be wrong to focus on § 823 I BGB only and to conclude that there is no compensation in German law for economic loss per se. Yet, as we shall note below, in both systems this basic premise has, in recent times, come under constant and ingenious attacks with practitioners (and judges) showing in many instances a willingness to probe for weak points in the wall of the citadel. Such an attitude,

Economic Loss  89 inevitably, gives rise to the question why should this be so. The question becomes more pressing (and, to some extent has defied a conclusive answer) whenever the problem is examined against the background of French law (and its derivatives) and Austrian law. For these systems have adopted the exact opposite solution. They do not differentiate types of loss yet they have not incurred the dire consequences that common lawyers and German lawyers so fear. Professor Koziol (Basic Questions of Tort Law from a Comparative Perspective (2015) §§ 8/53-8/60) has commented that the precise listing of protected interests in §  823 I BGB has not led to legal certainty. German jurists consider the provision to be overly restrictive and have sought to get around the limits by interpreting § 826 BGB on behaviour contrary to good morals very broadly, by ‘inventing’ the precontractual liability (now § 311 BGB after the Schuldrechtsreform), and by finding duties to ensure public safety under § 823 I BGB (so-called Verkehrssicherungspflichten) to protect the economic interests of others.

B.  Arguments against Liability for Pure Economic Loss i.  Indeterminate Liability Stripped to its essentials, the first argument against liability is that economic loss tends to give rise to difficulties of an administrative nature such as, for example, a potentially indeterminate number of claims (and, it should be stressed, it is the indeterminacy that matters rather than the number of claims itself), unreliable evidence, and collusive actions. These fears were succinctly voiced as early as 1861 by the great German jurist Rudolf von Jhering who wrote: What would it lead to if one could be sued in non-contractual relations generally for gross ­negligence as well as intent! A careless utterance, carrying a tale, giving false information and bad advice, uttering a thoughtless judgment, recommending an undeserving housemaid one used to employ, answering a traveller’s question about the way or the time, and so on, in a word, ­everything and anything, if grossly negligent, would make one liable for the harm it caused in spite of all bona fides; and in the course of such an extension the actio de dolo would become the veritable scourge of commercial and social intercourse, free conversation would be greatly inhibited, the most innocent word would become a snare! (von Jhering, ‘Culpa in Contrahendo’ (1861) 4 Jahrbücher für die Dogmatik des heutigen römischen und deutschen Privatrechts 1, 12).

This clearly echoes what was to become one of the best-known aphorisms of Cardozo J in his famous judgment in Ultramares Corp v Touche 255 NY 170, 174; NE 441, 444 (1931). Similar concerns have been voiced in England.

ii.  Free Self-Determination A second and more principled argument is expressed by Professor Canaris and Professor Larenz who conclude that the rule against recoverability of pure economic loss serves the purpose of guaranteeing individual freedom: Both the right to free development of his personality [Article 2 GG] and the right to compete entail that a citizen is permitted to interfere with the economic interests of another – indeed even

90  Specific Areas of Liability Under the Code: Economic Loss and Products frequently intentionally. Only when these interests have crystallised into property do they earn general and unconditional respect’ (Larenz/Canaris, Lehrbuch des Schuldrechts II, (Special part, first vol, 13th edn, 1986; second volume containing the law of torts, continued by Canaris, in its 14th edn, 1994) 357; also Kötz/Wagner, no 432).

In a free market economy financial harm of some kind to some persons is to be expected: ‘Competition involves traders being entitled to damage their rivals interest by promoting their own’: Home Office v Dorset Yacht Co Ltd [1970] AC 1004, 1027 (Lord Reid). Or, as Robert Goff LJ (as he then was) put it in his Court of Appeal judgment in The Aliakmon [1985] QB 350, 393: The philosophy of the market place presumes that it is lawful to gain profit by causing others economic loss, and that recognised wrongs involving interference with others contracts are limited to specific intentional wrongs such as inducing a breach of contract or conspiracy.

The same justification for the exclusion of economic loss is given in German law. However, this does not necessarily exclude the desirability (in Germany de lege ferenda) of welldefined exceptions in specific circumstances. The main concern is to keep these exceptions under control in the light of the individual’s right to self-determination in a market ­economy (see also Lord Goff ’s comments in Markesinis (ed), The Gradual Convergence (1994) 130; and Picker ‘Gutachterhaftung’ in Beuthien et al (eds), Festschrift für Dieter Medicus (1999) 397, 433).

iii.  The Internal Logic of the Code Professor Canaris also suggests that to create economic interests as an absolute right would contradict the schema of the Code and would amount to unjustified judicial lawmaking. The logic of the Code suggests that, outside specifically named protected interests, protection is offered by §§ 824 and 826 BGB for defined reasons, rather than a general principle of liability for fault (see Canaris, ‘Schutzgesetze – Verkehrspflichten – Schutzpflichten’ in Festschrift Larenz (1983) 27, 78 ff; Münchener Kommentar/Wagner, § 823 BGB, no 379).

iv.  Insurance Considerations A fourth argument is that ‘insurance considerations’ often favour the non-liability rule. On this view, ‘the loss [should] lie where it falls in a situation where the claimant has taken out first-party or loss insurance or, alternatively, where he could have done so relatively cheaply’ (Markesinis/Deakin, 173). It is useful to put this argument in such a stark manner since lawyers in Europe, especially continental Europe, are less accustomed to analysing tort cases in an overtly economic manner. The German decisions bear witness to the validity of this assertion, though it is no longer entirely true of academic literature. (See, Kötz/Schäfer, Judex oeconomicus (2003) especially cases 3 and 11. Also Kötz/Wagner, nos 82–85, 92–93.) Yet the assumption that the ‘insurance factor’ always favours the non-liability rule is simply not correct. The decision of the Canadian Supreme Court in Canadian National Railway Co v Norsk Pacific Steamship Co Ltd [1992] 1 SCR 1021 contains one of the interesting (if long) judicial discussions of the subject. (But it has not pleased all academics. Thus, see, Stapleton, ‘Tort, Insurance and Ideology’ (1995) 58 MLR, 820 ff).

Economic Loss  91 Since the 1990s, English law has confirmed the position that negligently caused economic loss would be recoverable only in very specific circumstances. As a result, a comparison with German law needs to pay attention to the special cases which are recognised in English law. The new orthodoxy expressed by the House of Lords in Murphy v Brentwood DC [1991] 1 AC 398 and Caparo v Dickman Industries plc [1990] 2 AC 605 establish the very limited character of recovery for economic loss. Recovery is accepted for negligent misstatements and negligence in the performance of a service. Otherwise there are no overarching principles (see Markesinis/Deakin, 174–75 and 177; and Markesinis/Deakin, ‘The Random Element of Their Lordships’ Infallible Judgment: An Economic and Comparative Analysis of the Tort of Negligence from Anns to Murphy’ (1992) 55 MLR 619).

v.  The Role of Contract Economic interests are primarily protected by contract law. As Weir put it, ‘if you want your wealth preserved, you should pay a stockbroker to look after it, and sue him in contract if he fails’ (A Casebook on Tort, 7). Recourse to contract law provides a right of compensation, but that depends on the injured party being treated as a party to the contract. Unlike German law, the English law is rather strict. Thus far, the Contracts (Rights of Third Parties) Act 1999 has not played much of a role; and the construction industry appears to be keen to exclude its application for the future. It must also be noted that the expansion of contract has come about incrementally through the activity of the courts. (See Markesinis/Deakin, 156–57, 168–73, and see below.)

C.  The Specificity of German Law i.  History of German Law In Germany, the rigid anti-compensation rule has been doubted by some academics and severely eroded in some situations by the courts, themselves, despite strong academic criticism. But, overall, the challenge has, again, been unsuccessful since the non-liability rule was clearly incorporated in the Code in accordance with the demands of both the socioeconomic environment of the nineteenth century and Roman legal tradition. For the socio-economic environment clearly ranked tactile forms of property above pure economic interests, and what is more, expressed a clear preference for land over movables. Legal tradition too was also hostile towards pure economic loss, since the lex Aquilia and classical Roman Law formed part of the German common law (Gemeines Recht) and this system of compensation was devised for damage to physical objects.

ii.  German Alternatives to Delictual Liability for Economic Loss Many consequences follow from this basic attitude of German law. Here we can only outline a few fundamental points, and further details will be given in the annotations to the translated decisions. First, one must note that as a result of the rigidity of tort law, German contract law has been expanded (many academics would argue excessively), to meet

92  Specific Areas of Liability Under the Code: Economic Loss and Products new situations calling for a pro-claimant solution. In particular, the interests of third parties to contracts have been protected through an expansion of the range of people who are deemed to be protected by the contract (eg, the originally judge-made Vertrag mit Schutzwirkung zugunsten Dritter). In particular, we will see this in the notes on the cases dealing with l­ iability for negligent statements and the liability of attorneys towards non-clients. Secondly, the expansion of § 826 BGB and contract law has often been the result of bold judicial creativity. This creativity has not, as already mentioned, always been met with ‘enthusiasm’ by the academic side of the profession. In this context, therefore, the harmonious collaboration between the two sides of the legal profession, so much the hallmark of German law (and so different from English law), has been ruptured. Thirdly, despite the above, there remain large areas of tort law where no recovery is allowed for pure economic loss and, in this sense, German law is very close to English law in result if not in methodology. The ‘cable cases’ provide an obvious example, but many others exist. Thus, for example, if the defendant injures the claimant’s employee, or debtor, an English claimant has no longer (ie, since 1982) an action in tort for his economic loss (though some common law systems – Australia, New Zealand, Canada – may, in limited instances, allow such claims). According to the prevailing view, interferences with contractual or quasi-contractual relations are not actionable under § 823 I BGB. This contrasts with the famous French decision (Colmar, D 1956, 723) which allowed a football club to claim the economic loss it suffered as a result of the injury of one of its leading players; this would be decided differently in Germany. (See generally, Bussani/Palmer, case 5, 241–54.) Fourthly, demarcation lines cannot always be drawn easily, especially in cases involving pure economic loss. The distinction between damage to ‘property’ and economic loss has thus caused many difficulties. For example, A damages B’s cable and C’s factory comes to a halt. Moulten material in his electrically operated machines solidifies and has to be discarded. This, clearly, is physical damage, actionable under § 823 I BGB. But what if the solidified material can be re-melted – no doubt at an extra cost – and reused? In trying to answer this question, German courts have come up with some rather abstract analyses. (See, eg, OLG Hamm, NJW 1973, 760; Möschel JuS 1977, 5.) Fifthly, the different methodology – dictated by the Code, German legal history, or legal education should not deter the reader from using ‘constructively’ the German ideas which may yet be transplantable into the common law. At the very least, these ideas should provide the common lawyer with food for thought. This point will be amplified in the sections that follow, and in the notes to the legal malpractice and negligent misstatement cases. Decisions such as that of the House of Lords in Henderson v Merrett Syndicates Ltd [1995] 2 AC 145, where comparative law was put to practical use, will surely encourage jurists to engage in such exercises in the future, in this field and elsewhere. In his leading speech, Lord Goff of Chieveley, after having carefully reviewed the available solutions in French and German law, opted for a concurrence of contractual and tortious actions. The German model, and the way it had worked in practice without any problems, clearly aided the learned Law Lord to reach his own conclusion as to what English law should be. Finally, for the reasons already given, the economic loss cases will be grouped under different headings and discussed separately, the assumption being that different factual

Economic Loss  93 situations call for different legal (and economic) analyses and, therefore, different solutions. The English law on this topic is usefully grouped in Markesinis/Deakin, 143–73. The laws on other legal systems is presented in terms of solutions to problems in Bussani/Palmer.

D.  Categories of Liability for Economic Loss i.  Interference with an Established and Operating Business In chapter two (section II.E.iii) we saw that the right to an established and operating business was recognised as a protected interest very soon after the Code came into force (see case  8). The interference with such a business is treated as analogous to the interference with property, rather than with a purely economic interest. In that way, the refusal to provide compensation for pure economic loss is preserved. But, as noted in ­chapter two, the conduct of the defendant will constitute an invasion of the claimant’s right if it is ‘businessconnected’. According to the BGH this means that it must be ‘in some way directed against the business as such … and must not simply affect rights and interests which are separable from the business as a functioning unit’ (BGH, BGHZ 29, 65, 74, and case 9). So the injury to an ice-skating partner was not an interference with a business as such.

ii.  Cable Cases Cases 28, 35 and 36 deal with a problem that has also exercised the English courts. Their annotations will bring out particular points and provide the reader with further bibliographical references. Three points, however, should also be made at this stage. The first is the fact that English and German law essentially reach the same result in this factual situation. It is by no means clear what is the right answer to this problem. If – and we need not give a conclusive answer at this point – the law ought to be changed, the question would then arise as to how this should be done, given the rigid phrasing of § 823 I BGB. Of course, it should be noted that German lawyers have not been short of ideas in their attempts to circumvent the leading tort provision. But the BGH, apart from a brief period of hesitation, has been as quick to reject them as the practising lawyers have been to invent them. Secondly, the cases are also noteworthy in their relatively open allusion to policy and, in this respect, they can easily be compared with some of the more recent English decisions. The awareness that policy will decide the outcome is also increasingly shared by the academics who have commented on these decisions. Once again, the Norsk decision contains a good discussion of the issues. Finally, both the English and German cases reveal how various legal devices have been used interchangeably in order to produce the desired result. This equivocation between the various elements of liability must be clearly stressed, for it will accustom the common lawyer to the fact that he must often seek to find in the German theory of legal cause the answers which he tends to produce through the notion of duty. For comparative studies on this subject see: Bussani/Palmer, 220–21; Taupitz, Haftung für Energieleiterstörungen durch Dritte (1981). More generally on the comparative law of causation see Steele, Proof of Causation in Tort Law (2015).

94  Specific Areas of Liability Under the Code: Economic Loss and Products

iii.  Loss of Use Two cases (BGH, BGHZ 55, 153 and BGH, NJW-RR 2017, 219) dealing with this issue are case 37 and case 7. In essence, the cases demonstrate the way in which the effects of a fault can be characterised as an interference with the use of property (and thus an interference with property). In the more recent decision (case 7), the claimant sought compensation for the immobilisation of its ship for three days, but was awarded damages for interference of only a few hours. The thing itself was not damaged, but its use was totally prevented. That constituted an interference with property. Mere restriction of the use of a thing is, however, not an interference with property. So a blockage on the motorway which prevents a car completing its journey is not an interference with property, but is merely economic loss (see  case 7). The annotations to them will make it clear that the results achieved by the courts have been seriously questioned by many academics. These cases also show how difficult it is to draw a line between what constitutes an interference with property, actionable under § 823 I BGB, and what should be called pure economic loss.

iv.  Damage Caused to the Product This is an economic loss which, arguably, should be left to contract rather than tort. Nevertheless, in Germany, tort law was expanded to cover some types of economic loss, mainly to circumvent some shorter limitation periods in contract that then applied (­Weiterfressermangel or Weiterfresserschaden). The problem is whether harm caused to the product which is defective constitutes damage to property or merely economic loss. Clearly, damage caused to other property is property damage. Whereas the case law before the revision to the Code in 2002 was clear that a defect in construction did not amount to damage to the land on which it was built (case 55), harm caused to the rest of a product by a defective component might be. In the latter cases, where a defective component created harm which was ‘substantially distinct’ from the defect itself, this might constitute property damage within the scope of § 823 I BGB. Since 2002, the limitation periods have been standardised at three years through §§ 195, 199 BGB and the need for such interpretation has at least to some extend gone. All the same, two reasons remain. First, if the case is treated as one of delict, then the limitation period is three years instead of the two years for sales (§ 438 I no 3 BGB). Secondly, the limitation period for delict starts from the date of harm, whereas that for sales starts from the date of sale. There will thus remain incentives to treat damage to the product cases in delict (and thus as harm to property), rather than as defects in sale (and thus a form of economic loss). See the notes to cases 53–55 for more details on the future of the Weiterfressermangel after the Schuldrechtsreform of 2002.

v.  Economic Loss as a Result of Negligent Misstatements Here, too, we are dealing with economic loss which in the common law systems will, if at all, be actionable in tort. Negligent statements relied upon by third persons have proved troublesome. The reasons for the difficulties inherent in this subject are many. First is the belief – not always factually correct – that words travel more than acts and can thus raise the spectrum of truly ‘indeterminate liability’ in terms of time and persons. Though Professor von Bar suggested the opposite solution by arguing that a person giving information in

Economic Loss  95 his professional capacity knowing that it will be accorded considerable importance by the recipient demonstrates an ‘assumption of liability’ for any harm caused by reliance on that statement (‘Liability for Information and Opinions Causing Pure Economic Loss to Third Parties’ in Markesinis (ed), The Gradual Convergence (1994) 113 and 116–17.) See also after the Schuldrechtsreform of 2002, the ‘Expertenhaftung’ under § 311 III 2 BGB, which is basically codified case law. Hence, the previous case law remains, in principle, applicable here. Secondly, if we take the example of an audit report prepared for a company, but relied on by third parties, the audited client retains a good deal of control over the records upon which the auditor bases his report. Thirdly, and not entirely unrelated to the previous point, is the fact that auditors will rarely be in a position to estimate anywhere near as accurately as will be necessary, the extent of their potential liability. This ‘informational asymmetry’ has been examined more in the US than in England by academic literature. (See, for instance, Siliciano, ‘Negligent Accounting and the Limits of Instrumental Tort Reform’ (1988) 86 Michigan Law Review 1929.) Situations of negligent misrepresentation can take an infinite variety of factual forms. These have been systematically analysed by Lorenz, ‘Das Problem der Haftung für primäre Vermögensschäden bei der Erteilung einer unrichtigen Auskunft’ in Festschrift K Larenz (1973) 575. Here suffice it to divide them into two groups. In the first, the defendant makes a statement (usually a report) to the person who asked for it (and, invariably, paid for it) but knows that it will be relied upon by a specified third person. OLG München, BB 1956, 866 is such a case and it is discussed along with other similar cases in Lawson/Markesinis, Tortious Liability for Unintentional Harm in the Common Law and the Civil Law (1982) I, 83 ff. In the US this situation is usually described as being covered by the ‘privity or near privity rule’. It finds an excellent illustration in Glanzer v Shepard 233 NY 236, 135 NE 275 (1922). That German law based its solution on contract whereas the American law opted for tort is mostly a matter of ‘emphasis’, as Cardozo J put it, adding that if necessary he, too, could have based his decision on contract. Real difficulties appear in the second type of situation where A commissions the (negligently prepared) report from B and then shows it to others who rely on it to their detriment. Case 41 is such a case and it is here that the problem of ‘indeterminate liability’, so well identified by Cardozo J in Ultramares Marine Corp v Touche 255 NY 170, 174 NE 441 (1931), rears its ugly head. The courts, if they abandon strict adherence to the privity requirement (as they are nowadays inclined to do) are, in such cases, forced to seek a balance between two opposing positions. The first is liability resting on pure foresight (or some equivalent concept). The second is liability based only on a form of direct nexus between the representor and the representee of the kind found in the aforementioned decision of the OLG München or in the Glanzer v Shepard decision. A more middling or flexible approach is that advocated by the Restatement (Third) of Torts: Liability for Economic Harm (Tentative draft 1) para 5 (2012) which rejects the private requirement and renders accountants liable not only to those persons whom they intended to influence but also towards the persons whom the accountants know that their clients intended to influence. English law, too, has vacillated on this topic in a manner which has been as confusing as it is difficult to summarise with any pretence to accuracy. Since the seminal judgment of the House of Lords in Hedley Byrne and Co Ltd v Heller and Partners Ltd [1964] AC 465, it has been settled that there is liability for careless statements causing pure economic loss provided

96  Specific Areas of Liability Under the Code: Economic Loss and Products there was a ‘special relationship’ between the claimant and the defendant and there was no disclaimer of liability. ‘Special relationship’ has obviously been a key phrase; and it has been subsequently interpreted to include a friend giving advice seriously though not in a professional context. The current state of the law is found in Caparo v Dickman [1990] 2 AC 605. In that case, the House of Lords refused to hold that the auditors of a company owed a duty of care towards the shareholders of the company who suffered losses by purchasing shares in that company by relying on that report. The judgments of at least two Law Lords – Lord Bridge and Lord Jauncey – suggest that liability can only arise if the statement was both intended to be relied upon for a particular purpose and was, in fact, relied upon. This, in the opinion of their Lordships, was not satisfied in this case. In Smith v Eric S Bush; Harris v Wyre Forest District Council [1990] 1 AC 831, 865, Lord Griffiths stressed that in cases where the advice has not been given for the specific purpose of the recipient acting upon it, it should only be in cases when the adviser knows that there is a high degree of probability that some other identifiable person will act upon the advice that a duty of care should be imposed.

Likewise, in Caparo Industries plc v Dickman [1990] 2 AC 605, 621 Lord Bridge argued that in these cases it is essential to prove that the defendant knew that his statement would be communicated to the claimant, either as an individual or as a member of an identifiable class, specifically in connection with a particular transaction or transactions of a particular kind (eg, in a prospectus inviting investment) and that the claimant would be very likely to rely on it for the purpose of deciding whether or not to enter upon that transaction or upon a transaction of that kind.

The development of the tort action in England and the US was largely brought about by the doctrine of consideration which (especially in England) made the expansion of the notion of contract impossible. (See Lord Devlin’s judgment in Hedley Byrne & Co. Ltd v Heller & Partners Ltd [1964] AC 465, 529.) In Germany the pressure was the reverse. A tort action under § 823 I BGB was and is impossible; and an action under § 826 BGB tends to be limited to the most opprobrious forms of misconduct. Though § 826 BGB has, in recent times, received an expansive interpretation, it is still unable to deal with the most common situations. The expansion of contractual or quasi-contractual remedies was the only answer German law could produce. A number of translated German decisions deal with this problem. Though the results reached by the German courts are often identical to those accepted by the English courts – Caparo, for example, could have been decided in the same way under German law. However, one must also note that recently the BGH extended liability in this field. (See the controversial decision reproduced as case 44.) Notwithstanding the possible convergence in solutions, the reasoning used by these two national courts remains different. This may be largely due to the fact that in these disputes the sources of the law are multiple and highly complex. More about the contractually ‘flavoured’ methodology will be said in the next sub-section; and the complexity of the sources that must be used by German judges to solve these cases will be discussed in the notes to the translated decisions.

vi.  Negligent Performance of Professional Services Case 47 deals with a related topic. A notary, solicitor, or attorney is negligent in the ­drafting of the will of the testator and, as a result, a potential legatee is deprived of the

Economic Loss  97 benefit he would have otherwise derived from the will. The lawyer’s contractual and/or delictual ­liability towards his client is not, of course, in doubt. But can he be made liable to the ‘third’ party/potential legatee? German law (as indeed English and American law) has given a ­positive answer, but has again justified it in contractual, not delictual terms. Common lawyers have opted for a different justification of the same result, but the comparison of the various cases shows that the problem – the limit of the potential liability – is the same. Incidentally, in these cases liability can often be said to result from what the lawyer says (ie, negligent statement), but it can also result from what the lawyer does. In the annotation in this case we shall examine the English and American approaches to the problem. The advantages of contract over tort are set out in the notes to case 47.

E.  Economic Loss at the Borderline of Contract and Tort The divide between contract and tort is not always easy to draw. It becomes very vague when the tortious conduct produces pure economic loss instead of the more typical physical injury or property damage. This division, explicable by reference to history, is more rigidly maintained by the common law where some of its jurists have even produced eloquently pithy but, it is submitted, not always persuasive reasons for its maintenance. (See, eg, Weir, International Encyclopaedia of Comparative Law (1975) XI, chapter 12, ‘Complex Liabilities’, chapter 5; and, more sceptically, Markesinis, ‘An Expanding Tort Law – the Price of a Rigid Contract Law’ (1987) 103 LQR 354, 384 ff.) This is not so in the modern civil law in general and the German law of torts in particular. For there, contract and tort are seen as species of the wider notion of obligation (Schuldverhältnisse). In this system, codal provisions or other reasons have forced lawyers, while not abandoning the search for doctrinal clarity, to often cross the boundaries of contract, tort law, and negotiorum gestio (§§ 677 BGB ff) in an attempt to find a solution (not necessarily the best one) to a problem. We shall note later on in section III of this chapter how this has worked out in specific instances of potential liability. Here suffice it to sketch two of the main contractual solutions devised to overcome shortcomings of the German law of tort. They are contracts with protective effects vis-a-vis third parties (Verträge mit Schutzwirkung zugunsten Dritter) and the (untranslatable) concept of Drittschadensliquidation; and their treatment in Germany is usually found in books dealing with the law of contract or the ‘general part’ of the law of obligations. Contracts in favour of third parties (Verträge zugunsten Dritter) give, under certain circumstances, a third party the right to demand that a promisor in a contract perform his primary obligation to him (and not to the co-contractor/promisee). They are regulated by §§ 328–35 BGB and they should not be confused with the contracts with protective effects for third parties. They are similarly recognised in many other systems. In England, the Contracts (Rights of Third Parties) Act 1999 made considerable inroads into the doctrine of privity and introduced the concept of a contract for the benefit of a third party into English law. But the common law remains otherwise rigidly faithful to all the facts of its doctrine of consideration. (For a thoughtful and critical discussion of the English common law, see: Law Commission, ‘Privity of Contract: Contracts for the Benefit of Third Parties’ Law Com No 242 (1996). See, also, Beatson, ‘Reforming the Law of Contracts for the Benefit of Third Parties. A Second Bite at the Cherry’ [1992] Current Law 1, where one also finds some interesting insights about the Law Commission’s research into foreign (including German) law.)

98  Specific Areas of Liability Under the Code: Economic Loss and Products Contracts with protective effect for third parties provide the beneficiary with protections similar to those of the primary parties to the contract (see Markesinis/Unberath/Johnston, 204–16). German courts have deployed the concept of a contract with protective effects for third parties in two quite different groups of cases. (The need to differentiate between these two groups is highlighted by Kötz, ‘The Doctrine of Privity of Contract’ (1990) 10 Tel Aviv University Studies in Law 195.) In the first category the function of the Vertrag mit Schutzwirkung zugunsten Dritter is to frame certain protective duties of care as collateral obligations under the contract (or in pre-contractual situations as culpa in contrahendo, see now § 311 III 2 BGB) in order to avoid the weak vicarious liability rule contained in § 831 BGB. This is well illustrated by the vegetable leaf case (case 69) in which the daughter of a shopper was given compensation for personal injuries sustained while helping her mother to pack shopping, but before the contract of sale between the mother and the shop had been concluded. The judicially created ­variant of contract with protective effects vis-a-vis third parties brings strangers to a contract under its protective umbrella and allows them to entertain an action for damages for breach of one of the contract’s secondary obligations. The situations in which this concept has provided a solution originally involved physical injury; and this contractual device enabled the German courts to overcome the restrictive provision of liability for harm caused by third parties found in the provisions on liability for others in § 831 BGB (discussed below in chapter five). For in § 831 BGB the Civil Code stipulates that the defendant is liable for his own negligence in selecting or supervising his servant but does not impute the servant’s negligence to him. Direct liability can however be secured in a contractual context by relying on § 278 BGB to create a duty to deliver performance not only to the principal contracting party, but also to a third party. Clearly, such a convoluted technique was never necessary for the common law (and, indeed, for those systems (eg, French) that opt for the true vicarious liability rule). The German ‘refinement’ of the traditional contract in favour of third parties has thus, understandably, escaped the attention of most common lawyers. In 2002 the legislator codified this first category of the Vertrag mit Schutzwirkung zugunsten Dritter (see §§ 280 I, 311 II nos 1–3, III 1, 241 II BGB). However, the old case law in this regard remains fully applicable. The second type of situation in which the notion of Vertrag mit Schutzwirkung zugunsten Dritter has been used is, however, much more interesting from a common law perspective and it concerns the so-called liability of experts (Markesinis/Unberath/Johnston, 208–14; the Schuldrechtsreform of 2002 also codified this kind of liability, see §§ 280 I, 311 III 2, 241 II BGB). § 839a BGB has subsequently made provision for the liability of court-appointed experts. The absence (in Germany) of a tortious exception to the rule that pure economic loss is not recoverable in tort (such as the Hedley Byrne principle) has prompted German courts to extend contractual reasoning. It is thus in this context that the German case law deserves attention and provides useful insights into the scope and nature of liability for the negligent performance of services by professionals which lead to economic loss. For example, the liability of a lawyer to a non-client/third party that has suffered pure economic loss as a result of the lawyer’s negligence: White v Jones. The same may be true in cases where a sub-contractor causes, through his negligence, economic loss not just to his co-contractor (the general contractor) but also the owner of the building (eg, Junior Books v Veitchi [1983] 1 AC 520 (Scotland and England); J’Aire Corp v Gregory 24 Cal 3rd 799, 598 P 2d 60 (1979) (US).) For, it will be argued (in the notes to the relevant German cases, cases 39 and 46), that in almost all of these situations (for an exception see case 44)

Economic Loss  99 the defendant (lawyer or sub-contractor, as the case may be), must not be made more extensively liable towards the third party than he would be if sued by his co-contractor. For this to be achieved, however, the cause of action against such defendants will have to be contractual. If, for whatever reasons, tort terminology is chosen, it will have to be made clear that the scope and extent of any tortious duty will have to be determined by the underlying contract between lawyer/client or owner/contractor. (See Lorenz/Markesinis, ‘Solicitors’ Liability Towards Third Parties; Back into the Troubled Waters of the Contract/Tort Divide’ (1993) 56 MLR 558, replying to Beatson, ‘Reforming the Law of Contracts for the Benefit of Third Parties. A Second Bite at the Cherry’ [1992] Current Legal Problems 1). This category of liability causes great c­ onceptual difficulties in both systems. (For a more detailed account see notes to cases 41–44 and case 47.) In English law, some have suggested actions for economic loss could be framed in contract. However, the Law Commission was at pains to emphasise that the 1999 Act does not cover situations such as White v Jones or Junior Books and expressly clarified that its reform proposal did not make allowances for the German concept of a contract with protective effects towards third parties. Whether this has been sufficiently expressed in the wording of the Act is controversial and gives rise to considerable uncertainty: see Andrews, Contract Law (2nd edn, 2015) 189. Hence, tort techniques will continue to dominate the reasoning in such cases outside the scope of the 1999 Act with one notable exception: the availability of an exclusion clause in the main contract to third parties who are employed in the exercise of the main contractor’s duties. Clearly, then, the above technique goes some way towards solving the kind of problem faced by Anglo-American courts in cases like J’Aire and Junior Books. However, it also challenges the doctrine of contractual privity, which is accepted by German law as it is by the common law systems (Relativität der Schuldverhältnisse). Some kind of workable compromise is thus needed if a right balance is to be preserved between the traditional doctrine and the judicially fashioned deviation. It follows that if the ambit of contract is to be enlarged – as it is by constructions such as the contract with protective effects vis-a-vis third parties – special care must be taken so that the expansion is kept under control. For if it is not, the dividing line between contractual and tortious liability may be blurred or, even, abolished. The way German lawyers have grappled with these, at times, incompatible aims is instructive for a number of reasons. Noteworthy first is the fact that we are here faced with an originally judge-made doctrine. True, courts and academics have tried for a long time – as is customary in German law – to pin their views on some article of the Code. Thus, sometimes the expansion of the contract has been based on intention within § 157 BGB, relying on a broad interpretation of the contract, implied intentions of the parties, and an analysis of the end purpose of the transaction: see RG, RGZ 87, 292; RG, RGZ 98, 213; RG, RGZ 106, 126; RG, RGZ 127, 218 (an interesting decision); and RG, RGZ 152, 177. The BGH continued this practice. (See BGH, BGHZ 1, 383, 386; BGH, BGHZ 5, 378, 384; BGH, NJW 1956, 1193.) In other cases, even § 242 BGB (good faith) has been invoked to render respectability to what is a clear example of judicial activism. Larenz’s scholarly writing (Larenz, Schuldrecht I (1st edn, 1953) 16. Larenz NJW 1956, 1193; NJW 1960, 79) changed not only the theoretical foundation of the new concept. Indeed, it also helped distinguish it from the traditional contract in favour of third parties regulated by §§ 328 BGB ff, thereby creating a new notion for German private law. This approach has greatly exercised academics. But the courts, in what has been called fits of

100  Specific Areas of Liability Under the Code: Economic Loss and Products ‘­pragmatism’ (Markesinis, ‘Conceptualism, Pragmatism and Courage: A Common Lawyer Looks at Some Judgments of the German Federal Court’ (1986) 34 American Journal of Comparative Law  349) have refused to resolve this ‘theoretical’ issue, preferring to focus on the narrow aspects of each action before them. (Thus in BGH, BGHZ 56, 269, 273 the theoretical basis of the concept was deliberately left undecided; and in BGH, NJW 1977, 2073, 2074 it was regarded as irrelevant!) However, the discussions about the theoretical basis of the Vertrag mit Schutzwirkung zugunsten Dritter came to an end after it was codified in 2002 (see §§ 280 I, 311 II, III BGB). A second interesting feature is, as we shall see, the emphasis on the relationship between contractual creditor and claimant/third party (which is known to the defendant/debtor) rather than on the foreseeability of the claimant/third party by the contractual debtor/ defendant. The weakness of the latter (tort) approach is the potential open-endedness of the liability; an open-endedness which could, given the vagueness of the foreseeability test, lead to the blurring of contractual and tortious liability. Nevertheless, we can notice over the years a gradual weakening, or as some might say, erosion of the requirement of an interest of the creditor in including the third party in the protective scope of the contract (in one sense the most important element). As the concept of Vertrag mit Schutzwirkung zugunsten Dritter was first applied to situations involving physical damage to a third party, it was natural to demand that the creditor was responsible for the wellbeing (Wohl und Wehe) of the third party. Any injury to the latter could be analysed as an injury to the creditor himself which in turn explained the third party’s inclusion in the contract (BGH, BGHZ 51, 91, 96). However, the extension of the Vertrag mit Schutzwirkung zugunsten Dritter into the realm of pure economic loss in the context of misstatements or other services by professionals also prompted a shift of emphasis from the relationship creditor/third party to that between third party/defendant. Here in this category of cases, of what has been called above ‘expert liability’ (Expertenhaftung), the criterion of the creditor’s interest in the third party’s wellbeing is much less appropriate and as a consequence was soon abandoned (see Kötz/ Wagner, nos 325–26 and 488). This last point is particularly obvious from recent decisions (taken from what one might describe broadly as the banking/financial area, as well as the provision of expert opinions and legal service). Cases 43–46 illustrate this trend, which many (even in Germany) regard as dangerously expansive. The widening of the protective ambit of the contract is obvious not only in the fact that the courts no longer insist that the protected third party may be specifically identified in advance. More importantly, it is evident from the fact that the third party no longer needs to be in a close personal relationship with the creditor. Instead, the paramount question is ‘in what circumstances the objective interests involved [sic] permit the inference that the parties [debtor/creditor] have [even] implicitly stipulated a duty of care towards third parties’ (BGH, NJW 1984, 355, 356). While the BGH still founds the concept on implied terms reasoning and thus derives the rights of the third party from the contract between creditor and defendant (the ‘expert’), the third party’s (reasonable) reliance on the accuracy of the statement and the special skill of the defendant attain special weight in the individual case. (See, now, § 311 III 2 BGB, which stresses the importance of reliance.) It comes as little surprise therefore to see that some decisions also apply the concept to situations where there is a potential or actual conflict of interest between the contractual creditor and the third party (BGH, BGHZ 127, 378; for details see note to case 43). This move away from the requirement of the creditor’s interest points towards a gradual convergence with the approach established

Economic Loss  101 in Hedley Byrne. But the reader should be aware that in this area of the law it is difficult to generalise from individual cases. For instance, in BGH, NJW 2001, 514 the BGH reasserted the contractual foundations of the concept. The LG Frankfurt had argued that certain heads of damages were not included in the scope of the duty owed by the surveyor. This was confined to the creditor’s (or for that matter the third party’s) reliance on the correctness of the commissioned report concerning the presence of toxic substances in the soil of the development site. The BGH rejected this line of reasoning as being too restrictive. In this context the Court stressed that once the third party was included in the contract and had a relation with the promisee, reliance was not the main element in determining the extent of the surveyor’s liability. Let us then turn to the conditions required for what we shall call ‘the opening of the contractual umbrella’ (see case 43 and Markesinis/Unberath/Johnston, 210–11). We note that they are – in theory – three. First, the third party must come into contact with the performance of the contractual debtor and be endangered (or otherwise affected) by any misperformance in (roughly) the same way as the contractual creditor. This is commonly known as the requirement of proximity of performance (Leistungsnähe). Secondly, according to what is probably the better view and subject to the qualifications already made, the contractual creditor must have some interest in protecting the third party. Thirdly, the above two elements must be known to the debtor/defendant at the time of conclusion of the contract (or the commencement of the contractual negotiations). This, as stated, is a subject rich in case law where most generalisations are dangerous; not all decisions are clearly reconcilable with one another (as German lawyers readily admit); and where the only discernible trend is for the courts – despite academic doubts – to move towards an expansion of the contractual umbrella. The codification of the Vertrag mit Schutzwirkung zugunsten Dritter did not change this trend – the previous case law remains applicable The Drittschadensliquidation is a judge-made doctrine (but see § 421 I 2 HGB) which allows a creditor (the promisee) to a contract to claim (in contract) for loss resulting from the non-execution or bad execution of the contract, which falls not upon him (the creditor) but upon a third party provided that the third party has suffered a loss instead of the promisee. The advantages, if any, that the contractual approach offers over the tort reasoning will be considered in the notes to cases 47 and 48. It is of first importance to note that the third party is entitled to have the right assigned. The principle involves an exception to the so-called doctrine of the creditor’s interest according to which as a general rule a claimant can recover for his own loss only. Unlike the concept of the Vertrag mit Schutzwirkung zugunsten Dritter it does not affect the notion of relativity of contract for it does not enable the third party to sue directly. Sometimes, however, a contract action may not be available, for instance where a third party to a contract of carriage damages goods in transit in an accident. If the buyer is bearing the risk, the seller will not suffer a financial loss, as he remains entitled to claim from the buyer the price of the goods (see § 447 BGB, which is however inapplicable in a business to consumer scenario, see § 474 II BGB). Yet, if the seller is the owner of the goods at the time of the accident, only he is entitled to bring an action under § 823 I BGB. The BGH (BGHZ 49, 356) allowed the action of the seller and applied the concept of Drittschadensliquidation. From this perspective, the concept appears as a general question of the law of damages. Still if the contract route is available, the action will most likely be in contract due to

102  Specific Areas of Liability Under the Code: Economic Loss and Products the absence of true vicarious liability in tort, which will be examined more closely in chapter five. The main rationale of the doctrine of Drittschadensliquidation (which was not codified during the Schuldrechtsreform of 2002) is to ensure that the defaulting party in the contract (or the tortfeasor) does not benefit from the fact that in these cases the loss has been shifted (Gefahrentlastung or zufällige Schadensverlagerung) from the creditor to the third party. If this exception to the doctrine of the creditor’s interest had not been accepted, the defaulting party would not be liable to his creditor (since the latter has suffered no loss). Nor would the guilty party have been liable (in contract) to the third party in the absence of any contractual link between the two of them. Like all judge-made rights, however, this right is kept under close scrutiny lest it get out of control and expose the contractual debtor to an unlimited number of claims. Thus, the third party will be allowed to rely on the doctrine and seek assignment of the creditor’s rights against the promisor or the tortfeasor only where special relations between him and the creditor to the contract cause the interest (and the loss) to be shifted on to him. The Drittschadensliquidation applies only in certain traditionally recognised situations. These are mainly three: certain agency situations, given that German law does not accept undisclosed agency; what English lawyers would consider to be trust and bailment cases; and, finally, in relation to carriage of goods. Indeed, the courts are reluctant to extend its scope except in an incremental manner. Thus, the BGH dismissed Drittschadensliquidation as an inappropriate way of solving the problem of product liability (see case 48), and denied its application to the factual context of the cable cases (see case 36). These two cases contain very useful comments on the scope and rationale of the doctrine. The fons et origo of this development seems to be a decision of the Court of Appeal in Lübeck (Seufferts Archiv II (1857) 36, 47), where an agent was allowed to claim damages suffered by his ‘undisclosed’ principal. The need for a concept such as ­Drittschadensliquidation becomes obvious if one takes into account that German law does not accept undisclosed agency. Thus, on the one hand, the agent does not sustain loss because he is acting on account of the ‘principal’ who reimburses him, but on the other hand the ‘principal’ cannot sue directly on the contract. Hence, the agent is allowed to sue on behalf of the ‘principal’ (eg, RG, RGZ 75, 169; RG, RGZ 115, 419; BGH, NJW 1989, 3099). An equally important example of the application of the theory can be found in cases where the risk (but not the property) in goods has passed from the seller to the buyer (eg, §§ 446 and 447 BGB). In this type of situation, German law has for a long time now (see, eg, RG, RGZ 62, 331, 335; BGH, VersR 1972, 1138; BGH, VersR 1976, 168) accepted that the seller can recover damages from the wrongdoer in order to hand them over to the buyer or assign this claim to the buyer. (Indeed, because of § 285 I BGB (before 2002: § 281 BGB) he is obliged, if requested, to do so.) One should add, however, that in cases involving carriage of goods by land, the contract of carriage is normally treated as a contract for the benefit of the consignee which is a source of additional rights (see § 421 I 2 HGB as a sort of codified Drittschadensliquidation). The concept of Drittschadensliquidation is confined to particular types of situation and is not freely available to third-party claimants (see cases 36 and 48 which contain guidelines as to when it is available). It has for instance not been applied to problems of product liability or the negligent misstatements situations discussed above, for they do not involve a transfer of a loss to a different person than the contracting party but increase the risk of liability: the product or the statement might cause loss to the contracting party but also to a per se indeterminate number of third parties. Therefore, additional controlling factors

Economic Loss  103 are ­necessary which reasonably limit liability and which are not and cannot be provided by the more limited and special principle of transferred loss. What unites the large miscellany of cases which the Germans have systematically brought under the heading of Drittschadensliquidation are two common elements. (Tägert’s Die Geltendmachung des Drittschadens (1938) was groundbreaking in identifying these common features.) First is the fact that in these cases the invocation of the floodgates argument is inappropriate since one person only suffers a loss. Secondly, the co-contractor of the defaulting party – in our two examples the testator or the seller of the goods – will have no incentive to sue (or may simply no longer be around to sue). As German lawyers argue, in these cases the person who has suffered the loss has no remedy while the person who has the remedy has suffered no loss. If such a situation is left unchallenged, the defaulting party may never face the consequences of his negligent conduct; he (or his insurer) may receive an unexpected (and undeserved) windfall; and the person on whom the loss has fallen may be left without any redress; a meritorious claim would go down a ‘legal black hole’ to use the more vivid English term. The question to our mind is not whether the claimants should be allowed to recover – we believe the answer must be in the affirmative. The real question is whether the defaulting defendants should run the risk of incurring greater liability towards these claimants than they would have incurred had they been sued by their co-contractor. The German reply is negative; and their contractually flavoured solutions offer a neater explanation of this result than the tentative English attempts to harness tort for an answer. Drittschadensliquidation has also been applied to cases of carriage of goods by sea where, as in English law, the rights under the bill of lading are transferred upon i­ndorsement. (See BGH, BGHZ 25, 250.) To compare this concept with English law, it is useful to look at Leigh and Sillavan v Aliakmon Shipping Co Ltd (The Aliakmon) [1986] AC 785. Simplifying the facts, there the buyer, who had the risk but not the property in the purchased goods and who was not the carrier’s contracting party, failed in his action against the ship owner whose negligent storage had damaged the goods resulting in the claimant’s economic loss. In The Albazero [1977] AC 774, the House of Lords had favoured a contractual solution to the problem allowing, in principle, recovery of damages in a contractual action on behalf of a third party. However, the perceived drawback of this solution was that the third party could not compel the promisee to bring such an action. In the Court of Appeal in The Aliakmon ([1985] QB 350) Robert Goff LJ was thus persuaded to attempt to create a tort remedy based on the ‘principle of transferred loss’. This would have enabled the third party to sue the carrier directly even though he did not have a proprietary interest in the goods or possession of them at any material time. In the House of Lords ([1986] AC 785, 817–18), Lord Brandon of Oakbrook refused to follow this line of reasoning mainly because he did not accept that there was, in this respect, a lacuna of English law. The learned judge was also suspicious of the new remedy on doctrinal grounds since, in his eyes, it amounted to a derivative action, which was contrary to its tortious nature. For the special feature of the transferred loss principle was that the liability of the carrier was ‘contractually flavoured’ in so far as the duty owed to the third party was shaped by the underlying duty to the goods owner. This, in turn, was determined by the exclusion and limitation clauses contained in the contract of carriage as contained in or evinced by the bill of lading. (In 1992 the problem was remedied by statute: Carriage of Goods by Sea Act 1992.) By contrast case 46 was a decision involving land t­ ransport. The seller was the contracting party and also the owner of the goods, while the buyer was on risk. The BGH, following established case law (starting with RG, RGZ 62, 331), had no difficulty in resorting to

104  Specific Areas of Liability Under the Code: Economic Loss and Products the theory of Drittschadensliquidation. This meant that the seller, was entitled to recover damages in respect of the buyer’s loss, and since this right had been assigned to the claimant buyer, the latter was allowed to recover damages for his own loss from the defendant carrier. In German law the claimant buyer in The Aliakmon would have been entitled to require the promisee, the seller, to assign his remedy against the carrier (by relying on § 285 I BGB). In practical terms, this addresses Lord Goff ’s main objection against a contractually founded theory of transferred loss (see The Aliakmon [1985] 1 QB 350, 390) and his later comments in White v Jones [1995] 2 AC 207, 257 and in Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518, 544–45: ‘The shortcomings of this rule must, I imagine, have been that it left the initiative with the seller, rather than with the consignee who was the person who had suffered the loss of or damage to the goods’). Thus, the doctrine of Drittschadensliquidation also provides a solution in those cases where the promisee might not have an incentive to enforce the right on behalf of the third party. The second and potentially significant extension of English contract occurred in the context of the promisee’s remedies in respect of a third party’s loss. In Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518, contractual remedies were extended to cover situations where a building employer is not the owner of the development site at the time of the breach of the building contract and, as a result (arguably) suffers no financial loss. The builder/defendant in these cases based his defence on the ‘no loss argument’. However, the courts allowed recovery in contract of substantial damages in respect of the site owner’s loss. Andrews, Contract Law, 183–87 and Burrows, ‘No Damages for a Third Party’s Loss’ (2001) 1 Oxford University Commonwealth Law Journal 107 consider this decision to be limited to cases where, before the 1999 Act, there was a remedial gap. The building employer is able to sue on behalf of the third party site owner/financier of the project and is required to account to that person. Accordingly, the measure of the damages recoverable by the building employer is the site owner’s loss (the cost of cure and lost rental). This does come close to the Drittschadungsliquidation, while rejecting this terminology. (See Lord Goff ’s pessimistic statement that ‘the concept is not an easy one for a common lawyer to grasp’: Markesinis (ed), The Gradual Convergence (1994) 129 ff.) The comparatist must first describe a foreign system to his readership and then see what conclusions can be drawn from it to benefit his national law. The picture of German law given thus far is, inevitably, a simplified one. The reality is infinitely more complex, if not inscrutable to the foreign observer who treads on perilous ground when expressing a critical view of this system. But even the potentially distorted appreciation of foreign law by the comparatist may be of use to the national lawyer. Four points should, thus, be made at this stage. First, the test that will determine who is to be included within the protective umbrella of the contract is crucial if the concept of contract with protective effects vis-a-vis third parties is to be employed. Most German lawyers agree that the list of such persons must be limited; but they differ greatly as to the criteria that must be employed to achieve this aim and, as a result, as to who precisely enjoys such protection. The traditional emphasis on the creditor’s interest to protect the third party/claimant seems to be the most precise test without being excessively restrictive. In any event it is probably more workable to place the emphasis on the relationship between creditor and third party/claimant (which is known to the debtor/defendant) than to operate, as the common law does, on the basis of the amorphous foreseeability test applied to the claimant/defendant relationship. However, as recent

Liability for Untrue Statements Under § 824 BGB  105 developments show, this approach might reach its limit where there is a potential conflict of interest between creditor and third party. This demonstrates that recourse must also be had to the reliance placed on the special skill of the professional in addition to the purpose and scope of the defendant’s undertaking to the contractual creditor. Secondly, one might venture the thought that the more recent attempts to enlarge the circle of contractually protected persons threatens to undermine the security and (relative) predictability provided by the older tests. If the current trend remains limited, however, to the banking/financial services, it is understandable if not necessarily justifiable. For in these cases the German courts are essentially faced with variations of the Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 problem which they cannot solve through tort law because of the restrictive provision of § 823 I BGB. The way they expand contract is thus, essentially, as arbitrary as our own attempts to limit tort duties in similar factual situations. Though the pressures are exerted in different directions in the two systems, the problem is the same: discovering the proper bounds of liability which modern insurance practices tend to expand outwards. Thirdly, the concept of contract with protective effects vis-a-vis third parties and the theory of transferred loss originally had a different area of application. The first was used in cases of physical injury and property damage (mainly in order to avoid the problems created by § 831 BGB); the latter applied to cases of pure economic loss, which had not always received full and adequate regulation by the positive law. In this original context the two notions presented one further difference. In the former, the risk of the contractual debtor was widened by the inclusion of a third party within the contractual umbrella. For example, the concept of contract with protective effects vis-a-vis third parties was extended in 1965 by the legal malpractice case (concerning the defective will: BGH, NJW 1965, 1955) to cover pure economic loss. Therefore, one now has two essentially contractual devices for dealing with these cases of economic loss. Fourthly, and most important, German law, once stripped of its many technicalities and competing theories, is characterised essentially by one central idea that could be useful to both English and American common lawyers. This is that these actions are contractual not tortious in nature. No matter that this approach grew out of the necessity to avoid defective or narrow tort provisions. No matter which device is used to accomplish the end aim (contract with protective effects vis-a-vis third parties or ‘transferred loss’). In the end, what matters is that the result achieved through the medium of contract ensures that the claimant succeeds in these cases but that the defendant’s liability remains similar to that which he had agreed with his co-contractor. This is not the right approach for all instances of pure economic loss; but it seems to be eminently suitable for those cases that straddle the traditional contract/tort divide.

II.  Liability for Untrue Statements Under § 824 BGB § 824 BGB provides: A person who declares or publishes, contrary to the truth, a statement which is likely to endanger the credit of another, or to injure his earnings or prosperity in any other manner, shall compensate the other for any damage arising therefrom, even if he does not know of its untruth, but should know of it.

106  Specific Areas of Liability Under the Code: Economic Loss and Products This is a distinct form of liability that protects economic interests where the loss has been caused by untrue statements. This is a relatively insignificant part of delict and is often omitted by shorter German textbooks. This is because the interests protected by this paragraph are also protected in other ways. As has already been seen, § 823 I BGB includes among ‘other rights’ the ‘right of an established and operating business’ (see chapter two, section II.E.iii). The earnings and prosperity of an individual may well be connected to a business which he runs, so § 823 I BGB would provide an alternative. § 187 StGB creates a criminal offence of defamation which punishes those who use untrue words deliberately to harm the business reputation of another and breach can give rise to civil liability under § 823 II BGB (RG, RGZ 51, 369, 375). Since §§ 823 and 826 BGB can cover situations where true statements are made but without a legitimate interest, then these may offer a better protection than § 824 BGB. The liability here attaches to ‘facts’ and not to value judgements or opinion, which obviously makes liability for restaurant reviews or comparative advertising difficult. In competition law, the Law on Unfair Competition (UWG) prohibits very specific kinds of unfair marketing or competition and breach is thus much easier to prove than the general provision of § 824 BGB. There is no need to refer to commonly accepted standards to prove a breach because the required standards are presented in the UWG. Furthermore, under the UWG, it is up to the person making the statement to prove the truth of a statement which falls within a proscribed category. On the other hand, the limitation period under § 824 BGB is longer – three years (see § 195 BGB), not six months under the UWG (see § 11 UWG). There is a practical limitation nowadays in relation to § 824 BGB. Much marketing communication is made by internet. Whereas § 824 BGB is predicated on a direct statement by the tortfeasor (such as on its homepage), it is more difficult to bring within its scope the results of information provided by intermediaries – search engines, blogs, social media fora, tweets and so on (Münchener Kommentar/Wagner, § 824 BGB, no 9). We have already considered the liability of intermediaries under § 823 I BGB in chapter two. So, while this is a potentially useful way of protecting economic interests, it is limited in its practical scope.

III.  Delictual Liability for Products Bibliography Wagner in Münchener Kommentar, ProdHG Kullmann, Produkthaftungsgesetz (6th edn, 2010); Lenz, Produkthaftung (2014); Whittaker (ed), The Development of Product Liability (2010).

A. Introduction Product Liability is now besides § 823 BGB governed first by specific legislation – the Product Liability Act (ProdHG). The ProdHG of 1989 is implementing Product Liability

Delictual Liability for Products  107 Directive 85/374/EEC which aims for a complete harmonisation of the liability of producers for death, personal injury and damage to consumer property caused by ‘defective’ products which they have put into circulation. That said, in practice the Produkthaftungsgesetz is little used. Wagner (in Whittaker (ed), The ­Development of Product Liability (2010) 138) has commented: The explanation for the feeble impact of the [Product Liability] Directive is that its liability regime is much closer to fault-based liability than the framers thought, while at the same time the scope of compensable loss was restricted. Thus, a claimant-victim stood to lose very little in terms of liability but gain a lot on the quantum side if he relied on the traditional law of delict instead of the Product Liability Act. The second half of the explanation will be expounded below, namely the drying up of litigation for compensation of product-related losses. Whatever the causes may be, the Product Liability Act and the underlying Directive merit the judgment: much smoke, no fire.

For this reason, we continue to present the contractual and delictual bases of product ­liability in this chapter. Linked to economic loss, the topics show the relationship of contract and delict.

B. History The law of product liability – and German lawyers have adopted this American term – was one of the most hotly debated issues during the 1960s and 1970s, the voluminous literature and case law constantly proving the theoretical and practical interest in the subject. This was a ‘new’ area of the law to the Germans. That is not to imply, of course, that product liability cases cannot be found before the 1960s of the last century. (See Wagner’s contribution to Whittaker (ed), The Development of Product Liability (2010) chapter 4, which locates the earliest case in 1902: 118.) But it does mean that until about the late 1950s important instances of product liability would not only remain uncompensated, they would also pass almost unnoticed by the law reports and the academic literature. In 1956, for example, the BGH had to deal with a claim brought by a claimant whose bicycle suddenly collapsed and injured him (BGH, DB 1956, 592). The accident was not due to a defect in design but in the production of the particular bicycle. But the Court had little sympathy with the claimant’s complaint and dismissed it in a cavalier manner with the statement that ‘common experience suggests … that such technical defects cannot be prevented’. In the Court’s view, the accident should have been treated as one of those unfortunate things that happen in life and must remain uncompensated. That the case was only reported in a specialised legal journal also indicates that it was not treated as one of general interest. With two interesting exceptions of dissertations written in the 1930s under the direction of the famous Ernst Rabel, the academic literature showed an equal lack of enthusiasm for a topic, which nowadays is, if anything, overworked. The change came in the early 1960s when Professor Werner Lorenz published an article, which for the first time made the majority of German lawyers aware of development in this field in the US (Lorenz, ‘Produkthaftung’ in Mikat (ed), Festschrift der Rechts- und Staatswissenschaftlichen Fakultät der Julius-Maximilians-Universität Würzburg zum 75. ­ Geburtstag von Hermann Nottarp (1961) 59 ff). The article, making excellent use of the comparative method – Lorenz had studied at Oxford with the late Professor Lawson and

108  Specific Areas of Liability Under the Code: Economic Loss and Products later worked at Cornell with Professor Schlesinger – appeared at the right time even though in the beginning legal practitioners vehemently opposed the introduction of American ideas. However, the 1960s and 1970s were decades that witnessed a number of spectacular product liability accidents, which triggered off public interest in this problem. In 1967, for example, nearly 800,000 owners of Ford cars were informed of design defects in a particular model and were advised to take certain precautionary steps. A year later, Volkswagen in Germany had to recall some 160,000 defective cars. Already in 1961 the Thalidomide scandal (in German known as Contergan-Skandal) had broken out leading to the birth of thousands of seriously incapacitated children and to worldwide litigation. These events, coupled with a general increase in consumer-orientated legislation, resulted in the development of the product liability law. The German Juristentag debated the issues in 1968 and this helped to shape the thinking of the BGH in its Fowl Pest decision of the same year (case 48 and Wagner in Whittaker (ed), The Development of Product Liability (2010) 147). As will become clear, this topic is now (also) covered by the ProdHG of 1989 (see chapter seven). But the legislation has for different reasons not been a major source of liability in Germany, and so it is still worthwhile and important as already said to consider the liability for products in contract and under § 823 I BGB. In any case, product liability has been formative in shaping delict.

C.  Contractual or Quasi-Contractual Solutions to the Problem? Broadly speaking, one can divide the development of product liability before the Product Liability Act into two phases. The first, which culminates with the seminal Fowl Pest judgment of the BGH in 1968 (case 48), is basically preoccupied with finding a legal basis for this essentially new heading of liability. The second was one of consolidation, elaboration and even expansion of the delictual action firmly established since 1968. A third phase came with the Product Liability Act of 1989 (see chapter seven). The leading judgment of 1968 clearly reflects the preoccupations of academics to find a legal basis for product liability in so far as it devotes much space to the detailed consideration of the various contractual or quasi-contractual theories developed in the 1960s to meet the new situation. If a common lawyer were to express surprise that this search for a juristic basis would be conducted in the area of contract law rather than tort law he should then consider the following two points. First, one must repeat what was said earlier on, namely that the law of contract has proved more pliable and able to expand on the civil law systems than it has in the common law. The doctrine of consideration is the main reason why the common law was forced to develop its law of torts. But wherever consideration has been taken somewhat less seriously – for example, in the US – the concurrent growth of contractual and delictual remedies has been a notable feature. Secondly, one should note the considerable advantages that a claimant could obtain if his action was dubbed by German law as contractual or quasi-contractual. Two should be mentioned here. The first is related to the burden of proof. Though in the civil law systems (unlike the common law) fault is an element of an action for breach of contract as well as tort, the burden of proof may be different in these two actions. Thus, § 282 BGB, which

Delictual Liability for Products  109 was applied, by analogy, to other contractual remedies, provided that, ‘If it is disputed whether the impossibility of performance is the result of a circumstance for which the debtor is responsible, the burden of proof falls on the debtor’, ie, if contested, the defendant has to disprove his fault. (This result follows now from § 280 II BGB.) On the other hand, according to the general rules of tort law, in a product liability case the claimant had to show that the product left the defendant’s enterprise in a faulty condition and that the defendant, or his legally appointed representative, had not organised his business in such a way as to enable the defect to be detected. The second, and not entirely unrelated, reason that made contractual actions preferable to those founded in tort could be found in § 831 BGB. This deals with the problems of vicarious liability and will be discussed in greater detail below in chapter seven. Here suffice it to say that it does not establish a true rule of vicarious liability but makes employers liable for the unlawful acts of their employees (Verrichtungsgehilfen) only where they are themselves guilty of negligent selection or supervision of the employees. In contrast debtors are, according to § 278 BGB, fully liable for the faults of the persons whom they employ in the execution of their contractual obligations (Erfüllungsgehilfen). Finally, one should also bear in mind the relatively short period of limitation which used to be applicable to tort claims before the revision of the Code in 2002 (especially § 195 BGB). Having stated the reasons which prompted German lawyers to turn to the law of contract rather than the law of tort initially, one should look briefly at the various contractual or quasi-contractual methods advanced by academic writers. The brief comments that follow should be read in conjunction with the relevant passages of the leading Fowl Pest case (case 48). One way of making the manufacturer liable to the ultimate consumer is by discovering an express or implied guarantee, which is directed to the ultimate consumer and on which he relies to his detriment. But such reliance is difficult to establish. A second contractual method can be found in the various attempts to discover a contract in favour of a third party or a contract with protective effects vis-a-vis third parties. The first type of contract (Vertrag zugunsten Dritter) is regulated by §§ 328 BGB ff. As already explained, this type of contract allows a third party (the ultimate consumer) to require performance of the contract concluded between the creditor and the debtor (eg, the manufacturer and the wholesaler). On reflection, however, this is a rather awkward notion. For what the third party/consumer needs is not the right to enforce the primary contractual obligation (delivery of the thing in exchange for payment of the price). Rather, his need is to be included under the protective umbrella of the subsidiary contractual obligations (in our case to deliver the thing in good order and with clear instruction, etc). This way of reasoning led German courts to develop the already discussed Vertrag mit Schutzwirkung für Dritte. In this way, third parties can be given the protection afforded to the main creditor which emanates from a cluster of subsidiary obligations which would be included in every such contract in accordance with § 242 BGB (good faith). However, we have already noted the need to keep this expansion of the contractual umbrella under control lest it undermines the relativity of the contractual bond. To put it differently, who will be treated as a third party and receive such protection? Though as already stated the requirement of ‘proximity to the performance’ (Leistungsnähe), a close relationship (personenrechtliches Fürsorgeverhältnis) between the contractual creditor and

110  Specific Areas of Liability Under the Code: Economic Loss and Products the third party has been relaxed by some recent decisions, this has not occurred in the context of product liability. Indeed, it is noteworthy that even those authors who have argued in favour of expanding the circle of ‘protected’ third parties have refused to apply their theories to this area of the law. (See, eg, Canaris, ‘Die Produzentenhaftpflicht in dogmatischer und rechtspolitischer Sicht’ JZ 1968, 494, 499 ff.) The Drittschadensliquidation has also been considered but finally rejected by the courts. In the Fowl Pest case (case 48) the BGH, disagreeing with the OLG, would not allow the vet to demand from the pharmaceutical company (which had sold him the defective vaccine) the loss suffered by the owner of the chickens which died as a result of the inoculation. (If such a claim had been recognised it could have been transferred by the vet to the claimant and pursued by the latter.)

IV.  Strict Liability? In addition to the above contractual theories, the jurisprudence also dealt with a number of others, which share some common elements including the desire to justify a strict or semi-strict type of liability. Two BGH of them deserve a brief look since they are expressly referred to (and rejected) by the BGH. The first, advanced by a leading expert in the field (Diederichsen, Die Haftung des Warenherstellers (1967) 297 ff, 327 ff, 345 ff) can, in a rather crass manner but for simplicity’s sake, be reduced to two basic propositions. First, the basic relationship in these cases is that between manufacturer and ultimate consumer. This is one of ‘reliance’, irrespective of any awareness of any advertisements by the manufacturer so long as the defective goods were purchased from a sales network set up by the manufacturer and were already defective at the time they left his factory. Secondly, that this relation is sui generis, not regulated by the written law and must thus be shaped in its details by the judge. A corollary to this is that the liability is strict. The Court’s dislike of any theory, which cannot be pegged on a clear provision of the Code, is obvious from the way this theory is dismissed. Equally obvious – and in tune with the Court’s long-established practice – is its refusal to discover new headings of strict liability in the absence of legislative intervention (BGH, BGHZ 54, 332). A third objection, not mentioned by the BGH but stressed by academics, is the following: if the manufacturer of goods is to be strictly liable, why should this liability be limited to cases where his goods were sold bearing his name (or through a sales network set up by him) and excluded whenever the same goods were sold unidentified in a department store or, even, bearing the latter’s commercial brand? Lorenz’s theory (‘Warenabsatz und Vertrauensschutz’ (1963) Karlsruher Forum 8, especially 14 ff) shares a number of common points with some other theories also considered and rejected by the Court. He, too, for example, puts the emphasis on the relationship between producer and ultimate consumer and he, also, is prepared to attach considerable significance to the reliance that one person (the consumer) places on the conduct of another (the manufacturer). Like other writers, Lorenz also accepts that we are here faced with a lacuna in the written law which must be filled in a way that will ensure that the claimant is given a protection equal to (if not greater than) that enjoyed by contracting parties (moving

The Fowl Pest Decision of 1968 and the Move from Contract to Delict  111 towards strict liability). Unlike other authors, however, Lorenz makes a clear attempt to base his solution on a specific provision of the Code and this, in his opinion, is § 122 BGB. This provides that if a declaration of an intention is void, either because it was made in error or because it was not seriously intended, the person who made the declaration must compensate the other party for the damages he has sustained as a result of relying upon the validity of the declaration. (Incidentally, the damages in this case cover only the reliance interest and not the expectation loss.) This provision, according to Lorenz, can be analogically extended to cover the present problem, since the manufacturer, through the advertising of his products, leads the ultimate consumer to expect that his products will be free of all defects. In its judgment in the Fowl Pest decision (case 48), the BGH directed its criticism mainly towards Lorenz’s point about the significance of modern advertising techniques and the effect they can be taken to have on the ultimate purchaser. It is submitted, however, that Lorenz’s view had two further weaknesses: first, it is by no means clear (to a non-German lawyer at least) that § 122 BGB, which envisages an entirely different situation, is capable of such an extension. It would appear more likely that Lorenz is trying to make in a very ingenious way the best of a bad situation, ie, to use the Code to solve a problem which could not have really been envisaged by its draftsmen. Secondly, even if § 122 BGB could be so extended, it would not lead to the imposition of strict liability on the manufacturer towards the ultimate consumer (with whom the manufacturer has no contract), but to a liability based on fault (in accordance with the contract of sale) towards his (the manufacturer’s) immediate purchaser – a solution which seems neither very reasonable nor attractive.

V. The Fowl Pest Decision of 1968 and the Move from Contract to Delict The contractual or semi-contractual theories considered and rejected by the BGH in its 1968 decision (case 48) suffered from one further defect which was shared by all of them. For they all aimed at protecting the person who was in some way involved in the sales chain and somehow could justify a ‘relationship’ with the manufacturer by means of reliance or a guarantee or some other manifestation on his part concerning his goods. True, some theories went further by trying to include within the protective circle other persons such as the family of the ultimate consumer or others living or working in his household. But if the policy reasons for imposing liability on the manufacturer are correct – and these include his greater ability to detect and correct a defect, to insure against the risk, and to shift the cost of accident when it is realised – then the same type of protection should be afforded even to third parties, such as the proverbial bystander who is injured by the exploding ginger beer bottle. Basing liability on tort, and in particular on § 823 I BGB, provided the necessary breakthrough. The Court realised that contract law had exhausted its limits and the time had come to utilise the law of tort. When studying the judgment, the reader should, among other points, also note the following. It is first worth noting that the BGH could and did base liability on § 823 II BGB since the defendant (vaccine manufacturer) was in breach of a special statute which was correctly deemed to be a protective statute in the sense of that provision. This is important since

112  Specific Areas of Liability Under the Code: Economic Loss and Products the manufacturer’s duties of care will, in most cases, be judge-made; but they can also emanate from the breach of duties laid down by specific statutes. The Machinery Protection Act (Maschinenschutzgesetz) of 24 June 1968, for example, made manufacturers (and ­distributors) of a whole range of machinery, tools etc liable for personal injury or death (but not property damage or economic loss) suffered by all users. (This has now been replaced by the Geräte- und Produktsicherheitsgesetz of 2004.) Many instances of accidents resulting from defective equipment will thus easily lead to the imposition of liability. The Pharmaceuticals Act (to be discussed in chapter seven) and the food and drug legislation should also be included in this category and can easily dispose of the manufacturer’s liability. But the significance of the decision lies in the fact that it did not stop at § 823 II BGB but, instead, proceeded to state that § 823 I BGB should also apply. As stated, the difficulty with § 823 I BGB is its requirement that the claimant needs to prove the defendant/manufacturer’s fault. One way around this problem would be for the Court to invoke the prima facie rule (not dissimilar to the common law doctrine of res ipsa loquitur); indeed, this had been done successfully in several cases involving § 831 BGB. However, the Court considered this to be an inadequate measure since all too often the owner of a business can show that the defect in the product might have been caused in a way that does not point to his fault – evidence which generally relies on activities in his business and which is difficult for the injured party to disprove. Consequently, when damage has arisen within the range of the manufacturer’s business risks, he cannot be regarded as exonerated merely because he points out that the defect in the product might have arisen without any organisation fault of his. On the contrary, he must supply positive and complete evidence that the defect in the product is not due to his fault. The courts had already reversed the onus of proving fault in the context of § 823 II BGB. They now saw no good reason why the same should not also be done with § 823 I BGB, given the special features of product liability and in particular the victim’s de facto inability to know what was happening in the manufacturer’s enterprise. The development of a separate category of liability under the heading of the so-called Produzentenhaftung brought about a further significant departure from orthodox reasoning, namely §§ 831 and 31 BGB. § 831 BGB which – originally – was confined to negligent selection or supervision of employees was reinterpreted and widened to also encompass the very organisation of the company. It also served to found an obligation to put schemes of production in place that would ensure that the product is free from dangerous defects. The appropriateness of § 31 BGB, which imputes the negligence of members of the management to the company, also seems doubtful. Both these provisions do not fit easily into the problem of product liability. In this category we are not in fact dealing with issues of vicarious liability. For the duties of care are primarily addressed to the manufacturer, who has to avoid putting into circulation dangerous products. Thus, the company and not its employees or executives is the direct addressee of these duties of care to structure the manufacturing process in an adequate way. The difficulties to which this slight discrepancy between the written law and law in action has given rise, come to light more fully in the cases regarding the liability of employees or executives themselves under the heading of product liability (cases 50 and 52). As expected, the decision resulted in the insurance market promptly producing a new form of product liability insurance for industrial enterprises. It also gave rise to a rich case law which German scholars discuss under four different headings: (i) defects in ­manufacture; (ii) defects in design; (iii) defects in instructions; and (iv) development risks.

The Various Forms of Product Liability  113 These distinctions have remained in use despite a parallel regime of liability governed by the Product Liability Act.

VI.  The Various Forms of Product Liability A.  The Producer’s Liability for Defects in Manufacture Here one is talking of an individually defective product, the defect usually being due to some kind of negligence or inattention in the manufacturing process. The leading case was precisely one of those cases so, strictly speaking, its ruling as to the burden of proof was directed only to this type of product liability situation. It will be noted, however, that subsequent cases have extended the application of the rule to include categories (B) and (C) discussed below. In these instances, the claimant’s task is usually limited to proving that his hurt emanated from the area of the producer’s organisation and the risks attendant on it, and that it resulted from an objective defect of the product which made it unsuitable to be put into circulation (BGH, BGHZ 51, 91, 105; BGH, NJW 1973, 1602). This burden is easily discharged save in those cases where the evidence may suggest that the defect arose after it had left the manufacturer’s zone of influence. (See on this Lorenz’s observations in ‘Beweisprobleme bei der Produzentenhaftung’ 170 AcP (1970) 366, 381 ff, where, once again, he makes extensive use of the American case law.) Once the claimant has established the above, the onus shifts to the defendant (manufacturer). He must then show that he, himself, was not in breach of one of his duties of care (imposed by statute or the case law) and that all persons in his employment were equally innocent of such a breach. In theory, therefore, a manufacturer of an isolated defective ­product – sometimes referred to as a ‘runaway’ (Ausreisser) – can escape liability. (Though this is not an admissible defence under the Product Liability Act.) Nevertheless, this exculpatory proof under § 831 BGB requires the manufacturer – at any rate whenever the manufacturing process is not fully automated – to name every individual involved in the manufacturing process and prove his ‘innocence’ (BGH, NJW 1973, 1602, 1603). This is clearly a burden of proof which makes this in name only fault-based liability but, in effect, greatly approximates the strict tort liability that is imposed by American courts. Once again, this misuse of terms has not passed without criticism, not least because the fault-based system can increase the time and cost of litigation and impede settlements out of court. This tendency to extend the area of quasi-strict liability was also underscored by a decision of the BGH in 1975 (BGH, NJW 1975, 1827) which held that the above-mentioned liability would be imposed not only on the manufacturer but also on his ‘high-ranking’ employees. This result, however, appears to be very dubious to say the least.

B.  The Producer’s Liability for Defective Design It has been noted that the leading case dealt with an individually defective product. But the case law did not stop there. It extended the new rule to apply also to cases of defective design (case 53) and in these instances, since many products may be involved, the defend-

114  Specific Areas of Liability Under the Code: Economic Loss and Products ant may be held liable to extensive damages. On the other hand, the claimant’s position in this case may be more difficult than in the previous one, since he will not only have to prove that the product was defective (in the sense that the defective design was a­ voidable given existing scientific and technical knowledge). He will also have to persuade the court that its design was defective in a way that it created an unreasonably great risk of danger for him and/or third parties. Whether this is so, will depend on the court’s appreciation of all the circumstances in accordance with the formula already given. Factors to be taken into account include the normal or extraordinary conditions of use, the type of average user, and the kind of dangers that may be specific to this type of product. Product liability may also extend to risks which arise from improper use of a product where the manufacturer should foresee that, in the light of the conditions under which the product was used, it would not always be used with the utmost care (OLG Köln, NJW-RR 1991, 285.) The court may also weigh carefully whether an alternative design would be economically feasible and to what extent it would reduce the risk of such damage occurring. If such a defect in design is proved, then the manufacturer’s breach of the required standard of care will also be established. Nowadays, many administrative regulations determine the standards that must be met by particular products, often as the result of EU harmonised legislation or ISO standards. Furthermore, in many cases the rules and standards are set by officially recognised legal institutions (eg, the Deutsches Institut für Normung, the Technischer ÜberwachungsVerein, etc) and conformity with these rules will, invariably, improve the manufacturer’s/ defendant’s position in a lawsuit involving one of his products. Compliance with mandatory regulations may now even afford a manufacturer with a complete defence in accordance with § 1 II no 4 of the Product Liability Act. Some commentators, however, feel that compliance with minimum standards may not, necessarily, exonerate the manufacturer. The picture described above could become more complicated where the ultimate damage could be attributed to a defective component. The permutations here are innumerable. The defective component – provided by a supplier – might have been incorporated in the final product by the main manufacturer. Should his liability depend on whether he checked or ought to have checked the component before incorporating it in his product? Should the answer be different if the component was manufactured to his specifications? And what if the defect is not due to the component but is due to the way the components were put together? The rich case law made a general answer impossible, but previously Professor Kötz (Deliktsrecht (2nd edn, 1979) 204) summarised the guiding principle of the law (as it then stood) as follows: In all these cases the strict rules of the law of product liability are applicable only in so far as their policy aims make them suitable for the occasion. This will be the case whenever the defendant is under an obligation to take the necessary measures within the organisation and area of his responsibility in order to prevent or remove the kind of defects which have led to the harm in suit.

This, for example, was the result whenever components were incorporated in a product which was finally marketed and sold under the manufacturer’s own name (eg, BGH, NJW 1985, 2420). Liability was also, invariably, imposed where components were not carefully selected, tested, or constructed in accordance with the manufacturer’s specifications (see, eg, BGH, BGHZ 86, 256; BGH, NJW 1985, 2420; OLG Köln, NJW-RR 1990, 414.) As a result of the enactment of the Product Liability Act in 1989, however, product liability law will apply

The Various Forms of Product Liability  115 to manufacturers of finished products and component parts alike. (The manufacturer of the component is not liable if the deficiency is due to instructions given by the manufacturer of the finished product or is attributable to the defectiveness of the finished product.) Similarly, dealers and importers who were generally not liable under the old regime (BGH, NJW 1980, 121 and BGH, NJW 1987, 1009 respectively), may now be saddled with liability in accordance with the Product Liability Act.

C.  The Producer’s Liability for Defective Instructions Once again the scope and extent of these duties of care are in principle fixed by the rich case law (eg, BGH, BGHZ 64, 46; BGH, NJW 1972, 2217; BGH, NJW 1981, 2514; BGH, NJW 1986, 1863). The duty to provide instructions arises at the time when the product is put into circulation though the manufacturer is under a duty to monitor new developments and, if necessary, alter the instructions that originally accompanied his product. The law on this subject was reviewed by the BGH in the ‘apple-scab’ case (BGH, BGHZ 80, 186; NJW 1981, 1603) where apple producers suffered serious production losses after having used a spray which was meant to prevent apple scab but which became useless after repeated use. Laboratory experiments (already published at the time of the accident) had mentioned this possibility, but the manufacturers of the spray had failed to bring this information to the attention of the apple producers. Had the knowledge that the spray was ineffective emanated from the manufacturers’ own sphere of control, then the usual reversal of the onus of proof would have operated in favour of the claimants; but since it was generally available at the time of the incident, their claim was rejected. In another judgment the BGH held that the duty to provide information is linked to the intended use of the product. Thus, a manufacturer is under no duty to provide warnings against dangers that will arise if the product is put to a use other than that for which it was intended (BGH, NJW 1981, 2514). The degree of danger posed by the product and the interests likely to be affected (life, property, etc) will, however, ultimately influence the scope and standard of duty of the manufacturer. Thus, warning labels must clearly specify the kinds of danger which may arise from the use of a particular product. If considerable injury to body or health may result from the product’s misuse, the consumer must be able to discern from the warning label why the product may be dangerous (BGH, NJW 1992, 560). And if infants develop cavities from constant sucking of sweetened children’s tea drunk out of plastic bottles, the manufacturer of the tea is liable if he failed to place a clear warning on the product (BGH, BGHZ 116, 60; BGH, NJW 1994, 932; BGH, NJW 1995, 1286). Thus, adequate warnings must always be given in the case of pharmaceutical products likely to be misused – especially those likely to be misused by children. There is no special heading for instruction defects in the Product Liability Directive; but the issue is dealt with under the general ­heading of product defects (Article 6 of the Directive).

D.  The Producer’s Liability for Development Risks The problems here are, essentially, different from those discussed in the earlier sections and thus make the return to the fault principle easy to recommend. Typically, in these cases

116  Specific Areas of Liability Under the Code: Economic Loss and Products the product will have been manufactured in accordance with the technological knowledge of the time, but subsequently acquired information reveals its potentially harmful effects. Many believe that to make manufacturers carry such a risk could hinder technological progress. To make them strictly liable for such development risks would also run counter to the rationale of imposing such a strict liability in the first place. For, it will be remembered, one of the justifications of imposing strict liability on the manufacturer is his ability to detect and avoid the defect. In the present instance, however, by definition this is not possible and the manufacturer’s duties are limited to an obligation to warn consumers or even withdraw their products once they become aware (or ought to become aware) of the defect or of their potential harmful consequences. The rules of the leading case have thus not been extended to this category. Article 15 VIII of the Product Liability Directive gives Member States the option of deleting the defence of state of art contained in Article 7(e) of the Product Liability Directive, but Germany has not exercised this right so the defence has been retained. (See for the state of art defence § 1 II no 5 of the Product Liability Act. Note, however, that the defence is not available under the Pharmaceutical Act; and the relationship between this enactment and the Product Liability Act has not been clarified. (See also § 15 of the Product Liability Act.) The retention of the state of art defence will not, however, absolve the manufacturer from continuously observing his products and warning users of (and if necessary recalling) products that are subsequently revealed as defective. (BGH, NJW 1987, 1009 is an interesting case since it extends the manufacturer’s post-marketing duties concerning his own product to the performance of component parts.)

5 Liability for Others Bibliography Brüggemeier, ‘Organisationshaftung – Deliktische Aspekte innerorganisatorischer ­Funktionsdifferenzierung’ 191 AcP (1991) 33; von Caemmerer, ‘Wandlungen des ­Deliktsrechts, Hundert Jahre deutsches Rechtsleben’ Festschrift zum 100-jährigen Bestehen des Deutschen Juristentages (1960) II 49, 115 ff, reproduced in his Gesammelte Schriften (1968) 452; von Caemmerer, ‘Reformprobleme der Haftung für Hilfspersonen’ ZfRV 1973, 241; Kupisch, ‘Die Haftung für Verrichtungsgehilfen (§ 831 BGB)’ JuS 1984, 250; Giliker, Vicarious Liability in Tort (2010); von Bar, The Common European Law of Torts (1998) vol 1, nos 329–53; Spier, Unification of Tort Law: Liability for Damage Caused by Others (2003); Träger, ‘Das funktionale Verständnis deliktischer Verantwortlichkeit für Dritte und seine Grenzen’ ZEuP 2015, 389; Zimmermann, The Law of Obligations (1990) 1118 ff.

I.  The Tortious Liability for ‘Employees’: §§ 831, 278 BGB A.  General Observations Until now we have been envisaging liability for one’s own acts or omissions. Its importance remains crucial in today’s world; and in fairly simple societies, with agrarian economies and a fairly elementary system of labour, it was the most crucial form of tort liability. But economic growth, industrialisation, the increase of commerce and of economic activity in general, necessitated the introduction of a more elaborate system of work which enabled one person or business entity to use the services of other persons in the furthering of their economic interests. Since these persons or entities – the masters as they were once called – derived the benefit from the services of those working for them – the ‘servants’ or, nowadays, employees – it was only natural to think of making the former liable for the harmful conduct of the latter. Besides, the masters were often in a position to take steps to prevent the harm or – at a later stage – to carry insurance against the risk. In any case, the employer had put the employee in that position in order to profit from his activity, so it is only reasonable that the employer should shoulder the burden of the cost to others of that employee’s activity undertaken on his behalf. Such a way of looking at things also offered considerable advantages to the victim, for he was thus offered a person worth suing in the place of the often, impecunious employee who had actually caused him the harm. Arguments such as these led to the strengthening and extension of what common lawyers call vicarious liability; subject

118  Liability for Others to the points made below, they are to be found as much in German law as they are in the other systems. But the urge to make the employer liable instead of or in addition to the employee could be approached in two ways. The one most consistent with the reasons we gave above was to make the employer liable strictly (ie, without proof of his fault) for the faults (or unlawful acts) of the employees. The employer’s own liability, therefore, was strict in the sense that it did not depend on any fault on his part; but fault there had to be on the part of the employee. (But on this point, as well, note that German law presents a variant.) This is, indeed, the position taken by most of the legal systems of the world. But the BGB opted for a weaker rule of ‘vicarious’ liability: the employer’s liability would be based on his own fault of bad selection or supervision of the employee but it would be rebuttable in accordance with what will be said very shortly. Liability of employer is thus one way of making a person liable for the harm caused by another. Liability under § 832 BGB for those one is supposed to supervise being the other. (It is discussed in section IV of this chapter.) There are a number of reasons that account for this different approach taken by German law. An historical explanation lies in the fact that the nineteenth-century Pandectists had convinced themselves that the doctrine of culpa in eligendo (fault in selecting your employee), which they were introducing finally into § 831 BGB, was the only one known to Roman law. That this was so in a number of individual factual situations is beyond doubt; but to develop from the casuistic Roman approach a generalised doctrine that the employer could only be liable if he himself was at fault was incorrect. (For more details see Lawson and Markesinis, Tortious Liability for Unintentional Harm in the Common Law and the Civil Law, Vol 1 (1982) 160–63; Zimmermann, The Law of Obligations, 1121–26.) A more pragmatic objection to the introduction of the ‘true’ notion of vicarious liability was the fear that it would bring in its wake unwanted economic consequences, and in particular, increased economic burdens for small businesses. It was the aspirations and interests of these small businesses, populated by the rising middle class, which the BGB had at heart. Not for the first time, therefore, the Code was to give effect to these ideas, oblivious to the fact that in the wider industrial field the enactment of such statutes as the Imperial Liability Act of 1871 had imposed strict liability on railway companies and, in this context, completely overtaken the notion of fault. In the end, therefore, the BGB chose to leave the regulation of special matters to specialised legislation. Instead, it sanctioned as a general principle the idea that the employer would be liable for the unlawful conduct of his employees only if fault could be imputed to him, the master, personally, in the choice and supervision of the employees. (If the master was a legal entity, the fault had to be imputed to its ‘duly’ appointed representatives under §§ 823 and 31 BGB, which are still applicable today in these situations.) Of course, where there was a contract between the employer and the victim, then different rules applied. The contract was made directly by the employer and, under § 278 BGB, it was responsible for the acts of its helpers (employees or others) chosen to enable the contract to be performed (Erfüllungsgehilfen). Professor Wagner (Münchener Kommentar/Wagner, § 831 BGB, no  2) writes that the development of the liability of a corporate body under §§ 823 and 31 BGB (Organisationsverschulden) and contractual liability under § 278 BGB (in combination with the contractual Anspruchsgrundlage) have altered the burden of proof and removed the substantial part of the practical effect of § 831 BGB. The common lawyer is thus warned not to expect that the

The Tortious Liability for ‘Employees’: §§ 831, 278 BGB  119 delictual rules on liability for others have the same importance as his own rules on vicarious liability. We shall discuss this subject under four headings (B)–(F): (B) the employer–employee relationship; (C) damage in the course of employment; (D) unlawfulness; and (E) the employer’s exculpatory proof. A concluding section (F) will deal with the many ways devised to the unfortunate effects of § 831 BGB, principally §§ 31 and 278 BGB.

B.  Employer–Employee Relationship The term ‘employer’ does not adequately capture the scope of § 831 BGB. The common law has a narrow conception, as we shall see. That paragraph uses the term ‘head of the business’ (Geschäftsherr) which covers all forms of remuneration and none. Because ‘master’ is now so antiquated in English usage, the term ‘employer’ is used for convenience, but the reader needs to understand the term in its broader signification. For the employer to be liable, the damage must have been caused by a person to whom the employer had ‘entrusted the performance of a function’ (zu einer Verrichtung bestellt). Who qualifies as a ‘helper’ or ‘employee’ (Verrichtungsgehilfe) is a mixed question of law and fact for the court to determine. Often, one encounters the term ‘dependency’ (­­Abhängigkeitsverhältnis; see Münchener Kommentar/Wagner, § 831 BGB, no 14); but like most of these terms, its utility depends on precise definition and this is not always possible. The most widely applied test, used to determine this relationship, is that of ‘direction and control’ (Weisungsgebundenheit) which means that salaried and wage-earning employees will, invariably, be classed as employees. (A classic formulation can be found in RG, RGZ 92, 345, 346.) The limitations of this test, in a society with sophisticated labour and economic relations, have become apparent in Germany as they have elsewhere. The need was thus felt to widen the test so as to render, for example, hospitals liable for the wrongs of their surgeons, anaesthetists and technical staff over whom, obviously, the employer (hospital) had no direct and detailed control. Thus, it has on several occasions been stressed that the right to direct and control need not cover details. In one case (case 61) the court expressly said that the right to give instructions need not cover details. It is sufficient that the master has the right to limit the worker’s activity or withdraw it or circumscribe it as to time or circumstances (BGH, BGHZ 45, 311, 313. See, further, Münchener Kommentar/Wagner, § 831 BGB, no 45; Giliker, Vicarious Liability in Tort, 61–65). The relaxed way in which the control test has been understood has thus allowed a hospital to be held liable for the harm caused by one of its doctors (BGH, NJW 1988, 2298) and a doctor for the harm caused by one of his locums (BGH, NJW 1956, 1834). The onus of proving the requisite relationship is on the claimant (BGH, ZfS 1995, 7). By contrast, a hospital will not be liable for medical staff using its facilities for medical treatment if it does not employ them. Thus, a hospital was not liable for an obstetrician and a midwife who failed to detect signs of eclampsia which led to the child being born in a state of asphyxia and suffering brain damage (BGH, BGHZ 126, 6). The private consultant (Belegarzt) was simply using the facilities of the hospital to treat his patient, and the hospital took no responsibility for the treatment, though it would be liable for the care and hotel services which it provided directly. Such a distinction is common in the health services of

120  Liability for Others many countries and applies to a range of other b ­ usinesses, especially where ‘contracting out’ has become common. Clearly, even this redefined test will not solve all difficulties, and borderline cases will always exist. So, for example, a problem area well known to common lawyers can be found in cases dealing with ‘borrowed employees’ (usually ‘let out’ by their own employer with complex machinery or specialist skills). If the technical expert on a computer system causes damage while operating it for the host business, who will be held responsible – the permanent or temporary employer? Much will depend on the facts of each case but as in England (see Mersey Docks and Harbour Board v Coggins & Griffiths (Liverpool) Ltd [1947] AC 1), so in Germany (see Münchener Kommentar/Wagner, § 831 BGB, no 24), there is a certain tendency to retain the responsibility of the permanent employer since it usually retains the greater degree of overall control. The solution adopted sometimes in the US, to hold both employers liable to the employee and then let them sort the situation out among themselves (as in Strait v Hale Constr Co,103 Cal Rptr 487 (1972)), has thus not found favour (see Giliker, Vicarious Liability in Tort, 89–93 and Viasystems (Tyneside) Ltd v Thermal Transfers (Northern) Ltd [2005] EWCA 1151; [2006] QB 510). It will be noticed, however, that there is an increasing tendency to think in terms of the possibility of command and not, necessarily, actual command – a development which tends to extend the area of vicarious liability. Attention is paid rather more to the way in which a person is integrated into the employing business. This trend is further reinforced by the fact that actual and not legal subordination will suffice to render the employer liable (see Münchener Kommentar/Wagner, § 831 BGB, no 26; cf Restatement (Third) of Agency (2006) § 7-07 (3) (a), which talks in terms of ‘an employee is an agent whose principal controls or has the right to control the manner and means of the agent’s performance of work’). This is significant at a time when businesses are ‘hollowed out’ and they engage more ‘self-employed’ staff to carry out tasks, especially in the ‘gig economy’ (see Münchener Kommentar/Wagner, § 831 BGB, no 17; Giliker, Vicarious Liability in Tort, 73–77). Equally, where firms are part of a conglomerate, it may be tempting to see them as part of a single enterprise. But the German courts still insist on proof that independent firms are not really independent but are working under the direction of a parent company (see BGH, NJW 2013, 1002). Moreover, the subordination need not be constant: a student working on a part-time basis may render his employer liable and this even if the services he is rendering to him are gratuitous. Determining whether a person is an employee or, alternatively, what common lawyers would call an independent contractor is essential, since, in principle, there will be no liability for the wrongs committed by the latter category. To achieve this, German lawyers are increasingly following the common law example and looking at the entire economic or social relationship, not merely enlarging or adapting the control and direction test. The growing complexity of relationships has led the common law courts to look at ways in which employers can be liable for people who are not technically part of an organisation when they are the main people with whom third parties come into contact. For example, priests or teachers may not be employed by a diocese, but they are the clear representatives of the Church in providing pastoral care or education (see Various Claimants v Catholic Children’s Welfare Society [2012] UKSC 56; [2013] 2 AC 1). This is particularly the case when the offi-

The Tortious Liability for ‘Employees’: §§ 831, 278 BGB  121 cial activity of the representative of the Church increases the risk of harm to the third party. This broadening of liability to cover persons who have a close link to the purposes of the enterprise has yet to be matched in German law (see Träger, ‘Das funktionale Verständnis deliktischer Verantwortlichkeit für Dritte und seine Grenzen’ ZEuP 2015, 389, 398–400). Eichholt, ‘Sexueller Missbrauch und körperliche Misshandlungen durch katholische Kleriker nach kirchlichem Recht sowie zivil- und strafrechtliche Folgen nach deutschem Recht’ NJOZ 2010, 1859, 1862–63 suggests that liability in German law would fall under § 839 BGB (liability for public office holders), not under the normal Civil Code provisions. Professor von Caemmerer has candidly suggested (‘Reformprobleme der Haftung für Hilfspersonen’ ZfRV 1973, 241, 254) that this enquiry should be directed towards such matters as which person is in a better position to carry the risk or is economically more suitable to take out insurance. Although individual solutions may occasionally receive a different answer, the German approach is, on the whole, quite similar to that taken by common law lawyers, so no further details need be given. This similarity is also to be found in the exceptions to the rule that one is not, in principle, liable for the torts of independent contractors. However, here, too, German lawyers have felt the need experienced by their common law colleagues to develop rules of responsibility analogous to our non-delegable duties. Thus, the master will be liable under § 823 I BGB if he himself has negligently selected the independent contractor and, on occasion, also if he failed to control him in the exercise of his task. The extent and nature of this duty will vary from case to case, but in cases of large building works – especially when neighbouring buildings or their foundations are endangered – such additional obligations will readily be imposed on the employer of the independent contractor. Case  56 provides another illustration, akin to the English notion of extra-hazardous activities. In that case, a chemical factory engaged a firm of specialist contractors to dispose of some very toxic waste for their benefit. The waste was improperly removed and the chemical factory was held responsible for this bad execution of the work. It will be noticed that, as in English law, these duties are stricter than the normal duties of care in so far as they impose a duty to see that care be taken; but that they do not actually impose truly strict liability. Some German writers, however, have advocated that a strict duty be imposed in such cases upon the employer (see Vollmer ‘Haftungsbefreiende Übertragung von Verkehrssicherungspflichten’ JZ 1977, 371).

C.  The Damage Must have been Inflicted by the Employee ‘in the Exercise of the Function Assigned to Him’ Behind this not very informative expression lies one of the most litigated aspects of the whole law of vicarious liability as common lawyers who have grappled with the equivalent notion of ‘course of employment’ will readily understand. To solve it the courts have used – as we shall note below – a variety of terms or notions. Perhaps we could attempt to simplify the problem by saying that in practice there is one rule. Either the employee is within the ‘course of employment’ (and so if the other conditions are satisfied will render his master liable), or he is not (only ‘bei Gelegenheit der Verrichtung’, in which case there is no liability for the master). Whether he is in the course of his employment or not is really a question of fact.

122  Liability for Others In a sense, the situation here is not dissimilar from that found when discussing the elements of negligence or carelessness. For also in that area, there is a simple rule: if a person has behaved carelessly, he is liable (subject to certain other conditions being fulfilled); if he was not careless, he is not liable. The question whether his behaviour was careless or not is, once again, one of fact. Just as there are guidelines (not rules) to help in determining carelessness, so there are guidelines, and no more, which help in determining ‘course of employment’. The decision is, therefore, often impressionistic. The only permissible generalisation is that the area of activity falling within the ‘scope of employment’ seems to be widening. This may be partly as a result of the increase in motor traffic (and the compulsory insurance schemes that go with it) and partly because the scope of acceptable risk has widened as legal entities have taken over from human beings the position of ‘employer’. However, one must immediately qualify the last sentence by pointing out that German law has consistently taken a stricter view on this matter than other systems have done (eg,  the French). It has thus excluded acts done by the employees merely because their employment provided them with the occasion or opportunity for performing these acts (Münchener Kommentar/Wagner, § 831 BGB, nos 24–31; also, case 57). Thus, if the wrong is something incidental to the work assigned (bei Gelegenheit der Verrichtung) to the worker, his employer will not be ‘vicariously’ liable (under § 831 BGB) for it, unless it can be shown that he himself was at fault (§ 823 I BGB) in introducing this risk. A practical joke played by one employee on another will therefore not justify the employer’s vicarious liability though it may attract his own personal liability if it can be shown that he was aware of the employee’s mischievous or irresponsible propensities. The key is how the terms and underlying ideas are interpreted in concrete fact situations. The employer may be liable not only for the task entrusted, but also for the significantly enhanced risk which the employment creates. For example, in BGH, BGHZ 11, 151, it was said that a theft committed by an employee working for a large firm on a building site could render his employer liable. In such a case, it would be the duty of the employer to put in place supervision arrangements of a large workforce to prevent thefts. In this case, there was a small group of employees whom the property owner could supervise and notice if they were stripping lead off his roof. On the other hand, the employer’s liability may be engaged even if the act accomplished by his employee is not exactly the one he was entrusted to perform. For this to happen, however, it must fall within the range of measures which can be properly linked to the exercise of the entrusted functions (see BGH, BGHZ 49, 19, 23). Sometimes this idea is also expressed in causal language. This is so whenever the court speaks of an internal, substantial connection between the function assigned to the employee and the activity that has caused the harm – (BGH, NJW 1971, 31). In practice this means that if the employee’s act amounts to a bad way of performing the entrusted function (rather than doing something completely different), the master will – all other conditions being satisfied – be liable for the wrongful result. So, using a vehicle of the employer’s in a forbidden manner will not necessarily absolve the employer from all liability (see BGH, VersR 1966, 1074; BGH, NJW-RR 1989, 726; Giliker, Vicarious Liability in Tort, 156–57). On the other hand, if the employee gives a free ride to the injured claimant in the employer’s car, despite the latter’s express prohibition, then the employer may not be liable (BGH, NJW 1965, 391). (The child abuse cases Various Claimants and Lister v Hesley Hall [2001] UKHL 22; [2002] 1 AC 215 explain the current English law on such matters.) The same is true of the so-called ‘deviation’ cases where the employee while on duty deviates from the prescribed route or even goes off on a

The Tortious Liability for ‘Employees’: §§ 831, 278 BGB  123 trip of his own and then causes damage. The answer here will largely depend on the extent of the deviation (see RG, DJZ 1930, 589). So the law is really looking for a substantial connection between the wrong conduct and the task committed to the employee, rather than asking whether this is the very thing he or she was employed to do. There are parallels here with the concerns of other jurisdictions (see Giliker, Vicarious Liability in Tort, 172–95).

D.  ‘Unlawful’ Damage § 831 BGB further requires that the damage caused by the employee be inflicted ‘unlawfully’. The element of unlawfulness and the element of culpa (fault, which is not mentioned in §  831 BGB) were discussed under the heading of § 823 I BGB (see chapter two, section II), but since they raise difficult problems in this context as well, they must be re-examined briefly. It will be remembered that there exist mainly two theories on the definition of ‘unlawfulness’ (see chapter two, section III). The traditional one looks at the result, and if this is an interference with one of the interests enumerated in § 823 I BGB, then the element of unlawfulness is satisfied. The more modern theory looks at the conduct and treats as unlawful only those interferences with the enumerated interests, which also amount to a breach of one of the duties of care. It will be remembered also that we stressed that, according to the traditional theory, the element of culpa – fault – is only considered after the element of unlawfulness is satisfied in accordance with the above. On the other hand, according to the newer theory, unlawfulness and culpa tend to be merged into the same phase of the enquiry. Finally, it will be remembered that we said that save in some exceptional circumstances the two theories will, almost certainly, produce the same practical results. § 831 BGB is one of those exceptional circumstances where the two theories could produce different results. This is because § 831 BGB, unlike § 823 I BGB, makes no mention of culpa – and, apparently, only requires an unlawful infliction of damage on the part of the employee. (Contrast on this point English law which requires fault on the part of the employee.) If ‘unlawful’ is taken to mean a simple interference (even if committed w ­ ithout fault) with one of the enumerated interests, then the employer will be presumed liable unless he can then adduce his exculpatory proof in accordance with what we shall say below under (E). To put it differently, a logical application of the traditional theory on unlawfulness would require the claimant/victim merely to prove that he had been injured, even by a non-faulty act of the employee. Then, and only then, would the presumption of fault (of the employer) under § 831 BGB come into play; and it would be for him to adduce the exculpatory proof envisaged by this provision. The newer theory on unlawfulness would look at things in a different way. An interference with one of the protected interests of the claimant is not, per se, unlawful; it will be so if, in addition, the employee does not attain the standard of care required in the circumstances. To put it differently, if the employee’s activity was in breach of one of the duties of care and also interfered with an enumerated interest, then and only then, would it be unlawful. Both these things are matters for the claimant/victim to prove, and only if they are established will § 831 BGB be invoked and the defendant/master will have to produce the required exculpatory proof.

124  Liability for Others The different distribution of the burden of proof, resulting from the application of one or other of the theories of unlawfulness, could have important practical consequences. A  employee/driver, for example, who through no fault of his own, injures the claimant because black ice forces his car into a skid, will have acted unlawfully if  the traditional theory is applicable, but lawfully if the new theory is used to determine the nature of his conduct. Let us take another example from case 58 decided by the BGH in 1954. The claimant was injured by a telephone post, which collapsed due to a heavy storm. The interference with the claimant’s life and limb was clear, and according to the traditional view, the element of unlawfulness was satisfied. This means that § 831 BGB should have been applicable, and the defendant post office (owner of the post that had collapsed) should have been called upon to adduce the exculpatory proof envisaged by § 831 BGB. The BGH, however, felt that this stage had not been reached since the claimant had not shown that the accident was also due to a fault on the part of the team of employees responsible for the maintenance of the posts. Unfortunately, the problem of who has to prove exactly what is not only linked with the view one takes on the notion of unlawfulness. In fact, our last illustration reveals the kind of uncertainties and difficulties that persist in this field. In a decision handed down in 1957, the Great Senate of the Federal Supreme Court had to deal with the following problem. (For fuller details, see the judgment reproduced in case 66, and Giliker, Vicarious Liability in Tort, 28–29.) The claimant was injured while getting into a tram due to the fact that the tram departed before the claimant had completed his entry. It could not be established whether the claimant’s injury was caused because he tried to jump onto the tram after it had started moving, or whether the accident was the result of the conductor giving the departure signal prematurely. If the older theory of unlawfulness was applied, then the employees of the defendant (tram) company had acted unlawfully and the burden of producing the exculpatory proof of § 831 BGB would have shifted to the defendant company. If, on the other hand, the newer theory applied, then the defendant would not have to be called to produce such evidence, since the claimant had not proved (nor, given the uncertainty we mentioned, could he prove) that the conductor had culpably and prematurely given the departure signal. The Great Senate of the Federal Supreme Court clearly opted for the newer theory on unlawfulness and, as we have already noted, this has commended itself to most modern lawyers (but not to all lower courts). But when it came to applying it to the burden of proof it did not take the attitude that has been described above but chose, instead, a different manner of distributing the burden of proof. The injured party was thus merely obliged to prove an interference with one of his protected rights. It was then for the master to prove that the conduct of his employee was correct in the circumstances and thus not unlawful. If he did not do this (and, in the present case, given the uncertainty as to what had happened, he could not), then he would have to rebut the presumption of his own fault in accordance with § 831 BGB. The convoluted reasoning as well as the result has not been welcomed (except for the part of the judgment that sanctioned the new theory of unlawfulness). The reason is clear. As Professor Kötz and Professor Wagner have remarked (Kötz/Wagner, Deliktsrecht, no 289), ‘this decision has the absurd consequence that where the facts of the accident are not clear, the injured party will be in a more favourable position if his injuries have been caused by the employee, and not the master himself ’. For if a pedestrian is run down by a van belonging to a pharmacist and it is not clear whether the accident could be attributed to the driver,

The Tortious Liability for ‘Employees’: §§ 831, 278 BGB  125 the  condition of the van, or the pedestrian himself, then the pedestrian’s claim may be rejected. This will be the case if the pharmacist (employer) was at the wheel, himself (since the action would then be based on § 823 I BGB) and the claimant would have to prove the defendant’s fault. If, on the other hand, the van was being driven by the pharmacist’s employee, then the victim would (by invoking § 831 BGB) be able to see his claim succeed unless the pharmacist could produce the exculpatory proof provided by this paragraph.

E.  The Employer’s Exculpatory Proof If all the above-mentioned conditions are satisfied, the defendant/employer will be presumed at fault and will be made liable unless he shows one of two things. Thus, he must show that he was careful in the selection, instruction and training of his employees and that he properly supplied them with the right kind of equipment. Alternatively he must show that the damage or injury would have occurred even if he (the employer) had fulfilled all of the above-mentioned duties. § 831 BGB thus establishes a simple rebuttable presumption of responsibility (widerlegliche Vermutung). Producing evidence that the employee was properly selected, instructed and supervised has become an increasingly heavy burden for employers – especially in those cases where the accident is caused in the context of carriage of passengers by buses, trains, trams and the like. Here, as cases 63 and 64 show, the degree of supervision required is very high and can include such things as random checks and regular warning notices. As Wagner (Münchener ­Kommentar/Wagner, § 831 BGB, no 38) puts it, ‘only people who are reliable, conscientious and above all capable of abstaining from alcohol can be entrusted with a goods vehicle, a lorry or even a bus’. When such accidents occur, and the action proceeds on § 831 BGB, the attention of the court is thus switched away from the details surrounding the accident, which the victim could conceivably discover or reconstruct. Instead, it becomes focused on the kind of internal supervision system that the defendant/employer had devised in order to avoid or minimise the chance of the accident. In these cases, however, the claimant/victim has little knowledge of what has gone wrong. So, often, rather than be faced with such uncertainties and the cost of prolonged litigation, he will settle for the lesser sums provided by the strict liability Acts such as the Road Traffic Act or the Strict Liability Act (discussed in chapter seven). Where large organisations are concerned, proof that every employee has been carefully selected or supervised is, of course, impossible. So the practice developed in Germany of ­allowing the employer to show that ‘leading employees’, who stand in a hierarchically ­intermediate position (eg, a foreman who had chosen and was supervising the ‘guilty’ employee), had been properly chosen and supervised. This system of ‘decentralised exoneration’ (dezentralisierter Entlastungsbeweis), which substitutes the intermediary employee for the ‘real’ employer and makes the former liable instead of the latter, is undesirable both economically and in terms of labour–management relations (Münchener Kommentar/ Wagner, § 831 BGB, nos 42–44). Not surprisingly, it has thus not been followed by other systems such as the Swiss which, in this area of tort law, has otherwise closely followed the German model (see Oftinger, Schweizerisches Haftpflichtrecht II, I (2nd edn, 1960) 139, 159). But German lawyers, too, came to realise the unfortunate nature of this rule, and the BGH itself discovered a way to neutralise it by finding fault in the real employer for the way he has organised his business and thus made the accident possible. This creation of the ­Organisationspflicht allowed the German courts to fall back on § 823 I BGB and, in this

126  Liability for Others way, provided a way of bypassing the unfortunate § 831 BGB (case 64). In many areas of modern tort law, the duty is placed on an organisation directly and so the idea of escaping liability by proving decentralised supervision is not relevant (see Münchener Kommentar/ Wagner, § 831 BGB, no 44).

F.  Methods Developed in Order to Avoid the Effect of § 831 BGB It will have been noticed that despite the fact that the German courts impose strict requirements for the exoneration of employers under § 831 BGB, the possibility of such proof being adduced is always there with the result that the victim can then only sue the usually penniless employee. This result is not only incompatible with the rationale of true vicarious liability; it is also economically unsound given the employer’s greater ability to insure and to spread the cost with a minimum of social dislocation. For some time now the courts have therefore been eager to discover ways to bypass the too narrow § 831 BGB and four of them will be discussed here. The first device that neutralises the exculpatory proof available to the employer under § 831 BGB originates in labour law. If in the course of his employment an employee negligently causes loss to a third party he acquires, under certain circumstances, a right to an indemnity against his employer in respect of any claim which the victim may have against him, personally. So, in these cases the ‘innocent employer’ will shoulder the consequences of the employee’s negligence even though his careful selection and supervision of the employee should have, normally, exonerated him (the employer) from all liability. The conditions under which the liability is transferred (back) to the employer are examined below in section III.A. So here suffice to say that once it is established that the conduct of the tortfeasor is sufficiently linked to his employment the courts will be likely to grant the employee the right to an indemnity from his employer. (This is the reverse of a situation better known to the common law (but also known to German law) and involving the employer seeking contribution or a full indemnity from the employee for having been held liable towards a third party because of his employee’s fault.) In English law this is, nowadays, covered by the so-called ‘gentlemen’s agreement’ of 1959 by which employers’ insurers waived their entitlement to exercise subrogation rights against the ‘guilty’ employee. It is discussed in Gardiner, ‘Lister and Romford Ice and Cold Storage (Report of the Inter-Departmental Committee)’ (1959) 22 MLR 652 and in Giliker, Vicarious Liability in Tort, 32–34. The second is particularly applicable to legal entities of a private (§ 31 BGB) or of a public law (§ 89 BGB) character (both in combination with § 823 BGB): BGH, NJW 1985, 1838. The legal entity’s liability for the torts committed by its organs, ie, members of its board, or other ‘duly appointed representatives’, is absolute without any possibility of exoneration so long as the tort was committed by the representative in the ‘carrying out of his duties’. The potential sphere of application of this provision was, initially, rather limited, but in more recent times it has been expanded considerably, especially by giving a very wide meaning to the phrase ‘duly appointed representative’. Consequently, the original requirement that this liability be applied only for the acts of organs which had a legal power to represent the legal entity in legal transactions was abandoned in favour of a wider definition. (See RG, DR 1944, 287, and case 57.) Representatives who have the right to make independent decisions in their own sphere of work, subject only to general ­instructions,

The Tortious Liability for ‘Employees’: §§ 831, 278 BGB  127 will thus be included in the definition. This will be so even though they may not have the wider power of legal representation and their powers are not specifically defined in the articles of association. And the legal entity may also be liable for the torts of persons who have been authorised to act for it ad hoc in lieu of the person who should have acted in accordance with its articles (RG, RGZ 157, 228, 235 ff). It is necessary to distinguish liability of the legal entity towards third parties and the liability of the members and representatives towards the entity. This latter kind of liability has been restricted since 2013, when new §§ 31a and 31b BGB came into force. § 31a BGB exempts from liability to the legal entity members of its board and its special representatives who work gratuitously or receive less than €720 a year for their services, unless they are guilty of intentional fault or gross negligence. §31b BGB exempts from liability to a club where its members work gratuitously or receive less than €720 a year for their services, unless they are guilty of intentional fault or gross negligence. Thus, voluntary members of an association or sports club need not fear actions for recourse being brought against them in relation to what is effectively voluntary activity. (cf personal liability in the common law of members of an unincorporated sporting association to third parties: Harrison v West of Scotland Kart Club 2004 SC 615.) Liability of the entity for its own defective organisation, in accordance with what is said in the next paragraph, may also be invoked by the third party injured. The third way around § 831 BGB is by discovering a ‘defect in the structure of the enterprise’ for which the employer/entity is made liable. We are here talking of liability under § 823 I BGB and no longer of liability under § 831 BGB. Cases 59 and 60 show how effective is this method of bypassing § 831 BGB. In case 59 the claimant was hurt while in the defendant’s hospital as a result of risks inherent in the treatment he was receiving but of which he had not been adequately warned. The defendant/hospital was successful in adducing the exculpatory proof required by § 831 BGB but was found liable under § 823 I BGB for its own culpable failure to guide its doctors as to how they should discharge their duties to warn and explain matters to patients. Similarly, in case 60 the defendant’s employees carelessly damaged an underground gas pipe which caused an explosion which led to the destruction of the claimant’s house. The track record of the employees was perfect and the defendant was able to adduce the exculpatory proof imposed upon him by § 831 BGB. The BGH however, was not interested in this line of reasoning and chose to hold the defendant liable for his own fault. It should be noted that though the grounds of liability are distinct, there is no reason why in practice the result could not be based on both. A decision of the BGH in 1955 (BGH, BGHZ 17, 214) illustrates this. In that case, the Federal Railways used wagons to transport animal foodstuffs. The wagons had not been properly cleaned and the foodstuffs were contaminated, thereby causing serious damage to the claimant’s cows. Both the OLG and the BGH had no difficulty in holding the defendant railway company liable on both grounds, ie, liable for not properly inspecting their employees (§ 831 BGB) and for their own failure to adopt a safe system of work (ie, liability under § 823 I BGB). The importance of this type of liability for defective organisation of an enterprise cannot be overstated since out of it grew the modern approach to product liability under the heading of Produzentenhaftung long before strict liability was imposed on manufacturers (and others) under the P ­ rodHG. (See Wagner, ‘The Development of Product Liability in Germany’ in Whittaker (ed), The Development of Product Liability (2010) 124–26.)

128  Liability for Others The advantage of the heading ‘defective organisation of the enterprise’ meant that liability could be based on the employer’s fault (for failing to organise his business properly) independently from his employee’s negligence. It was a small step from there to hold the employer liable by simply reversing the burden of proof for a deficient organisation of the production process where the injury was caused by a defective product. This heading of liability for faulty organisation of an enterprise emerged as a way of bypassing § 831 BGB. Having achieved this, it was then transplanted to liability for defective products. (This occurred in the famous Fowl Pest case in 1968, reproduced as case 48. See also Wagner in Whittaker (ed), The Development of Product Liability (2010) 127–33.) Shifting the burden of proof was prompted by the kind of considerations that also underlie the presumption of fault of § 831 BGB. For it will be difficult if not impossible for the victim to prove that the organisation of the manufacturing process was defective and ascertain the cause of the product’s defect. As the BGH remarked in the Fowl Pest case, the manufacturer ‘surveys the field of production, determines and organises the manufacturing process and the control of delivering the finished products’. As a consequence, the manufacturer needs to furnish the proof of exoneration. As in the instances of organisational fault outside the field of product liability, the courts allow the ‘employer’ to rely on a system of decentralised exoneration alluded to in the previous section.

II.  The Escape into Contract: § 278 BGB The fourth way of evading § 831 BGB is for comparative law purposes the most intriguing. In one sentence, it meant invoking the adaptable law of contract in order to remedy the deficiencies of of the narrow German tort law. This, of course, is not the first time a civil law system has had to turn to its law of contract in order to remedy the shortcomings of its law of tort. For example, we have already noted how the non-recognition of purely economic loss as a compensable type of harm under § 823 I BGB forced German (and French) lawyers to ‘discover’ contracts in the negligent misstatement cases which, in the common law system, are resolved through the law of tort. The converse was true of the common law systems: the doctrine of consideration – especially where it was taken rather seriously (eg, in English common law) – meant that contracts could not be discovered where the claimant had not ‘paid’ for the information he received. The law of product liability is another example, for in this area as well, civil law has shown a tendency to extend the law of contract to do the work of the law of tort. We have noted (above, ­chapter four, sections III.C and V) how German law has moved away from this position. (cf French law where the ultimate purchaser’s rights in product liability cases are still in many instances viewed as an extension of the rights conferred by the law of sale to the immediate purchaser (Articles 1641 ff French Code civil) though, in recent times, tort law has reasserted its position.) The problems posed by § 831 BGB provided the third, though by no means least, important impetus to sidestep tort law and have recourse to contract; § 278 BGB provided the much needed escape provision. § 278 BGB states that a ‘debtor’ – which in the instances that concern us means the employer – ‘is responsible for the fault of his statutory agent and of persons whom he

The Escape into Contract: § 278 BGB  129 employs in fulfilling his obligation, to the same extent as for his own fault’. It thus imposes upon the debtor ‘strict’ liability for faults of the persons he uses in the course of fulfilling his contractual obligations. The possibility of exoneration, which can be found in § 831 BGB, is absent in this case. Moreover, the terms used in § 278 BGB suggest that the debtor’s liability may cover the faults of persons whom he uses in the performance of these obligations, but who may not, strictly speaking, be ‘employees’ (in the sense of § 831 BGB). Both these points, and especially the first, make the claimant’s position more advantageous than it might otherwise be if his action were based on § 831 BGB. There are other advantages for the claimant who can shift in this way the basis of his claim from tort to contract. It will suffice to mention three. First, pure economic loss is more easily recoverable in a contract action. Secondly, the contractual period of limitation is sometimes longer, though not always (see BGH, BGHZ 61, 227). Finally, the burden of proof may be more favourable for the claimant if the action is based on § 278 BGB (see § 282 BGB and BGH, BGHZ 66, 51; now § 280 I 2 BGB: see Zimmermann, The New German Law of Obligations (2005) 50–51). But these advantages for the claimant are also bought at a price: § 278 BGB will only apply in the fulfilment of a contractual­ obligation; and the range of remedies it may offer the victim/claimant may be more restricted than it would be if the action were based on tort. These two points require further elaboration. Since § 278 BGB requires a contract (hence, § 278 BGB is never applicable in combination with one of the tort law provisions and in particular not with § 823 BGB), in order to come into force, the courts set about discovering such contracts where none would be immediately obvious to a common lawyer. This meant extending the contract to the precontractual phase and also extending its scope to include persons other than the immediate contracting parties. The famous linoleum case of the RG (case 68) marks historically the first attempt to extend contractual remedies to the pre-contractual phase of negotiations through the concept of culpa in contrahendo. This doctrine was developed by Rudolf von Jhering. (Culpa in contrahendo, Schadenersatz bei nichtigen oder nicht zur Perfektion gelangten ­Vertraegen, in Jahrbuecher für die Dogmatik des heutigen römischen und deutschen Privatrechts (1861); now codified in § 311 II BGB; see also Markesinis/Unberath/Johnston, 91–97.) It was extended from certain contractual situations to cases, such as the one before the RG in 1911, which were essentially delictual in nature. In that case, the prospective purchaser entered the store, asked to inspect some carpets and, while doing so, was injured by two rolls which fell from the shelf. The Court took the view that the demand to see the carpets and the fulfilment of this demand resulted in a relationship preliminary to the sale and similar to a contract and imposed duties of care with respect to the person and property of the parties. The wording of this judgment makes frequent references to the ‘prospective purchaser’ and, therefore, makes it clear that this extension of the ‘contract’ to the precontractual phase will not be attempted in all instances. The demarcation line is left for future courts to draw. Probably, the same contractual protection will be extended to cover not only the prospective purchaser who, for example, is queuing to pay for the goods he has already selected, but also the ‘potential purchaser’ who enters the shop ‘to look around’ but with as yet no fixed intention to purchase anything in particular. The shoplifter, on the other hand, who slips on spilt yoghurt, will not be protected in this way (case 69). In between these ‘extremes’, one can envisage other possibilities, for example, the citizen who

130  Liability for Others seeks refuge in the store during a heavy storm. The solution and the casuistic approach of the German courts should neither surprise nor disturb the common lawyer. Given the greater willingness to discover ‘duties of care’ these days, the answer to our hypothetical problem should be sought in the law of delict and not the law of contract. And the disadvantage that this might create for the claimant – the return to § 831 BGB – could be avoided by arguing that the store’s potential liability should be justified by reference to §  823 I BGB. In other words, it should be based on the shopkeeper’s own fault in the running of his business. The expansion of the contract to the pre-contractual phase was not enough; the protective sphere of the contract had also to be expanded to cover persons other than the immediate contracting parties. In case 69, the person injured was not the prospective purchaser but her young daughter who was accompanying her in order to help her with her shopping. In the court’s view, good faith required that the child should be included in the protective sphere of the contract (which was about to be concluded); indeed, the court felt that even mere ‘bystanders, who do not themselves participate in a contract’, should be included under the contract’s protective umbrella. This, of course, is precisely the kind of situation, which could not receive a satisfactory solution through the medium of § 831 BGB. It thus forced the German courts to develop, under juristic guidance, the concept of contract with protective effects towards third parties, which was briefly described in chapter two, section IV.C. But, until 2002, resorting to § 278 BGB provided a partial answer at best. Because the liability established by this provision was contractual, the claimant’s damages in these cases were limited to his economic loss alone. Unlike the then § 847 BGB, the old wording of § 253 BGB did not allow a contractual claim in damages for pain and suffering. But since 2002, § 253 II BGB states ‘If compensation is to be provided, because of injury to the body, health, freedom or sexual self-determination, fair compensation in money can also be claimed for harm which is not financial harm’. Hence, the new law now allows tortious and contractual claims in damages for pain and suffering. An illustration of problems in the past is given in case 71. In that case from 1951 (BGH, BGHZ 1, 383), the claimant was referred to the defendant hospital as an outpatient for a minor ailment in his foot. The second defendant – who was the hospital’s chief doctor – administered a mild anaesthetic before attending to the patient’s foot but failed to make the claimant lie down properly on a couch and instead made him sit temporarily on a narrow kind of settee used for gynaecological examinations. As a result of the injection of the anaesthetic, the claimant temporarily lost consciousness and fell off the settee and severely injured his cervical column. He claimed his economic loss and compensation for pain and suffering from both defendants and the OLG granted him both these claims. The BGH adopted a more nuanced approach. The contract of hospital treatment was between the hospital/first defendants and the claimant’s union, who had referred him to the hospital. Yet this was a contract in favour of third parties – with protective effects vis-a-vis third parties we would say today – and thus the hospital was liable to the claimant for the doctor’s careless behaviour under § 278 BGB. This action could cover the claimant’s economic loss but not – because of the (then) wording of § 253 BGB – his claim for pain and suffering. But the claimant had a further cause of action against the second defendant – the doctor – and since this was delictual in nature, based on § 823 I BGB, it could justify, under the then § 847 BGB, a claim against the doctor (but not the hospital) for compensation for pain and suffering.

Liability Regimes in Labour Law  131

III.  Liability Regimes in Labour Law Making the employer of the tortfeasor liable for the damage the latter has caused may provide compensation for the victim and, in that sense, largely fulfil the function of tort law as a system of compensation for accidents. Yet achieving this result will not mark the end of the problems that have to be faced by the law. Thus, further issues have to be resolved which are of interest to tort law and insurance law, for example, should insurers have such subrogation actions? Is this not tantamount to their having their cake (ie, collecting premiums) and eating it (ie, being given subrogation claims) unless, perhaps, someone can prove that by having such rights and exercising them they can (and do) keep premiums at lower levels? But even more questions have to be answered. Should the actual wrongdoer – the employee – go scot-free because policy considerations related to the smooth functioning of labour relations demand this? Will such a solution lead to more accidents by making employees less careful? Is it economically advisable to place part of the risk on a worker who might be without personal insurance? These concerns of different parts of private law come together when one sees these cases in the context of increased industrial accidents, modern insurance practices, collective labour agreements, and an ever-increasing volume of litigation with the delays this phenomenon brings in its wake. Little wonder then that this problem of the employee’s liability towards his employer has given rise to considerable debate but little agreement in Germany. The revirement of the case law of the BAG must be seen in this light. But the problem is best understood if we explain first the kind of factual configurations in which these problems arise. There can, in fact, be three. The first will be easily recognisable to English lawyers. The employer is held liable (either under common law principles of vicarious liability or under § 831 BGB) for the harm caused to a third party by his employee and then seeks a contribution or an indemnity from the latter. The second variant, mentioned earlier, is more Germanic in its nature and stems from the possibility that is open to the employer to avoid liability by invoking the exculpatory proof contained in § 831 BGB (careful selection/supervision of employee). In this case, the employer may not be liable. But if the employee is sued by the victim and is made liable to him, can he – the employee – then seek an indemnity from the employer? As stated, German labour law allows this to happen and, as a result, § 831 BGB is, in practice, circumvented. The final and in practice most important variant is where the employee negligently causes harm to his employer and, as a consequence is sued by the latter. For instance, the defendant/employee drives mini cabs owned by the claimant/employer. Because of the negligence of the defendant, a collision takes place with a third party in which the claimant’s car is also damaged. Can the claimant/employer seek damages from his employee/ defendant? (eg, BAG, NJW 1988, 2816). Currently, the governing decision can be found in case 67. From the discussion that will follow it will be noticed that German law treats – with some measure of justification – all these three variants in the same manner for, in substance, in all three it sets out to alleviate the employees’ personal liability. The real question, thus, was how extensive should this ‘immunity’ be? Moreover, a workable method had to be discovered that would distinguish those cases where the employee was liable to pay a contribution or a full indemnity from those where his potential liability could be engaged.

132  Liability for Others Since the decision of the Great Senate of 25 September 1957, the BAG limited the employee’s liability towards his employer where the activity carried out was not ‘dangerprone’ (gefahrgeneigte Arbeit). Moreover, liability would follow provided further conditions were satisfied. Notably, it had to be shown that the employee had acted with ‘gross’ negligence. (BAG, BAGE 5,1: the first decision where the criterion of dangerous work was utilised to restrict a worker’s liability was ArbG Plauen, ARS 29, 62 from 1936). The partial or total immunity granted to the employee was and still is difficult to reconcile with general principle. More precisely, the fundamental assumption of the rules on reparation and compensation (§§ 249 BGB ff) is that if the conditions of liability are met (in particular if the tortfeasor is shown to have acted negligently) he will be held liable for all the loss caused by the wrong. The only express exception to this doctrine is found in § 254 BGB: contributory negligence. However, in the line of cases examined here it is not contended that the employer contributed negligently to the loss of the third party. The damage is caused exclusively by the fault of the employee. Hence, in 1957 the BAG had to assert that there was in fact a ‘concealed’ gap in the Code and that it was entitled to modify the rules applicable to the special relationship arising by reason of a labour contract (§ 611 BGB). The reason why German law (especially the BAG) has come to regard the employee’s full and unconditional liability as being contrary to equity (Billigkeit) is this. The employee acts at the instance and in the interest of the employer. The latter determines the production process or more generally how the company is organised. The employee’s pursuit of his job is directed by his integration into the business organisation and the actual conditions of the work process. The employee cannot influence the risk inherent to the activity assigned to him by the employer, and he cannot avoid these pre-determined conditions of work either factually or legally. Nor will his wages normally reflect or cover the risk if anything goes wrong. So, although the employee is under the general legal obligation of neminem laedere, German courts have argued that it is justified to limit his liability in specific circumstances. However, as already suggested, this alleviation of the employee’s liability depended – until recently – on whether the employee could establish that his activity was ‘danger-prone’. This requirement was meant to ‘preserve’ an area where the employee could be held accountable. But the criteria for this category became increasingly open-ended once the BAG no longer applied them in an abstract and typified way but took account of the specific circumstance of the individual case. Thus, in case 67, the BAG did not regard the activity of supervising the driver of a bulldozer as dangerous, even though the activity of the driver of the machine was undoubtedly so. The unworkable nature of the criterion of ‘danger-prone activity’ was also revealed by the tragic case of BAG, NZA 1986, 91. There, an experienced nurse accidentally dropped a baby which was 12 days old. As a result of the fall, the baby suffered a skull fracture. In earlier proceedings the child had sued the nurse and her employer and had been held entitled to recover all losses resulting from the accident. In the case at hand, the nurse sought an indemnity from her employer in respect of the child’s claims. The BAG came to the conclusion that in the circumstances the activity of taking a baby out of its bed was not ‘danger-prone’. The consequence of such a determination would have been that the nurse would shoulder full responsibility – a result which was widely considered as unacceptable. (The case settled so we do not know what happened in the end.) In case 67 the Great Senate of the BAG responded to this widespread criticism and decided that the time had come to abandon altogether the criterion of ‘danger-prone’ activity. Since the BGH (in NZA 1994, 270) agreed as to the result, it was not – in the end – necessary for the Common Great

Liability for those in Need of Supervision, Especially Children: § 832 BGB  133 Senate of the Supreme Courts to decide the issue. The case thus reproduced in the book reflects the current state of the law. The criterion that replaces that of the dangerous character of the activity carried out by the employee is that of an intrinsic link between the activity and the duties assigned to the employee. From a methodological point of view it is interesting to note that the BAG felt the need to assert once again its powers to change and develop the law in this area. The irony is that in its latest judgment the BAG was departing from its own jurisprudence and not the rules of the BGB. This is somewhat concealed behind general observations on the role of the judiciary. Though by its decision the BAG, essentially widened the scope of the employee’s immunity, the other conditions of liability remained untouched. In the case of gross negligence (or of course in cases of intentional actions), the employee must, as a rule, bear the total loss alone. At the other end of the spectrum, in the case of the slightest negligence, he is not liable at all. For normal negligence, the loss is, as a rule, to be divided between the employer and the employee proportionately. In such cases, all the circumstances regarding the causing of the harm and its consequences are to be balanced against each other in a reasonable way and in accordance with the principles of fairness. In weighing up the circumstances of the individual case the following factors can, according to the Great Senate of the BAG, be taken into account. The danger involved in the activity. Whether the risk in question can be taken into account by the employer and covered by insurance. The position of the employee in the business is also important, as are the level of salary (ie, whether the employee is paid a risk premium) and the personal circumstances of the employee. For instance, how long he has been part of the business; his age; his family circumstances; and also the employee’s conduct so far under his contract of employment. From these the insurability of the risk by the employer is certainly the most difficult to determine in practice (see Tschöpe and Henninge ‘Die neue „alte“ Arbeitnehmerhaftung des BAG’ MDR 1995, 135, 137). In the case of gross negligence it will be decisive whether the remuneration of the employee is out of proportion to the risk of damages that have materialised as a result of the grossly negligent conduct. In BAGE 90, 148, for instance, a lorry driver caused an accident because he had run a red light. His attention was distracted as he was speaking on the mobile phone installed in the cabin. The lorry was damaged and the BAG found that he had been grossly negligent. The Court held him liable to the full extent of the loss because the loss was not out of proportion to his wage (it was less than the sum of three monthly gross wages, which amount is taken as a first indication).

IV.  Liability for those in Need of Supervision, Especially Children: § 832 BGB § 832 BGB makes those who are under a duty to supervise (Aufsichtspflichtige) other persons (minors, mentally or physically incapacitated adults, etc) liable for the damage caused by these persons to third parties or to their property. This is a personal duty of supervision, not a matter of vicarious liability. It does, however, reverse the burden of proof, since it is up to the supervisor to demonstrate either that the supervision was adequate or that the harm would have occurred even with adequate supervision.

134  Liability for Others The fairness of this liability needs to be understood by considering the personal liability of children. Under § 828 I BGB, a child under the age of seven is not liable for any harm it causes. Children between seven and ten are not liable for accidents with vehicles, trams, trains or suspension railways. Minors under 18 (but above seven) are not liable if they do not have sufficient insight to be awaren of the wrongness of their actions (­Einsichtsfähigkeit). This leaves the possibility that the victim will go uncompensated, unless a supervisor was at fault. The German legislator foresaw this and § 829 BGB enables the judge to take into account the financial position of the parties (including the insurance situation) and to oblige the innocent tortfeasor to pay the equally innocent victim/claimant such compensation as equity demands. The factors that are to be taken into account in establishing that the minor is under an equitable obligation to pay compensation are the seriousness of the injury; how close the culpability of the minor was in relation to the threshold of § 828 BGB; and, crucially, the economic situation of the defendant. The child or incapacitated adult will only be liable to the extent that this does not deprive him of their means of subsistence or the means to fulfil their subsistence duties to others. But the limited recourse against the child (which is radically different from French law) creates a pressure to allow a wide scope of liability under § 832 BGB (compare Giliker, Vicarious Liability in Tort, 206–07 with 213–17 on French law). Two things should be noted about § 829 BGB. First, § 829 BGB can apply also in the reverse situation where the minor is the victim and where he is not culpable, ie, contributorily ‘negligent’, under § 828 BGB. Secondly and more importantly, although this section is often referred to as the ‘millionaire provision’ the minor, himself, need not be wealthy. The question is whether his liability insurance is a factor that can found his liability under § 829 BGB. The role of insurance in the context of § 829 BGB was considered and in principle accepted as relevant by the BGH in a number of decisions, for example, BGH, BGHZ 76, 279; BGH, NJW 1958, 1630, but never relied on to establish liability. BGH, NJW 1995, 452 (previous edition case 144), has clarified a number of controversial points and in particular states that liability can flow from the fact that the defendant was insured. There is, however, an important theoretical problem in imposing liability based on the fact that the defendant was insured. The so-called Trennungsprinzip is a fundamental principle of tort law (see Janssen, Präventive Gewinnabschöpfung (2017) 132 ff). Indemnity insurance follows liability but liability cannot flow from the fact that the tortfeasor is insured. Therefore, deriving the minor’s liability from his insurance amounts to an exception to this principle. The BGH acknowledged this in that decision. All the same, the reforms of 2002 restricted the liability of children for road accidents and this makes § 829 BGB significant. Adults who lack mental capacity or who are unconscious when they cause unlawful harm are not liable by virtue of § 827 BGB. Where the person is only temporarily incapable as a result of self-induced consumption of alcohol or drugs, they remain liable. The obligation to supervise may stem from the law (kraft Gesetzes). Persons under such duties include the parents of a child (§§ 1626 I, 1631 I BGB) and the legal guardian (§§ 1793, 1800 BGB). Alternatively, the obligation to supervise may derive from contract (kraft Vertrages). This category usually includes those in charge of private kindergartens, boarding schools, holiday camps, orphanages, private nursing homes, and the like. (For doctors and nurses in psychiatric hospitals see: BGH, NJW 1984, 2574; BGH, NJW 1985, 677.) In yet other instances, difficult demarcation problems may arise (eg, a grandparent or a neighbour

Liability for those in Need of Supervision, Especially Children: § 832 BGB  135 looking after a child: is this always a purely factual situation or can it amount to a legal relationship bringing into operation § 832 BGB)? As for those doing an ‘apprenticeship’, the courts seem to distinguish between apprentices who are lodged with their employers and those who are not. In the first case, the employer may be liable for all harm caused by his apprentice, while in the second the employer’s liability may be engaged only if the harm occurred during working hours: BGH, VersR 1958, 549 (see Münchener Kommentar/ Wagner, § 832 BGB, no 13). Many obligations to supervise children or adults who lack capacity arise in public law – in relation to state schools, public hospitals and care homes. The liability of the supervisor here arises under § 839 BGB (in combination with Article 34 GG), rather than under § 832 BGB. This is illustrated in case 75 in which young children in a kindergarten threw stones at a vehicle parked in the school grounds and damaged it. The teacher, as a public official, was held liable for failure to supervise the children adequately. It was held that the burden of proof is the same under § 839 BGB as under § 832 BGB. So the basic grounds of liability are essentially the same in the public and the private sector. The liability of the supervisor arises the moment the ‘tortfeasor’ has realised the objective conditions of a particular rule of liability. If such an unlawful infliction of loss has occurred, the supervisor will be presumed to have culpably failed to discharge his own duty to supervise. He will then be liable to the victim, either solely or jointly with the ‘tortfeasor’ depending on whether the latter is capable of some fault (§§ 827–28 BGB). The supervisor’s liability will be avoided only if he proves that he had exercised the requisite standard of care or if he can show that the harm would have occurred in any event. The requisite standard of care in supervision obviously varies from case to case, the Reichsgericht having stated that it will depend on ‘the age, disposition, characteristics, development, education, and all other individual features of the minor’ (RG, RGZ 52, 73). The current formulation shows that the standard is context-specific. Attention must be paid to ‘the age, character and nature of the person in need of supervision, the local environment, the extent of the dangers, the foreseeability of the harmful behaviour and the reasonableness of the supervisory measures for the supervisor’ (case 74). Thus, a ‘difficult’ child will have to be kept under closer control. The vagueness and flexibility of such phrases is deliberate, but it should not conceal a discernible trend in recent cases to raise the standard of care expected of modern parents. Courts have taken a stern view in cases of damage caused by children playing with matches (see BGH, NJW 1983, 2821; OLG Karlsruhe, VersR 1985, 599). In case 74, the BGH held liable the parents of a seven-year-old child who started a fire having got hold of an easily accessible box of matches. But the duty to supervise was held to be satisfied where parents had forbidden a normal, well-behaved child of 8.5 years to use matches and had explained the dangers. The courts are aware that parents cannot always closely supervise their children (auf Schritt und Tritt). Cases 73 and 74 illustrate that children of different ages need different supervision. But parents also need to be aware of likely risks. So it might be necessary to supervise a 15-year-old who is downloading music illegally from the internet, as that is what children of that age might often do. (Though many parents might quibble with the court’s view in that case that ‘The duty of supervision requires [parents] to be concerned about with what their children are busying themselves in their free time, what they observe from time to time when they are clearing up their child’s room and cleaning their clothes’: case 73.)

6 Medical Liability COLM McGRATH

Bibliography The leading modern German academic treatment of this subject, although it predates the 2013 legislative reform, remains Katzenmeier, Arzthaftung (2001). A wide-ranging and exhaustive comparative survey of this topic by one of the titans of modern German medical law – although due to its age it is now outdated in places – may be found in Giesen, International Medical Malpractice: A Comparative Law Study of Civil Liability Arising From Medical Care (1988). Specific works referred to in this section are Giesen, W ­ andlungen des Arzthaftungsrechts (1983); Katzenmeier, ‘Arztfehler und Haftpflicht’ in Laufs/Katzenmeier/ Lipp Arztrecht (2015); Kubella, Patientenrechtegesetz (2011); Neelmeier, ‘Die einrichtungsbezogene Patientenaufklärung’ NJW 2013, 2230; Stauch, The Law of Medical Negligence in England and Germany (2008); Spickhoff, ‘Behandlungsvertrag’ in Spickhoff, Medizinrecht (3rd edn, 2018) 433–73 and Greiner, ‘Unerlaubte Handlungen’ in ibid., 492–564; Münchener Kommentar/Wagner Schuldrecht: ­Besonderer Teil II, §§ 535–630 BGB, ‘Behandlungsvertrag’, §§ 630a–630h’ (7th edn 2016).

I. Introduction Medical liability is a subject that has garnered considerable attention from both German academic writers and, over the course of the twentieth and twentieth-first centuries, the courts. This is a result of the large number of cases that reach the BGH: Stauch noting (The Law of Medical Negligence in England and Germany, 9) that around 10–20 decisions are handed down by that court annually, in stark contrast to the totality of such cases considered by the House of Lords and, now, the UK Supreme Court, which falls substantially short of that number. German judges have been given sustained opportunity to shape the law here and have done so with the often explicit aim of offering patients a significant degree of protection against injurious medical harm. Such has been the extent of judicial creativity here that, despite the idea being rejected decades previously (Spickhoff, ‘Behandlungsvertrag’, 433–35), the legislator finally introduced a new part of the BGB through the Patientenrechtegesetz 2013 (PatRG) which added eight new paragraphs (§§ 630a–630h BGB) dealing explicitly with contractual medical liability. Thus, many of the most significant judicial accretions that emerged in the past now have a formal basis in the BGB, but the role of the

The Doctrinal Basis of Medical Liability Claims  137 courts remains of paramount importance in responding to new challenges as medicine and healthcare delivery both develop. This chapter focuses on the revised law from 2013 which has had the effect of transforming much of medical liability into a special branch of contract law. Duties to take reasonable care are entailed by contractual duties to do one’s best in providing medical treatment. The cases provided in the appendix to this book in relation to this chapter show how tort law can still have a limited place in duties to inform. The older cases in medical negligence may also illustrate how current contractual duties may be interpreted.

II.  The Doctrinal Basis of Medical Liability Claims Healthcare is traditionally provided through membership of an insurance fund which, for a fee, provides the subscriber with access to healthcare services by purchasing them from separate healthcare providers. This choice of how to arrange healthcare provision informs the architecture of the legal duties surrounding healthcare and medical malpractice in Germany, making the doctor–patient relationship primarily a contractual one, in stark contrast to the position in the English common law (although it is clear that the English common law dislikes allowing any distinction in how the obligation is framed in the medical context to make a meaningful difference, see Thake v Maurice [1986] QB 644). Given the network of parties involved, a patient may have a contract only with the relevant hospital, covering all their care (this totaler Krankenhausvertrag accounts for most cases in practice) or, with both hospital and doctor individually (gespaltener Arzt-Krankenhaus-Vertrag). Outside hospitals the contract will be with the treating practitioner only. This position was, historically, complicated somewhat by the fact that damages for pain and suffering (Schmerzensgeld) were restricted to claims in tort by § 847 BGB. Hence, in order to receive damages for pain and suffering resulting from medical malpractice the claimant had to successfully argue that, as well as having breached their contract, the defendant was also liable in tort. (This is possible as there is a ‘freie Anspruchskonkurrenz’ (a free competition of entitlements) between contract and tort under German law, hence the claimant can equally rely on contract and tort.) This bar on the recovery of damages for pain and suffering in contract was removed by the Schadensersatzrechtsreform in 2002, and that development has made medical malpractice, in nearly all cases, a matter of contractual liability (Münchener Kommentar/Wagner, § 630a BGB, nos 11–15). That is not to say that a tortious claim will now never be relevant. Indeed, the German courts have long recognised that claims may concur and, in the medical malpractice context, have striven to minimise any differences that would otherwise result from framing the claim as one or the other, such as the otherwise different framework for vicarious liability in tort and contract within the BGB (Spickhoff, ‘Behandlungsvertrag’, 470, 493–94; OLG Bamberg, VersR 1994, 814). Furthermore, it is clearly the case that injurious medical treatment infringes the legally protected interests a claimant has in their body and health, which are protected by § 823 I BGB (Spickhoff, ‘Behandlungsvertrag’, 494–96). For instance, where, a patient has a totaler Krankenhausvertrag then a claim in tort provides the only route for a direct, personal action against the practitioner concerned (Münchener Kommentar/Wagner, § 630a  BGB, nos 35–37). As Katzenmeier (‘Arztfehler und Haftpflicht’, 335) notes, tort remains free, unlike

138  Medical Liability the now codified contractual rules following the PatRG, to respond flexibly to the challenges that new medical advances will, undoubtedly, produce. There are situations where § 823 BGB remains relevant, particularly in understanding the extent of the judicial activity that underpinned the 2013 reforms. But, following the combined effect of the 2002 and 2013 reforms to the BGB, it is, doctrinally, the law of contract rather than § 823 I BGB that now forms the anvil on which much of the law here will be shaped. The effect of the PatRG was to recognise a special form of contract, the ‘treatment contract’ (Behandlungsvertrag). In keeping with the prevailing approach to contracts for ­medical care, the treatment contract is viewed as a sub-species of the general contract for services (§ 611 BGB ff, Dienstvertrag; see generally, Markesinis/Unberath/Johnston, 153), and thus does not, importantly and happily for medical practitioners, guarantee the patient’s health, but rather that the contracting party will provide the treatment promised and take reasonable care in doing so: see § 630a BGB. Clearly, treatment must be understood as covering more than that which aims at merely healing or palliating the patient in a strict sense: Spickhoff, ‘Behandlungsvertrag’, 437. (Although it is likely that tattoo artists are not caught directly by the treatment contract!) As was the case previously, whether the claim was rooted in tort or contract, the standard of liability imposed by the law is, thus, one of simple fault (Greiner, ‘Unerlaubte Handlungen’, 494) and the 2013 reform has done nothing to alter that position. Yet within this relatively simple framework however the courts have created an intricate and detailed labyrinth.

III.  Types of Claim Cases concerning medical liability may be divided, broadly, into two main categories: claims involving a failure to have a treatment carried out to the required standard (a so-called treatment error or Behandlungsfehler); and claims where, despite the fact that everything has been carried out properly, injury has resulted from a risk inherent in the treatment itself that was not disclosed to the patient (Aufklärungsfehler). In this latter category, the claim revolves around the failure to have ensured the patient’s consent had been secured following the provision of appropriate information.

A.  Treatment Malpractice i.  The Primacy of the Behandlungsfehler Since the 1970s, liability for failure to have properly effected medical treatment has hinged on the demonstration of a Behandlungsfehler. Claims here may concern diagnosis, prevention, treatment and aftercare and it is trite that liability may result as much from the omission to undertake the proper course of action, as from shoddily doing so (­Katzenmeier, ‘Arztfehler und Haftpflicht’, 336). As it was put in BGH, NJW 1987, 2291 whether the defendant is liable here entails asking the question ‘whether in the precise situation, considering the medical proficiency and experience that may be demanded from him, the practitioner had made a justifiable decision concerning the diagnostic and therapeutic measures undertaken and carefully executed these measures’. This naturally involves an assessment of whether the

Types of Claim  139 practitioner met the required standard of proficiency. The importance of the standards of contemporary medical practice (recalling what was said on the matter by Lord Denning in Roe v Minister of Health [1954] 2 QB 66) has now been enshrined in § 630a II BGB which sets out that ‘Unless agreed otherwise, the treatment must take place according to the medical standards that are generally recognised at the time of the treatment’. This is the paragraph that contextualises the abstract, objective standard of conduct imposed by § 276 II BGB for medical liability and ensures that patients can expect a bare minimum quality of care regardless of whether the practitioner has agreed to it or not (Neelmeier, ‘Die einrichtungsbezogene Patientenaufklärung’ NJW 2013, 2232). Thus, although the standard takes into account the current nature of medical practice and medical science, it also requires a normative rather than a simply practical judgement (Katzenmeier, ‘Arztfehler und Haftpflicht’, 338). This is in keeping with the emphasis placed by § 276 BGB on requiring a defendant to show the degree of care that is required in a given situation.

ii.  Expert Evidence and the Role of Professional Guidelines The process of finding a practitioner liable for a Behandlungsfehler necessarily requires expert evidence to help establish the relevant standard against which they are to be judged (BGH, NJW 1993, 2378). As part of that process, the court will often take regard of any professional guidelines that are available, or indeed legally binding regulations on minimum standards of care (Richtlinien). Obviously where these have been developed over a period of time by the relevant professional body of experts in a given field, they allow an expert, as Katzenmeier (‘Arztfehler und Haftpflicht’, 338) puts it, to offer an institutional rather than a merely individual assessment of the defendant’s behaviour, provides the court with something to test an expert’s opinion against and, where sufficiently clear, ease the burden of the patient in demonstrating that the defendant’s behaviour was not what it ought to have been. Yet such documents may be aspirational, aiming at raising the standard of current practice or indeed have become outdated, and the BGH has stressed that, while they may well describe it, they are not to be treated, without more, as evidence of the standard of care in practice (BGH, VersR 2014, 879). Indeed, given their abstract nature, where there are necessary grounds to deviate from them in a concrete situation, it is no answer to a claim of negligence that the relevant guidelines were complied with (Katzenmeier, ‘Arztfehler und Haftpflicht’, 339).

iii.  The Normative Assessment of Medical Behaviour While in practice medical expertise plays a large role in determining the relevant standard of care, the extent to which that standard of care imposed contains a normative element can be seen in the space, curated by the courts, between the medical understanding of accepted practice, and the standard actually imposed by the courts. While for a considerable period of time, English courts refrained from questioning accepted medical practice (a position famously enshrined for both treatment and disclosure errors in the Bolam v Friern Hospital Management Committee [1957] 1 WLR 582). The English common law has since moved closer to the German position with the much belated recognition that cases involving disclosure of information in the healthcare context are not rooted in

140  Medical Liability the exercise of medical expertise: see Montgomery v Lanarkshire Health Board [2015] UKSC 11; [2015] AC 1430. English courts have only come relatively recently to clarify that they retained the ability to question medical practice where, having failed to appropriately balance the risks and benefits for the patient, it is not logically defensible. By contrast, the German courts have long been willing to question accepted medical practice where it appears not to provide patients with the required degree of safety they deserve. Thus, in the years before Bolam the BGH, in 1952, noted that it was not sufficient to avoid liability to demonstrate that a particular practice was customary if it in fact did not provide the patient with the required protection from avoidable risks (BGH, BGHZ 8, 138. See also BGH, NJW 1987, 2291). This willingness to scrutinise medical conduct may also be seen in cases concerning the administrative and organisational arrangements for the provision of healthcare (Greiner, ‘Unerlaubte Handlungen’, 499, 504–508) but, it is important to stress, is not limited to this less technical arena. This view, supported by notable medical lawyers such as Giesen emphasises, in the final account, the judicial nature of the standard being imposed (Giesen, Wandlungen des Arzthaftungsrechts, 15; Greiner, ‘Unerlaubte ­Handlungen’, 495). In recent decades, ­Katzenmeier has defended the use of medical guidelines as the primary influence on constructing the relevant standard, noting that it is the task of the courts here to merely act as a ‘border control’ and, in most cases, follow the expert advice (Katzenmeier, ‘Arztfehler und ­Haftpflicht’, 341). While this may appear to reduce the difference between contemporary German and English positions, this is not, straightforwardly, the case. Commenting on the question from a comparative standpoint, Stauch, The Law of Medical Negligence, 45 suggests that the position in Germany is largely similar to that of the English law following Bolitho v City and Hackney Health Authority [1998] AC 232 – which clarified that there are limited circumstances in which an English court may reject customary medical practice – but with a stronger emphasis against finding that a practitioner was not at fault simply because they conformed with the relevant accepted practice or guidelines. Indeed, this normative element of the German standard may be more clearly viewed where it is impossible to yet speak of a standard in medical practice, as is often the case with new and developing treatments. There, the German courts must themselves police whether the defendant has shown the care required of a prudent practitioner (BGH, NJW 2007, 2774; BGH, VersR 2007, 995; Spickhoff, ‘Behandlungsvertrag’ 441–42). In any case, we shall see below that the question of constructing the standard to be applied is not the only way in which the German law may be thought more indulgent towards patients.

iv.  Setting an Objective Standard The relevant standard that the court focuses on in the usual circumstance will be that attained by the average expert (Facharzt) in the relevant field (BGH, NJW 1996,780; BGH, NJW 1987, 1479; BGH, NJW 1998, 2736), but remains objective rather than subjective to the particular practitioner (BGH, NJW 2011, 1672). Yet, where a practitioner is particularly highly skilled, then, unless there has been an agreement that the usual standard of care will be provided, they will be held to the appropriate standard that their higher degree of ability merits (Spickhoff, ‘Behandlungsvertrag’, 442; BGH, NJW 1987, 1479; BGH, NJW 1997, 3090). Where dealing with a junior doctor (Assistenzarzt), or those still in training, the courts are, as in England (see Wilsher v Essex Area Health Authority [1987] QB 730),

Types of Claim  141 unwilling to lower the standard of care that may be expected by a patient and often focus on the need for a suitably qualified practitioner to be present during an operation in order to actively monitor their colleague’s ability to perform the treatment properly (OLG Oldenburg, NJW-RR 1999, 1327; Greiner, ‘Unerlaubte Handlungen’, 496–99). Indeed, as Stauch notes, the focus of liability often shifts in such cases towards the overseeing practitioner or institution for allowing an underqualified practitioner to undertake treatment in the first place (Stauch, The Law of Medical Negligence, 37, citing BGH, NJW 1984, 655). Indeed the PatRG has now enacted, in §630h IV BGB, a presumption that where a patient has been treated by an underqualified practitioner and has suffered an injury to their life, body or health, this was caused as a result of the underqualification. Where their level of expertise and knowledge is sufficient, there is no need for a junior practitioner to be overseen by a more qualified colleague (OLG Düsseldorf, NJW 1994, 1598). Whether the standard may be adjusted, albeit by straining the notion of objectivity, to account for a practitioner in training to be a specialist remains contested but there are cases where the courts have been willing to adjust the standard to account for this (BGH, NJW 1994, 3009; Greiner, ‘Unerlaubte Handlungen’, 496). Regardless of a practitioner’s degree of training, subjective factors such as fatigue, overwork and age are irrelevant in the process of constructing the standard to be applied (BGH, NJW 1987, 1479). Practitioners at all levels are expected to remain conversant with the state of the medical scientific literature as it pertains to their field (BGH, NJW 2012, 2453), with a greater degree of awareness of foreign developments expected only from top specialists (BGH, VersR 1962, 155; BGH, NJW 1991,1537)

v.  Alternative Medicine When confronted with alternative practitioners or therapies, the court cannot simply assume that allopathic treatment is superior, and instead must interrogate – again with the help of expert evidence – whether this is capable of offering the required degree of protection from risk (BGH, NJW 1995, 2930). Although as one leading commentary notes, the liability of those, such as spiritualists, who entice their clients into foregoing medically indicated treatment is harshly policed (BVerfG, NJW 2004, 2890). Equally, this admirable judicial willingness to take most schools of ‘medical’ thought at face value is balanced with often stringent requirements to ensure that the patient is fully informed about the risks and the options available from more mainstream medicine. Where the patient is fully aware of these however, and chooses the alternative route, liability is unlikely to result (BGH, VersR 1991, 469).

B.  Disclosure Malpractice Rigorous judicial policing of information disclosure is the hallmark of the German law where claims revolving around disclosure appear in up to two-thirds of medical liability claims (Stauch, The Law of Medical Negligence, 95). The overarching aim of the law here is to fully vindicate a patient’s right, enshrined in Articles 1 I, 2 II and 2 II GG, to selfdetermination. (See the emphasis upon respecting the patients’ dignity in the early post-war cases such as case 77, although, as set out below, the standard of disclosure has developed

142  Medical Liability further since then.) The case law here is both extensive and sophisticated and, following 2013, now depends, as a matter of doctrine, on the new codified provisions of the BGB enacted by the PatRG.

i.  The Importance of the Patient’s Consent While English law maintains a judicial and doctrinal disinclination to hold a medical practitioner liable for trespass (Chatterton v Gerson [1981] QB 432), the German law suffers no such bifurcation between trespass and negligence, and thus may address the question in a more straightforward manner. The root of the law here is an 1894 decision of the RG (RG, RGSt 25, 375) which, as a matter of criminal law, held that a medical intervention carried out on a patient without their consent – even if successful or to the patient’s eventual betterment – was, as a matter of law, in principle a criminal act. This Körperverletzungsdoktrin, is one of the most controversial aspects of medical liability and has come in for fierce criticism ever since. However, the courts have long held their ground here and the choice not to readdress this position in the PatRG now settles the question for the foreseeable future. From relatively early in the era of the BGB this characterisation of non-consensual medical intervention came to supply the necessary unlawful element of a claim under § 823 I BGB and, by the 1930s, formed the genesis of the corollary duty on medical practitioners to disclose the necessary information on which patients would be able to make their decision to undergo treatment or not (see Stauch, The Law of Medical Negligence, 107–12; RGZ 163, 129). Thus, in contrast to the English law here, the German law may properly be thought of as protecting informed consent.

ii.  The Burden of Proof and ‘Hypothetical Consent’ It has always been the case that it is for the defendant medical practitioner to prove sufficient information was provided to the patient. Although this approach has its roots in the Körperverletzungsdoktrin, it is now enshrined in § 630h II BGB, justified, in part, on the basis that the defendant is in a position to better document the process of obtaining the patient’s consent (Münchener Kommentar/Wagner, § 630h BGB, no 34). It remains open to the defendant to argue that, had the patient been properly informed, they would have consented (hypothetische Einwilligung), although in practice this requires the defendant to vault a high bar. In particular, the plea may be defeated if the patient can demonstrate that, rather than the refusal of consent being clearly against their interests, they would instead have been faced with a genuine dilemma (echten Entscheidungskonflikt) as to which choice to make (case 76; BGH, NJW 2015, 74).

iii.  What Must be Disclosed? While much of the content of the disclosure duty, described accurately by Katzenmeier, ‘Arztfehler und Haftpflicht’, 107) as both demanding and not rarely complicated, was originally mapped out in the context of tort decisions, the duty has now been encapsulated in

Types of Claim  143 the new §§ 630d and 630e BGB and, thus, shifted to the law of contract, although it remains simultaneously a contractual and a tortious wrong with identical contours when it comes to content (BGH, NJW 2005, 1718). § 630d I BGB sets out the requirement that the treating party acquire the consent of the patient (or their custodian) before the implementation of any treatment, while § 630e BGB now captures the content of the information that must be delivered to a capacitous patient in order for their consent to be valid. The breadth of the protection given to patients is clear from § 630e BGB. The starting position for the legal analysis is set out in § 630e I BGB: The treatment provider is obliged to inform the patient of all the circumstances relevant to consent. These include the nature, scope, implementation, expected consequences and risks of the procedure, as well as its necessity, urgency, appropriateness and chances of success in the light of the diagnosis or therapy. Information includes referring to alternatives to the procedure, if several medically recognised and usual methods can lead to significantly different consequences, risks of chances of recovery.

iv.  A Subjective Standard for Risk Disclosure Nevertheless, the circumstances listed in § 630e I BGB are only indicative of what sort of information must be provided, and each case must be decided on its own merits. The courts will look to see whether the patient was put in a position where they could fully vindicate their underlying right to self-determination, and thus a fixed list of what must be disclosed cannot be provided in advance by either the legislature, or the courts (BGH, NJW 1986, 780). As to the standard that a practitioner must apply in assessing what information about risks is relevant, unlike in English law where the courts look first to the objective standard of the reasonable person in the position of the patient, and only where there are special circumstances, consider what would be significant to the particular patient (Montgomery v Lanarkshire Health Board [2015] UKSC 11; [2015] AC 1430) the German case law focuses strongly on the concrete situation of each particular patient (see case 79; also BGH, NJW 1980, 2751; BGH, NJW 1986, 780; BGH, NJW, 1994, 3012; BVerfG, NJW 1979, 1925). Only by doing that, can each patient’s individual right to self-­determination be properly vindicated. The strong subjective focus on each individual patient is balanced by the courts only requiring that the patient is given the information in broad terms (im Großen und Ganzen; BGH, NJW 1977, 337; BGH, NJW 1984, 1397) and the extent of disclosure is often taken to be inversely proportional to the urgency with which treatment is required and its likely success (BGH, NJW 1991, 2349). Thus, the patient does not have to understand the precise nature of the risk in medical terms (BGH, VersR 1992, 238), but rather only the type or risk and the severity of the consequences for their lives (BGH, NJW 1990, 2929). Nevertheless, where satisfied that a particular risk does threaten a patient’s lifestyle, the mere fact that the statistical magnitude of the risk is very small, indeed barely perceptible in some cases, will not dissuade the court from holding that it ought, nevertheless, to have been disclosed (case 76 and case 79). Particularly where the situation is not threatening, the courts will require a thorough canvassing of the risks (BGH, NJW 1980, 1905), and certainly more so where an operation is merely cosmetic in nature (BGH, NJW 1972, 335; BGH, NJW 1991, 2349).

144  Medical Liability

v.  Disclosing Alternative Available Treatments As to alternatives, the starting point is the freedom of the practitioner to choose what they regard as the appropriate treatment, the so-called Therapiefreiheit. The standard of practice set out in § 630a BGB governs both the choices available within that freedom and whether a treatment is regarded as an alternative to that suggested by the practitioner. Only where there are multiple possible treatments, each with a different risk profile or chance of success, do these have to be disclosed; although it is not necessary that the scientific discussion about the risks associated with an alternative treatment is comprehensively settled within medical practice, merely that some reputable practitioners regard it as suitable (case 78). In short, there must be a real choice between the possible treatments (eine echte Wahlmöglichkeit; BGH, NJW 1997, 1637; OLG Köln, VersR 2000, 767), which is often the case where one option is more conservative than the other. Equally, emerging or new treatments, which have not yet reached the point at which they may be considered as standard practice are unlikely to have to be disclosed unless the practitioner knows that it would be particularly efficacious for their patient due to some special characteristic of that case (Spickhoff, ‘Behandlungsvertrag’, 461). Conversely, the BGH has held that the novelty of a treatment proposed may have to be disclosed (case 78); BGH, and where the risk profile is not yet known, the patient clearly informed of this (BGH, NJW 2006, 2477). In hewing closely to that standard of practice at any given moment, the cases here are more restrictive than those concerning the disclosure of risks, demonstrating the courts’ keen awareness of the implications for resource allocation (Stauch, The Law of ­Medical Negligence, 110 ff). Indeed, in keeping with the insurance-based system that underpins healthcare provision in Germany, a practitioner’s disclosure duty had been taken by the courts to include information about the economic consequences of the treatment, ­particularly where it is not covered by insurance (BGH, NJW 2000, 3429) This is now captured by § 630c III BGB.

vi.  Implementing Disclosure in Practice Finally, to a greater extent than English law, the German law has considered not only the content of the duty, but also its implementation. § 630e II BGB requires that the information must be delivered orally by either the practitioner, or someone trained appropriately, with the patient also receiving any documents that have been referred to. This may be achieved by telephone (BGH, NJW 2010, 2430), but previous cases, where merely written information was deemed sufficient for routine cases (case 78) are now impossible to support in practice on this point (Spickhoff, ‘Behandlungsvertrag’, 465–66). In addition, the information must be delivered in a timely fashion to allow the patient a period to reflect and weigh the relevant information. While, again, courts tailor their assessment to the concrete situation, so the lower the risk the closer to the treatment that disclosure may be made (BGH, NJW 1995, 2410) and with most inpatient procedures the courts will insist on disclosure being made at least the day before (BGH, NJW 1998, 2734) unless the circumstances requiring treatment have arisen in an emergency (Katzenmeier, ‘Arztfehler und Haftpflicht’, 113). Finally, the information must be understandable for the patient. As with the assessment of what information must be disclosed, this is tied to the particular patient and, thus, formulaic or technical language is unlikely to satisfy this requirement.

Procedural Indulgences  145

IV.  Procedural Indulgences The PatRG also encapsulated, in § 630h BGB, the numerous procedural indulgences that the courts had developed over the twentieth century. Thus, it is not simply the case that the German law is more favourable to patients than the English law in terms of the standards it uses to judge medical conduct, and the greater willingness to scrutinise accepted medical practice, it is the existence of well-defined exceptions to the normal procedural rules that ease the burden of proving the patient’s case. Indeed, the difficulties inherent in demonstrating that there has been an error in the course of treatment have long been assumed by many leading authors, somewhat cynically perhaps, to be a central motivation behind the courts’ willingness to find that the patient’s right to full disclosure has not been vindicated (Spickhoff, ‘Behandlungsvertrag’, 470 ff). These various reversals and indulgences may apply variously to either treatment errors or disclosure errors. Two are particularly notable innovations in light of the continued distaste among English courts for providing such procedural indulgences in medical liability cases. (See the discussion on the burden of proof by the Court of Appeal in Wilsher v Essex Area Health Authority [1987] QB 730.)

A.  Fully Controllable Risks § 630h I BGB raises a presumption of fault (but not of causation) where injury has resulted to the patient from a general treatment risk that was fully controllable (voll beherrschbare Risiken) by the medical practitioner or institution. This is most often deployed in the context of the organisation or administration of a healthcare institution where the risk that causes harm emerges from the setting within which treatment is administered rather than a mistake on the part of the treating practitioner (BGH, NJW 1994, 1594; BGH, NJW 2007, 1682). In particular, the provision of appropriate levels of pharmaceuticals, medical products, machinery and patient oversight measures are all common categories of cases here (BGH, NJW 1978, 584). In order to be considered fully controllable, it is vital to demonstrate that, with appropriate care, the risk could have been practically excluded (BGH, NJW 1991, 1541).

B.  Gross Treatment Errors Drawing on the extensive earlier case law of the BGH, § 630h V BGB provides full reversal of the burden of proof where there has been a gross treatment error (grobe Behandlungsfehler) on the part of the defendant and that has led to an injury to the life, body or health of the claimant. In such cases, the court will presume the error to have caused the injury, satisfying so-called haftungsbegründende Kausalität. As Wagner notes, the claimant’s difficulty in sheeting home their case in this area, arises not because the patient lacks access to the information that would make this process easier, but rather from the epistemological difficulties of causation that plague medical malpractice and create an often insurmountable hurdle for the patient (Münchener Kommentar/Wagner, § 630h BGB, no 76). Thus, he argues convincingly, § 630h V BGB, in shifting that full burden to the defendant, arguably operates as a

146  Medical Liability shift in liability rather than a simple, procedural shift in the burden of proof. This is particularly so given the broad definition given to the concept of a gross treatment error. The courts will look for an error that is contrary to proven rules of medical practice and is one that it is, objectively, incomprehensible that a doctor would allow to happen (BGH, NJW 1983, 2080; BGH, NJW 1998, 1780). Such errors may be held to have occurred in both diagnosis (BGH, NJW 1983, 333) and treatment (BGH, NJW 2008, 1304). Furthermore, a course of smaller, individual errors over the course of treatment may be taken as amounting to a gross error when viewed, in context, as a whole (BGH, NJW 2000, 2737).

V.  Extra-Judicial Alternatives Although the doctrinal regime that has been examined above goes to considerable lengths, compared with the English law, to alleviate many of the inherent difficulties associated with litigation concerning medical liability, for many patients, extra-judicial processes prove more inviting than going to court. This is because since the 1970s, and on the initiative of regional medical chambers, the regime overseen by the German courts has been joined by a nationwide system of arbitration panels and mediation groups (Gutachterkommissionen und Schlichtungsstellen) designed to offer aggrieved patients access to a relatively cheap and fast way of resolving their complaint and allow medical practitioners a less censorious forum within which their professional reputation and practice will be assessed. In short, it looks to counter the adversarialism that can turn litigation surrounding medical injury into a long and fraught experience for all concerned. Katzenmeier (‘Arztfehler und Haftpflicht’, 384) posits three principles that underpin this system: it is voluntary for all parties concerned; it is non-binding and without impact on either the right to go to law or the legal analysis thereof; and it is free for the principal parties. The boards offer patients the opportunity to have a panel of independent medical and legal experts assess the claim and produce an opinion (Gutachten) on whether the facts suggest negligent conduct or not. Ultimately, the aim is to use this opinion to speed up settlement of the issue by the practitioner’s insurer or to convince the patient to drop their claim altogether. Although not suitable for all potential medical liability claims, the system is viewed as a positive way of dealing with many routine and more straightforward cases. By way of an indication of their success, the national medical chamber (Bundesärztekammer) publishes annual statistics of the uptake rate. This reveals that the current number of cases considered by the boards is around 12,000 claims per year with around 24 per cent of closed cases in 2015 and 2016 resulting in a finding that there was an error causative of the patient’s injury.

7 No-Fault Liability Bibliography Lohsse, ‘The Development of Traffic Liability in Germany’ in Ernst, The Development of Traffic Liability (2010) ch 4; Scherpe, ‘Technological Change in Germany’ in Martín-Casals (ed), The Development of Liability in Relation to Technological Change (2010); Wagner, ‘Tort, Social Security, and No-Fault Schemes: Lessons from Real-World Experiments’ (2012) 23 Duke Journal of Comparative and International Law 1. Thus far, we have been considering mainly liability within the BGB itself. In order to understand how frequent kinds of accident in a broad sense give rise to compensation, it is necessary to consider the ways in which the legislator has intervened to provide schemes of compensation outside the Code. In a first section, we consider the German approach to no-fault liability, both before the BGB was introduced in 1900 and since. This chapter cannot deal in detail with all such statutes. In a comparative text, it is more interesting to concentrate on a few, frequently used areas of law. Accordingly, we will look at liability for railways and factory machinery, work accidents, road traffic accidents, and for defective products.

I.  German Approaches to No-Fault Liability A.  General Observations Tort liability was in German law traditionally based on fault. This was certainly true of the lex Aquilia, in a sense the fons et origo of Roman law which, in its turn, became the basis of the Gemeines Recht that prevailed in a large part of central Germany during the pre-codification era. The Allgemeines Preußisches Landrecht from 1794, in force mainly in the north and the east of the then German territory, had also based tort liability on fault; and so, of course, had the French Code which had also been adopted (with some smaller amendments) by yet another group of German states in the Rhine region. Apart from history, logic also dictated – and dictates – that ‘bad’ people must pay for the harm they cause and, usually, the greater the degree of their blameworthiness the greater the amount that they have to pay. But during the nineteenth century – especially in its latter half – the reverse of this proposition was also advocated by many lawyers: if there was no fault there should be no liability and the loss should be left to lie where it fell. The mixture of moralistic, economic and other arguments that led to the adoption of this attitude are reviewed by Professor Tunc in his excellent introductory chapter to the tort volume of the Encyclopedia

148  No-Fault Liability of International and Comparative Law, vol XI (1983) chapter 1. But, as Tunc has shown – and his observations though couched in broad comparative terms, also apply to German law – these arguments are hardly convincing. It could, of course, be argued that it would be asking too much of the nineteenthcentury draftsmen of the German Civil Code to see the weaknesses of the proposition that there can be no liability where there is no fault. The nineteenth century was the century when the fault rule reigned supreme. Yet, interestingly enough, some courts did make limited attempts to introduce strict liability automatically by discovering fault in particular activities. More importantly, during the latter part of the nineteenth century the German Parliament had enacted a number of specific but important statutes, which introduced risk liability (Gefährdungshaftung). So, if there was one national legislator in Europe at that time that had realised the limitations of the fault principle, it was the German. The problem of the foundation of tortious liability could thus have received a more unified and innovating treatment than was, in the end, actually accomplished. But legal tradition prevailed. Apart from one minor exception found in the BGB (§ 833 BGB) dealing with ‘luxury animals’, the Civil Code refused to be moved from the principle that liability for fault was the only acceptable basis for any obligation to compensate the victim. The specific legislation alluded to above, was treated as exceptional and denied the moral superiority attributed to provisions found in the BGB itself. This approach had many consequences. Notable among them are two. First, it set the pattern of the future development of strict liability in German law and in this respect set it apart from other civil law systems, notably the French. Second, it created a dual regime of liability, partly to be found in the BGB and partly in specific statutes, with resulting difficult problems of demarcation. The difficulties of demarcation, and the gaps that have resulted from this dual system of treating accidents, will be noted later on as particular aspects of these enactments are considered more closely. Here suffice it to note that the Janus-like nature of the German legislator, displaying a ‘social’ outlook in his special legislation, while remaining strongly ‘individualistic’ in his general BGB, did not pass without criticism even at the time. An extract from Gierke’s scathing comments brings out clearly the inconsistencies and dangerous consequences of this approach. He wrote Die soziale Aufgabe des Privatrechts (1889) 16–18 (translated by von Mehren and Gordley, The Civil Law System (2nd edn, 1977) 693): [I]t is a fatal error – an error committed by the draft of the German Civil Code – to think the social work can be left to special legislation so that the general private law can be shaped, without regard to the task that has thus been shifted, in a purely individualistic manner. There thus exist two systems ruled by completely different spirits: a system of the general civil law that contains the ‘pure’ private law, and a mass of special laws in which a private law, tarnished by and blended with public law, governs. On the one side a living, popular, socially coloured law full of inner stimulus, on the other an abstract mould, romanistic, individualistic, ossified in dead dogmatics. The real and true private law can now develop in all its logical splendour oblivious of the heretical special laws … But the general law is the native soil out of which the special laws also grow. By contact with the general law our youth learn legal thinking. The judges take their nourishment from it. What a fatal abyss opens before us! What a schism between the spirit of the normal administration of justice and the administrative jurisdiction that is being extended further and further! What a … danger of stagnation and degeneration of jurisprudence.

In the remainder of this subsection we shall concentrate on the peculiarly German method of introducing strict liability in the legal system. Then, in the next subsection (B) we shall

German Approaches to No-Fault Liability  149 note some features shared by these enactments and, finally, in subsection (C) we shall take a closer look at some of the most important statutes: the Strict Liability Act, the Road Traffic Act and related statutes.

B.  The German Approach to Strict Liability The passing of strict liability statutes is not a phenomenon unique to Germany. One can find specific statutory interventions in the common law system (eg, the English Animals Act 1971) and in other civil law systems. What is, however, typically German is the ­development of a legal tradition, going back to the first Prussian Railway Act of 1838, that the introduction of strict liability into the legal order is a prerogative of the legislature. This mentality, along with the carefully, and on the whole restrictively, drafted articles of the Civil Code had an important consequence. It made it difficult for German judges to develop the kind of general, all-embracing rules which their French counterparts were able to create thanks to the wide if not amorphous delict provisions found in their Code. As a result, though there are a number of situations where fault can be presumed, there is no general presumption of liability for damage caused by things (whether dangerous or not) under one’s control analogous to that established by the famous first paragraph of (what is now) Article 1242 of the French Code civil, or in a much more limited fashion in England (Rylands v Fletcher (1868) LR 3 HL 330), or any general rule dealing with ‘extra-hazardous’ activities. The next thing to note is that the introduction of strict liability was the result of different though not necessarily mutually exclusive factors, which influenced the mind of the legislator. (Indeed, looking at the strict liability acts one can trace the evolution of industrial and technological developments in modern Germany.) So, for example, it has for some time now been recognised that the social security legislation of the early 1880s, namely the Sickness Insurance Act of 1883 (Krankenversicherungsgesetz) and the Accident Insurance Act of 1884 (Unfallversicherungsgesetz), had predominantly political not legal motives. For they were largely prompted by Bismarck’s political calculation that the satisfaction of certain legitimate needs of the working classes concerning conditions of work and accident insurance would go a long way in ‘taking the wind out of the sails’ of the socialist movement which was at that time, in Germany and elsewhere, slowly gaining wider political support. In other instances, it was the novelty of the danger coupled perhaps with the risk of serious injury resulting from the operation in question. This was so, for example, in the case of the Prussian Railway Act of 1838 (later incorporated in the Imperial Act on Liability of 1871) and the Road Traffic Act 1909 (Straßenverkehrsgesetz, StVG), both of which dealt with potentially dangerous (and, at the time of their enactment, also novel) activities. In all instances, however, the utility of rail and, later, motor vehicle transportation was perceived. Clearly, increased benefit was accompanied by increased dangers. The solution was obviously to permit these activities and, indeed, to encourage them in various ways, but only on condition that they were saddled with the cost of the risks they entailed. In yet another group of cases, the enormity of the possible damage resulting from the activity in question was such that the activity could only be allowed to continue ‘at a very high price’. §§ 25 ff of the Act Relating to the Peaceful Use of Nuclear Energy and the Protection Against its Dangers (Gesetz über die friedliche Verwendung der ­Kernenergie und den Schutz gegen ihre Gefahren) 1985 – more briefly referred to as the Nuclear Energy

150  No-Fault Liability Act (Atomgesetz) – therefore imposes absolute liability on the operator of installations which are concerned with nuclear fusion or fission. This is also the case according to § 33 ff of the Air Traffic Act 2007 (Luftverkehrsgesetz) in relation to persons and property not in the aircraft. In both these instances, liability is truly ‘absolute’ in the sense that even the defence of force majeure is denied to the ‘operator’ (of the nuclear installation) and custodian (of the aircraft). Finally, the enormity of the potential harm that can be caused by water pollution must explain the (financially) unlimited liability imposed by § 89 of the Water Supply Act 2009 (Wasserhaushaltsgesetz) (originally from 1957). This is imposed on anyone who ‘introduces’ substances into water (which includes lakes, rivers, streams, ponds etc), thereby altering the quality of the water so as to render it harmful. The Imperial Act on Liability 1871 (Reichshaftpflichtgesetz, RHPfG), originally imposed strict liability for death or personal injury suffered by persons ‘in the course of operation of a railway’ (§ 1) and for mines, quarries, pits and factories (§ 2). The legislator had a variety of aims in mind when, in 1940 it extended the statute to cover property damage and in 1943 extended it further to cover death or personal injury caused, under certain specific circumstances, by gas, electricity, or steam. (The present version – the Haftpflichtgesetz of 1978 – includes harm caused by gases, fumes and piped fluids.) (For this history of the origins and amendments to this legislation see Scherpe, ‘Technological Change in Germany’, 134, 160–71.) Notable among these aims was the desire to facilitate the evidentiary burden of proof cast on the unfortunate victims of what the French, at that time, called the ‘anonymous accidents’ caused by modern industrial machinery. (See Josserand, Cours de droit civil positif français (2nd edn, 1933) vol ii, no 415.) To some extent the same is also true of the most recent of these strict liability statutes – the Act on Pharmaceutical Products of 1976 (Arzneimittelgesetz). But arguably from the beginning, and certainly, with the passage of time, it became obvious that the imposition of strict liability in the above instances also aimed at placing the risks of these activities on the shoulders of those who could best carry them. For all these industrial concerns were in a far better position to spread the cost of accidents either by reflecting it in the form of minute increases in the cost of their products or, later, by their greater ability to insure. The same motive can also be found in modern product liability law, though the 1989 Product Liability Act (Produkthaftungsgesetz) had, as its immediate cause, the (then) EEC’s desire to try to achieve greater harmonisation of the law of the Member States. Be that as it may, the fact is that in our modern mechanised society a variety of policy aims accounted for the steady increase of legislative enactments, each dealing with a fairly narrowly defined activity or risks emanating from ownership of potentially dangerous things or substances. Some of the problems raised by this patchy growth of the law will be noted in the next subsections.

C.  Some General Characteristics Shared by All or Most Strict Liability Enactments i.  Similar or Analogous Clauses Though one of the ideas behind specific legislation is to allow the legislator to word his provisions in a way most appropriate to the particular risk or industry being regulated, this has not prevented the appearance in most of these enactments of almost identical provisions.

German Approaches to No-Fault Liability  151 One such provision – imposing maxima for monetary compensation – can be found in all but one of the statutes, and because of its importance it will be discussed separately below. Another common provision (eg, § 12 of the Strict Liability Act 1978; § 16 of the Road Traffic Act 1952) preserves the validity of the ‘common law’ – which, in effect, means the Civil Code – so that a victim can recover further sums by relying on the fault-based articles of the BGB. This, as we shall note, is often necessary. For, first, the monetary maxima imposed by these statutes (and discussed below) may not be sufficient. Secondly, and perhaps more importantly however, is the fact that compensation under these statutes originally did not include sums for pain and suffering. These could thus be claimed only if the fault-based provisions of the Civil Code can be successfully invoked. According to the 2002 Schadensersatzrechtsreform, this artificial restriction was abandoned. Damages for pain and suffering are now available also if the claimant bases his claim not on § 823 BGB but on the defendant’s strict liability under the various specialised statutes (see now § 253 BGB). At this stage, it is, perhaps, worth observing that other systems, which have on the whole adopted the German way of introducing strict liability by means of specific statutes, have not followed the German example of imposing monetary maxima or excluding from the statutory provisions compensation for pain and suffering. As a result of this arguably more logical approach to the problem, these systems have been able to provide for the exclusion of the ordinary rules of civil responsibility. A third type of common clause reduces the liability of the tortfeasor by taking into account the contributory fault of the victim. (See, eg, § 2a of the 1871 Imperial Act on ­Liability – now § 4 of the 1978 Strict Liability Act; § 27 of the Nuclear Energy Act.) The reduction of the damages awarded to the victim will be decided in accordance with § 254 BGB after weighing the victim’s own fault against the typical risks connected with the activity in question (the so-called ‘business risk’) and the causative connection with the victim’s injury (BGH, BGHZ 2, 355). In extreme cases this could mean either that the victim could lose his entire claim for compensation or the reverse, ie, receive full compensation despite some negligence on his part. In the context of traffic accidents, the recognition of this defence led to a net increase in contested cases. For there is hardly an incident in which the keeper of the vehicle will not invoke this defence and start a usually lengthy dispute into the exact facts of the accident. Many of the advantages of a strict liability statute can thus soon be lost in a controversy over facts which have little or reduced significance given today’s insurance background. The revision in 2002 to § 7 II of the Road Traffic Act reduced the scope for appealing to ­contributory fault. Whereas the previous version specifically treated the contributory fault of the victim as an instance of an ‘unavoidable event’, the 2002 reform simply limits the exclusion of liability of the keeper to vis maior (höhere Gewalt). This was particularly important in r­ elation to the many accidents in which children were the injured victims of motor vehicles (see Lohsse, ‘The Development of Traffic Liability in Germany’ 101).

ii.  Monetary Maxima Imposed on Compensation Paid Under these Statutes Save in the case of the Water Supply Act (and also in the case of § 833 BGB) all other strict liability statutes impose maximum amounts, which can be paid in the form of compensation under their respective provisions. However, recourse to the fault-based provisions of the BGB for additional compensation for pecuniary losses, as well as for pain and suffering, is in all cases expressly permitted. (See, eg, § 12 of the 1978 Strict Liability Act; § 16 of the 1952

152  No-Fault Liability Road Traffic Act; § 37 of the Air Traffic Act; § 31, § 38 of the Nuclear Energy Act.) Here the only limitation on the tortfeasor’s liability is, practically speaking, his capacity to pay or, if he is insured, the ceiling of his insurance coverage. Thus, if a person is killed or injured through the operation of electricity, gas, steam, or current escaping from a cable or a pipeline or a plant for the provision of such energy or material (§ 2 of the Strict Liability Act 1978), then the concern in question will be liable to indemnify to the full his medical expenses (§ 6 of the Strict Liability Act 1978) and to compensate him for his lost earnings by paying him an annuity of not more than €600,000 or an annuity of €36,000 per annum per victim (§ 9 of the Strict Liability Act 1978). And the liability under the Act (§ 10 of the Strict Liability Act 1978) for property damage will not exceed €300,000. (This figure applies even if more than one object was damaged in the course of the same accident; but it does not apply to damage to buildings.) In the case of motor vehicle accidents, to which the Road Traffic Act of 19 December 1952 applies, the sums are €36,000 in the form of an annuity or a maximum lump sum of €600,000. Where several persons are killed or injured in the same accident, the liability of the person responsible normally cannot exceed in total the amount of €5 million. But in the case of automated or driverless cars, the maximum liability is €10 million. Where the vehicle is being driven as part of a business and more than eight people are killed or injured, then the limit is extended by €600,000 for every person over the eight. The total liability under the Road Traffic Act for damage to property is, again, €1 million and this even where several objects are damaged in the same accident (§ 12 I of the Road Traffic Act; see also § 37 of the Air Traffic Act and § 30 of the Nuclear Energy Act). The limit is raised to €2 million in the case of automated or driverless vehicles These figures represent true maxima so that if, for example, more than one person or car is injured or damaged in the same accident the total amount available will have to be shared between them all. Who, in the case of a traffic accident, is responsible for paying these sums will be discussed in greater detail in section II.C.ii, below. Here suffice it to state that since the enactment of the Obligatory Insurance Act in 1939, the ‘keeper’ of any car is obliged to take out third-party insurance which, as a minimum, covers the above sums. Needless to say, the growing cost of road accidents, coupled with the very real possibility of the ‘keeper’ of the car being made additionally liable under § 823 I BGB, has meant that insurance policies are covering risks. Policies with cover in excess of €100 million are no longer unusual. A governmental decree sets the minimum cover required in order to take into account inflation and other rising costs. As stated, the regulation of compensation through statutory maxima makes it increasingly likely that in cases of serious accidents the ‘common law’ – ie, the BGB – will be invoked. This, of course, means that the victim is then thrown back into the fault system with all the theoretical and practical disadvantages that this entails (delays, costs, uncertainty of result, increasing the load of court work). Even so, the victim’s position has, once again, been improved in recent years by the development of three devices. The first is the ‘discovery of new duties of care’ which were discussed above, in chapter two, section IV). The second way is to treat many of the provisions of the Road Traffic Act as ‘protective laws’ and allow the victim to bring an action under § 823 II BGB (discussed in chapter three). Finally, the German courts are, in many cases, willing to invoke the doctrine of prima facie proof – Anscheinsbeweis – which is analogous to the common law doctrine of res ipsa loquitur. In practice, this can often result in the surreptitious introduction of strict liability in a system which, judging by the letter of its Civil Code, remains faithful to the idea of fault.

German Approaches to No-Fault Liability  153

iii.  The Courts’ Role in Defining the Precise Ambit of the Statutes As one would expect, all these enactments contain terms or notions, which though simple and obvious at face value, have given rise to many difficulties of proper demarcation. In the face of these observations, the courts have not been inactive and the rich case law that has emerged clearly presents great interest both to the academic and practising lawyer. Here, for reasons of space, we shall limit our observations to three points. First, is the use of normative theories of causation as a means of defining the proper ambit of the statute in question. Secondly, comes the occasional tendency to construe narrowly certain provisions. Finally, we note the tendency in other, more numerous, instances to define more widely a particular statutory term, and thus to enlarge the scope of the statute in question. In all these instances we find illustrations of how the courts have exercised the rather limited role ascribed to them by legal tradition in the area of strict liability. 1. Compensation under the strict liability rules will clearly be limited to the extent that the harm complained of represents the realisation of precisely that danger which prompted the legislator to enact the strict liability rule. The search for the protective aim of the violated norm thus becomes as important in this area of the law as it is when discussing causation problems arising from the violation of fault-based rules (§ 823 I and II BGB; see above, chapter two, section V). The limits of the liability will, therefore, be determined by discovering whether the type of harm in suit and the manner of its infliction was of the kind the statute wished to prevent. The search for an answer to such questions will, obviously, start by looking at the wording of the relevant statute. For example, was the claimant injured ‘in the course of the operation of a motor vehicle’? (beim Betrieb des Fahrzeuges: § 7 I of the Road Traffic Act.), or was he killed ‘in the course of the operation of a railway’ (§ 1 of the Strict Liability Act)? In all these cases, the end result will largely be determined by the judge’s value judgement of the situation, which will often lead him to an interpretation of the enactment against the background of contemporary socio-economic demands. A decision of the BGH in 1959 brings this point out very clearly (case 80). The Court in that case had to decide whether a stationary vehicle could be brought under § 7 I of the Road Traffic Act. This, as will be explained below, imposes strict liability upon the keeper of a motor vehicle which ‘in the course of operation’ injures or kills another person. In the Court’s view, if the legislator has not provided any … explanation, it is for the judge to interpret this ambiguous concept [accident in the course of operation]. The judge is, therefore, not prohibited from interpreting § 7 of the Road Traffic Act broadly if in so doing he conforms to the sense and purpose of the enactment to protect participants in traffic against the dangers of motor traffic. It is therefore entirely within the scope of permissible interpretation if this protection … is extended also to the dangers produced by stationary vehicles in present-day traffic conditions.

Clearly, continued the Court, even if the legislator of 1909 [when the first Road Traffic Act came into force] saw the chief danger of motor vehicles, in their rapid movement due to engine power … that would not exclude the adaptation of the concept ‘in the operation of a motor vehicle’ to the experiences and requirements of present-day traffic.

In the end, therefore, the use of normative theories of causation can lead – as AngloAmerican lawyers have also discovered – to a considerable flexibility. In turn, this can

154  No-Fault Liability produce an extension (and not only a restriction) of liability, rendering the defendant liable for all the ‘typical’ consequences inherent in his business activity. 2. An example of narrowing liability can be found in the area of application of § 833 BGB in so far as it imposes strict liability. Here, it must be shown that the harm caused was the result of the specific dangers arising from the animal’s nature. Damage caused by a bolting horse – even where the cause of its fright is an external noise – or from a biting dog, would clearly be the kind of typical harm that animals of this kind can cause. But the injury suffered by a rider who borrowed from a friend a horse, which he knew to be unruly when ridden by strangers, in order to demonstrate his greater riding skills, would not lead to strict liability of the owner of the horse. (BGH, NJW 1974, 234; BGH, NJW 1977, 2158). Nor, as Professor Kötz and Professor Wagner have suggested (Kötz/Wagner, no 534) would a cyclist, who collided in darkness with the corpse of a dead dog, be able to sue its owner under § 833 BGB. For in such a case, the harm to the claimant cannot be traced back to a special risk inherent in the animal. The example may seem far-fetched, but this kind of reasoning produced the same (negative) conclusion in a case where the claimant’s cellar was flooded as a result of his drains being blocked by cow dung from the defendant’s cows (LG Köln, MDR 1960, 924). At this point a brief excursus can show how the same kind of legal reasoning can be found in precisely the same area of the law in the common law system. Thus, section 4(1) of the Animals Act, enacted in England in 1971, imposes strict liability for ‘damage’ done by straying livestock ‘to the land or to any property on it’. The definition of damage in this section is narrower than the general definition given in section 11 of the Animals Act, which includes personal injury and disease. The narrower definition of section 4(1) of the Animals Act is generally taken to prevail in this case since it is regarded as lex specialis (eg, Winfield and Jolowicz, On Tort (19th edn by WE Peel and J Goudkamp, 2014) § 17-019 and footnote 68). For our purposes, however, it could be seen as a statutory embodiment of the scope of the rule theory. In other words, it can be said that the legislator wished to impose strict liability only when the typical consequences resulting from cattle trespassing actually occurred (damage to land, crops etc). When other harmful consequences flowed from such straying livestock (eg, human beings were trampled down) then liability should be based on the possible fault of their owner and not on the statute. A similar narrow interpretation of the rules of strict liability has been adopted in other instances outside the area of the Civil Code. The Water Supply Act imposes, as we have seen, strict liability on anyone who ‘introduces’ (leitet ein, bringt ein) substances into water, thereby prejudicially altering its physical, chemical, or biological characteristics. The deliberate discharge by factories of pollutants into nearby rivers, lakes, ponds, or estuaries is, of course, caught by this provision. But so is the discharge of substances which do not affect the quality of water and marine life therein, even if its effects are not known to the person (legal or physical) who is carrying on these activities. On the other hand, the courts insist that for harmful conduct to be brought under this statute it must be shown that there was ‘a positive act objectively aimed at the water’. As stated, this would include the above activities of ‘discharge’ of substances, but would exclude, for example, a collision between two petrol tankers which led to one of them falling into a nearby river and thereby accidentally emptying its contents into the water. More often than not, however, the courts use the avowed purpose of the rule imposing strict liability in order to give an extended meaning to a term or phrase to be found in one of the enactments. A number of illustrations will be given in section II.C below, when we

German Approaches to No-Fault Liability  155 talk about traffic accidents. Here we shall, therefore, concentrate on one of the best-known examples which can be found in the definition of a ‘railway’ in § 1 of the old Imperial Act on Liability – now included in the 1978 Strict Liability Act. Today, there is no doubt that ‘railway’ includes all types of transport moving on rails – whether wide or narrow gauge, or moving above or beneath the metal rails in question; indeed, the Strict Liability Act has made this clear by expressly including cable cars and suspension railways. But the statute also requires that the accident happened ‘in the course of the operation of a railway’. The question thus arises whether this statute can be extended to cover other activities carrying with them risks not unrelated to the kinds of danger peculiar in some sense to the operation of a railway. This question as to whether the accident can be regarded as a ‘business accident’ (Betriebsunfall) and thus covered by the statute was, in a sense, linked with the question of proper definition of a railway. Both were raised in one of the early cases that came before the RG in 1879 (RG, RGZ 1, 247). In that case, the defendant, a building contractor, was engaged in the business of constructing a railway and was moving earth around in tipping-wagons operated on a narrow-gauge rail when the accident occurred. The Court of Appeal refused to apply § 1 of the Imperial Act on Liability of 1871. Its decision was reversed by the RG in a judgment most notable for its polemical style against all attempts (favoured by some judges and academics) to give a narrow interpretation to the recent Imperial enactment. The RG openly alluded to the policy factor briefly mentioned at the beginning of this paragraph. It concluded that any narrow interpretation of the wording of the statute, of the kind adopted by the Court of Appeal, would lead to the emasculation of the new statute and should, therefore, be rejected. As a result of this bold judgment, and after many others took a similarly broad view of the notion of ‘business accident’, German law has now come to include under the protective ambit of this paragraph not only typical accidents connected with railways, such as deaths or injuries resulting from the sudden application of brakes (even where this is caused by the totally unexpected appearance of a child or animal on the tracks: RG, RGZ 54, 404; BGH, VersR 1955, 346), swaying or swinging of carriages, derailments, or accidents caused by faulty signalling, but also cases where passengers are injured on platforms when jostled by other passengers during rush hour. For this to happen, however, there must exist a ‘direct external local and temporal connection between the accident and a particular business procedure or business installation belonging to the railway’ (BGH, BGHZ 1, 17, 19). This rather verbose statement can lead to some fine distinctions so that, for example, if the claimant’s injury is caused by the kind of jostling that takes place in crowded stations or results from an uneven or slippery surface of the platform, the railway concerned will be liable. But if the injury resulting from the fall was caused by, say, the presence of black ice, formed by freezing rain, then the liability of the railway would have to be based on fault (ie, pleaded under § 823 I BGB). However, it is always possible in this case to try and argue that the water that froze, and caused the fall of the claimant, came from a railway engine or found its way onto the platform because of a defect in the station roof. If such an allegation is substantiated, then one could again be back under the heading of ‘business accident’ and thus be able to invoke strict liability. Given the desirability of avoiding such niceties and, one might add, given the prevalence of modern insurance, it is not surprising to note a very clear tendency to interpret the statute ‘generously’ and thereby afford maximum protection to victims. This is a result that other legal systems have also succeeded in achieving.

156  No-Fault Liability In addition, there is often the possibility of liability in contract, when a passenger with a ticket is moving around the station in order to board or alight from a train (see case 72). This case reflects the distinction now made between the activities of the train operating company (Deutsche Bahn) and the network operator. Both are potentially liable as operators of the rail business, but there may be issues about identifying the person liable (see further Kötz/ Wagner, no 526).

iv.  Is Analogical Extension of the Statutory Rules Possible? We have already noted how the German courts carved out for themselves an important area of activity in this otherwise statute-dominated part of the law. Yet they stopped short of taking the most vital step, which would have placed them on an approximate par with the legislature, when they refused to arrogate to themselves the right to extend analogically specific statutes to new situations raising similar issues of public policy. The important judgment of the RG of 1912, RGZ 78, 171, that marked the beginning of this judicial attitude towards this matter, is reproduced below as case 86. (For other instances see RG, RGZ 147, 353; BGH, BGHZ 54, 332.) The litigation was provoked by an accident caused when one of Count von Zeppelin’s experimental airships was forced by bad weather to land and then broke its moorings, injuring one of the many spectators who had spontaneously gathered to witness this novel sight. An attempt to extend analogically the recently enacted (3 May 1909) Road Traffic Act was rejected by the Reichsgericht on the ground of the exceptional nature of this piece of legislation. Yet, the policy reasons behind the legislator’s decision to enact the Traffic Act (novel form of transport, increased dangers etc) were, arguably, equally to be found in airships; and, indeed, other German-inspired systems, such as the Austrian, which has allowed their courts to extend statutes analogically, imposing strict liability (see cases cited by Zweigert/Kötz, 657). In 1912, however, the RG refused to accept this and the BGH has continued to do so (see, eg, BGH, BGHZ 55, 229 and cases cited previously). The ‘tame’ language employed in that famous judgment thus stands in stark contrast to the ‘bold’ approach adopted some 30 years earlier when, for a moment, the Court seemed to indicate its willingness to play a part in expanding the grounds of strict liability.

v.  A Critical Epilogue Though necessarily brief, our sketch of the German way of introducing strict liability has already revealed some of the system’s cardinal weaknesses. The notion that only the legislator can introduce strict liability has resulted in a delayed, patchy and complicated system for handling accidents resulting from new technology and more generally, the risks of modern life. It has been delayed because, inevitably, there always was, and always will be, a time lag between new technological developments and the time when the legislator intervenes in order to regulate them. The result is that until such intervention occurs, the courts have to step in and handle as best they can the problems posed by new technology. (Some illustrations can be found in RGZ 17, 103 (protection of property before the enlargement of § 1 of the Imperial Act on Liability, discussed in section III and below); RG, JW 1938, 1234; RG, RGZ 147, 353 (liability of electricity companies before the 1943 extension of the Imperial Act on Liability); RG, DJZ 11, 1316 (car accident before the enactment of the 1909 Road Traffic Act).)

Five Specific Areas of Strict Liability  157 It was patchy, since each statute only handled specific problems, on the basis of the scientific and technological information available at the time of their enactment, while leaving often related activities or risks outside their purview. The inability to extend these enactments analogically only aggravated the difficulties. Some German scholars have for some time now been pointing out the capriciousness of the existing law and advocating the adoption of a more generalised provision to deal with this subject. So, for example, why cannot the dangers inherent in operating an explosives factory be assimilated to those of the gas industry dealt with by § 2 of the Strict Liability Act? Could it not be said that the operation of a large river dam poses risks broadly analogous to those found in nuclear stations regulated by § 25 of the Nuclear Energy Act? Should the spraying of a poisonous insecticide lead to strict liability only if it contaminates water, in accordance with § 22 of the Water Supply Act, but not when it destroys or dangerously contaminates useful crops? Or why should a contractor using a tipping-wagon for the construction of a railway be strictly liable for any damage he causes, but only be liable upon proof of fault if he is simply helping build a factory or a large block of flats? Other systems have provided for strict liability not only in the case of specifically mentioned activities, but also in all those instances where an activity carries with it an increased danger for others. The system is complicated because the imposition of maxima for monetary compensation and the exclusion under these statutes of all compensation for pain and suffering often means recourse to the ordinary, fault-based liability rules to be found in the BGB. If these ‘limitations’ imposed by the statutes were dictated by fears of unlimited liability and unbearable economic consequences, especially at a time when insurance was not as widely spread as it is today, then the time has surely come to reconsider the validity of this kind of argument. Certainly, the absence of any maxima in compensation paid under the Water Supply Act has caused no problems. In motor vehicle insurance, coverage in excess of the maximum amount provided by the statute is widely obtained without a considerable increase in premium cost. Finally, the Swiss experience, quite different in this respect from the German, has not justified the fears expressed in Germany concerning an extension of the rules of strict liability. A more unified treatment of its problems would, it is submitted, be a considerable improvement on the status quo. But, despite many rumblings, and even more proposals for reform, the present system seems unlikely to be greatly changed in the near future. Thus, in this as in so many other areas of civil liability (eg, § 831 BGB; express recognition of the right of personality etc) the codal framework has proved too resistant to much needed change.

II.  Five Specific Areas of Strict Liability A.  The Strict Liability Act 1978 It was stated earlier that the history of the German strict liability statutes follows closely the development and expansion of modern industry. The Strict Liability Act of 1978 brings this point out very clearly. The origin of this Act can, in a sense, be traced back to the 1838 Prussian Railways Act – by any reckoning a most pioneering enactment. For when it was enacted, the Kingdom of Prussia had less than 100 kilometres of railway tracks so there was really no pressing

158  No-Fault Liability practical need for such a measure. But capitalism in those days also had its paternalistic aspects; and, in any event, the economic consequences resulting from the imposition of strict liability for harm to persons or property ‘resulting from carriage on the railway’ (§ 25 of the Prussian Railways Act) hardly affected the mainly landowning dominant class. The importance of the railway system for the economy and, later, the defence of the realm, was quickly perceived by the German leaders. The investment in an efficient national railway system was considerable and with the unification of the Reich, the 1838 enactment was to serve as the model of the Imperial Liability Act of 1871 (Reichshaftpflichtgesetz, RHPfG). This statute introduced strict liability for railway carriage throughout the entire Reich. But the 1871 version of the statute was also narrower than its model – which remained in force in Prussia and certain other parts of Germany (and also served as the model of for Austrian enactment of 1869). § 1 of the Reichshaftpflichtgesetz of 1871 limited strict liability to cases of death or personal injury only (and excluded property damage) resulting from the ‘operating of the railway’. This discrepancy between the old, geographically limited but in one respect wider statute and the Imperial enactment posed difficult problems which a number of courts tried to resolve by extending strict liability to property damage caused by the operation of railways (cf RG, RGZ 17, 103). These attempts, however, achieved only limited success and, on the contrary, attracted some hostile academic criticism. It was not, therefore, until the enactment of the 1897 Commercial Code (Handelsgesetzbuch) that some measure of uniformity was achieved in the area of liability for carriage of goods. This trend was firmly consolidated in 1940 when a special statute, amending the Reichshaftpflichtgesetz of 1871 Imperial law, introduced strict liability for property damage as well (Gesetz über die Haftpflicht der Eisenbahnen und Strassenbahnen für Sachschäden). This position is, of course, now also clearly reflected in § 1 of the Strict Liability Act of 1978. Apart from this ‘retrograde’ step, connected with the exclusion of property damage from the scope of the 1871 statute, the Reichshaftpflichtgesetz was a far-reaching enactment. § 2 of the Act, for example, imposed what we would call true vicarious liability on the operators of mines, quarries, pits and factories for the damage caused by the faults of their authorised agents or representatives. This was a great step forward for those persons working in these industries and most exposed to their dangers. And the progress was even greater if taken together with another set of provisions of the Reichshaftpflichtgesetz – §§ 6 and 7 of the Act – which greatly increased the discretion of the courts in evaluating the evidence and the amount of damages to be awarded. This ‘free evaluation’ principle (freie Überzeugung), as it became known was a great innovatory step when compared with the rigid rules of procedure applicable at the time. (It was subsequently widely adopted by the Code of Civil Procedure of 1879 with the result that §§ 6 and 7 of the Reichshaftpflichtgesetz became redundant and were abolished.) But the more equitable treatment of industrial accidents did not stop there. The passing of the social security legislation of the early 1880s gave even greater protection to the working classes for accidents at work, and the consolidation of the entire law of social insurance by the 1911 Reichsversicherungsordnung removed accidents at work from the province of the law of tort. A bird’s eye view of this system will be given in the next subsection. The expansion of the Reichshaftpflichtgesetz continued well into the twentieth century. Apart from the enlargement that took place in 1940 in order to include property damage, a further amendment was introduced in 1943. This extended the ambit of the statute to cover injury to persons or damage to property resulting from the operation of electricity,

Five Specific Areas of Strict Liability  159 gas, steam, or current escaping from cables, pipelines, or plants for the provision of such energy or materials. The 1978 Strict Liability Act extended strict liability further so as to include gases, fumes and piped fluids, but in other respects it can be regarded as a consolidating act. Finally, one should note that the Strict Liability Act contains the usual defences – contributory fault of the victim (§ 4 of the Strict Liability Act) and force majeure (höhere Gewalt) (§ 3 of the Strict Liability Act), which is interpreted in a very stringent manner (and thus is more demanding a test than that of unavoidable event: unabwendbares Ereignis). Thus, in one case (BGH, BGHZ 7, 338) the young claimant was electrocuted when his kite – secured by a metal wire and not, as is usual, by a string – came into contact with an overhead electricity cable. Though the facts of the case were, clearly, very atypical, the BGH refused to treat this as a case of an unavoidable accident and held the electricity operators liable to the victim.

B.  Accidents at Work and Social Security Legislation in Modern German Law Since 1884 Germany has had a no-fault compulsory insurance scheme covering accidents at work, the so-called gesetzliche Unfallversicherung (statutory accident insurance). This has been amended and expanded in various ways by subsequent enactments and now forms part of a wider and more comprehensive system of social security that covers such things as permanent incapacity for work as well as sickness. Here we shall limit our comments to the treatment given to accidents at work, a phrase which should be taken to include not only injuries sustained while actually at work but also accidents occurring while travelling to and from work. (Hence in practice we have, here, a considerable overlap with the compensation system established by the Road Traffic Act discussed below.) The importance of this statutory insurance can be seen from the fact that two-thirds of the population of Germany is currently covered (Kötz/Wagner, no 579). Awards are made to all those in paid employment (whether German nationals or not) and certain groups of self-employed persons. Since 1971, children and students have been covered by the schemes and this group is certainly not negligible in terms of pay-outs (Kötz/Wagner, no 601). The significance of this area is that German law takes a broad interpretation of the concept of a ‘work accident’. There is a list of recognised industrial illnesses to which others can be added with the necessary scientific proof. If the victim’s illness can be identified in this way, then there is no need for litigation to obtain compensation. Travelling to and from work has been covered since 1925 (now § 8 II Sozialgesetzbuch, Book VII, (hereafter ‘SGBVII’)), whether as a pedestrian, a passenger on public transport or as a passenger or driver in a vehicle. This has an important impact on compensation for vehicle accidents. As long as the injury is sufficiently connected to the work activity, then compensation can be sought for an injury. It is not required that the work activity should be the sole cause. In general, the way to work begins at the front door of the flat or house and ends in the workplace. All the same, there are inevitable borderline cases where someone takes a roundabout route to go to work (see Kötz/Wagner, nos. 588–90). In general, this is an easier burden of proof than civil litigation (see Kötz/Wagner, nos 584–85). This ground for compensation

160  No-Fault Liability also avoids the complications of § 831 BGB where the employer may be able to escape liability by showing adequate supervision or by showing that the fault is that of a fellow employee who has been suitably supervised. For work injuries, the victim is met by no such defences in claiming compensation (see Kötz/Wagner, no 586). Compensation in the above cases is made through various schemes which are administered by trade cooperatives or institutes (Berufsgenossenschaften) which are separate legal entities, usually in close contact with one another, and under the general supervision and responsibility of the Minister of Labour and Social Security. The institutes function on a territorial basis and are organised to cover different commercial or other activities. There are in all some 9 industrial accident insurance institutes following reforms in 2008–2011. These institutes are self-governed by boards or councils, usually composed of equal numbers of employers and employees. Every employer is automatically a member of the institute appropriate to his firm’s activities in the locality in which it carries on its business. Institutes may provide voluntary insurance for the self-employed in their areas and some actually make this compulsory. The financing of the various institutes is a complicated affair. Generally speaking, revenue from taxes funds those institutes, which insure public employees; and the funds of agricultural institutes are subsidised by the central (federal) government. The 9 industrial accident insurance institutes, on the other hand, derive their funds entirely from contributions made by employers, though there is the possibility (realised once only) of mutual financial help. The contributions vary depending on the risk factor attendant on the branch of industry to which the member belongs as well as on the risk rating of the firm in question. These figures are reviewed periodically and contributions tend to vary from one to 12 per cent of earnings (see generally Kötz/Wagner, nos 596–98). The awards are made by the officials of the appropriate institutes; and there is an intricate system of appeals to local state and federal courts. A basic assumption of the system is that if an employee is entitled to compensation under SGB VII (for an accident suffered at work), save in cases of intentionally inflicted injury, the injured victim cannot claim any further compensation by relying on the ordinary tort rules of the BGB: the employer or any other colleague of the victim who may also be responsible for the accident enjoy an immunity (§§ 104, 105 SGB VII). Hence, this is the only main area in which tort law in Germany has been completely replaced by a compulsory and statutory insurance scheme. It is interesting to note that one of the main objects of tort – to provide incentives to reduce the risk of accidents – has been apparently achieved by other means. In 1976, the institutes running the system introduced a system by which the contribution of the individual employer also depended on the number of accidents in his company. As a result, the overall number of accidents has decreased significantly. (cf Kötz/Schäfer 189 AcP (1989) 501.) The statutory scheme just described thus provides a number of advantages/incentives to employers. But is the system also acceptable from the employee’s perspective? One of the main advantages is that the employee will be able to obtain compensation from a solvent debtor and he will not have to establish the fault of the employer. Nor will his own contributory fault be taken into account to reduce his ‘damages’. This highlights once again the overall aim of social protection of the system. Its main disadvantage is, of course, that the employee cannot recover damages for pain and suffering. On the other hand, the system of awards tends to be closely connected with the victim’s pre-accident earnings

Five Specific Areas of Strict Liability  161 and the sums recoverable can thus often be quite generous. More precisely, the system of an abstract assessment of the victim’s earning disability tends – to some extent – to generate windfall payments. Imagine a legal representative who while on a business trip has an accident and loses his right arm. This means that according to the disability guidelines his earning capacity will be diminished by 75 per cent. Generally speaking, whether or not he subsequently learns to write with his left hand and performs his duties just as he did before the accident will not be taken into account. (Limited exceptions from this are contained in §§ 85, 87 SGB  VII.) Moreover, pensions and other periodic payments are index-linked. What is awarded depends largely upon whether the case is one of personal injury or death. Awards for personal injuries will cover medical costs, including the costs of nursing, convalescence and rehabilitation. The vast majority of cases will be dealt with under the general sickness insurance schemes (which are financed by contributions from both employers and employees). But the accident insurance institutes will meet all costs after the eighteenth day and, in about 15–20 per cent of the cases, depending on the type and seriousness of the injury, they take over responsibility from the outset and handle the case through their own specialists and hospitals. The institutes will also pay varying sums for loss of wages depending on the degree of invalidity incurred (minimum 20 per cent) and the period it lasts, but during the first six weeks of incapacity the employer remains responsible for paying the victim’s wages. Total incapacity will usually produce approximately 65 per cent of the pre-accident wages for the first 13 weeks of incapacity, and from then on a pension equal to two-thirds of the pre-accident wages within certain maximum limits. In the case of partial incapacity, the sums payable represent the proportion of the sum payable in the case of total incapacity that corresponds to the actual degree of incapacity and these sums are increased by small amounts if the injured person has dependants. In the case of fatal accidents, a sum equal to one month’s earnings plus funeral expenses becomes payable immediately. In addition to this sum, a widow would receive a pension, which is usually 30 per cent of the deceased husband’s pre-accident income. This sum can be increased to 40 per cent where the widow is over the age of 45 or her own earning capacity is reduced by at least 50 per cent, or if she has children to look after. Children can also receive a pension, which is higher where both parents are dead and lower if one of the parents has died. The sums, once again, calculated on the pre-accident earnings of the parent, are index-linked, and cease to be paid when the child becomes 18. A widower, too, can claim a pension, but only where he can show that his wife was mainly responsible for the maintenance of the family and that he is, through incapacity, unable to support himself. Naturally, this applies if the wife died in an industrial accident as defined above. A final issue that is of great practical importance in this context of accidents at work is whether the insurance institution can recoup from the tortfeasor the compensation it has paid to the victim. According to § 110 SGB VII the employer (or another employee) is liable to the extent that the insurer paid the victim; this is however subject to the crucial condition that the accident was caused intentionally or by gross negligence. In the case of a deliberately caused accident this seems perfectly sensible. But this may be more difficult to justify in the case of gross negligence since the advantages of certainty and simplicity of the social security system may thus be undermined. If on the other hand a third party caused the accident negligently, then the victim’s claim in tort against the third party will be transferred to the insurer (cessio legis): § 116 SGB VII. This has given rise to difficulties

162  No-Fault Liability in cases where both the employer and a third party have caused the injuries. The question then is whether the third party is fully liable or whether his liability ought to be limited to his share of the blame. The courts have adopted the latter view (BGH, BGHZ 51, 37; BGH, NJW 1987, 2669). Otherwise the third party (who might be 10 per cent responsible) would be required to pay compensation for 100 per cent of the loss sustained by the victim, while at the same time he could not claim any contribution from the employer, who is 90 per cent to blame, but who enjoys an immunity from liability as against the victim: § 104 SGB VII. This cannot be right. The aim of the statutory insurance scheme is not to deprive third parties of their right to contribution (§§ 840, 426 BGB) but to protect the employer who finances the insurer by paying premiums. Thus, the insurer will be able to recover only 10 per cent of the loss in our example. It goes without saying, as the example given also shows, that the rights to recoup awards of compensation raise intricate issues and require a special infrastructure to deal with them. In certain areas, where the third party is, himself, insured, the social security institutions sometimes enter into so-called general ‘loss-sharing-agreements’ with the private insurer (Teilungsabkommen). The claim is then settled on the basis of previous statistical experience without looking at the facts of the individual case. This saves the cost of establishing the respective portions of negligence in the individual case but it also departs from the idea of personal responsibility for one’s acts under § 823 I BGB. This is most likely the case in the area of car accidents, for here insurance is compulsory.

C.  The Road Traffic Act 1952 i.  General Observations The twentieth century presented tort law with challenges never before encountered during its long history. A set of legal rules, originally devised for human beings, were increasingly applied to legal entities. Rules, which are meant to regulate the consequences of blameworthy conduct were used to determine the allocation of risks. Modern insurance and social security meant that more and more of those who met the cost of accidents were innocent absentees. One could go on and on with this list with the intention either to criticise the ‘antiquated’ tort system and recommend its reform or abolition or, alternatively, to marvel at its ability to survive such changes. This is not the place to do either. But it is, perhaps, appropriate to remind the reader that the topic that has revealed the greater weaknesses of tort law, has prompted some of its most imaginative writing, and has proved a veritable hotbed for ideas for reform, is the law of traffic accidents. The practical significance of the topic is undisputed. In Germany, with whose system we are here primarily concerned, the cost of car accidents, in both human and financial terms, is enormous. In 2017, there were about 62.6 million licensed vehicles. In the same year, the police registered 2,637,547 accidents in which 3,177 people were killed and 301,169 injured. Given the complexity of the compensation system – which draws its funds both from social security and private insurance – it is difficult to give an accurate idea of the financial cost. Whatever else these figures may suggest, they certainly make one wonder whether and to what extent the strict liability statute has succeeded in accelerating compensation for victims of traffic accidents and reducing the volume of civil litigation.

Five Specific Areas of Strict Liability  163 Clearly, the topic is one of those that could justify on its own an ‘advanced course in tort law’. Here we shall only outline the German approach under three headings. In the first, we shall sketch briefly the gradual expansion of the statute law in order to assure a more comprehensive protection of victims of car accidents. In the second, we shall describe the main liability provisions of the Road Traffic Act of 1952. In the third, we shall consider some of the shortcomings of the present law in the light of some brief comparative observations.

ii.  Increasing Protection Through Statutory Interventions We have already noted that the introduction of strict liability in German law has been a closely guarded legislative prerogative. In this area of the law, legislative intervention on two fronts (the purely delictual and the insurance front) has been coupled with a close regulatory function on the part of the state. In different ways both have tried to improve the protection given to victims, the public in general, and in some cases, the insured keepers of the cars. The process has been a gradual one. The first attempts to introduce strict liability were made nearly two years after the BGB came into force, hence in 1902. A conference of lawyers then passed a resolution demanding the extension of the Imperial Liability Act of 1871 to motor vehicles (even though at that time there were fewer than 2,000 cars on the road) and, what is particularly interesting, proposing the creation of a mandatory cooperative riskspreading association. (Verhandlungen des Sechsundzwanzigsten Deutschen ­Juristentages I, 27–55; III, 163–207 (Berlin, 1902, 1903).) The idea met with some success with the government, which even went so far as to present Parliament with a Bill in 1905. But by that time the motor car lobby was also gaining strength. So the Motor Vehicle Act (Gesetz über Verkehr mit Kraftfahrzeugen) that was finally enacted on 3 May 1909, was a compromise. First, it introduced maxima for monetary compensation, which the Imperial Liability Act 1871 in its original form did not contain. Secondly, it included no proposals for some kind of insurance scheme (as proposed by the 1902 conference). Thirdly, it excluded from its application death or injuries suffered by the driver or non-paying passengers. The idea behind this last restriction was that the rationale of strict liability for car accidents was the danger posed to road users by fast-moving objects. Strict or stricter forms of liability by means of specific statutes were first introduced by Denmark in 1903 (and were considerably extended by a 1918 amendment). Sweden followed suit in 1906 (and its statute was further amended in 1916), then came Greece in 1911, Norway in 1912, Finland in 1925, Switzerland in 1932 and the Netherlands in 1935. A readable account of the very different evolution of the English common law during this same period can be found in an article written by Spencer in [1983] Cambridge Law Journal 65 ff. After various amendments and re-enactments, the 1909 Motor Vehicles Act became the Road Traffic Act of 19 December 1952 and has since then survived basically unchanged. But the introduction of strict liability helps the victims of traffic accidents only so long as the tortfeasors can and will pay. In the absence of obligatory insurance this could not originally be guaranteed, even though many German drivers voluntarily obtained insurance coverage after the enactment of the 1909 Motor Vehicles Act. In the 1930s, however, a new trend started to manifest itself. In 1931 warehouse operators were, under certain circumstances, obliged to carry insurance; in 1936 the same was true for aeroplanes. Obligatory third-party liability insurance for cars was clearly not far away. In fact, it became a reality on 7 November 1939, when the first Obligatory Insurance Act came into force

164  No-Fault Liability imposing on the ‘keeper’ of a motor vehicle an obligation to carry insurance for himself and for the authorised driver of his vehicle. But there were still important gaps and, following the 1959 European Convention on Compulsory Insurance against Civil Liability in Respect of Motor Vehicles, the 1939 Act was revised and re-enacted under the short title Pflichtversicherungsgesetz of 5 April 1965. The main two loopholes that were closed by this enactment concerned (i) uninsured cars and (ii) hit-and-run accidents. In effect, the Act ‘legalised’ an unofficial agreement that the insurance industry had operated since 1955. A private non-profit corporation, controlled and managed by the insurers, was created and compensation was provided out of its funds to the victims of the above-mentioned type of accidents. But compensation from the fund was limited in two important ways. First, it was entirely secondary in nature and could be claimed only if no compensation could be obtained from any other source. Secondly, it was limited to the statutory maxima (now €600,000) and was and is further limited to claims for actual pecuniary damages arising from death or injury. Property damage, therefore, and pain and suffering are not compensated under this scheme save in very exceptional circumstances of real hardship. The other insurance gap that remained to be filled was connected with the possibility of an insurance company going bankrupt and being unable to meet its obligations. Though not something that has happened frequently – indeed so far as one can discover there exists only a handful of such incidents – German insurers decided to intervene in this area as well. Thus, in 1968 they created a private law corporation known as the Aid for Traffic Victims Fund (Verkehrsopferhilfe eV) which meets to the full all claims made against insolvent members, subject to a small deduction. The increased legislative intervention described in the preceding paragraphs has created a regulatory background against which the modern insurance market operates. The intricate nature of the rules so established stems partly from the need to regulate the interrelationship with the social security system of compensation, notably through the establishment of a complicated system of subrogation. The complexity also becomes inevitable when one remembers that one is here trying to protect at one and the same time the interests of (i) the public at large, (ii) the injured person and (iii) the insured himself. The protection of the public at large is assured first by the creation of the obligatory system of liability insurance. (Only the Federal State, the States of the Federal Republic and certain public institutions are exempt from this requirement.) Secondly, this protection is ensured by imposing an obligation on insurers to provide the minimum mandatory coverage (application for insurance coverage cannot be refused except in certain narrowly defined cases given in § 6 of the 1965 Obligatory Insurance Act). Thirdly, the protection is ensured by the establishment of an elaborate administrative system by which no car is put on the road without a valid licence and, for this to be obtained, a valid certificate of insurance must be produced. Operating a car in contravention of the above is made a criminal offence, and penalties are also imposed if the termination of an insurance policy is not notified without delay to the licensing authority. The protection of the injured person is, clearly, also furthered by all the above rules. In addition, however, since 1965 the victim has been given a direct right of action against the insurer (§ 3 of the Obligatory Insurance Act, following the French model of the action directe). The victim can rely on the insurance policy even after its cancellation, but only if the claim is made within one month from the cancellation being notified to the licensing authority. Moreover, the victim’s rights against the insurer are protected against the risk of

Five Specific Areas of Strict Liability  165 the contract being void or voidable or the insurer having some other defence against the insured. Defences of the insurer are that the insured failed to pay the insurance premiums on time, or that the insured breached some other collateral ‘obligation’ arising from the internal relationship between the insured and insurer. The most important example of this is found in cases where the insurer claims that the victim increased considerably the risk of an accident by driving under the influence of alcohol or not keeping the car in a safe condition for driving. Finally, since 1965 the insurer is also liable for the damage caused by unauthorised drivers of vehicles for which their keeper is not liable under § 7 III of the Road Traffic Act. This is because the insurance covers the respective driver of the insured whether he may be authorised by the keeper or not. As a result of all these statutory provisions, the victim’s protection under the compulsory insurance scheme is almost absolute. This can be understood only if one acknowledges that this comprehensive insurance coverage serves mainly a social purpose. This is to protect the injured but at the same time to spread the risk of this immensely useful but also highly dangerous activity to the whole community of those carrying out the activity. The general rule as to statutory insurance schemes is that the insurer’s liability to the victim is limited to the amounts, if any, that the victim cannot recover from other sources – notably the social security system (§ 117 Versicherungsvertragsgesetz (VVG), Insurance Contracts Act). It should be noted however that this rule does not generally apply in the context of car insurance (§ 3 of the Obligatory Insurance Act.) The insurer’s liability is not excluded by the fact that the injured is entitled under a social security system. In these cases, the victim’s medical expenses and even lost earnings are met by the appropriate social sickness insurance or social accident insurance. Given the dominant role in the compensation system played by the various social security schemes, the insurance companies tend to be brought into the picture at a later phase when the social insurance carrier wishes to be subrogated to the compensation claims of the insured. (The victim’s claim is assigned by operation of law to the social security carrier, § 116 I Sozialgesetzbuch, Book X (SGB X).) The subsidiary liability of the car insurer is, in turn, subject to an exception where the insured breached one of the collateral ‘obligations’ (Obliegenheiten) owed to the insurer, the insurer is then relieved from his liability to the victim. Needless to say, an insurer who has paid the victim or his social security carrier may, in his turn, seek reimbursement from the insured person in accordance with the relative insurance laws and will be entitled to do so under § 3 of the Obligatory Insurance Act if the insured breached an obligation owed to the insurer. It should not be overlooked, however, that the insurer’s claim against the insured is in most cases limited by statute to an amount of €5,000 (§ 5 III 1 Kraftfahrzeug-Pflichtversicherungsverordnung, KfzPflVV). (There is no such limit in the case of reimbursement claims by social security carriers.) Where the injured is covered by social security legislation and in addition the insurer is not liable under § 3 of the Obligatory Insurance Act, the combined effect of the above rules will be that the insured will be held personally liable to the full extent. This is the case if certain obligations owed by the insured to the insurer are breached. In practice, as was already alluded to, the insurer will seek reimbursement from the insured in cases where the insured is in some way in breach of the contract of insurance. This will be the case where, for instance, the car is used by an unauthorised or unlicensed driver, or is used for unauthorised racing. The same would be true if the contract was concluded under fraud or misrepresentation or there was a failure to pay agreed premiums etc.

166  No-Fault Liability Thus, as Professor Kötz and Professor Wagner point out (Kötz/Wagner, no 569), the rules which govern the question whether the insured is protected by the policy acquire the function of determining whether and to what extent the keeper or driver of the car will be held personally liable for the accident. This is remarkable for this was originally the purpose of the rules governing ordinary delict and strict liability.

iii.  The Salient Features of the Road Traffic Act 1952 The leading provision of this enactment is, undeniably, § 7 of the Road Traffic Act. It imposes upon the ‘keeper’ or ‘holder’ (Halter des Fahrzeugs) of a ‘motor vehicle’ strict liability for personal injury, death and property damage resulting from the ‘operation of a motor car’. These three terms must be examined more closely. a.  Motor Vehicle This includes, according to § 1 II of the Road Traffic Act, all land vehicles, which are driven by mechanical force and are not attached to railway tracks. § 8 of the Road Traffic Act, however, excludes from the purview of the Act all slow-moving vehicles, ie, those whose maximum speed at ground level does not exceed 20 kilometres per hour (12.5 mph). Given the evidence that we now have that most lethal traffic accidents occur at speeds of under 30 mph, this provision of the statute seems of dubious validity. b. Keeper The liability is primarily imposed on the keeper of the car. The keeper is the person who uses the car at his own expense and who has the power of disposal that goes with such use (see RG, RGZ 127, 174, 175; BGH, BGHZ 13, 254 etc). The owner is usually deemed to be, but need not always be, the keeper. Cars driven by the employees of the keeper and causing damage will render him liable under the Act, the defence of bad selection or supervision, provided by § 831 BGB (discussed in chapter five, section I.E), not being available in this case. A person using a car on a short-term hire agreement will, usually, not be treated as its keeper (see BGH, BGHZ 32, 331; 37, 306). But in the case of a long-term hiring agreement, the user of the car may become its keeper if he is saddled with all the running costs (BGH, BGHZ 87, 133). If the car is used with the consent of the keeper, or it has been stolen because the keeper’s negligence facilitates such a theft, the keeper (along with the user: Benutzer) will remain liable under the Act (§ 7 III of the Road Traffic Act). But if the car is used without the keeper’s knowledge and consent – by a so-called ‘joy-rider’ (usually a thief) – then that person and not the keeper will be liable under the Road Traffic Act. The danger that could result from this rule to a victim of a car accident (impecuniosity of the ‘joy-rider’ and, hence, inability to meet the victim’s claims) has, as we have seen, been removed by the insurance legislation of 1965 which renders the insurer liable. The German statute – unlike those of Austria and Switzerland – also regulates in § 18 of the Road Traffic Act the liability of the driver. This, however, is only a prima facie liability, which the driver can rebut by proving that he was not negligent when driving the car. In practice, this exculpatory proof is very difficult to adduce, the courts imposing on drivers a very high standard of care indeed, and thus rendering the driver jointly liable with the keeper of the vehicle. When this is so,

Five Specific Areas of Strict Liability  167 § 17 of the Road Traffic Act is brought into operation and the extent of the compensation to be paid as between keeper and driver will be determined in accordance with the usual rules of contributory fault (§ 254 BGB). c.  Damage Caused in the Course of the Operation (Running) of the Car This is the last positive requirement for strict liability to be imposed on the keeper. As already indicated, this term has given rise to a very rich case law which is marked by the courts’ desire to extend the protection of the victims of traffic accidents. (Though, once again, their value judgements are often couched in causative language. See, eg, BGH, NJW 1972, 1808.) Naturally, the term ‘in operation’ includes the typical way harm is caused, namely through collisions with moving or even immovable objects (other cars, cycles, pedestrians, signposts etc). But no contact with the car that causes the injury is required. For example, in BGH, NJW 2017, 176: C was driving a vehicle along a road behind a motorbike ridden by D1. C wanted to overtake a car driven by D. He had moved out into the contrary carriageway and had almost completed the manoeuvre when the motorbike is alleged to have moved out to do the same thing and C moved further left to avoid him and ended up in the ditch causing injury to self and lorry. The BGH held: ‘It is sufficient that there is a danger arising from the vehicle and that the event causing harm is imprinted by the vehicle’. (See case 85.) A leakage of oil on the road or dropped cargo, which then causes an accident, can also be brought under this heading. An accident is caused by the ‘operation’ of a car even where the car is stationary and not, strictly speaking, ‘running’ on the road. Abandoned stationary vehicles (because the driver is having a rest or because they have broken down) which have caused an accident have thus also been brought under this heading (see, eg, BGH, BGHZ 29, 163, case 80); though a police car or a motor cycle which was parked in the middle of the road with its lights on to serve as a ‘signal’ that there was an accident ahead, was not included under the term ‘in operation’ (OLG Celle, DAR 1973, 183, 187). Accidents in a car park off the main road are still treated as caused by the ‘operation’ of the vehicle (BGH, NJW 2016, 1098 and BGH, NJW 2016, 1100). For example, the keeper of a car driving backwards in a supermarket carpark was held 60 per cent responsible for the damage caused to another vehicle in the car park under § 9 V of the Road Traffic Act. Even though they are not on a main road, keepers should anticipate the reversing of vehicles and so § 1 I of the Road Traffic Act still applies in that there is a mutual duty to look out for other vehicles. The case law, in its desire to invoke the strict liability of the Road Traffic Act and afford greater protection to victims has, in fact, gone even further than the above examples may suggest (though these results have not escaped criticism). In one case when a tank smashed a paddock fence thereby enabling a horse to escape onto the highway causing an accident, it was held that the accident had occurred in the course of ‘operating a motor vehicle’ (OLG Celle, NJW 1965, 1719). In other cases, a correct result has been reached by observing the proper purpose of § 7 of the Road Traffic Act. One such case is BGH, NJW 1975, 1886, which is reproduced below (case 82), not only because it illustrates the point just made, but also because it shows how casuistic the approach of German courts is in this respect. In that case the engine of a stationary specialised motor vehicle was kept ‘running’ in order to help to discharge its cargo in a silo. One of the questions the Court had to decide was whether damage caused during this operation could render the keeper of the vehicle liable

168  No-Fault Liability under § 7 of the Road Traffic Act. The BGH, overruling the OLG, held that it could not since, in principle, the statute only applied to ‘such perils … which emanate from the motor vehicle in its capacity of an engine serving transport’. The BGH continued: Since our legal system does not know of a general principle of strict liability for operating engines supplying power at work, § 7 of the Road Traffic Act cannot be applied to accidents which occur in consequence of technical processes which cannot any longer be reasonably connected with the character of the engine employed as part of a motor vehicle.

If the above requirements are satisfied, then the keeper of the vehicle will, usually, be liable to the extent provided by the Road Traffic Act (see its §§ 10, 11 and 12) and perhaps, additionally (see § 16 of the Road Traffic Act) in accordance with the general rules of the law of delict (namely § 823 I or II BGB). But the liability under the 1952 Road Traffic Act was originally excluded if he, the defendant, succeeded in proving that the accident was caused by an ‘unavoidable event’ (§ 7 II 2 of the old version of the Road Traffic Act). In 2002, in line with other strict liability statutes, the keeper’s liability was amended and restricted to being able to raise the defence of force majeure (höhere Gewalt). In an extreme example, a driver under the influence of alcohol and drugs, committed suicide by driving a car into a lorry. The keeper of the lorry sued the personal representatives of the keeper of the car who was also killed in the accident. The OLG Nürnberg (NJW 2011, 538) held that höhere Gewalt was defined as an event outside the operation [of the vehicle] caused externally by the forces of nature or the conduct of a third party, that was unforeseeable according to human insights and experience which could not have been prevented or made harmless with economically affordable means and with the utmost care and which is not to be taken into account by reason of its frequency.

In this case, the keeper of the care was tied up in the boot of the car and it was being driven without her knowledge or consent. She was not at fault in enabling the car to be used, and so höhere Gewalt was established. More commonly, the amended provision will make it difficult for the keeper to avoid liability where child pedestrians are injured by the movement of a vehicle (see Kötz/Wagner, no 555). In the past, occupants of the car were excluded from the protection of the Act, but this was altered by § 8a: see Kötz/Wagner, no 565. In this, and in other respects, one should note a considerable convergence between French and German road traffic liability, for example, in their respective case law on such key definitions as the involvement (implication) of the car in the accident in question. Finally, as was already alluded to, according to § 9 of the Road Traffic Act, the injured party’s contributory fault will also be taken into account. This can mean that, either this fault will be deemed to be the sole or main cause of the accident, or more likely, the victim’s fault will be considered as a contributing factor to his hurt and the damages awarded to him will be reduced in accordance with § 254 BGB. It is of first importance to observe how the nature of liability under the Road Traffic Act transforms the defence of § 254 BGB. It is not necessary for the defendant to invoke or establish the fault of the other driver or keeper if two or more cars are involved in an accident (§ 17 I of the Road Traffic Act). Decisive is the risk inherent to the respective vehicle in the circumstances (Betriebsgefahr). This means that if two cars collided and both drivers were without fault then each driver will be able to recover 50 per cent of his loss from the other provided that the two cars posed roughly the

Five Specific Areas of Strict Liability  169 same degree of danger. It should be noted that this is by no means rare. One must consider that fault needs to be proved by the claimant and this will often be difficult. Hence, in most cases an (expensive) expert will be instructed by the parties to reconstruct the accident and often it will remain impossible to ascertain the exact degree of negligence involved on either side. The expert will in effect determine the outcome of the trial either way. If fault is established on either side the respective rate of liability will shift accordingly up to a maximum of 100 per cent where the risk peculiar to the claimant’s car is totally outweighed by the defendant’s share of responsibility (for instance because he was grossly negligent).

iv.  A Comparative Epilogue Despite the fact that over the years a number of loopholes affecting traffic accident victims have been closed, German law on this subject still retains much of its vitality and controversial nature. Many of the criticisms have been voiced in a comparative way and it is appropriate in a book such as this to adopt a similar attitude. The German approach to traffic accidents via a strict statutory liability is not unique. Many countries have no-fault systems. But in addition to being different, the German approach was, despite gaps, also pioneering in so far as it introduced strict liability at a very early stage in the life of the motor car. (The Scandinavian countries took a similar approach at about the same time.) Yet, even allowing for the progressive closing of the gaps of the original enactment and recognising as undeniable the extension of the protection given to car accident victims, German law still remains, in some respects at least, less wide and less generous to victims than some of the more contemporary European systems. Two of its main weaknesses will be discussed below while a third – the extreme complexity of the compensation system – will be ignored since this accusation can also be levied against the English and French systems. Subject to the reform proviso explained above the first weakness of German law is the exclusion from the Traffic Act of injuries suffered by non-paying passengers. The older arguments invoked against such an extension (consent of the victim; impropriety of suing one’s ‘benefactor’ without at least proving some fault on his part), advanced in all systems, have been increasingly recognised for what they are – fictions, appropriate to an era when thirdparty liability insurance was not compulsory, but objectionable relics now that modern insurance practices have transformed this part of the law. Old practices, however, die hard, especially when the insurance lobby wishes to retain them. Insurance arguments also point to another weakness of the German system: the decision to reduce (and in extreme cases even eliminate) the victim’s damages because of his own contributory fault. The abolition by the courts of this defence is impossible in German law given the express statutory provisions of the main Act; but even the desire to do this has often been lacking. Proposals for reform have always been met with moralistic arguments that any such move would not only increase the number of accidents but would also sap tort law of much of its moral content. Empirical evidence, however, has shown that the first objection at least is not convincing. Many would thus be prepared to treat the legalistic arguments in favour of retaining the defence of contributory fault as a smokescreen concealing the vested interests of certain members of the legal profession who vehemently oppose the abolition of this lucrative source of revenue. Tort law is thus increasingly seen in the area

170  No-Fault Liability of law accidents as little more than a ‘forensic lottery’ (the title of a pioneering monograph by Professor Ison). Tort litigation (especially in France and in common law jurisdictions) has cluttered the overburdened courts even further. And tort law has itself been forced to encourage the growth of fictions (eg, the tendency to discover negligence in cases of unfortunate but statistically inevitable inattentions) in order to avoid the harshness of its rules. This comparative epilogue should, perhaps, end by reminding the reader that, once again, the study of the subject can be greatly enhanced by an interdisciplinary approach. The contact with insurance and with social security and health provision, in particular, must never be forgotten; and they could provide the ‘unifying link’ in any comparative study that sought to argue that legal borrowing is possible even in an area where historical and conceptual differences might at first sight seem to discourage it (see generally, Kötz/Wagner, nos 569 and 570).

D.  Statutory Liability for Products Bibliography Kullmann, Produkthaftungsgesetz (6th edn, 2010); Luczak, Das Recht der Produkthaftung in der Umsetzung der EG-Richtlinie (85/374/EWG) durch das deutsche Produkthaftungsgesetz vom 15.12.1989 (1992); Wagner, ‘The Development of Product Liability in Germany’ in Whittaker (ed), The Development of Product Liability (2010) ch 4; Whittaker, ‘Introduction to Fault in Product Liability’ in Whittaker (ed), The Development of Product Liability (2010) ch 1. In chapter four, we looked at the way product liability played an important part in the development of delict liability under § 823 I BGB. It was noted there that the law on product liability was changed in 1989 by the enactment of the Produkthaftungsgesetz. This law, like part 1 of the UK Consumer Protection Act 1987, was enacted to give effect in domestic law to European Community Directive 85/374/EEC, the Product Liability Directive. Indeed, many of its provisions are copied word for word from that Directive. The Court of Justice of the European Union has declared this Directive requires ‘a complete harmonization’ of the law within its scope – hence a maximum harmonisation (Case C-52/00 Commission v France [2002] ECR I-3827, paras 15–16; see also Whittaker, ‘Introduction to Fault in Product Liability’ in Whittaker (ed) (2010) 25–27.) As a result, there is limited scope for national variation. All the same, Article 13 of the Directive provides ‘This Directive shall not affect any rights which an injured person may have according to the rules of the law of contractual or non-contractual liability or a special liability system existing at the moment when this Directive is notified’. This savings clause does not preclude ‘the application of other systems of contractual or non-contractual liability based on other grounds, such as fault or warranty in respect of latent defects’ (Case C-154/00 Commission v Greece [2002] ECR I-3879, para 18). In this way, it preserves the law mentioned in chapter four – for Germany this means § 823 BGB remains applicable. In addition, it preserves the distinct regime in German law of pharmaceutical products. As Wagner (‘The Development of Product Liability in Germany’ in Whittaker (ed (2010) 134) explains, the principle iura novit curia makes it unnecessary for the claimant to choose whether to rely on the Product Liability Act or on the Civil Code as the basis for her action.

Five Specific Areas of Strict Liability  171 There are a number of reasons for continuing to rely on the BGB in the first place. First, Article 9 of the Directive has a narrow definition of ‘property’ and it excludes property used for commercial purposes (see also § 1 I of the Product Liability Act). Secondly, there is a threshold for claims of €500 (§ 11 of the Product Liability Act) and a maximum of €85,000,000 for claims relating to one incident of defect (see § 10 of the Product Liability Act). Thirdly, until 2002, damages for non-pecuniary losses (such as pain and suffering) were excluded, but the German reforms of the BGB in that year also amended the Product Liability Act in that regard (see now § 253 BGB). The Product Liability Act is more generous if the victim dies, since it covers attempted medical treatments and lost earnings (see § 7 of the Product Liability Act). It is therefore sometimes concluded that the differences between the Product Liability Act and the BGB can be confusing and haphazard, and that the German courts interpret both to help the victim to navigate to the best solution. Because the Product Liability Act represents EU-wide harmonised law, this is not the place to provide a systematic presentation of all its provisions. It is sufficient to identify a number of issues on which German law and German courts have taken distinctive positions. The most important question is whether liability under the Directive and the Product Liability Act is ‘strict’ or not. Wagner (‘The Development of Product Liability in Germany’ in Whittaker (ed) (2010) 137–38) argues that it is not. Only if ‘fault’ is interpreted as meaning a subjective failure to take care reflecting the idiosyncratic situation and knowledge of the defendant producer does the Product Liability Act introduce a real change in the standard of liability. This was not the case. As we have seen in chapter four, German law already operated a presumption of fault that was difficult to rebut under § 823 I BGB. Basing liability on the notion of ‘defect’, not ‘fault’ changes little. In addition, German law was already sophisticated in identifying defects relating to manufacture, design and instruction, as well as development risks. In Wagner’s view (‘The Development of Product Liability in Germany’ in Whittaker (ed) (2010) 145) ‘It is only in the area of manufacturing defects that the Product Liability Act goes further than the law of delict and really creates liability without negligence’. German courts reinserted their division of manufacturing, design and instruction/warning into the interpretation of the Product Liability Act: case 51, where a mineral bottle exploded. This is very significant, as strict liability under the Directive really only applies to manufacturing defects, which is still stricter than under § 823 BGB, where the ‘odd unit’ defence applies through the fault test. Failure in meeting consumer expectations might play a role in identifying defects in instructions and design, they do not really apply in manufacturing. There is a more objective standard of a safe product. But with the exception of the ‘odd unit’ defence, the standard for product liability under the Product Liability Act and the Directive is not significantly stricter than under the fault provisions of the BGB. The ‘products’ to which the Product Liability Act applies include all movables and even electricity (see § 2 of the Product Liability Act) – with the exception of medical products intended for human use (§ 15 I of the Product Liability Act). The German courts have interpreted the concept of products broadly. For example, in BGH, NJW 2014, 2106, the defendant as operator of the electricity network held that liability arose for a power surge. The product (‘electricity’) is distributed when the network distribution chain reaches the end-user. In his commentary, Wagner (Münchener Kommentar/Wagner, § 2 ProdHG, no  17) notes that, to keep the concept in step with technological developments, it needs to be interpreted teleologically. He illustrates this with the way smart technology works.

172  No-Fault Liability The homeowner may be licensed to use software to control remotely her household appliances by connecting her computer or smart phone to the cloud. Would the sharing in software be a ‘product’, a movable (material) thing, within the meaning of § 2 of the Product Liability Act? If the software misbehaves, will the Product Liability Act produce a remedy? The issue of computer software raises the general question of what is it to be ‘manufactured’? Very often an installation requires a manufactured item to be fitted in order to work. For example, surgery to replace a hip with an artificial hip. In OLG Koblenz, VersR 2014, 251, it was held that where the surgeon only replaced part of a hip with a defective artificial component, the resulting hip was not ‘manufactured’. It was not a case of product liability, but clinical liability under § 823 I BGB (besides the possible contractual liability). Furthermore, these products must, be ‘defective’ in the sense that they lack the security one is entitled to expect from them (§ 3 of the Product Liability Act). The definition of defect is thus stricter than that found in § 434 BGB of the section on the law of sales which defines the defect by reference to the reduced value or utility of the sold object. An example of a failure in safety is seen in BGH, NJW 2013, 1302. A hot water machine installed under a table exploded when the water supply was stopped. It was held that the manufacturer of a product which was to be distributed to a variety of customers must provide sufficient instructions about the existence and management of potential dangers so that the least informed and least competent consumer would take notice of potential risks. The product should be designed so that it can be installed and used without danger, which the Dutch manufacturer had failed to prove here. In effect, the German court was introducing the idea of defect of instructions found in interpretations of the BGB into the concept of manufacturing defect within the Product Liability Act. This liability envisaged by the statute falls on the ‘producer’. This person is primarily the manufacturer (Hersteller) (§ 4 of the Product Liability Act). If more than one is implicated, their liability is in solidum (gesamtschuldnerisch: § 5 of the Product Liability Act). Clearly manufacturers of finished products, component parts and new materials are subject to the regime of the Product Liability Act (§ 4 I of the Product Liability Act reflecting Article 3 I of the Product Liability Directive). But the Product Liability Directive (Article 3 I of the Directive) and the Product Liability Act (§ 4 I of the Act) resolved an ambiguity that existed in German law prior to 1989 by categorising anyone ‘who presents himself as the producer by affixing to a product his name, trade name, or other distinguishing feature’ as a “producer”’. Dealers were also not normally liable for not testing products (BGH, NJW 1980, 119), though there was a greater inclination to find dealer-importers liable given the difficulty of enforcing judgments against foreign manufacturers. Immunity, however, seemed the rule rather than the exception (BGH, NJW 1987, 1009). Again, the regime of the Product Liability Act is stricter. § 4 III of the Product Liability Act thus follows Article 3 III of the Product Liability Directive, making the supplier liable under the Product Liability Act whenever the producer cannot be identified. The ‘harm’ to which the Product Liability Act applies covers personal injury and damage to (other) property (see § 1 I of the Product Liability Act) but not economic loss or the so-called, insidious spreading loss (Weiterfresserschaden). (See chapter four for the Weiterfresserschaden.) In the case of death, funeral expenses can also be claimed; and, in what is an interesting illustration of claimable ricochet damage, the Product Liability Act expressly allows dependants to claim their own loss of support (§ 7 II of the Product Liability Act).

Five Specific Areas of Strict Liability  173

E.  Other Statutory Provisions for Products Another way in which the claimant may choose to base his claim is on one or the other, related statutes of strict liability. The Pharmaceutical Products Act (Arzneimittelgesetz) of 1976, in force since 1 January 1978 and modified on 9 August 1994, imposes strict liability on pharmaceutical concerns which introduce into the market drugs for human use or consumption (the Product Liability Act is not applicable here: see § 15 I of the Product Liability Act) which produce harmful results that go beyond those which current medical opinion regards as acceptable (see § 84 I of the Pharmaceutical Products Act). The risk-based liability is incurred irrespective of whether the damage is the result of bad development, production, or labelling. But like most German laws of strict liability, the § 88 of the Pharmaceutical Products Act lays down certain maxima for monetary compensation. Defective medical devices (like a pacemaker or an artifical hip) are not governed by the Pharmaceutical Products Act but by the Product Liability Act (see § 15 I of the Product Liability Act). (For an illustration (defective pacemaker) see the Boston Scientific decision of the BGH in NJW 2015, 2507.) Finally, the Gentechnikgesetz of 20 June 1990 lies at the borderline between environmental liability and product liability. For its liability regime, see § 33 of that Act.

8 The Liability of Public Authorities Bibliography The literature on this topic is very extensive. The leading treatise is that of Professor Fritz Ossenbühl and Matthias Cornils, Staatshaftungsrecht, currently in its 6th edn (2013). For a comparative account in English see Markesinis/Auby/Coester-Waltjen/Deakin, Tortious Liability of Statutory Bodies – A Comparative and Economic Analysis of Five English Cases (1999). Other comparative works include Fairgrieve/Andenas/Bell, Tort Liability of Public Authorities in Comparative Perspective (2002); Bell/Bradley (eds), Governmental Liability: A Comparative Study (1991); Oliphant (ed), The Liability of Public Authorities in Comparative Perspective (2017). The liability of public authorities is governed partly by the Civil Code and partly by the Basic Law – they complement each other for the liability of public authorities. This reflects the distinctive position which public authorities occupy in serving the common good. As the Introduction to the Prussian General Land Law of 1794 (EinlALR) acknowledged, ‘the furthering of the common good takes precedence over individual rights and privileges of the members of the state’ (§ 74 EinlALR). But, as it also acknowledged, those individuals who suffer a special loss need to be compensated (§ 75 EinlALR). The Committee of Ministers of the Council of Europe recommended in 1984 that there should be two principles governing compensation to be paid by public authorities. The first is that ‘Reparation should be ensured for damage caused by an act due to the failure of a public authority to conduct itself in a way which can reasonably be expected from it in law in relation to the injured person’. The second is that ‘Reparation should be ensured if it would be manifestly unjust to allow the injured person alone to bear the damage’ if the act is done for the common good and a limited number of persons suffered exceptional damage (Recommendation No R (84) 15 on Public Liability, adopted by the Committee of Ministers of the Council of Europe on 18 September 1984 (Strasbourg, 1985)). German law reflects these two principles. The BGB deals with fault liability and the Constitution deals with harm suffered for the common good (what is often called ‘expropriation’). The Civil Code has a primary provision in relation to the liability of officials in § 839 BGB (section I of this chapter), but the vicarious liability of a public authority for its employees may also be engaged. In most cases, a public body will have primary and no-fault liability for the acts of its officials which cause harm to third parties under ­Article 34 GG. So § 839 BGB and Article 34 GG are studied together, even if their rationales are different. § 839 BGB is based on making people compensate others for harm caused by their fault. Article 34 GG is part of a suite of provisions which ensure respect for the rule of law by public authorities. In situations where (even lawful) acts

Liability Under § 839 BGB and Article 34 GG  175 of a public body undertaken for the common good cause an exceptional loss to a limited number of individuals, then the state has a no-fault obligation to provide compensation under Article 14 GG: see section II of this chapter. It is worth a common law scholar remembering that litigated claims against public authorities are very low. To begin with, the claimant will normally be required to make an administrative complaint (Widerspruch) against a contested administrative decision as the first stage in any litigation process. The result is that many complaints are resolved at an early stage and do not reach court. Markesinis/Fedtke, Engaging with Foreign Law (2009) 290–91 report a study of cases between 1993 and 1995 which showed that whereas 112,847 claims were filed a year against the different levels of the public administration only 4,673 (4 per cent) were litigated. Earlier research had suggested that, of all litigated cases, only 18 per cent were about general duties of public officials, and most were either about traffic accidents or related to the postal service. Harlow has also identified the important place of informal complaint resolution in the English legal system in contrast to the ‘sporadic and uncertain awards of pecuniary compensation’ available in tort law (Harlow/Rawlings, Law and Administration (3rd edn, 2009) 777). She has long pointed to the importance of ex gratia payments as a more common source of compensation (see Harlow, Compensation and Government Torts (1982) Part IV). Such an approach is reflected in ‘Principles of Good Administration’ adopted by the Ombudsman in the UK in 2009: Where maladministration or poor service has led to injustice or hardship, public bodies should try to offer a remedy that returns the complainant to the position they would have been in otherwise. If that is not possible, the remedy should compensate them appropriately … An appropriate range of remedies will include … financial compensation for direct or indirect financial loss, loss of opportunity, inconvenience, distress, or any combination of these (www.ombudsman.org.uk/ about-us/our-principles/principles-remedy/putting-things-right).

In the importance of alternatives to litigation, Germany and England are very much on the same page, however different the legal rules may be.

I.  Liability Under § 839 BGB and Article 34 GG § 839 BGB – dealing with liability for breach of official duty – is one of the most important ‘special’ provisions of the tort section of the Civil Code and has given rise to a rich case law. Before analysing the elements of liability, three preliminary observations should be made. First, one must note that this paragraph provides for the personal liability of the official. In most cases, however, the victim/claimant will be anxious to engage the liability of the state (or other local authority or agency). When and how this can be done depends on the nature of the act of the official. This brings us to a second observation. The official may be exercising a ‘sovereign act’, an act involving special unilateral powers, or he may be pursuing ordinary, private law activities on the part of the state, such as driving a car. The distinction between acts iure imperii and gestionis, never entirely satisfactory, has become more difficult in recent times as the modern state has entered the marketplace. Nevertheless, as we shall note further on, the distinction is of great significance in the context of § 839 BGB.

176  The Liability of Public Authorities Finally, one must always remember that § 839 BGB is a specific enactment and as such has precedence over the provisions of the other more general clauses of the Civil Code (BGH, BGHZ 3, 94, 102; BGH, NJW 1971, 43, 44). This is important to bear in mind since often a claim relating to the performance of the same act (by the official) can be brought under §§ 839, 823 I or II, or 824 BGB. Where this is the case, § 839 BGB will prevail and this may have serious repercussions on the position of the claimant given the various restrictions of liability provided in § 839 BGB. In this sense, therefore, § 839 BGB represents a narrowing of liability. On the other hand, the paragraph is also wider than some of the other general clauses (eg, § 823 I BGB) in so far as it imposes liability for any damage arising from the unlawful conduct of the official. This means that under this heading even claims for negligently inflicted purely economic loss may succeed. In German law, tort liability of public authorities is widely discussed. Reform has been considered for many years, but no significant changes have been introduced. At present, however, most of the law is judge-made; it is secreted in many different kinds of causes of action, and it is not always clear. In this book, however, we will concentrate solely on those situations where damages are sought for breach of an official duty (Amtspflichtverletzung) – comparable to the factual situations found in many English cases. In this section, we will be dealing only with the liability of public bodies and not with the personal liability of their employees. The latter will result from § 839 BGB only if there is no liability of the public body according to the combined application of Article 34 GG and § 839 BGB and only if the employee has the status of a civil servant (Beamter). Other employees will be liable in accordance with §§ 823 BGB ff where no direct state liability is envisaged.

A.  The Principles of Liability of Public Bodies and Liability of Officials The typical liability of public authorities flows from the combined application of Article 34 GG and § 839 BGB. § 839 I BGB provides: If an official wilfully or negligently commits a breach of official duty incumbent upon him towards a third party, he shall compensate the third party for any damage arising therefrom. If only negligence is imputable to the official, he may be held liable only if the injured party is unable to obtain compensation otherwise.

Article 34 GG provides: If any person, in the exercise of a public office entrusted to him, violates his official duty to a third party, liability shall rest principally with the state or public body that employs him. In the event of intentional wrongdoing or gross negligence, the right of recourse against the individual officer shall be preserved. The ordinary courts shall not be closed to claims for compensation or indemnity.

The conditions for liability under § 839 BGB are thus that (i) an official has (ii) culpably breached (iii) an official duty (iv) owed to the claimant as a third party. If that is the case, then Article 34 GG makes the public authority which entrusted the office to him liable in the first instance to pay the damages. The individual official disappears from view, unless either the duty in question was not a public duty (and so liability is based on other provisions of

Liability Under § 839 BGB and Article 34 GG  177 the BGB) or because the public authority seeks a right of recourse against him where there has been intentional wrongdoing or gross negligence. So public authorities are liable in damages to individuals injured by their own (or their employees’) culpable failure to perform properly any official duty owed to the individual. Essentially, this liability is subsidiary to other remedies. Liability is excluded where, first, the breach of a duty is due to a negligent act only and the individual injured can obtain redress from another source (§ 839 I 2 BGB). Secondly, liability is also excluded where the victim did not make use of any legal remedy which could have mitigated his damages (§ 839 III BGB). Finally, liability is excluded where a statute expressly provides for such an eventuality. For example, BNotO (Bundesnotarordnung, which is the Federal Law on Notaries) § 19, which provides for the personal liability of the notary public. Furthermore, in 2016, the BGH (NJW 2016, 3656) held that § 839 BGB and Article 34 GG did not apply to the actions of German military personnel on peacekeeping duties in Afghanistan. Two Afghani residents sued the German government for the death of their relatives which was the result of a fatal air strike ordered by Colonel Klein who was in charge of the Provincial Reconstruction Team in Kunduz in the northern part of Afghanistan. On the one hand, there was no humanitarian duty in international law owed to the claimants. On the other hand, these were not ordinary administrative acts, but acts in international law along with other parties. Here, it will suffice to draw the reader’s attention to two elements of the cause of action: ‘fault’ and the fact that ‘the duty must be owed to the individual claimant’ and not to the public at large.

i.  An Official The liability under § 839 BGB arises not because a person has a particular status, but because they have a particular task entrusted to them. Hence, the law focuses on the person who carries out a specific official task or duty (Auftrag). From the perspective of the law on liability, it does not matter whether the person has the formal status of a civil servant (Beamter) or not. Tasks may be entrusted to a casual employee who is not a civil servant or may be delegated to the private sector altogether. From the point of view of the victim, it does not matter what the legal status of the ‘official’ is. It suffices that this is the person to whom a public authority has confided the task which has not been properly performed (haftungsrechtlicher Beamtenbegriff). Legal systems usually draw a distinction between acts of government and acts of ordinary (commercial) administration. It is important to note that the liability of the federal government (state or other public body) is not limited to the acts of state officials (as the term is defined in administrative law) but can include the conduct of any other person. This includes a private enterprise or private individual, so long as they are performing acts which fall within the realm of ‘sovereign’ activities of the state. The position is different when officials (in the public law sense) breach official duties while pursuing the private law interests or obligations of the state. For such acts the state can only be liable, either under § 31 BGB (acts of a constitutionally appointed representative) or under the rules of vicarious liability of § 831 BGB, both of which have been discussed in chapter five. Whether and how the liability of the state can be engaged will thus depend on how the activity is characterised. Since the distinction between sovereign and private law acts is not clear, a rich case law has, inevitably, developed in this area. Thus, some activities (eg, running the police,

178  The Liability of Public Authorities the post office, etc) are described as sovereign acts attracting the direct liability of the state under Article 34 GG, while others (eg, running the Federal Railways system (but excluding the activities of the railway police), the maintenance of public buildings, operation of state hospitals, etc) are treated as private law acts leading first and foremost to the liability of the official under § 839 BGB and, possibly, the state under §§ 31 or 831 BGB.

ii. Culpability The requirement of culpability has to be seen against the Code’s historical background: § 839 BGB was designed originally to cater solely for the liability of a public official himself. The old (Roman law) principle – si excessit, privatus est (if an official exceeds their authority, it is a matter of personal liability) – is also known in English law. Indeed, it forms one of the pillars of Dicey’s rule of law. This principle, along with disputes over whether the Empire or its constituent kingdoms had the legislative competence for state liability rules, induced the draftsmen of the BGB to refrain from any rule on public authority liability, leaving this issue to the Member States. There were, however, provisions on liability of public bodies acting fiscally (see §§ 89, 31 BGB). (For further details, see Entwurf eines Einführungsgesetzes zum BGB für das Deutsche Reich, 1. Lesung nebst Motiven (1888) 185.) The central idea (first introduced by the Prussian Beamtenhaftungsgesetz of 1909 and then in the Imperial Civil Service Law of 1910 and, subsequently, acknowledged in Article 131 of the Weimar Constitution of 1919) was that such an official should bear liability in damages only where he is at fault, normally by way of recourse by the state against him. As far as the victim is concerned, individual responsibility is of less significance where the state takes over liability. Such debates should not, however, conceal the fact that the concept of fault in German civil law (in contrast to the concept of fault in criminal law) is already understood in a very broad way. So, as in English law, the standard of care in cases of negligence is an objective one, concentrating on the reasonable person in general and – with regard to particular groups or professions – on the special high standard of care one can expect from such particular group or profession. In practice, the test thus often comes close to the notion of strict liability. It has been demonstrated that in most litigation concerning breach of official duty the issue of fault is rarely an obstacle for claimants. Markesinis/Fedtke, Engaging with Foreign Law, 292–93 provide a valuable summary of the role of various reasons why claims against the administration. They argue that public authorities tend to reject demands [for compensation] by arguing that they were not at fault (which is often the most straightforward course to pursue), while courts, conducting a systematic analysis of the case at hand focus on the objective requirements of a claim (duty, damage) and deal with the question of breach only once these have been established.

A study of all claims for the liability of public officials from 1993 to 1995 found that the absence of duty or breach was the overwhelming ground for the rejection of claims in full (59.4 per cent against municipalities; 61.2 per cent against Länder; and 66.8 per cent against the Federation). By contrast, absence of fault accounted for rejection in 28.4 per cent of claims against municipalities; 19.1 per cent against Länder; and 15.6 per cent against the Federation (Markesinis/Fedtke, Engaging with Foreign Law, 292). This contrasts with claims brought against public authorities based on general tort liability (§ 823 BGB) in which the absence of fault is the major reason for rejecting claims in full (64.8 per cent against

Liability Under § 839 BGB and Article 34 GG  179 municipalities; 47.4 per cent against Länder; and 61.5 per cent against the Federation) (Markesinis/Fedtke, Engaging with Foreign Law, 293). Secondly, discretionary acts of public bodies (or their employees) are, in Germany, subject to judicial scrutiny to a far greater extent than in English law. Thus, a German judge may rule on and find fault even where the official acted within the ambit of his discretion (as will be shown in detail below). The discretionary character of an act is not in principle, therefore, a bar to justiciability; nor does it hinder the proof of careless decision-taking within the ambit of the discretion. ‘Fault’ should not be equated with ‘unreasonableness’ as has often been the case in English administrative law: see Craig, Administrative Law (8th edn, 2016) para 30-011, but also para 30-016; Cornford, Towards a Public Law of Tort (2008) 181–85.

iii.  Official Duty The duty owed by the official must be a public duty. As a human being, a person employed by the public service will owe many duties. § 839 BGB is limited to those duties owed in the performance of the official’s public role. There can be fine lines drawn. When is the ­chauffeur of an official car ‘on duty’ and when is he merely like any other motorist? As in English law, the situation becomes more difficult for the claimant where the public official is granted discretion, rather than being under a duty to act. Normally, a wrong exercise of discretion does not give rise to liability unless the exercise of discretion was unreasonable. For example, in case 91, a person contested their detention in a secure unit by reason of their mental health. The person was able to show that the doctor had not followed required procedures in signing documents under which he was detained. Again, in case 90, a director was arrested and prosecuted for breach of trust in agreeing to false accounting. The prosecutor should have realised that the evidence on which he had been arrested was totally unreliable and did not justify his arrest and detention. In such circumstances, the director was able to recover damages under § 839 BGB for the loss of consultancy contracts which were cancelled because of the arrest and prosecution. Case 93 shows the limits of official duty. Here an action was brought by parents who claimed that they were harmed by an adoption order. The social services department was obliged to bring in the court and was not liable for the decision it took. Each administration has its own responsibility.

iv.  Duty Owed to the Claimant as a Third Party If the requirement of fault is no real obstacle to state liability the same is not true of the second element, namely ‘the official duty incumbent upon him in relation to a third party’. This serves as an effective filter to remove from all public wrongs those cases where the state itself might be liable in damages. The duty must not exist solely for the benefit of the general public, but must at least also protect the individual or a class to which the individual/claimant belongs. The claimant must thus be such a protected individual or a member of a protected group, and the duty must exist to protect especially those interests of the individual that have been injured. The parallels here with the English requirements of liability

180  The Liability of Public Authorities for breach of statutory duty are evident. Nevertheless, one must remain conscious of the dangers that would accompany any complete assimilation. Although there are many decisions on this issue leading to some uncertainty over the exact application of this requirement in given cases, the approach of German law seems to be stricter than that found in English cases. Thus, where it is open for policy considerations to play a part in the outcome of a dispute, they tend to focus on the relevance and meaning of the official duty. There must be a specific relationship between the duty owed and the harmed individual: Münchener Kommentar/Papier/Shirvani, § 839 BGB, nos 227 ff. By contrast, less attention is paid to the wider considerations of justice, fairness and economic efficiency which one finds in English decisions. One, therefore, starts with the premise that fairness and justice require the state to be held liable to the individual for public wrong, except where the official duty is owed only to the public at large. Although the element of ‘duty towards the individual’ (drittbezogene Amtspflicht) is phrased as a requirement and not only in a negative form as an obstacle to the claim, the relation of rule and exception in English and German law seems in many instances to be the reverse. This is obvious in the decision of the BGH with regard to the banking control system, where the court inferred from the silence of the statutory rule that the duty was owed towards the individual (BGH, NJW 1979, 1354; BGH, NJW 1979, 1879). For doubts on the constitutionality of any attempts to exclude the liability of regulatory bodies to individuals in this area, see Münchener Kommentar/Papier/Shirvani, § 839 BGB, no 252. This may be further illustrated by contrasting the indicators of such a ‘duty towards the individual’ with the requirements of state liability in English law. There are three features which show that the purpose of the norm is to protect the interests of an individual, as opposed to the public in general. The first is whether the official duty is owed to third parties at all. The second is whether the claimant falls within the class of protected persons. Thirdly, whether the interest harmed of that person is encompassed by the duty. How does one tell whether a duty is owed to an individual, rather than just to the public authority or to the public at large? It is well established that there is a ‘duty towards the individual’ when the (particular) individual has a right to claim performance of that duty (öffentlich-rechtlicher Erfüllungsanspruch). Claim of and duty towards the individual are two sides of the same coin. For example, an applicant may be entitled to claim the issue of a building permission where he has complied with certain requirements. If the permission is not issued, or is issued too late, or is (illegally) made subject to a supplementary condition, a private law cause of action will arise: BGH, NJW 1979, 641, 642; BGH, NJW 1994, 1647; BGH, NJW 1990, 505 (marriage officer arriving too late in the hospital for the marriage ceremony, the fiancée having died already: Münchener Kommentar/Papier/ Shirvani, § 839 BGB, no 231). Of course, these situations are less problematic and do not arise frequently in practice because the individual may usually launch an appeal against the decision and thereby obtain what he is entitled to claim, which is a requirement of § 839 III BGB. Although not identical, this class of case comes close to those situations in English law where breaches of statutory duty are invoked: see Craig, Administrative Law, paras 30-025–30-027. Another instance giving rise to a duty towards an individual is where the public body and the individual have entered into a special relationship. The duties of protection and care arising from such relationship are owed to the individual and also to third parties included in the realm of protection (Schutzwirkung zugunsten Dritter). See for instance: BGH, NJW

Liability Under § 839 BGB and Article 34 GG  181 1974, 1816, 1817 – a municipal slaughterhouse owed a duty towards the employee of the butcher, who had to use the slaughterhouse. This notion of third-party protection is known not only in tort law but especially in contract law, where contractual duties may involve the protection of persons close to the parties. Another example can be taken from the education context. A school owes a special duty of care towards its pupils: BGH, NJW 1982, 37, 38; BGH, FamRZ 1984, 1211 (both concerning the negligent control of a school bus stop). In most cases there will be no liability for the school and its responsible body because liability under § 839 BGB is subsidiary. In relation to schools, many types of harm will be covered by special statutory insurance against school accidents. This exception will not apply, however, when violations of the right of personality (Persönlichkeitsrechtsverletzungen) are at issue and money compensation for pain and suffering is sought: in OLG Zweibrücken, NJW 1998, 995, the responsible body had to pay DM 1,600 to a pupil who had consistently been made fun of by his teacher in front of the class causing the pupil great psychological harm. In addition, a school has the duty to prevent pupils from causing harm to others. For example, as we saw in chapter seven, in case 75, teachers (and replacing them the town council) were held liable when young children in a kindergarten threw stones at a parked car and the teachers failed to prevent them from doing so: BGH, NJW 2013, 1233. It is tempting here to draw parallels with the Dorset Yacht case, although one might also be inclined to compare this element of the ‘duty towards the individual’ with the requirement of proximity found in the Caparo test (Caparo Industries plc v Dickman [1990] 2 AC 605). But there are differences. Paragraph 24 of that judgment carried over from § 832 to § 839 BGB the imposition of the burden of proof on the supervisor of children to demonstrate that the harm had not resulted from failure in supervision. This makes the liability in German law much stricter than in English law. There are also differences, however, in so far as in general the focus of the requirement of proximity is not on the relationship between the tortfeasor and the injured person, but on the relationship between the injured person and the category of person protected by a special relationship with the tortfeasor. A ‘duty towards the individual’ will also arise where the public body directly infringes absolute rights of an individual, namely his life, body, health, freedom, property (and other rights or interests of comparable weight, eg, the right of personality). But such duties do not extend to a person’s purely economic interests and only in a limited (and direct) way to his right to an ongoing business (BGH, NJW 1983, 627, 628; Münchener Kommentar/Papier/ Shirvani, § 839 BGB, no 233). If none of these indicators are present, a ‘duty towards the individual’ may arise from the protective purpose of the rule (Schutzzweck der Norm); – the rule which imposes a certain duty on the public body – must have been created, inter alia, to prevent the mischief that occurred. But this need not necessarily follow from the express intention of the legislator. It suffices that such protection for the individual arises from the nature of public dealings and the circumstances of such dealings, even if the rule has been laid down primarily for the protection of the public in general. One indicator of the protective purpose of the duty is the availability of a public law remedy for an injured person; another indicator is the special danger for the life and health of an individual resulting from these dealings. If public dealings create a special situation where an individual can rely on the duty of care owed to him by a public body, this indicates that duties arising from public dealings also have the purpose of protecting individuals. But the extent of the protective purpose may

182  The Liability of Public Authorities be limited to certain interests, especially to absolute rights and interests. For example, the German weather service was not held liable for failing to warn airline companies of a hailstorm which was coming and which caused damage to planes parked on the ground (BGH, BGHZ 129, 33). It is useful in this context to consider different forms of public duty. General public duties relate, as in private law, to the protection of rights and duties. Omissions will give rise to liability when there is a duty to act in relation to the individual and not just the public. For example, in case 87 the claimant complained that the police had not stopped burglars stealing from her house. The duty of the police is to maintain public order. But, to quote the BGH: The task of preventing crimes is not however owed by the police in the interest of the general public alone, but, as to crimes which also intrude directly into the protected legal sphere of the individual, to the endangered individuals as well. If the police do not properly fulfil this task, this not only violates a duty owed by the police to the general public but also a duty owed by it to the endangered individuals.

Although the Court recognised that the police exercise a discretion whether to investigate or to prosecute, such discretion has limits. Where the acts committed are very harmful, then the police are bound to intervene. In this case, the gang in a specific locality were known to be in danger by the police officers in question and they turned a blind eye to the people they knew to be the burglars. (Indeed, they were found to be in collusion with them.) That failure to perform their public duty was considered to be a breach of a duty owed with regard to individuals for which they could recover. The same might be true where police knew of a wartime mine in the garden of a house, but did not take steps to remove it (BVerwG, VerwRspr 5, 319). This decision can be compared with case 89. Here a company had been prosecuted for fraud, but the prosecution had been discontinued after a hearing in the AG. The company continued to trade and the claimant lost money in a transaction with it. The BGH held there was no liability, because the duties in relation to the prosecution of the original offences were owed to those who had already traded with it, rather than to future customers. The duty to regulate a particular activity is a public law duty. For example, the installing of traffic lights or street lighting or speed limits are undertaken to control the flow of motor vehicles. Thus, if traffic lights are installed wrongly and, as a result, an accident occurs which causes injury to individuals and damage to property, the public authority will be liable for all these damages (BGH, NJW 1962, 791). However if, due to the wrong installation of traffic lights traffic congestion occurs, no liability will arise towards individuals who suffered economic loss because they were caught in the resulting traffic jam. Generally speaking, the duty does not extend to protection against economic loss (BGH, NJW 1973, 463). The duty to ensure safe traffic on the roads (Straßenverkehrssicherungspflicht) is essentially a private law duty. This exists towards every individual road-user in order to protect their absolute rights with regard to life, body, health, liberty, property and other rights and interests of comparable weight. The duty to protect individuals may also arise from the public ownership of the highway and land adjoining it. For example, in case 88, a hedge on

Liability Under § 839 BGB and Article 34 GG  183 the central reservation separating two lanes of a highway had been allowed to grow higher than the height of a normal car. As a result, the driver of a car was unable to see an oncoming car as she tried to cross the central reservation in her car at a junction. The BGH held that: A party under a duty of protective care must, in an appropriate and objectively reasonable manner, remove (and if necessary warn about) all those dangers …which are not visible or not visible in time for a highway user who is exercising the necessary care and to which he cannot adjust or cannot adjust in time.

An interesting example is a case of the BGH in 1989 (BGH, BGHZ 106, 323). The protective scope of the duty owed by the local planning authority in relation to polluted soil was geared towards the protection of the health of those who would be living in the respective area. However, it was not regarded as necessary for the liability under § 839 BGB to arise that the inhabitants actually suffered physical damage. The purchasers of the uninhabitable land could recover their purely economic loss: contrast case 47, and see, also, notes to cases 53–55. If there is a duty towards the (respective) individual, and the protected rights and interests of the individual have been injured, there will be no further room for policy arguments and the state will be held liable – provided, of course, that the other requirements mentioned above are fulfilled. No duty towards the individual, however, exists with respect to legislative acts, such as the failure to provide necessary laws or the violation of individual rights by virtue of unjust or improper laws. Legislative acts – in comparison to specific acts towards individuals or groups of persons – are owed only to the public in general and, thus, cannot constitute a duty towards an individual or a violation of an individual’s rights, unless specified by administrative or judicial acts. Other principles, however, apply with regard to ‘legislative wrongs’ under EU law; see Joined Cases C-6 and 9/90 Francovich v Italy [1991] ECR I-5357 and Case 46/93 Brasserie du Pêcheur SA v Germany [1996] ECR I-1029. The liability for the decision of the court meets the requirements of the Köbler v Austria decision (Case C-224/01, [2003] ECR I-10239) that the state should be liable for wrongful application of EU law.

B.  Liability of Court Experts § 839a I BGB, provides that: If an expert nominated by the court submits an incorrect report intentionally or with gross negligence, he is under a duty to compensate for the harm which arises for a party to the proceedings through a court decision which is based on this report.

Judges are liable under § 839 BGB. § 839a BGB clarifies this liability in relation to other court-appointed officials who are involved in legal decisions. Prior to the reform, the courts had refused to regard the forensic expert’s employment by them as acquiring protective effects towards the actual parties to the proceedings. As a result, the expert was liable only under § 823 II BGB in connection with the criminal provisions that prohibit false statements under oath; § 154 StGB. § 839a BGB makes a court-appointed expert liable for making a false opinion intentionally or with gross negligence which

184  The Liability of Public Authorities leads to a judicial decision causing harm to a person. The harm in question can include economic harm. Wagner argues that this covers the liability of witnesses as well as experts (Münchener ­Kommentar/Wagner, § 839a BGB, no 14), but this is a view which is contested. Certainly, the provision includes the liability of court officials in the legal process who are not judges, such as those auctioning goods in an insolvency process (BGH, NJW-RR 2014). Wagner (Münchener Kommentar/Wagner, §  839a BGB, no 8) identifies some incoherence in the law, because § 60 of the Insolvency Act (Insolvenzordnung, InsO) makes the administrator in an insolvency liable for ordinary fault in the conduct of the insolvency.

C.  In What Way is this Different from English Law? In an illuminating comparative study, Professor Coester-Waltjen explained that the German approach to the liability of public authorities has evolved significantly since the enactment of the BGB in 1900 (in Markesinis/Auby/Coester-Waltjen/Deakin, 58 ff). Whereas in the early years of the twentieth century, the German courts were concerned with similar policy considerations to those expressed by UK judges in Hill v Chief Constable of West Yorkshire [1989] AC 53; X v Bedfordshire CC [1995] 2 AC 633; Stovin v Wise [1996] AC 923; and Elguzoli-Daf v Commissioner of Police of the Metropolis [1995] QB 335. The idea that public officials would be too cautious if they were held personally liable was raised at the time of the drafting of the Civil Code. In an early draft, this was met by restricting liability to malicious or criminal acts. But § 839 BGB as enacted merely limited liability to negligence and where no alternative redress had been found. It was considered to be grossly unfair to leave a victim without compensation. The subsequent enactment of liability of the state standing behind the civil servant removed the worry about personal liability. The more general argument was that officials would be inhibited in their actions because of the possibility of leading to liability of the state. Coester-Waltjen in Markesinis/Auby/Coester-Waltjen/Deakin, 60–61 points to a 1996 decision in which the state was held liable for the acts of a social worker in a similar case to X v Bedfordshire because the court considered that the official would act according to professional knowledge and experience. The idea that there will be a cost implication was raised vociferously in the UK by Weir, ‘Governmental liability’ [1989] Public Law 40. In German an official study in 1976 reported that the financial burden of state liability amounted to only 0.015 per cent of the state budget (Coester-Waltjen in Markesinis/Auby/Coester-Waltjen/Deakin, 61). As in France, there is no evidence that wide liability of the state causes significant financial problems for public bodies. A third argument is often raised by English judges. It suggests that a finding of fault against a discretionary decision taken by a public authority would amount to ‘second guessing’ what was the right decision and thus an infringement of the separation of powers between the executive and the judiciary. But it is clear that German courts will not interfere with discretionary choices (Ermessen) – for example whether to award a contract to one supplier rather than another. But they will leave a lot of latitude in the case of exercising judgement (Beurteilungsspielraum), such as whether a person should be kept in a psychiatric asylum, and will only find fault where the decision is not plausible (vertretbar: see Coester-Waltjen in Markesinis/Auby/Coester-Waltjen/Deakin, 63, 69).

No-Fault Liability of the Administration  185 In the end, the German scholars and judges appeal to the rule of law (Article 20 II GG) to justify ensuring that public bodies respect the law diligently, rather than worrying too much about the separation of powers. The conclusion she draws is that the German courts would have come to different results in cases like Hill v West Yorkshire and X v Bedfordshire. The interesting point to note is that the House of Lords or Supreme Court have departed from these decisions partly in the light of case law from the European Court of Human Rights in Strasbourg (see Robinson v Chief Constable of West Yorkshire [2018] UKSC 4 and Phelps v Hillingdon LBC [2001] 2 AC 619). (See further Markesinis/Stewart, ‘Tortious Liability for Negligent Misdiagnosis of Learning Disabilities’ in Fairgrieve/Andenas/Bell, Tort Liability of Public Authorities in Comparative Perspective (2002).)

II.  No-Fault Liability of the Administration: Expropriation and Sacrificial Encroachment A. Introduction If § 839 BGB and Article 34 GG focus on the liability of the official and the state employer paying in his stead, the second principle with a long pedigree in German law is liability for expropriation. The EinlALR of 1794 provided: § 74 The furthering of the common good takes precedence over individual rights and privileges of members of the state, if a genuine conflict exists between these two positions. § 75 The State is, however, bound to compensate anyone who is forced to sacrifice his individual rights and privileges for the common good.

These rules reflect a medieval heritage common across Europe and found, for example, in the English Case in Saltpetre (1607) 12 Co Rep 12. If property is taken for public necessity, then the public must pay compensation. This principle is repeated in Article 14 III GG: Expropriation shall be permitted only in the public weal. It may be effected only by or pursuant to a law which shall provide for the nature and extent of the compensation. Such compensation shall be determined by establishing an equitable balance between the public interest and the interests of those affected. In case of dispute regarding the amount of compensation, recourse may be had to the ordinary courts.

The fundamental idea is that public necessity renders lawful the taking or encroachment on the property of another. But the provision of the current Basic Law requires legislative authorisation for expropriation and specific provisions for compensation. Specific problems such as a delay in a court coming to a decision can be compensated by specific legislative provisions such as § 198 GVG. As a result, there is little room for the need to resort to the general principle in Article 14 III GG. After the Second World War, the courts expanded the concept of legally justified ­expropriation to cover unlawful acts by the administration which encroach on tangible assets and thereby cause loss to a person. The victim can obtain compensation from the courts for such ‘quasi-expropriatory encroachment’ (enteignungsgleicher ­Eingriff). The result is that a citizen who has suffered loss as a result of unlawful action by the

186  The Liability of Public Authorities administration typically has a claim for damages against the public official (or the state substituting for him) based on § 839 BGB as well as under the concept of quasiexpropriatory ­encroachment (see Rüfner, ‘Basic Elements of German Law on State Liability’ in Bell/Bradley (eds), ­Governmental Liability: A Comparative Study (1991)). Indeed in some Länder, the 1969 provision of the German Democratic Republic state liability law (§ 1 I StHG-DDR) still applies under which the state is directly liable without fault for the acts of public officials. Whereas the annulment of a decision is a matter for the administrative courts, the award of compensation is a matter for the private law courts. In 1981, the BVerfG ruled that Article 14 III GG, unlike Article 153 II of the Weimar Constitution, did provide the direct legal basis for a claim to compensation (BVerfG, BVerfGE 58, 300, Nassaukies). The Court had long before ruled that expropriation, to be lawful, needed to be linked to compensation (the so-called linking clause (JunktimKlausel)). So a claim to compensation needed to be based, in principle, on the authorising law. So in that case, the claimant complained of the effects of the extraction of gravel which deprived his property of water. He sought compensation in the civil courts on the basis of Article 14 III GG. A statute of 1976 had removed the right to water from the guarantees of property, but the claimant contested its validity. It was held that the planning permission for the extraction could be challenged in the administrative courts, but there was no option to choose to sue in the private law courts instead for the harm suffered. The result of the decision is that there are four possible situations: 1. Interference with property is expressly authorised by a constitutionally valid statute. Interference is lawful and no compensation is required. 2. Interference with property is expressly authorised by a constitutionally invalid statute. The statute and its implementing acts can be challenged as unconstitutional. The ­statute does not directly give a right to compensation, but the unconstitutional law could the foundation for other claims. 3. Interference with property amounting to expropriation within Article 14 III GG is lawful, but gives rise to a right to compensation (Aufopferungsanspruch). 4. Interference with property based on a constitutionally invalid law. This is unlawful and challengeable. It does not give rise directly to a right to compensation, but compensation may be based on other grounds. It can be seen that Article 14 GG does not give the injured party a choice of basis for compensation – public and private law. Rather unlawfulness may be the justification for the award of compensation on some other basis. Challenge by way of constitutional review can only lead to annulling a decision, whereas compensation is needed for losses incurred. The BGH responded by accepting that claims for compensation could not be based directly on Article 14 III GG, but could be based on provisions of private law inspired by the notion of sacrificial expropriation. In NJW 1984, 1169, the Court ruled that compensation could be granted for the unlawful refusal of p ­ lanning permission. The unlawfulness of the act constituted fault within the meaning of § 254 BGB. While the administrative courts deal with the judicial review of the lawfulness of an administrative decision, the civil courts can provide compensation where the consequences are so severe that the victim should not have to bear the loss.

No-Fault Liability of the Administration  187 A further extension was made to provide compensation for harm to immaterial rights (non-property rights) through the concept of ‘sacrificial encroachment’ ­(Aufopferungsanspruch). Interference with material rights constitutes quasi-expropriatory encroachment.

B.  The Elements of the Right to Compensation The right to compensation arises in relation to administrative measures (1) which are expropriatory or quasi-expropriatory; (2) affect present rights and assets; and (3) caused the loss suffered by the claimant. 1.

The most important part of this claim is that the victim has made a ‘special sacrifice’, that is to say has suffered a loss which is much greater than other members of society generally. This idea is based on the weight of the burden borne by an individual and the extent to which it is reasonably bearable by a single person (BVerwG, BVerwGE 5, 143, 145ff). The justification for compensation is not the value of any protected interest affected, the reduction in the substance of a thing affected or the idea that the harm does is essentially extraneous to the act authorised by statute. In expropriation, this is usually straightforward, for example, if one person’s house is pulled down to create a fire brake and thus to prevent the fire spreading to a whole town. In the case of quasi-expropriation, it will be the effect of unlawful action which constitutes the special sacrifice. So in the early cases, planning permission was wrongfully refused to a particular landowner, who thereby suffered loss (see BGH, BGHZ 6, 270 and BGH, NJW 1984, 1169). Mere omission, for example, caused by a delay in deciding on planning permission is not enough (BGH, DVBl. 1971, 464) – there must be a positive act. The measure must be some form of act of authority, such as a legal order. Mere permissions allow private people to do things, such as to build a house. If all the permit does is to regulate the action of the private individuals, but confers on them no new entitlement to act, then it does not cause any harm to others. Unless there is a breach of EU law, unlike French law, there is no liability for special sacrifices caused by statute. In such cases, the victim needs to bring proceedings for constitutional review of the measure in question. 2. Any harm must be caused to present rights and assets of the victim. This means that the impairment of earning capacity falls outside the scope of expropriation – Article 14 GG protects the gain, not the effort. This explains why this remedy is rarely of use in relation to government steering or regulation of the economy. The limitation of new businesses would not constitute an interference with ‘present and concrete assets’. A business may benefit from advantages due to its location, but that is not a property right which can be expropriated. For example, alterations to the flow of traffic on a street might cause a decline in custom at a pub because of a decline in the number of potential passing customers (BGH, BGHZ 48, 58; BGH, BGHZ 55, 261). The favourable siting of a petrol station is not an asset for which compensation can be sought when construction works disrupt traffic flows for a long period of time (BGH, BGHZ 57, 359, Construction of Frankfurt Underground). On the other hand, where the road

188  The Liability of Public Authorities construction works were so delayed that they constituted an interference with property beyond that which an ordinary neighbour ought to tolerate, then this could constitute a breach of § 906 BGB (BGH, BGHZ 57, 359 and BGH, BGHZ 64, 220). 3. Any harm caused must be an immediate consequence of the unlawful act. Thus there must be an interference, a legal act which causes an interference. This is obvious, for example, where shots are fired during a military exercise which accidentally set fire to wood in a forest (BGH, BGHZ 37, 44) or where birds, attracted to a municipal rubbish dump, eat seeds a farmer has sown (BGH, NJW 1980, 770). By contrast, damage caused by third persons to a car which had been clamped by the police was not held to be a direct loss (BGH, BGHZ 100, 335).

C. Compensation It is important to appreciate that compensation for expropriation and quasi-expropriation is not the same as damages in tort. Its purpose is not to make reparation for harm suffered, but simply to make up for the lost value of the asset that has been taken away for the common good. There is no compensation for loss of any expected gain of future profits from the use of the asset. For example, there can be no compensation for the loss of rent income from a house whose construction was unlawfully prohibited (BGH, BGHZ 30, 338, 352). The only compensatable use is that of the land, not of the future building. That is to say, what a person wanting to build would be willing to pay for the land if it were permitted to build on it. Even when an existing asset is affected, the mere chance of making a profit in the future from its use has to be excluded. But if there is a protected interest whose use is wrongfully affected, then the loss of income is recoverable. For example, where a person has an established business of letting a flat for short-term stay through Airbnb and a local authority unlawfully imposes restrictions on use which prevent the continuation of that business or reduce its profitability, then the quasi-expropriation has harmed an asset whose value includes the typical rental income, and the flat owner can claim compensation. In practice the diminution in the value of the asset affected by the unlawful action of the public body will often be close to the value of lost future profits. A landowner unable to build a house because of the unlawful refusal of planning permission will get as compensation the reduction in the value of the land and that will, indirectly, reflect the lost profit in building the house, since the owner does not have the costs of construction. What he will not obtain as compensation is the increase in construction costs caused by the delay in obtaining planning permission (see Rüfner, ‘Basic Elements of German Law on State Liability’ in Bell/Bradley (eds) (1991) 267–68).

D.  Quasi-Expropriation (enteignungsgleicher Eingriff) The basic rules on the special character of the loss, what assets are compensatable, the directness of its cause, and the measure of compensation are common to all the categories of expropriation covered here. The category of ‘expropriatory encroachment’ (enteignungsgleicher Eingriff) serves to deal with unlawful interferences with property. In expropriation, there is a valid removal of property or interference with essential features of

No-Fault Liability of the Administration  189 property in order to achieve some common good. If an excessive burden is placed on one person, the whole community provides compensation. Logically, it follows that if an effect equivalent to expropriation is achieved by unlawful means, the public authority should be no better off than if it had proceeded lawfully. If the victim would have got compensation for a lawful act, then, a fortiori, he should get compensation for an unlawful act. The Nassaukies decision of 1981 (BVerfG, BVerfGE 58, 300) makes it clear that the legal basis for compensation is not Article 14 III GG. The BVerfG decided that the legal basis was not a specific article of the Civil Code, but the ‘general expropriation principle of §§ 74, 75 EinlALR in its judicially endorsed expression’. This leads to the view that an unlawful act of the administration is, in itself, a special sacrifice, and so justifies compensation based on this principle.

E.  Sacrificial Encroachment (Aufopferungsanspruch) Compensation for sacrificial encroachment is similar. It compensates for the interference with immaterial interests such as life, health, body, personal freedom or privacy, which are not covered by the formal provisions on expropriation (of property rights). Statutes often provide for the lawful interference with personal integrity. For example, the law on infectious diseases (Infektionsschutzgesetz (IfSG), previously Bundesseuchengesetz) can authorise quarantine or inoculation, and this can give rise to compensation under § 56 of the law under some circumstances. Such acts are lawful. Where an act of a public authority is unlawful, or where the consequences of a lawful act are unlawful, then compensation can be provided. So in a decision of 1953, the BGH found a duty of the state to compensate the unintended victims of the inoculation law then in force (BGH, BGHZ 9, 83). The harm to the children was an interference with an immaterial right as a consequence of a lawful programme. The decision was then based on Article 14 GG, but now would be based on the general principle mentioned above (or in this specific case on the statutory compensation provision). Other examples would include where a policeman injures a passerby through a carelessly aimed shot in the pursuit of a criminal. (In such a case, there is likely to be a special law on compensation for acts of the police, eg, § 67 Polizeigesetz Nordrhein-Westfalen.) Compensation is provided where the harm suffered goes beyond what is normal. Thus the occupants of houses in a street may have to tolerate noise and fumes from diverted traffic. But where there is an individual and serious injury then compensation can be ordered. A child injured while jumping normally during a gymnastics lesson could not be said to suffer the result of an action which fell outside the normal risks of everyday life (BGH, BGHZ 46, 327). In such cases, there is no need to prove fault on the part of any official, but the compensation is limited to the financial cost of the harm (medical bills, care costs or loss of earnings), rather than wider damages (eg, for pain and suffering). Interference with immaterial interests may occur where there is a breach of fundamental rights either under the Basic Law or under the ECHR. Usually, the legal basis will be fault of an official under § 839 BGB combined with Article 34 GG. The reason for this is that the recoverable damages are far greater and include items such as pain and suffering. For example, the keeping of a prisoner in a prison cell and locked up for an excessive period in breach of the ECHR gave rise to damages based on § 839 BGB and Article 34 GG because of the act of the official who continued the situation beyond a transitional period after the

190  The Liability of Public Authorities Berlin Constitutional Court had declared such treatment unconstitutional (BVerfG, NJW 2016, 389). In another famous case, Jakob von Metzler, a kidnapper (Magnus Gäfgen) was observed by the police when he picked up the ransom paid by the victim’s family. After a few hours during which the victim was not released, he was arrested. After being threatened with torture as ordered by the Frankfurt Police Vice President, he confessed and stated where the body of his victim was hidden. He brought a successful claim to the European Court of Human Rights or breach of Article 3 ECHR and a German court ultimately awarded him €3,000 for pain and suffering (LG Frankfurt, BeckRS 2011, 21493). The decision was based on § 839 BGB for fault on the part of the office holder and Article 34 GG.

9 The Law of Damages Bibliography Berger, ‘Abkehr von der konkreten Schadensberechnung?’ VersR 1985, 403; Brand, Schadensersatzrecht (2nd edn, 2015); Däubler, ‘Sachen und Menschen im ­Schadensrecht’ NJW 1999, 1611; Flessner, ‘Geldersatz für Gebrauchsentgang’ JZ 1987, 271; Koziol, ­Grundfragen des Schadenersatzrechts (2010); Lange/Schiemann, Schadensersatz (3rd edn, 2003); Looschelders, Die Mitverantwortlichkeit des Geschädigten im Privatrecht (1999); Medicus, ‘­ Naturalrestitution und Geldersatz’ JuS 1969, 449; Mertens, Der Begriff des ­Vermögensschadens im bürgerlichen Recht (1967); Schiemann, Argumente und P ­ rinzipien bei der Fortbildung des Schadenrechts (1981); Thüsing, ‘Das Schadensrecht zwischen Beständigkeit und Wandel’ ZRP 2000, 126; Thüsing, Wertende Schadensberechnung ­ (2001); Wagner, ‘Das Zweite Schadensersatzrechtsänderungsgesetz’ NJW 2002, 2052; Wagner, ‘Prävention und Verhaltenssteuerung durch Privatrecht – Anmaßung oder legitime Aufgabe?’ 206 AcP (2006) 352; Wagner, Neue Perspektiven im Schadensersatzrecht – ­Kommerzialisierung, ­Strafschadensersatz, Kollektivschaden, Gutachten zum 66. DJT (2006).

I.  Preliminary Observations The concluding chapter of this book deals with the scope and extent of remedial relief that a victim of a proved tort may claim from his tortfeasor. Clearly, the two main issues that have to be discussed here are compensation for personal injury and for damage to property (besides ricochet damage in the context of accidents and interference with the general right to one’s personality). For reasons of space, injunctive relief (see the Unterlassungs- und Beseitigungsanspruch under § 1004 BGB for violation of property and possession and the quasinegatorischer Unterlassungs- und Beseitigungsanspruch under §§ 1004, 823 I BGB for the other protected rights under § 823 I BGB) and self-help (Selbsthilfe under § 229 BGB) will not be discussed here even though in some cases it may provide the most appropriate remedy as far as a particular claimant is concerned (eg, in cases of personality rights infringements). Before this, however, it is advisable to make a few preliminary observations. The first thing to notice is that for the traditional common law everything that pertained to the notions of damage and damages was within the province of the jury and not the judge. As a result, for much of its history the common law was weak in the elaboration of legal principles; indeed, at times one could have been forgiven for thinking that they were non-existent. This statement must now be qualified as far as the actual English common law is concerned. The abolition of juries in personal injury cases may be a comparatively

192  The Law of Damages recent phenomenon. (It was decided by the full Court of Appeal in Ward v James [1966] 1 QB 273; see especially Lord Denning’s reasons at 299–300.) Remarkably however, in the years that have elapsed since this important decision was handed down, a clear body of legal principle has emerged, making the comparison with German law easier than it would have been in days gone by. Indeed, in the pages that follow, the presentation of German law has, once again, been accompanied by frequent excursus into English common law in order to show how a different history and a different methodological approach have, yet again, failed to produce significant differences in outcome. Indeed, in many respects the similarities between the two systems is quite remarkable. Overall, one must also note that the levels of compensation are quite similar in both England and Germany. However, we must immediately stress how very different is the methodological approach adopted by the two systems. German law, a creation of the universities and the product of a constant move towards abstraction and systematisation, immediately reveals these features in its law of damages. For it is these characteristics that account for the reduction in the vast English casuistry into a mere handful of provisions which are related to tort law damages: §§ 842–46 BGB (§ 847 BGB has been repealed through the Schadensersatzrechtsreform of 2002) dealing with personal injury; and §§ 848–51 BGB dealing with damage to property. However, provisions dealing directly or indirectly with compensation can also be found in the various other German liability statutes. Such as, for instance, §§ 5–10 Strict Liability Act; §§ 9–13 Road Traffic Act; §§ 6–11 Product Liability Act; or § 15 General Equal Treatment Act (Allgemeines G ­ leichbehandlungsgesetz, AGG). And it is the tendency to be systematic and logical that accounts for the fact that the provisions that crucially supplement the above-mentioned provisions are to be found in the general part of the law of obligations (§§ 249–54 BGB) and not in the tort section of the BGB. § 249 I BGB states that a person who is obliged to make compensation must restore the situation which would have existed if the circumstances, which render him liable to make amends, had not occurred. This provision is to be found in the general part of the law of obligations quite simply because an obligation to pay compensation can arise from breach of contract and/or the commission of a tort. German authors, judges and practitioners thus apply it directly to tort situations without any hesitation. The second point that must be stressed, therefore, is that once again the common lawyer must be prepared to find the guiding principles in different parts of the BGB. Learning how to jump over these hurdles of classification will resolve much of the apparent difficulty of finding the law in the foreign codes. A rule that must satisfy both contract and tort inevitably must be widely phrased and abstract. Abstract generalisations may be good for codes. Without more, however, they will be of little use to practitioners. Often they must be transformed into concrete rules of thumb, especially if out-of-court settlements are to be encouraged. Theory must yield to the demands of practice and the codal bones must acquire flesh and muscle before they can function properly. Indeed, the regulation of compensation by the BGB as such hardly does justice to the difficulty of the subject matter. This is where the courts come into the picture and it is through their work that the comparative lawyer can start to perceive the real similarities that the abstract apparatus of the BGB tends to obscure. Another area in which the two systems come closer together is where ‘satisfaction’ (­ Genugtuung) – a notion originally taken over from Swiss law by the BGH

Preliminary Observations  193 (BGH, BGHZ 35, 363, Ginsengwurzel), but given a different meaning in German law  – takes over from the dominant ‘compensation’ principle (Kompensation or Ausgleich) and the courts are instructed by the legislator to weigh all the surrounding circumstances when deciding the level of the award (especially in cases of damages for pain and suffering). The same is true of wider considerations of ‘equity’ or fairness, which are sometimes very obviously taken into account but in most cases tend to be concealed. An excellent example of the former can be found in a decision of the BGH, MDR 1993, 847. For the decision there, handed down in the aftermath of German reunification, stated that the calculation of damages had to start by taking into account the practice in the (former) East Germany. But the figure thus reached (for pain and suffering) should then be adjusted upwards to take into account the differing economic realities that had followed reunification and, in many cases, caused much hardship to the population of the former German Democratic ­Republic. Thus, even the judicial literature – traditionally sombre and concept-orientated – can reveal a refreshing interest in the problems of real people and real life. Its famous and earlier attempts to flesh out the famous good faith provision of the Civil Code (§ 242 BGB) has given it, of course, good training. The third point that must be made absolutely clear is that the advent of social security has dramatically affected the function and purpose of the rules concerning compensation. This is, of course, true in all systems; but it is particularly noticeable in Germany where social security covers most of victims’ needs and then takes over the tort actions against their tortfeasors (§ 116 Sozialgesetzbuch Book X). At this point it is important to stress three points. First, the breadth of this subrogation mechanism is manifest from the range of entities that it covers. Thus, for instance, the statutory health insurance scheme, the retirement pension scheme, and the accidents at work insurance scheme will all, automatically, be subrogated to these claims – it is therefore a mandatory cessio legis. Secondly, the reader must realise that this subrogation occurs at the moment of the accident and results in the victim automatically and immediately losing all control over the claim (or parts of the claim) which he may have. Finally, it might be worth clarifying the fact that we are here talking only of claims for material losses in cases of personal injury. Incidentally, the claimant which usually refers to either die Kasse (the social security insurer) or die Gesellschaft (the private insurance company), underscores the fact that the bulk of the personal injury litigation is these days undertaken by these two types of subrogees. Or, to put it differently, those who nowadays pay in tort cases are ‘innocent absentees’ namely, social security insurers, private insurers and employers. In such circumstances, compensation of the victim can no longer be the prime purpose of the tort rules (even though German judges and jurists, inordinately it would appear, enjoy stressing this function). Rather they have come to form a part of the intricate complex of rules, which help allocate risks or, in some cases, seek to promote deterrence (especially deterrence and prevention (Abschreckung or Prävention) which seems to be on the rise in Germany; see the Caroline of Monaco I decision (case 96) and Janssen, Präventive Gewinnabschöpfung (2016); Wagner, ‘Prävention und Verhaltenssteuerung durch Privatrecht – Anmaßung oder legitime Aufgabe?’ 206 AcP (2006) 352.) To put it differently, the tort action, when it is taken over by the social security carrier or the insurer, helps to put the cost of accident back on the shoulders of the wrongdoer (or his insurer). Be that as it may, the fact remains that modern tort law has been forced to take into account the fact that its rules are no longer the only ones that determine compensation for loss. The need to regulate the interrelationship between all these disparate rules of compensation

194  The Law of Damages has thus arisen in Germany as it has elsewhere. This topic should and has been approached with one guiding principle in mind: the tort victim must be indemnified for his loss but he must not make a profit out of it (so-called Bereicherungsverbot: see Janssen, P ­ räventive ­Gewinnabschöpfung, 191 ff; Mook, Das Bereicherungsverbot im Schadensrecht nach §§ 249–253 BGB (1983)). In this respect the traditional approach taken by German law is different from American law (and much closer to English law) since, on the whole, the latter appears to take a very generous view about cumulation of different benefits partially, no doubt, because a substantial part of the award goes towards financing the costs of tort litigation. However, in recent times this German dogma of avoiding any kind of windfall profits for the tort victim is increasingly questioned by academics who advocate for a stronger preventive (not necessarily punitive) function of tort law (see, eg, Janssen, Präventive Gewinnabschöpfung, 191 ff; Wagner, ‘Prävention und Verhaltenssteuerung durch­ Privatrecht – Anmaßung oder legitime Aufgabe?’ 206 AcP (2006) 352ff). According to them the question is, in the end, only who should receive the windfall profit of a tort: the tortfeasor or his victim? The last preliminary point that has to be made here is that the claimant’s damages will be reduced (and in some circumstances even completely wiped out) in order to take into account his contributory fault (Mitverschulden or Mitverursachung: see § 254 BGB). The term ‘contributory fault’ is here used instead of the more familiar common law term ‘contributory negligence’ not only because it is the one employed by German law, but also because it is wider than the common law term in at least two respects. For in the first place, contributory fault includes intentional as well as negligent conduct. Secondly, and perhaps more importantly, it includes the conduct of the injured party/claimant after the occurrence of the initial harm as well as before it. However, though the BGB distinguishes the fault of the injured party that positively contributes to his harm and his failure to minimise it once it has happened, it subjects both these types of contributory fault to the same rules. For more details on contributory fault see cases 22 and 23 and the accompanying notes.

II.  Personal Injury (Pecuniary Losses) Personal injury can cause primary and consequential loss. The first term is taken to refer to such items as medical expenses incurred as a direct result of the injury. On the other hand, the second heading would include future loss of earnings and expenditure incurred as a result of further deterioration in the health of the victim flowing from the accident itself, for example, subsequent development of epilepsy as a result of severe cranial injuries. This distinction between primary and consequential loss, with its strong causal undertones, is made both in cases of personal injury and damage to property and is usually adopted by textbook writers. Here, however, we shall adopt mainly the English distinction between pecuniary and non-pecuniary losses, partly because it appears to be neater but mainly because it will help in the comparative presentation of the German law. (Another set of terms that might be appropriate is material and non-material harm.) It should also be noted that the following remarks apply equally to claims based on the tort law provisions in the BGB as well as to those based on the provisions of special statutes. The technique used in the latter case is one of special provisions and partial cross-referencing linking these statutes

Personal Injury (Pecuniary Losses)  195 to the paragraphs of the BGB on damages. (For instance, see §§ 10–13 of the Road Traffic Act.) With regard to pecuniary losses, the most important deviation from the general rules of the BGB is found in the imposition of monetary maxima in most cases of strict liability. (For instance, § 12 of the Road Traffic Act and the earlier discussion contained in chapter seven.) When the injured party’s loss is pecuniary, ie, it can be estimated in money terms, then the guiding principle is that of restitutio in integrum. This is as true of English law as it is of German law. In Livingstone v Rawyards Coal Co (1880) 5 App Cas 25, 39, Lord Blackburn remarked: I do not think there is any difference of opinion as to its being a general rule that, where any injury is to be compensated by damages, in settling the sum of money to be given for reparation of damages you should as nearly as possible get at that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation.

§ 249 I BGB expressly authorises the restoration of the position which the claimant would have been had the injury not occurred, which in personal injury cases means ordering the defendant to meet the claimant’s costs (see § 249 II 1 BGB). It follows that all reasonably incurred medical expenses, including such items as hospitalisation, nursing, physiotherapy, radiotherapy, post-operative convalescence, the acquisition of special, for example, ­orthopaedic aids, cosmetic surgery etc, will be met by the tortfeasor or, more likely, his insurer etc. (Once again, the position is identical in England.) The cost of private medical care may also be claimable if reasonably incurred and is usually claimed and awarded in the more serious types of injury where long and costly treatment or convalescence is necessary (see BGH, VersR 1964, 257). In England, failure to use the facilities of the National Health Service (NHS) will not affect the reasonableness of the claimant’s expenses which will thus be claimable (see Harris v Brights Asphalt Contractors Ltd [1953] 1 QB 617, 635 (Slade J)). In German law medical expenses cannot be claimed if they have not actually been incurred or, at the very least, it can be shown that the claimant does not intend to use the money for medical treatment (BGHZ 97, 14, see case 142 in the previous edition of this book). Further limits may be placed by § 242 BGB and § 251 II BGB (the cost of the treatment must not be disproportionate). § 251 II BGB provides for monetary compensation if the cost of curing the defect is disproportionate. This presents formidable difficulties in cases of personal injury and in particular where the cost of cosmetic surgery is claimed. For apart from the cost of actually restoring the claimant’s health, his interest is non-pecuniary. Because of the human dignity one cannot resort to a diminution ‘in value’ measure. At the same time in some extreme cases there may be reasons for rejecting claims for cost of ­medical treatment for personal injury. The BGH ingeniously solved this problem by relying on § 242 BGB and thus bridged the gap in the BGB. On this basis, the BGH (BGH, BGHZ 63, 295) denied the claimant’s claim for DM 2,590 requested in order to pay for an operation to remove a 2.5 cm scar located next to his right ear. The BGH stressed that reasonableness depends on the circumstances of each case. Accordingly, a balancing operation had to be undertaken and it would weigh the severity of the injury, the scale of the claimed cost, and the motives of the claimant. The Court reaffirmed that as a general rule cost of purely cosmetic surgery could be recovered as part of the restoration owed by the defendant under § 249 BGB. But the BGH also accepted the Court of Appeal’s finding that awarding compensation would

196  The Law of Damages be unreasonable in the present case. It seems that this was because the scar was regarded as insignificant and, in any event, hardly visible and likely to disappear over time. Finally, the BGH also pointed out that the claimant was awarded a correspondingly higher amount of damages for pain and suffering. Hence, the Court in effect arrived at a solution which is surprisingly close to § 251 II BGB. Where cost of reinstatement to the status quo ante appears unreasonable, the claimant may obtain some other monetary compensation, for instance in the form of an increased award of damages for pain and suffering. As in English law, the purpose of the award is to put the claimant in the same position, financially, as if he had not been injured. Where future lost earnings are claimed the claimant is not restricted to restoration of the status quo ante but can ask to be put in the (hypothetical) position he would have been in but for the injury. Therefore, in the calculation of lost future earnings, increases in pay, promotions and the like will be taken into account when deciding the amount of compensation. Where the victim is self-employed, his future prospects will have to be estimated as best as possible. But, in keeping with the pro-claimant predilection, some courts have suggested that ‘the guessing process’ should not be subjected to over-rigorous proof at the expense of the claimant (BGH, MDR 1994, 43). In any event, all loss of earnings will have to be compensated (BGH, VersR 1984, 639). If the claimant/ victim, has been forced to settle after his accident for a less well-paid job, or has otherwise experienced a loss of gains, he will be allowed to claim these amounts (BGH, VersR 1973, 423). Income from an illegal or immoral source, however, tends not to be taken into account (see, however, the controversial decision of BGH, BGHZ 67, 119). Damages are not awarded (or are reduced) if the defendant can show that the injured party/claimant would have lost his income in any event, for example, through an imminent dismissal (BGH, BGHZ 10, 6; BGH, VersR 1963, 674). Not infrequently, relatives of the victim come to his assistance thereby incurring travelling expenses and often more serious loss of income (eg, a mother giving up her job to look after her injured child). German and English law are, in principle, at one on this by accepting that the victim may recover from the tortfeasor these expenses. (See § 843 BGB; BGH, VersR 1961, 272; BGH, VersR 1964, 532 and cf Donnelly v Joyce [1974] QB 454; also BGH, NJW 1989, 766; BGH, VersR 1991, 559; and Seidel, ‘Der Ersatz von Besuchskosten im Schadensrecht’ VersR 1991, 1319). However, a fair number of decisions also seem to take a harsher view on such claims whenever the visits cannot be genuinely linked to the condition of the victim (BGH, NJW 1990, 1037; BGH, NJW 1991, 2340). Both systems also agree that if compensation is decreed for the victim it is then for him to decide whether he will reimburse these relatives with the sums he has recovered from the tortfeasor. Equally, however, in both systems attempts have been made to impose a legal obligation on the victim to reimburse the relatives who have come to his aid and thereby suffered loss. In Germany this could arguably be satisfied by having recourse to §§ 677, 683 BGB (management without mandate) and in England by utilising the trust mechanism (see Cunningham v Harrison [1973] QB 942, 952 (Lord Denning MR)). In both these systems, however, these attempts have met with little success in the courts. The intricacies of this topic come to full light in case 58 and are further discussed in the accompanying notes. As was explained in chapter five, for accidents at work the social security system has almost completely ‘replaced’ tort law. But even outside this special field, the victim’s loss (including his lost earnings) are often met by some social security insurer or private insurer who is then subrogated to the victim’s tort action to the extent that he has indemnified him.

Personal Injury (Pecuniary Losses)  197 It is clear, however, that the social security systems will provide a minimum coverage regardless of whether the victim has a right to compensation against another person. Generally speaking, it is also immaterial whether the injury is caused by the ‘negligent’ conduct of the injured (BSozG, NJW 1986, 1572). Thus, in those cases where the victim is entitled to social security services and payments, the purpose of tort law is, in effect, to determine whether the social security carrier can seek reimbursement from the tortfeasor or his insurance. In accordance with what was said earlier, the right of the insurer is here provided by § 116 SGB X. Likewise in England social security benefits, as well as NHS costs of treatment of traffic accident victims, are generally recouped by the state (see generally, Markesinis/ Deakin, 808–15). If the social security carrier has only partially compensated the victim, the latter naturally retains his tort action for the difference. An obvious example is damages for pain and suffering. Up to this point the presentation of German law will have caused no difficulties to the common (especially English) lawyer. When we move, however, to the form of the award and the method of its calculation, some important differences of approach become obvious. Surprisingly, however, once again they seem to be attenuated in practice. The source of the difference lies in the attitude any given system is prepared to take towards lump sum awards and periodical payments. Of course, whenever a debate about this issue takes place one must remember that it refers to the form the compensation will take for future economic loss. For no system objects to capitalising earnings lost up to the time of the judgment. And the same is true for sums awarded to ‘compensate’ for pain and suffering – the relevant paragraph of the BGB (§ 253 II BGB) being silent on this point. The dispute as to the form the payments should take is thus limited to such items as loss of future earnings, future medical expenses, and in the case of wrongful death, loss of future support. The question ‘what form should these payments take?’ can receive four possible answers. At the one extreme one finds common law systems with their unequivocal preference for lump sum awards. The task of the court in assessing damages for personal injuries is to arrive at a lump sum which represents as nearly as possible full compensation for the injury which the claimant has suffered. However, by section 2(1) of the Damages Act 1996, a court may make an order for the whole or part of the damages to take the form of periodical payments, provided the parties agree to this. The approach of most legal systems can be divided into two categories: the first includes those systems which are, technically speaking, neutral as to what form the award will take, accepting that either lump sums or periodical payments are perfectly acceptable. (France and Switzerland belong to this category.) The systems that belong to the second group, in which we find German law, accept that awards can take either form but expressly state their preference for periodical payments. §§ 843 I BGB, 844 II and 845 sentence 2 BGB state this preference in unequivocal terms. (According to §§ 843 II and 760 BGB annuities are paid three months in advance (but monthly annuities are commonly agreed). The duration of the annuity will be estimated at the time of the judgment on the basis of the claimant’s estimated earning years but for the accident: BGH, VersR 1988, 464.) The only exception to the annuity rule is provided by § 843 III BGB where it is stated that a capital sum can be allowed instead of a periodical payment only if ‘a serious reason’ exists (ein wichtiger Grund, eg, the danger of the defendant going bankrupt (OLG Stuttgart, OLGE 2, 440, 441)). (For further theoretical observations with regard to the payment of a lump sum and periodical payments, see 911 ff of the previous edition of this book.)

198  The Law of Damages

Bibliography Küppersbusch/Höher, Ersatzansprüche bei Personenschäden (12th edn, 2016).

III.  Personal Injury (Non-Pecuniary Losses) Personal injury does not only lead to pecuniary losses of the kind described above; typically it also entails non-pecuniary losses such as pain and various forms of mental suffering. The German term ‘Schmerzensgeld’ is wider than any equivalent found in the common law and it should thus be made clear that it encompasses such headings of damage as pain and suffering, loss of amenity, disfigurement, loss of expectation of life etc. (This term is sometimes also used for the compensation of non-pecuniary losses suffered from a personality right infringement. However, the courts increasingly use for the latter cases the term ‘Entschädiging’ in order to distinguish them from the ‘traditional’ personal injury cases.) These distinctions and sub-divisions are not always made clear in either the German books on the subject or in judgments; yet they are in the judges minds when fixing the level of compensation for Schmerzensgeld as is seen from the actual decisions and books which contain summaries of awards. Yet, it is in a certain respect narrower than some of its common law counterparts. For an award of Schmerzensgeld presupposes that the victim suffered personal injury (see § 253 II BGB, which also mentions other elements as freedom or sexual self-determination). In short, the object of an award of Schmerzensgeld is to compensate for all kinds of non-material harm suffered as a consequence of personal injury. (In this book, however, instead of Schmerzensgeld we have, for convenience sake, used the term ‘pain and suffering’ while also warning the reader not to understand it in the technical English sense.) The indemnification of the victim for such losses has caused difficulties of a similar kind both in England and Germany. For though both systems are prepared to take cognisance of such losses, both realise that they are dealing with unquantifiable items of loss where restitutio in integrum is not possible. Instead, the idea of ‘fair compensation’ (Ausgleich) and ‘satisfaction’ (Genugtuung) is introduced into the legal vocabulary (see case 95) – while the idea of punishment is still widely rejected not only in the area of pain and suffering but also for the German tort law in general (see Ebert, Pönale Elemente im Privatrecht (2004); Klumpp, Die Privatstrafe (2001)). The idea of fair compensation and satisfaction are suggesting not only an inability for precise calculation, but also a desire for a certain degree of uniformity of awards. The above, however, should not be taken to suggest that money paid for pain and suffering is an insignificant part of the total award in Germany. On the contrary, there is a clear tendency in German case law to increase the size of the awards under this heading in the last decades (up to €700,000 for pain and suffering). (See the countless Schmerzensgeld-decisions mentioned in Slizyk, Beck’sche Schmerzensgeldtabelle (15th edn, 2019).) Academic opinion is, on the whole, firmly behind this trend and argues in favour of further increases (see Höke, ‘Schmerzensgelddiskussion in Deutschland: Bestandsaufnahmen und europäischer Vergleich’ NZV 2014, 1; Neuer, ‘Das Schmerzensgeld’ JuS 2013, 585). In fixing these awards the German courts tend to attach much importance to the pain suffered by the victim. The great intensity and duration of the pain will thus help push the

Ricochet Damage in the Context of Accidents  199 awards higher (BGH, VersR 1960, 401; BGH, BGHZ 18, 149; BGH, NJW 1976, 1148.). It comes as no surprise, therefore, to see that the various special tables of cases (the most important one is Slizyk, Beck’sche Schmerzensgeldtabelle), which collect and systematise the case law, structure their account of awards for damages for pain and suffering according to the injury suffered by the victim. Needless to say, that these (albeit non-binding) special tables of cases give important guidance to the courts and help avoid diverging Schmerzensgeldamounts for a similar injury. But the actual award must, nonetheless, be calculated de novo taking the circumstances of the individual case into account; and the judge must give his reasons for the sum he has reached (BGH, VersR 1976, 967). The mere fact that a comparable award was made in a similar (or apparently similar) case is not sufficient justification (BGH, NJW 1989, 773).

Bibliography Coester-Waltjen, ‘Der Ersatz immaterieller Schäden im Deliktsrecht’ Jura 2001, 133; Deutsch, ‘Schmerzensgeld für Vertragsverletzungen und bei Gefährdungshaftung’ ZRP 2001, 351; von Gerlach, ‘Die prozessuale Behandlung von Schmerzensgeldansprüchen’ VersR 2000, 525; Höke, ‘Schmerzensgelddiskussion in Deutschland: ­Bestandsaufnahmen und europäischer Vergleich’ NZV 2014 1; Neuer, ‘Das Schmerzensgeld’ JuS 2013, 577; Scheffen, ‘Tendenzen bei der Bemessung des Schmerzensgeldes für Verletzungen aus Verkehrsunfällen, ärztlichen Kunstfehlern und Produzentenhaftung’ ZRP 1999, 189.

IV.  Ricochet Damage in the Context of Accidents When the victim dies from his injuries or is at least seriously injured, third parties can suffer further loss. A young girl may lose her father’s much needed financial support; an ageing relative the services of a younger member of the family; an employee may see his job disappear as a result of the death of his employer; a football club may be deprived of a sizeable transfer fee when one of its star players is killed (the facts of a classic French case: Colmar, D 1956, 723). The list of ricochet victims can be endless; the harm they suffer can range from pure emotional distress to severe pecuniary loss. Three main questions arise normally in those situations: the first is whether a new cause of action should be created for this type of situation; the second is to whom should it be given; and the third is what should it be for. The German law is regulating these questions in §§ 844–45 BGB, which have already partly been discussed in chapter two, section II.A, so the following observations seem to suffice here. § 844 BGB deals with three different aspects in cases where the injured party deceased: § 844 I BGB obliges the tortfeasor to ‘make good the funeral expenses to the person on whom the obligation of bearing such expenses lies’. (See for the narrow interpretation of this provision, case 2.) § 844 II BGB is about the loss of support and proclaims that if a third party is deprived of the right to claim maintenance, the tortfeasor is obliged to pay a money annuity in so far as the deceased would have been bound to furnish maintenance during the presumable duration of his life. This typically consists of an action brought by the spouses (§ 1360 BGB), children, including adopted children (§ 1766 BGB), and

200  The Law of Damages (in  certain circumstances) even separated (§ 1361 BGB) and divorced spouses (§§ 1569 BGB ff). The German legislator has also provided at the end of § 844 II BGB that a child conceived but unborn at the time of the injury is not excluded as a potential claimant. An important group of potential claimants who are left without an action in German (and, very likely, English) law are fiancée(s) (of both sexes) since before their marriage there is no obligation to provide support (KG, NJW 1967, 1089). Mistresses are also treated with similar harshness and, for the same reasons, denied any right of action. The 2017 newly introduced § 844 III BGB deals with the compensation of emotional distress of third parties (Angehörigenschmerzensgeld or Hinterbliebenengeld) which has to be differentiated from damages for a nervous shock resulting from the death of the victim under § 823 I BGB (see chapter two, section II.B and cases 1–3). (This provision brings an end to an almost endless discussion in Germany; see Janssen, ‘Das Angehörigenschmerzensgeld in Europa und dessen Entwicklung – Verpasst Deutschland den Anschluss?’ ZRP 2003, 156; Wagner, ‘Schadensersatz in Todesfällen – Das neue Hinterbliebenengeld’ NJW 2017, 2641.) Unlike § 844 I BGB it suffices under § 844 III BGB that the survivor was at the time of the injury in a particularly close personal relationship with the deceased. Such a close personal relationship is presumed if the survivor was the spouse, the civil partner, a parent or a child of the deceased (§ 844 I 2 BGB). It needs to be seen whether the courts also accept other persons like grandparents or grandchildren (in general or at least in some circumstances) as eligible claimants under § 844 II BGB. Another yet unsettled issue is what can be understood as ‘reasonable monetary compensation’ the tortfeasor has to provide to the survivor(s). As the ‘rule of thumb’ €10,000 for each eligible third party under § 844 III BGB is discussed, but as said there is no relevant case law yet (Begründung des Regierungsentwurfs zum­ Hinterbliebenengeld, BT-Drs 18/11397, critical Jaeger, ‘Gesetz zur Einführung eines Anspruchs auf Hinterbliebenengeld’ VersR 2017, 1041, 1055 ff). § 845 BGB foresees a cause of action against the tortfeasor for the third party for the loss of services. Unlike § 844 BGB, § 845 BGB does not necessarily require the death of the victim as the injury to his/her body or health or deprivation of his/her liberty would also suffice. If the injured party was bound by law to perform services in favour of a third party in his household or industry, the tortfeasor is obliged compensate that third party by a payment of a money annuity. § 845 BGB covers mainly situations in which an ‘older’ person demands compensation for the loss of the services of a younger member of the family. Natural and adopted children are, in certain circumstances, under a duty to provide such services to their parents (see §§ 1619 and 1754 BGB) so that if they are injured the parents can claim their loss (BGH, BGHZ 69, 380). When the wife is injured she can claim under § 842 BGB for among, other things, her inability to continue to provide services to her family; but where she is killed a claim for loss of support under § 844 II BGB may be available to her husband (BGH, BGHZ 51, 109). On the other hand, her work as ‘housewife’ does not qualify as a service to justify an action under § 845 BGB (BGH, BGHZ 77, 157). The last point to which we must briefly turn our attention is that of contributory negligence on the part of the deceased/victim of the tort. There is an express provision in the BGB that deals with this matter in conjunction with § 254 BGB. This is § 846 BGB which, quite simply, declares that the third party’s claim under §§ 844, 845 BGB will be reduced to take into account the victim’s own fault in the realisation of the harm. The solution is similar to that adopted by the English Fatal Accident Act 1976 and is irreproachable.

Damage to Property  201

Bibliography Ebel, ‘Schadensersatz bei Personenschäden (§§ 844–846 BGB)’ Jura 1985, 561; Jaeger, ‘Gesetz zur Einführung eines Anspruchs auf Hinterbliebenengeld’ VersR 2017, 1041; ­Janssen, ‘Das Angehörigenschmerzensgeld in Europa und dessen Entwicklung – Verpasst Deutschland den Anschluss?’ ZRP 2003, 156; Wagner, ‘Schadensersatz in Todesfällen – Das neue ­Hinterbliebenengeld’ NJW 2017, 2641.

V.  Interference with the General Right to One’s Personality The general right to one’s personality and the indemnification for interference with it has already been discussed extensively in chapter two, section II.E.iv. For further information, please consult this part of the book and the cases referred to (including the accompanying notes). In addition, we would urge the reader to consult the Caroline of Monaco I decision of the BGH (case 96) and the accompanying note to it.

VI.  Damage to Property Once again the fragmented delict provisions of the BGB on damages to property (§§ 848 BGB ff) are supplemented by the practically much more important general provisions found in §§ 249–52 BGB. The starting point is, in fact, the restoration of the status quo (§ 249 I BGB). Taken literally, it suggests that the defendant must through his own efforts to restore or repair the damaged property. However, § 249 II 1 BGB enables the claimant in the case of physical damage to property (and in the case of an injury to a person) to claim the cost of restoration instead. In practice, it is the claimant who has his property repaired or replaced and then seeks to recoup his expenditure from the defendant. Therefore, what is presented by § 249 II 1 BGB as the possible exception to § 249 I BGB is, in practice, the rule. Monetary compensation is, however, openly recognised to be the rule where restoration in kind is impossible (§ 251 I BGB); or requires a disproportionate economic expenditure (§ 251 II BGB). The defendant’s obligation is to make good all primary and consequential losses occasioned by the damage to the claimant’s property, subject of course to the rules of legal cause. Normative theories of causation (such as the scope of the rule theory) can, once again, be used to impose effective legal limits on the extent of the obligation to compensate. The evaluation of material damages takes in principle the form of a mathematical calculation, which estimates the difference between the state of the damaged property if the damaging act had not occurred and the actual state of the property after the damaging act or event (so-called Differenzhypothese; the ‘godfather’ thereof is Mommsen, ‘Zur Lehre von dem Interesse’ in Beiträge zum Obligationenrecht (1855)). However, § 252 BGB specifically authorises the compensation of lost profits (entgangener Gewinn). According to the second sentence of the provision, ‘(p)rofit is deemed to have been lost which could probably have been expected in the ordinary course of events, or according to the special circumstances, especially in the light of the preparations and arrangements made’. Even though this rule favours the injured

202  The Law of Damages claimant, it does not allow him to claim for a possible chance – the German law does not allow the loss of a chance concept known in common law (see, eg, BGH, NJW 1981, 1673; Mäsch, Chance und Schaden (2004)). The bulk of claims for damage to property arise in the context of car accidents. This then is an important topic on which we can concentrate for our illustrations. But it is also interesting from a didactic point of view to focus our attention on this topic since it reveals very clearly how the needs of practical life have helped fashion a series of detailed case law-based rules that concretise the rather abstract provisions of the BGB. Clearly, one of the primary losses likely to be suffered by the owner of a damaged ­vehicle is the cost of repair. The cost of repair can also include what is sometimes referred to as the ‘commercial inferiority’ of the repaired vehicle (merkantiler Minderwert). This occurs whenever the damaged vehicle, though fully repaired, becomes ‘marked’ as a repaired vehicle and thereby loses some of its resale value (BGH, BGHZ 35, 396). Depending on the circumstances of the case at hand the ‘commercial inferiority’ can amount to 50 per cent of the cost of the repair (MünchenerKommentar/Oetker, § 249 BGB, no 56). It is not material in this context whether the claimant intends to sell the car or whether he intends to go on using it. In Payton v Brooks [1974] 1 Lloyd’s Rep 241 the claimant alleged, but failed to prove, that the value of the damaged new car was diminished even though repairs were well done. Roskill LJ, as he then was, elegantly summarised the applicable principles in the following passage: There are many cases which arise, whether in the field of contract law or of tort, where the cost of repairs is a prima facie method of ascertaining the diminution in value. But it is not the only method of measuring the loss. In a case where the evidence justifies a finding that there has been, on top of the cost of repairs, some diminution in market value – or, to put the point another way, justifies the conclusion that the loss to the [claimant] has not been fully compensated by the receipt of the cost of complete and adequate repairs, because of a resultant diminution in market value – I can see no reason why the [claimant] should be deprived of recovery under that head of damage also. I would only add one word of caution. This conclusion is not a charter under which infuriated [claimants], who have the misfortune to have their cars damaged by careless drivers, acquire an unfettered right to recover diminution of value in every case in addition to the cost of repairs. It is essential in such a case, in my judgment, for appropriate evidence to be called to prove diminution in value.

The reverse situation arises where repairing the car has increased its value compared with the status quo ante. In principle it would be unfair to allow this to stand, for the defendant cannot be required to improve the claimant’s overall financial position. The courts’ approach is a pragmatic one. So if the replaced part would have normally lasted for the car’s ‘lifetime’ then damages are not reduced (KG Berlin, NJW 1971, 142). On the other hand, if the part is already worn out and is replaced by a new part then the ‘betterment’ must be taken into account (so-called Abzug neu für alt, eg, for tyres). The amount of the reduction due to Abzug neu für alt is estimated by the judge (§ 287 ZPO). See on this (in)famous principle of the German law of damages, BGH, BGHZ 30, 29. Cost of repair will be borne by the defendant even if the claimant did not carry out the necessary repairs. The amount claimable in such cases will be equal to the sum that the garage would have charged had it carried out the repairs (but excluding the VAT: see § 249 II 2 BGB). In practice, the claimant will claim damages on the basis of the estimate of an expert instructed by him (or by the defendant’s insurance company) to prepare a report on the necessary repairs. But the claimant is then again not required to use the compensation

Damage to Property  203 given him to carry out the necessary repairs. It is in that case no concern of the law what the claimant does with the damages. The theoretical basis of such ‘fictitious’ damages is said to be § 249 II 1 BGB according to which the claimant may claim the necessary cost of repair instead of having the property repaired by the defendant. However, as already mentioned, in personal injury claims, the claimant must intend to spend the money on the necessary medical treatment (see BGHZ 97, 14, case 142 of the previous edition of this book). Otherwise, it is said, he would be awarded compensation for a non-pecuniary loss and this would be contrary to § 253 I BGB. But this distinction between damages for personal injury and damage to property is by no means self-evident. Overall, therefore, the present practice of awarding ‘fictitious’ damages in cases of property damages must be seen as an example of the (perhaps too) generous attitude of German courts towards compensation for physical damage to chattels. Where the cost of repair and replacement are approximately the same, the owner of the damaged vehicle will be free to decide what he will do. It must be remembered, however, that § 254 II BGB always obliges the claimant to mitigate his loss. Furthermore, according to § 251 II BGB, the cost of repair must not be disproportionate. A further and more specific principle has been developed by the courts in the context of § 249 II 1 BGB. According to this provision, only costs that are ‘necessary’ (erforderlich) can be recovered. From this the courts have inferred the requirement that the claimant’s conduct must be reasonable from an economic point of view (Wirtschaftlichkeitsgebot). This means that if there are several ways of restoration within the meaning of § 249 BGB the claimant must choose the most cost-effective. Cost of replacement and cost of repair both serve the same purpose. So, generally speaking, if the cost of replacement is lower than the cost of repair, the owner of the vehicle will have to take the former option. A limited exception is made if the claimant has a legitimate and special interest in having the damaged car repaired. To give an example: a car that is particularly fitted for the needs of a disabled claimant (AG Lahr, NZV 1990, 356). Somewhat surprisingly, the BGH extended this exception to used cars in general. Thus, the cost of repair can be claimed provided that it does not exceed by 30 per cent the cost of buying a comparable car (BGHZ 115, 364; case 149 of the previous edition of this book). It is important, however, to note that cost of repair can be recovered in these special cases only if the victim actually uses the money for repairs. Problematical, though equally well compensated in practice, are also the ‘consequential’ losses, especially the costs of hiring a substitute car. (See more detailed on this issue the ­previous edition of this book, 935 ff). The BGH regards those costs in principle already as part of the reparation owed by the defendant under § 249 BGB and does not treat it as lost profits under § 252 BGB. This is because these costs restore the position in which the claimant would have been in but for the tort. An important consequence of this is that the costs must be ‘necessary’ under § 249 II 1 BGB. Such claims can be maintained only if the claimant is in some way economically affected by the loss of use of the car. If, for example, the owner of the vehicle would not or could not have used it anyway because he, himself, was injured in the same accident, a claim will not usually be allowed because the claimant has not been affected (fühlbar beeinträchtigt) by the loss of use of the car (BGH, NJW 1968, 1778). The reason for this requirement becomes clear immediately if one considers the rationale behind awarding damages for loss of use. The cost of a substitute car can be claimed, as was explained, if the loss of use of the car affects the claimant economically. At the same time, a claimant who does not hire a substitute car even though he was entitled

204  The Law of Damages to do so would get nothing. But in many cases using other means of transport rather than hiring a car is certainly more reasonable, prudent and cost-effective. Therefore, awarding damages also where the claimant did not rent a substitute undeniably serves as an incentive not to hire a substitute and also as a gift to those who exercise self-restraint and save expense. It goes without saying that the amount of compensation for (simple) loss of use must be less than the cost of the substitute. In practice roughly 30 per cent of the normal rate of hiring a comparable car is awarded and the relevant figures are published in specialised and up-to-date tables. It will have been noticed that by calling this type of loss (loss of use) ‘pecuniary loss’ the courts have bypassed once again the obstacles of § 253 I BGB for non-pecuniary losses. However, in order to try to maintain the impression of consistency a number of theories have, finally, been developed to explain why the exception was only ‘apparent’. According to one view, the loss of use as such represents an economic value capable of sounding in damages (Kommerzialisierungstheorie); in this sense BGH, BGHZ 45, 212. This may be plausible at first sight, but it fails to explain why the BGH awarded no such damages in the case of objects that do not typically fulfil a vital or central role in everyday life. This has been accepted for cars and for the matrimonial home (BGH, BGHZ 98, 212), but claims were denied in the case of ‘luxury’ objects such as a racing boat (BGH, BGHZ 89, 60), a swimming pool (BGH, BGHZ 76, 179), a caravan (BGH, BGHZ 86, 128) or even a garage (BGH, NJW 1993, 1793). Thus, this ‘evasive’ action is not always possible. However, all these uses have commercial significance, evidenced by the fact that there is a market for them. The restriction of ‘vital’ use must however be seen as an attempt to keep liability under control and the floodgates shut. In the meantime, the principal area of application are claims in the context of traffic accidents. To mention just one further ‘theory’, it suffices to refer to the ‘frustration’ approach. The claimant invested in being able to use an object. Being deprived of this use amounts to a frustration of his investment. The drawback of this is that it is difficult to see why it should be relevant whether the car was a gift or whether it was bought. (This highly controversial problem is thoroughly reviewed in BGH, NJW 1986, 2037. For the question of ‘lost enjoyment of a holiday’ as pecuniary loss, see the previous edition of this book, 940 ff.)

Bibliography From the extensive literature on these problems see: Brinker, Die Dogmatik zum Vermögensschadensersatz (1982); Dunz, ‘Schadensersatz für entgangene Sachnutzung’ JZ 1984, 1010; Eley, Das Schadensersatzrecht des BGB und die Kfz-Sachschadensabrechnung des BGH (2015); Flessner, ‘Geldersatz für Gebrauchsentgang’ JZ 1987, 271; Hagen, ‘­Entgangene Gebrauchsvorteile als Vermögensschaden?’ JZ 1983, 833; Jahr, ‘Schadensersatz wegen deliktischer Nutzungsentziehung – zu den Grundlagen des Rechtsgüterschutzes und des Schadensersatzrechts’ 183 AcP (1983) 725; Lipp, ‘Der Ausgleich des Integritätsinteresses im KFZ-Schadensrecht’ NZV 1996, 7; Medicus, ‘Nutzungsentgang als Vermögensschaden’ Jura 1987, 240; Ott/Schäfer, ‘Begründung und Bemessung des Schadensersatzes wegen entgangener Sachnutzung’ ZIP 1986, 613; Roussos, Schaden und Folgeschaden (1992); Sanden/Völtz, Sachschadenrecht des Kraftverkehrs (9th edn, 2011); Ströfer, Schadensbegriff und Kommerzialisierung (1982); Weber, ‘Entschädigung für den entgangenen Gebrauch eines Kraftfahrzeuges’ VersR 1985, 111; Weyers, Unfallschäden (1971); Würthwein, Schadensersatz für Verlust der Nutzungsmöglichkeit einer Sache oder für entgangene Gebrauchsvorteile? (2001).

APPENDIX 1: EXTRACTS FROM THE GERMAN CIVIL CODE AND IMPORTANT PROVISIONS FROM OTHER LEGISLATIVE ACTS 1. Relevant bgb provisions § 31 The association is liable for any damage which the board, a member of the board, or other duly appointed representative may, in carrying out his duty, cause a third party, if the act obliges the making of compensation. § 195 The regular period of limitation is three years. § 199 (1) The regular period of limitation starts from the end of the year in which 1. the claim arises and 2. the creditor obtains knowledge or but for his gross negligence ought to have obtained knowledge of the circumstances that found his claim as well as of the debtor’s identity. (2) The claims for damages arising from injury to life, body, health, or violation of f­ reedom are time-barred irrespective of when the claim arises and the victim obtains, or with gross negligence fails to obtain, knowledge after thirty years from the time at which the wrongful conduct occurred, the duty was breached, or the other event occurred that caused the damage. (3) Other claims for damages are time-barred 1. irrespective of whether the victim obtains, or with gross negligence fails to obtain, knowledge within ten years from the time at which the claim arises 2. irrespective of when the claim arises and the victim obtains, or with gross negligence fails to obtain, knowledge within thirty years from the time at which the wrongful conduct occurred, the duty was breached or the other event occurred that caused the damage. Whichever of these limitation periods is shorter, prevails … § 226 The exercise of a right is inadmissible if it can only have the purpose of causing damage to another. § 227 (1) An act required by self-defence is not unlawful. (2) Self-defence is that defence which is necessary in order to ward off from oneself or another an actual unlawful attack.

206  Appendix 1 § 228 Anyone who damages or destroys a thing belonging to another in order to ward off from himself or another a danger threatened by it, does not act unlawfully, if the damage or destruction is necessary to ward off the danger and the damage is not out of proportion to the danger. If the person acting is to blame for the danger, he is bound to make good the damage. § 229 Anyone who for purposes of self-help takes away, destroys, or damages a thing or for purposes of self-help apprehends an obligor suspected of intending flight or overcomes the resistance of the obligor to an act which the latter is bound to suffer, does not act unlawfully if the help of the authorities cannot be obtained in good time and there is danger that unless he acts at once the realisation of the claim will be frustrated or appreciably impeded. § 230 (1) Self-help must not go further than is necessary to ward off the danger. (2) In case of the seizure of things, in so far as compulsory execution is not effected, leave to distrain must be applied for. (3) In case of the apprehension of the obligor, in so far as he is not set free again, leave for the precautionary detention of his person must be applied for to the District Court in whose district the apprehension has taken place; the obligor must be brought before the Court without delay. (4) If the application is delayed or rejected, the restitution of the things seized and the ­liberation of the person apprehended must follow without delay. § 231 Anyone who does one of the acts specified in § 229 under the mistaken assumption that the necessary presuppositions for the exclusion of illegality are in existence, is bound to compensate the other party, even if the mistake is not due to negligence. § 241 (1) The effect of an obligation is that the creditor is entitled to claim performance from the debtor. The performance may consist of refraining from acting. (2) Each party to the obligation may according to the content of the obligation be required to apply proper care as to the rights and interests of the other party. § 249 (1) The person who is bound to make compensation must restore the situation which would exist if the circumstance making him liable to compensate had not occurred. (2) If compensation is to be made for injury to a person or damage to a thing the creditor may demand, instead of restitution in kind, the sum of money necessary to effect such restitution. When an object is damaged, the necessary sum of money in accordance with sentence 1 only includes VAT if and in so far as it is actually incurred. § 250 The creditor may by notice to the person liable to compensate, fix a reasonable period for the restitution in kind with a declaration that he will not accept restitution after the expiration of the period. After the expiration of the period, the creditor may demand the compensation in money if the restitution is not effected in due time; the claim for restitution is barred.

Appendix 1  207 § 251 (1) If performance in kind is impossible or insufficient to compensate the creditor, the party obliged to provide reparation must do so in money. (2) The party obliged to provide reparation may do so by paying money only if performance in kind requires disproportionate expenditure. Expenditure incurred in healing an injured animal is not disproportionate for the reason alone that it exceeds its value considerably. § 252 The damage to be made good includes also lost profits. Profit is deemed to have been lost which would have been expected with probability according to the ordinary course of things, or according to the particular circumstances, in particular, according to the preparation and provisions made. § 253 (1) For an injury which is not an injury to property compensation in money may be demanded only in the cases specified by law. (2) If damages are to be paid for an injury to body, health, freedom or sexual self-­ determination, reasonable compensation in money may also be demanded for any damage that is not pecuniary loss. § 254 (1) If any fault of the injured party has contributed to the occurrence of the damage, the duty to compensate and the extent of the compensation to be made depend upon the circumstances, especially upon how far the injury has been caused predominantly by the one or the other party. (2) This applies also if the fault of the injured party was limited to omission to call the ­attention of the debtor to the danger of unusual serious damage, of which the debtor neither knew nor ought to have known, or to an omission to avert or mitigate the damage. The provision of § 278 applies mutatis mutandis. § 255 The person who is to make compensation for the loss of a thing or of a right is bound to make compensation only upon an assignment to him of the claims which belong to the person entitled to compensation by virtue of his ownership of the thing or by virtue of his right against third parties. § 276 (1) The debtor is responsible for recklessness and negligence, unless a stricter or less strict liability is otherwise provided or is to be inferred from the content of the obligation, especially if the debtor guaranteed performance or undertook the risk of supply. The provisions of §§ 827 and 828 apply. (2) A person who does not exercise the care expected in daily affairs acts negligently. (3) The debtor may not be released beforehand from responsibility for recklessness. § 277 The person who is answerable only for such care as he is accustomed to exercise in his own affairs is not relieved from liability for gross negligence.

208  Appendix 1 § 278 A debtor is responsible for the fault of his statutory agent, and of persons whom he employs in fulfilling his obligation, to the same extent as for his own fault. The provision of § 276 section 3 does not apply. § 280 (1) If the debtor violates an obligation he is liable to the creditor for the damages arising therefrom. This does not apply, when the debtor did not act wilfully or negligently … § 311 … (2) An obligation involving duties according to § 241 section 2 may also arise by 1. entering into contractual negotiations, 2. establishing contacts with a potential contract partner which allow this partner to affect the rights or interests of the other party, or 3. similar business contacts. (3) An obligation involving duties according to § 241 section 2 may also arise with regard to persons who are not meant to become a party to the contract. Such duties arise especially where a third party claims special trustworthiness for itself and thereby considerably influences the contract negotiations or the conclusion of the contract. § 328 (1) A contract may stipulate for performance to a third party, so that the third party acquires a right to demand performance. (2) In the absence of express stipulation it is to be deduced from the circumstances, especially from the object of the contract, whether the right of the third party shall arise forthwith or only under certain conditions, and whether any right shall be reserved to the contracting parties to take away or modify the right of the third party without his consent. § 329 If in a contract one party binds himself to satisfy a creditor of the other party without assuming the debt, it is not to be presumed, in case of doubt, that the creditor shall acquire a direct right to demand satisfaction from him. § 330 If, in a contract for life insurance or an annuity, payment of the insurance or annuity to a third party is stipulated for, it is to be presumed, in case of doubt, that the third party shall directly acquire the right to demand the performance. The same rule applies, if in a gratuitous transfer of property the duty to perform the act to a third party is imposed upon the recipient, or if a person, on taking over the whole of another person’s property or goods, promises an act of performance to a third party for the purpose of settling the latter’s debts. § 331 (1) If the performance to the third party is to be made after the death of the person to whom it was promised, in case of doubt the third party acquires the right to the performance upon the death of the promisee. (2) If the promisee dies before the birth of the third party, the promise to perform to the third party can be revoked or altered only if the right to do so has been reserved.

Appendix 1  209 § 630a (1) Under the treatment contract, the person agreeing to provide medical treatment of a patient (the treatment provider) is obliged to provide the promised treatment, and the other party (the patient) is obliged to guarantee the agreed payment, unless a third party is obliged to pay. (2) The treatment must comply with all professionally recognised standards at the time of treatment, unless another standard is agreed. § 630b The provisions concerning a service relationship which is not an employment relationship under § 622 apply unless this sub-title provides otherwise. § 630c (1) The treatment provider and the patient shall cooperate in the implementation of the treatment. (2) The treatment provider is obliged to inform the patient of all relevant circumstances relating to the treatment in an comprehensible manner at the beginning and, where necessary, in the course of the treatment, in particular the diagnosis, the probable health prognosis, the therapy and the precautions to be taken during and after the therapy. If there are circumstances of which the treatment provider should be aware, which amount to an acceptance of a treatment error, he must inform the patient about these on request or in order to prevent a danger to health. Where the treatment provider or his specified assistants under § 52 I of the Code of Criminal Procedure commits a treatment error, the information mentioned in sentence 2 may be used as evidence in any criminal or regulatory proceedings against the treatment provider or his assistants only with their consent. (3) If the treatment provider is aware that the costs of treatment are not fully underwritten by a third party or sufficient indications of this emerge from the circumstances, he must inform the patient in writing before the beginning of the treatment of the likely costs of treatment. Additional requirements as to formality arising from other provisions are unaffected. (4) Informing the patient can exceptionally be dispensed with in special circumstances, in particular when the treatment cannot be delayed or where the patient has expressly waived to information. § 630d (1) Before the implementation of a medical procedure, in particular an invasion of body or health, the treatment provider is obliged to obtain the consent of the patient. If the patient is unable to consent, the consent of an authorised person is required insofar as the procedure is not permitted or prohibited by a living will according to §1901a I sentence 1. Additional requirements as to consent arising from other provisions are unaffected. Where the consent cannot immediately be obtained for a procedure that cannot be delayed, it can be carried out if it probably conforms to the will of the patient. (2) The effectiveness of a consent presupposes that the Patient or, in the case of (1) sentence 2 above, an authorised person is informed before consent in accordance with §630e, paras (1) to (4). (3) The consent can be revoked at any time and without giving reasons or complying with formalities.

210  Appendix 1 § 630e (1) The treatment provider is obliged to inform the patient of all the circumstances r­ elevant to consent. These include the nature, scope, implementation, expected consequences and risks of the procedure, as well as its necessity, urgency, appropriateness and chances of success in the light of the diagnosis or therapy. Information includes referring to alternatives to the procedure, if several medically recognised and usual methods can lead to significantly different consequences, risks of chances of recovery. (2) The information must 1. be communicated orally by the treatment provider or by a person who has the necessary training in the implementation of the procedure; this can be supplemented also by ­documents which the patient receives in written form; 2. be provided in good time so that the patient can make his consent decision in a well-considered fashion. 3. be understandable for the patient. The patient should be provided with copies of documents which he has signed in connection with the information or consent. (3) The information of the patient is not necessary insofar as exceptionally special circumstances make it unavoidable, in particular when the procedure cannot be delayed or the patient has expressly waived his right to information. (4) If the consent of an authorised person is required under §630d I sentence 2, this person is to be informed according to the provisions of paragraphs (1) to (3) above. (5) In the case of §630d I sentence 2, the relevant circumstances in paragraph (1) are to be explained to the patient in a form corresponding to his understanding, insofar as he is in a state to receive the explanation due to his development and capacity to understand and insofar as this does not interfere with his wellbeing. Paragraph (3) applies accordingly. § 630h (1) A treatment error is presumed if a general treatment risk materialises, which was fully manageable for the treatment provider and has led to harm to the life, body or health of the patient. (2) The treatment provider must prove that he has obtained a consent in accordance with §630d and provided information according to the requirements of §630e. If the information does not satisfy the requirements of §630e, the treatment provider may demonstrate that the patient would have consented to the procedure also in the case of proper information…. (4) Where the treatment provider is not qualified to perform the treatment, it is presumed that the lack of qualification is the cause of the occurrence of any harm to life, body or health. (5) If there is a gross error in treatment and this is fundamentally connected to a harm to life, body or health of a kind which actually occurred, it is presumed that this treatment malpractice is the cause of the harm. This applies also if the treatment provider failed to make or record a medically required diagnosis in good time, in so far that the diagnosis would have brought results with sufficient certainty that further measures would have been taken, and if the failure to take such measures would have constituted gross malpractice.

Appendix 1  211 § 675 … (2) A person who gives another person advice or a recommendation, notwithstanding the responsibility that arises from a contractual relationship, a tort or another statutory provision, is not obliged to pay compensation for the damage arising from following the advice or the recommendation. § 823 (1) A person who wilfully or negligently injures the life, body, health, freedom, property, or other right of another contrary to law is bound to compensate him for any damage arising therefrom. (2) The same obligation attaches to a person who infringes a statutory provision intended for the protection of others. If according to the purview of the statute infringement is possible even without fault, the duty to make compensation arises only if some fault can be imputed to the wrongdoer. § 824 (1) A person who maintains or publishes, contrary to the truth, a statement calculated to endanger the credit of another, or to injure his earnings or prospects in any other manner, must compensate the other for any damage arising therefrom, even if he does not know of its untruth, provided he ought to know. (2) A communication the untruth of which is unknown to the person making it does not thereby render him liable to make compensation, if he or the recipient of the communication has a justifiable interest in it. § 825 A person who induces another by deceit, threat or abuse of a relationship of dependence to undertake or suffer sexual acts is obliged to compensate him for the harm arising out of this. § 826 A person who wilfully causes damage to another in a manner contra bonos mores is bound to compensate the other for the damage. § 827 A person who does damage to another in a condition of unconsciousness, or in a condition of morbid disturbance of the mental activity, incompatible with a free determination of the will, is not responsible for the damage. If he had brought himself into a temporary condition of this kind by spirituous liquors or similar means, he is responsible for any damage which he unlawfully causes in this condition in the same manner as if negligence were imputable to him; the responsibility does not arise if he has been brought into this condition without fault. § 828 (1) A person who has not completed his seventh year of age is not responsible for any damage which he does to another. (2) A person who has completed his seventh but not his tenth year is not responsible for the harm which he has inflicted on another in an accident with a motor vehicle, a railway or a suspension railway. This does not apply if he has caused the injury intentionally.

212  Appendix 1 (3) A person who has not completed his eighteenth year is, in so far as his responsibility is not excluded under sections 1 or 2, not responsible for the harm which he inflicts on another, if, on commission of the act causing the harm, he does not have the understanding necessary for recognition of responsibility. § 829 A person who in any one of the cases specified in §§ 823–826 is by virtue of §§ 827, 828 not responsible for any damage caused by him, must, nevertheless, to the extent that compensation cannot be obtained from a third party charged with the duty of supervision, make compensation for the damage in so far as according to the circumstances – in particular according to the relative positions of the parties – equity requires indemnification, and he is not deprived of the means which he needs for his own maintenance according to his station in life and for the fulfilment of his statutory duties to furnish maintenance to others. § 830 (1) If several persons have caused damage by an unlawful act committed in common, each is responsible for the damage. The same rule applies if it cannot be discovered which of several participants has actually caused the damage. (2) Instigators and accomplices are in the same position as joint-doers. § 831 (1) A person who employs another to do any work is bound to compensate for damage which the other unlawfully causes to a third party in the performance of his work. The duty to compensate does not arise if the employer has exercised ordinary care in the choice of the employee, and, where he has to supply appliances or implements or to superintend the work, has also exercised ordinary care as regards such supply or superintendence, or if the damage would have arisen, notwithstanding the exercise of such care. (2) The same responsibility attaches to a person who takes over the charge of any of the affairs specified in section 1, sentence 2, by contract with the employer. § 832 (1) A person who is bound by law to exercise supervision over a person on account of minority, or of his mental or physical condition, is bound to make compensation for any damage which the latter unlawfully does to a third party. The duty to compensate does not arise if he fulfils his duty of supervision, or if the damage would have occurred notwithstanding the proper exercise of supervision. (2) The same responsibility attaches to a person who takes over by contract the exercise of supervision. § 833 If a person is killed or injured, or the health of a person is affected, or a thing is damaged by an animal, the person who keeps the animal is bound to compensate the injured party for any damage arising therefrom. The duty to make compensation does not arise if the damage is caused by a domestic animal which is intended to serve the profession, the business activities, or the support of the keeper of the animal and if the keeper of the animal has either exercised the requisite care in supervising the animal or if the damage would have occurred notwithstanding the exercise of such care.

Appendix 1  213 § 834 A person who undertakes to supervise an animal under a contract with the keeper of the animal is responsible for any damage which the animal causes to a third party in the manner specified in § 833. The responsibility does not arise if he has exercised the requisite care in the supervision of the animal, or if the damage would have occurred notwithstanding the exercise of such care. § 835 [Repealed] § 836 (1) If, by the collapse of a building or other structure attached to a piece of land, or by the detachment of parts of the building or structure, a person is killed or injured, or the health of a person is affected, or a thing is damaged, and if the collapse or the detachment was caused by defective construction or inadequate maintenance, the possessor of the land is bound to compensate the injured party for any damage arising there-from. The duty to make compensation does not arise if the possessor has exercised the requisite care for the purpose of averting danger. (2) A former possessor of the land is responsible for the damage if the collapse or the detachment occurs within one year after the termination of his possession, unless during his possession he exercised the requisite care, or unless a subsequent possessor could have averted the danger by the exercise of such care. (3) The possessor within the meaning of these provisions is the proprietary possessor. § 837 If a person in the exercise of a right possesses a building or other structure on the land of another, the responsibility specified in § 836 attaches to him instead of the possessor of the land. § 838 A person who undertakes for the possessor the maintenance of a building or a structure attached to land, or who has to maintain the building or the structure by virtue of a right of use belonging to him, is responsible in the same manner as the possessor for any damage caused by the collapse or the detachment of parts. § 839 (1) If an official wilfully or negligently commits a breach of official duty incumbent upon him towards a third party, he shall compensate the third party for any damage arising therefrom. If only negligence is imputable to the official, he may be held liable only if the injured party is unable to obtain compensation otherwise. (2) If an official commits a breach of his official duty in giving judgment in an action, he is not responsible for any damage arising therefrom, unless the breach of duty is subject to a public penalty to be enforced by criminal proceedings. This provision does not apply to a breach of duty consisting of refusal or delay in the exercise of the office. (3) The duty to make compensation does not arise if the injured party has wilfully or ­negligently omitted to avert the injury by making use of a legal remedy.

214  Appendix 1 § 839a (1) If an expert nominated by the court submits an incorrect report intentionally or with gross negligence, he is under a duty to compensate for the harm which arises for a party to the proceedings through a court decision which is based on this report. (2) § 839 section 3 is to be applied accordingly. § 840 (1) If several persons are together responsible for damage arising from an unlawful act, they are liable, subject to the provisions of § 835, section 3, as joint debtors. (2) If, in addition to the person liable under §§ 831, 832 to make compensation for the damage caused by another, that other person is also liable, as between themselves only the latter is liable, or in the case provided for by § 829, only the person who has the duty of supervision. (3) If, in addition to the person liable under §§ 833–838 to make compensation for any damage, a third party is also liable for the damage, as between themselves only such third party is liable. § 841 If an official whose public duty requires him to appoint another person for the purpose of acting for a third party or to supervise such an activity or to cooperate in this activity by giving his consent to legal transactions is responsible with the other person for the damage caused by the latter through neglect of his duties, then, as between the two of them, that other party is solely liable. § 842 The obligation to make compensation for damage on account of an unlawful act directed against the person of another extends to the detriment which the act occasions to his earnings or prospects. § 843 (1) If, in consequence of an injury to body or health, the earning capacity of the injured party is destroyed or diminished or an increase of his necessities arises, compensation must be made to the injured party by the payment of a money annuity. (2) The provisions of § 760 apply to the annuity. Whether, in what manner, and to what amount, the person bound to make compensation has to give security is determined according to the circumstances. (3) Instead of an annuity the victim may demand a lump sum settlement, if a serious reason exists for it. (4) The claim is not excluded by the fact that another person has to furnish maintenance to the injured party. § 844 (1) In the case of causing death the person bound to make compensation must make good the funeral expenses to the person on whom the obligation of bearing such expenses lies. (2) If the deceased at the time of the injury stood in a relation to a third party by virtue of which he was or might become bound by law to furnish maintenance to him, and if in consequence of the death such third party is deprived of the right to claim maintenance, the person bound to make compensation must compensate the third party by the payment of a money annuity, in so far as the deceased would have been bound to furnish ­maintenance

Appendix 1  215 during the presumable duration of his life; the provisions of § 843, sections 2–4, apply mutatis mutandis. The obligation to make compensation arises even if at the time of the injury the third party was only en ventre sa mère. (3) The person liable in damages must provide reasonable monetary compensation to a survivor, who at the time of the injury was in a particularly close personal relationship to the deceased, for the emotional distress caused to the survivor. A particularly close personal relationship is presumed if the survivor was the spouse, the civil partner, a parent or a child of the deceased. § 845 In the case of causing death, or of causing injury to body or health, or in the case of ­deprivation of liberty, if the injured party was bound by law to perform services in favour of a third party in his household or industry, the person bound to make compensation must compensate the third party for the loss of services by the payment of a money annuity. The provisions of § 843, sections 2–4, apply mutatis mutandis. § 846 If, in the cases provided for by §§ 844, 845, some fault of the injured party has contributed to cause the damage which the third party has sustained, the provisions of § 254 apply to the claim of the third party. § 847 [Repealed] § 848 A person liable to restore an object of which he deprived another unlawfully is also liable if it perished accidentally, if its return has become impossible accidentally for any other reason, or if it deteriorated accidentally, unless the destruction, the impossibility to return it for other reasons, or its deterioration, would also have occurred if it had not been taken. § 849 If a party can claim damages because he was deprived of an object or because it had been damaged and has suffered in value, he can claim interest on the sum representing damages from the time which serves to determine its taking. § 850 Where the person liable to restore an object unlawfully withheld has incurred outlays in respect of that object, he is entitled, as against the injured party, to claim the same rights as the possessor of an object has against the owner for outlays incurred. § 851 If a person bound to make compensation for any damage on account of taking or damaging of a moveable compensates the person in whose possession the thing was at the time of the taking or damage, he is discharged by so doing even if a third party was owner of the thing, or had some other right in the thing, unless the right of the third party is known to him or remains unknown in consequence of gross negligence. § 852 If the person liable has acquired anything by the delict at the expense of the injured party, he is, even after the expiry of the limitation period, bound to return it under the provisions relating to the return of unjust enrichment. This claim is time-barred in ten years from the

216  Appendix 1 time it arose, or irrespective of the time at which the claim arises in thirty years from the time at which the wrongful conduct occurred or the other event occurred that caused the damage. § 853 If by an illegal act a person acquires a contractual claim, the injured party may refuse to perform even if the time has passed for hearing the contractual claim. § 904 The owner of a thing is not entitled to prohibit the interference of another with the thing, if the interference is necessary for the avoidance of a present danger and the damage threatened is disproportionately great compared to the damage caused to the owner by the interference. The owner may demand compensation for the loss suffered by him. § 906 (1) The owner of a plot of land may not prohibit the introduction of gases, steam, smells, smoke, soot, warmth, noise, vibrations and similar influences emanating from another plot of land to the extent that the influence does not interfere with the use of his plot of land, or interferes with it only to an insignificant extent. An insignificant interference is normally present if the limits or targets laid down in statutes or by statutory orders are not exceeded by the influences established and assessed under these provisions. The same applies to values in general administrative provisions that have been issued under section 48 of the Federal Environmental Impact Protection Act [Bundesimmissionsschutzgesetz] and represent the state of the art. (2) The same applies to the extent that a material interference is caused by a use of the other plot of land that is customary in the location and cannot be prevented by measures that are financially reasonable for users of this kind. Where the owner is obliged to tolerate an influence under these provisions, he may require from the user of the other plot of land reasonable compensation in money if the influence impairs a use of the owner’s plot of land that is customary in the location or its income beyond the degree that the owner can be expected to tolerate. (3) The causing of intrusion through a special conduit is not permissible. § 907 (1) The owner of a piece of land may demand that on adjacent land no works be installed or maintained as to which it is to be foreseen with certainty, that their existence or use will result in an inadmissible interference with his piece of land. If a plant satisfies the provisions of the State law, which prescribe a certain distance from the boundary or other protective measures, the removal of the plant may not be demanded until the inadmissible interference actually results. (2) Trees and bushes do not belong to works within the meaning of these provisions. § 1004 (1) If the ownership is interfered with otherwise than by dispossession or withholding of possession, the owner may demand from the disturber the removal of the interference. If further interference is to be apprehended, the owner may sue for an injunction. (2) The claim is excluded, if the owner is obliged to tolerate the interference.

Appendix 1  217 2. Relevant Provisions of the Act on Artistic Creations (Kunsturhebergesetz) § 22 Pictures of people can only be disseminated or displayed publicly with the consent of the persons portrayed. In cases of doubt, consent is to taken as having been given if the person portrayed received a payment for letting himself be portrayed. After the death of the person portrayed, the consent of the relatives of the person portrayed is needed until 10 years have elapsed … § 23 (1) The following may be disseminated and displayed without the consent necessary in accordance with § 22: 1. Pictures of people from the realm of contemporary history; 2. Pictures in which the persons only appear as accessories near a landscape or other locality; 3. Pictures of meetings, processions and similar events in which the persons depicted have taken part; 4. Pictures of people which are not made to order insofar as the dissemination or display serves a higher interest of art … 3. Relevant human rights provisions of the basic Law (as subsequently amended) Article 1 (Protection of human dignity) (1) The dignity of man shall be inviolable. To respect and protect it shall be the duty of all state authority. (2) The German people therefore acknowledge inviolable and inalienable human rights as the basis of every community, of peace and of justice in the world. (3) The following basic rights shall bind the legislature, the executive, and the judiciary as directly enforceable law. Article 2 (Rights of liberty) (1) Everyone shall have the right to the free development of his personality in so far as he does not violate the rights of others or offend against the constitutional order or the moral code. (2) Everyone shall have the right to life and to inviolability of his person. The liberty of the individual shall be inviolable. These rights may only be encroached upon pursuant to a law. Article 3 (Equality before the law) (1) All persons shall be equal before the law. (2) Men and women shall have equal rights. The state shall promote the actual implementation of equal rights for women and men and take steps to eliminate disadvantages that now exist. (3) No person shall be favoured or disfavoured because of sex, parentage, race, language, homeland and origin, faith, or religious or political opinions. No person shall be disfavoured because of disability.

218  Appendix 1 Article 4 (Freedom of faith and creed) (1) Freedom of faith, of conscience, and freedom to profess a religious or philosophical creed, shall be inviolable. (2) The undisturbed practice of religion is guaranteed. (3) No one may be compelled against his conscience to render military service involving the use of arms. Details shall be regulated by a federal law. Article 5 (Freedom of expression) (1) Everyone shall have the right freely to express and disseminate his opinion by speech, writing, and pictures and freely to inform himself from generally accessible sources. Freedom of the press and freedom of reporting by means of broadcasts and films shall be guaranteed. There shall be no censorship. (2) These rights are limited by the provisions of the general laws, the provisions of law for the protection of youth, and by the right to inviolability of personal honour. (3) Art and scholarship, research and teaching, shall be free. Freedom of teaching shall not absolve anyone from loyalty to the Constitution. Article 6 (Marriage, family, illegitimate children) (1) Marriage and family shall enjoy the special protection of the state. (2) The care and upbringing of children are a natural right of, and a duty primarily incumbent on, the parents. The state shall watch over their endeavours in this respect. (3) Children may not be separated from their families against the will of the persons entitled to bring them up, except pursuant to a law, if those so entitled fail or the children are otherwise threatened with neglect. (4) Every mother shall be entitled to the protection and care of the community. (5) Illegitimate children shall be provided by legislation with the same opportunities for their physical and spiritual development and their place in society as are enjoyed by legitimate children. Article 8 (Freedom of assembly) (1) All Germans shall have the right to assemble peaceably and unarmed without prior notification or permission. (2) With regard to open-air meetings the right may be restricted by or pursuant to a law. Article 9 (Freedom of association) (1) All Germans shall have the right to form associations and societies. (2) Associations, the purposes or activities of which conflict with criminal laws or which are directed against the constitutional order or the concept of international understanding, are prohibited. (3) The right to form associations to safeguard and improve working and economic conditions is guaranteed to everyone and to all trades, occupations, and professions. Agreements which restrict or seek to impair this right shall be null and void; measures directed to this end shall be illegal. Measures taken pursuant to Article 12a, to paragraphs (2) and (3) of Article 35, to paragraph (4) of Article 87a, or to Article 91, may not be directed against any industrial conflicts engaged in by associations within the meaning of the first sentence of this paragraph in order to safeguard and improve working and economic conditions.

Appendix 1  219 Article 10 (Privacy of posts and telecommunications) (1) Privacy of posts and telecommunications shall be inviolable. (2) This right may be restricted only pursuant to a law. Such law may lay down that the person affected shall not be informed of any such restriction if it serves to protect the free democratic basic order or the existence or security of the Federation or a Land, and that recourse to the courts shall be replaced by a review of the case by bodies and auxiliary bodies appointed by Parliament. Article 11 (Freedom of movement) (1) All Germans shall enjoy freedom of movement throughout the federal territory. (2) This right may be restricted only by or pursuant to a law and only in cases in which an adequate basis of existence is lacking and special burdens would arise to the community as a result thereof, or in which such restriction is necessary to avert an imminent danger to the existence or the free democratic basic order of the Federation or a Land, to combat the danger of epidemics, to deal with natural disasters or particularly grave accidents, to protect young people from neglect or to prevent crime. Article 12 (Right to choose trade, occupation, or profession) (1) All Germans shall have the right freely to choose their trade, occupation, or profession, their place of work and their place of training. The practice of trades, occupations, and professions may be regulated by or pursuant to a law. (2) No specific occupation may be imposed on any person except within the framework of a traditional compulsory public service that applies generally and equally to all. (3) Forced labour may be imposed only on persons deprived of their liberty by court sentence. Article 14 (Property, right of inheritance, expropriation) (1) Property and the right of inheritance are guaranteed. Their content and limits shall be determined by the laws. (2) Property imposes duties. Its use should also serve the public weal. (3) Expropriation shall be permitted only in the public weal. It may be effected only by or pursuant to a law which shall provide for the nature and extent of the compensation. Such compensation shall be determined by establishing an equitable balance between the public interest and the interests of those affected. In case of dispute regarding the amount of compensation, recourse may be had to the ordinary courts. Article 19 (Restriction of basic rights) (1) In so far as a basic right may, under this Basic Law, be restricted by or pursuant to a law, such law must apply generally and not solely to an individual case. Furthermore, such law must name the basic right, indicating the Article concerned. (2) In no case may the essential content of a basic right be encroached upon. (3) The basic rights shall apply also to domestic juristic persons to the extent that the nature of such rights permits. (4) Should any person’s right be violated by public authority, recourse to the court shall be open to him. If jurisdiction is not specified, recourse shall be to the ordinary courts. The second sentence of paragraph (2) of Article 10 shall not be affected by the provisions of this paragraph.

220  Appendix 1 4. Road Traffic Law of 19 December 1952 II Liability § 7 Liability of the Keeper of a Vehicle (1) If in the course of the operation of a motor vehicle or a trailer, designed to be taken along with a vehicle, a person is killed, the body or the health of a person is injured or an object is damaged, the keeper is obliged to compensate the injured party for the damage resulting therefrom. (2) The duty to compensate is excluded if the accident is caused by force majeure. (3) If somebody uses the vehicle without the knowledge and consent of the keeper of the vehicle that person is liable to pay compensation for the damage in the place of the keeper; in addition the keeper himself remains liable to pay compensation if the use of the motor vehicle was facilitated by his negligence. The first sentence of this paragraph does not apply if the person using the vehicle was employed by the keeper for the purpose of operating the vehicle or if he was entrusted with the vehicle by the keeper. Sentences 1 and 2 are to be applied correspondingly to the use of a trailer. § 8 Exceptions The provisions of § 7 do not apply, 1. if the accident was caused by a motor vehicle which cannot travel on level ground at a higher speed than twenty kilometers per hour, or by a trailer connected to such a vehicle at the time of the accident, 2. if the injured person was operating the motor vehicle, or 3. if an object has been damaged which was being transported by the motor vehicle or by a trailer connected to it at the time of the accident, unless a person who is being transported is carrying the thing on him or takes it with him. § 8a Liability to Passengers in the Course of Commercial Transport of Persons In the case of commercial transport of persons for remuneration, the duty of the keeper to compensate in accordance with § 7 because of the death or injury of persons transported cannot be either excluded or limited. The commercial character of a transport of persons is not excluded by the fact that the transport is performed by a body or institution governed by public law. § 9 Contributory Negligence of the Injured Party If the injured party contributed to the damage by his fault, § 254 BGB applies with the proviso that if an object was damaged, fault on the part of the person exercising factual control over the object is treated as equivalent to fault on the part of the injured party. § 10 Extent of Liability in the Case of Death (1) In the case of death, damages to be paid comprise compensation for the expenses of an attempted cure and for the economic loss which the deceased has suffered because his earning capacity was destroyed or reduced during his illness or because his needs were increased. The person liable to pay damages must also reimburse the cost of the burial to the person responsible for it. (2) If at the time of the injury the deceased stood in a relationship to a third party by virtue of which he was legally bound to maintain the latter, or might become so liable, and if as a

Appendix 1  221 result of the death the third party has lost the right to maintenance, the person liable to pay compensation must pay damages to the third party to the extent that the deceased would have been liable to pay maintenance during the probable duration of his life. The duty to compensate arises even if the third party was conceived at the time of the injury, but had not yet been born. (3) The person who is bound to pay compensation is liable pay suitable financial compensation to survivors who at the time of the injury to the deceased were in a special close personal relationship for their emotional harm. A special close personal relationship is presumed if the survivor is a souse, partner, parent or child of the deceased. § 11 Extent of Liability in the Case of Injury to the Person In the case of injury to the person or to health, the damages comprise compensation for the expenses of the cure and for the economic loss which the injured party suffered because his earning capacity was temporarily or permanently destroyed or reduced as a result of the injury or because his needs have increased. Equitable compensation in money can also be claimed for non-pecuniary loss. § 12 Maximum Amount of Liability (1)The person who is bound to pay compensation is liable to pay 1. where one or more persons were killed or injured in the same event only up to a total of € 5,000,000, or for harm arising from the use of a highly or fully automated vehicle within § 1a1 only up to a total of € 10,000,000; in the case of remunerated business transport of people where more than eight passengers are killed or injured, the liability of the keeper of the motor vehicle or the trailer is increased by € 600,000 for every further killed or injured passenger; 2. where an object was damaged, even if several objects are damaged in the same event, only up to a up to a total of € 1 million, or for harm arising from the use of a highly or fully automated vehicle under § 1a only up to a total of € 2 million. The upper limits according to sentence 1, number 1 apply both to lump sums and to p ­ eriodic payments. (2) If the damages to be paid to several claimants involved in the same event exceed in total the maximum limit laid down in (1), the damages payable to each individual are reduced in proportion of the total in relation to the maximum amount.

1 Vehicles with a highly or fully automated driving function within the meaning of this Act are those which are technically equipped 1. such that can steer the vehicle under activation which controls the driving function both forwards and sidewards (vehicle steering); 2. that is able to conform to traffic regulations during highly or fully automated vehicle steering; 3. that at any time can be manually overridden or deactivated by the vehicle’s driver; 4. that can recognize the requirements for independent vehicle steering of the vehicle’s driver; 5. that can show the requirements for independent vehicle steering to the vehicle driver optically, acoustically, tactilely or otherwise with sufficient time before the starting the vehicle steering, and 6. that indicate on the description of the system alternative ways of operating.

222  Appendix 1 § 12a Dangerous Goods (1) If dangerous goods are transported, the person bound to pay compensation is liable to pay 1. where several persons were killed or injured in the same event, notwithstanding the limits laid down in § 12 para 1 no 1, a total capital sum of up to 6,000,000 euros or periodic payments of up to 360,000 euros per annum, 2. where immovable objects are damaged, even if several objects are damaged in the same event, a sum of up to 6,000,000 euros, in so far as the damage is caused by the characteristics which make the transported goods dangerous. In other respects § 12 para 1 remains unaffected. (2) Dangerous goods in the sense of this Act are substances and objects whose transport on the road is forbidden, or allowed only under certain conditions, in accordance with Appendices A and B to the European Convention of the 30th September 1957 on the International Carriage of Dangerous Goods by Road (ADR) (reference omitted) in the version applying at that time. (3) Paragraph 1 is not to be applied in the case of exempted transports of dangerous goods or transports in limited quantities within in the limits laid down in marginal number 10 011 of Annex B to the Convention mentioned in paragraph 2. (4) Paragraph 1 is not to be applied when the damage on transport has arisen within a business in which dangerous goods are produced, treated, processed, stored, used or destroyed, in so far as the transport takes place on a self-contained site. (5) § 12 para 2 applies accordingly. § 12b Armoured Caterpillar Vehicles §§ 12 and 12a are not to be applied when damage is caused by the operation of an armoured caterpillar vehicle. § 13 Periodical Payments as Damages (1) In the future, damages in respect of the loss or the reduction of earning capacity or because the needs of the injured party have increased as well as the damages due to a third party under § 10, para. 2, must be paid by way of periodical amounts. (2) The provisions of § 843, II to IV of the BGB apply correspondingly. (3) If at the time when judgment was given for periodical payments the judgment debtor was not asked to give security, the person entitled to the payment may demand security nevertheless, if the circumstances of the judgment debtor have deterioriated considerably; in the same circumstances he can demand that the security fixed by the judgment should be increased. § 14 Period of Limitation The period of limitation is determined by the analogous application of the rule of the Civil Code governing the limitation of actions in tort. § 15 Duty to Give Notice – Laches The claimant for damages forfeits the rights granted by the provisions of this law, unless he had given notice of the accident to the person liable to pay compensation within no later than two months after having ascertained the damage and the identity of the person liable to pay compensation. Forfeiture does not take place if the failure to give notice was due to

Appendix 1  223 circumstances for which the claimant for damages is not responsible or if the person liable to pay compensation has come to know of the accident by other means during the period set out above. § 16 Liability due to Other Legal Provisions Any Federal provisions are unaffected according to which the keeper of a motor vehicle is more extensively liable for damage caused by the vehicle than according to the provisions of the present law or according to which another person is liable. § 17 Contribution among Several Persons Liable to Pay Compensation (1) If damage is caused by several motor vehicles and if the keepers of the vehicles involved are bound by law to pay compensation to a third party, the liability to pay compensation of the keepers of the vehicles and the extent of the compensation to be paid as between themselves depends upon the circumstances, especially according to whether the damage has been caused predominantly by one or the other of the parties. The same applies to the liability of one of the keepers of the vehicles if the damage was caused to another keeper of a vehicle involved in the accident. (2) If one of the keepers involved suffers the damage, the provisions of para. (1) apply accordingly for the liability among the keepers. (3) The duty to compensate according to paras (1) and (2) is excluded if the accident was caused by an unavoidable event that is neither due to a defect in the construction of the vehicle or to the failure of its mechanism. An event is only deemed unavoidable if the keeper as well as the driver have applied that amount of care that is required in the light of the circumstances. The exclusion also applies for the owner of a vehicle who is not a keeper. (4) The provisions of paras. (1) to (3) are to be applied correspondingly if the damage is caused by a motor vehicle with connected trailer, by a motor vehicle and an animal, or by a motor vehicle and a train. § 18 Liability of the Driver to Pay Compensation (1) In the circumstances covered by § 7 I, the driver of the motor vehicle is also liable to pay compensation in accordance with the provisions of §§ 8–15. No liability exists if the damage was not caused by the blameworthy conduct of the driver. (2) The provisions of § 16 apply correspondingly. (3) If in the cases in § 17 the driver of a motor vehicle or trailers is also obliged to pay compensation for the damage, the provisions of § 17 are to be applied accordingly to this duty in his relationship with the keepers and drivers of the other motor vehicles involved, with the keeper or drivers of the trailer connected to another motor vehicle involved at the time of the accident, with the keeper of the animal or with the railway undertaking. § 19 (Abrogated.) § 20 Local Jurisdictions Claims based on this Act fall also within the jurisdiction of the court of the district in which the event occurred which caused the damage.

APPENDIX 2: TRANSLATED CASES CASES to CHAPTER 2 § 823 I BGB 1. PROTECTED INTERESTS: BODY AND HEALTH SPECIAL ISSUE 1: Nervous Shock Case 1 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 11 MAY 1971 BGHZ 56, 163 = NJW 1971, 1883 = VersR 1971, 905, 1140 Facts On 6 March 1965, when he was 64 years old, the claimant’s husband was fatally injured in a collision with the defendant’s motor vehicle. The claimant was 50 years old at the time. In this suit she claims damages for the injury to her health which she suffered through the death of her husband. The LG allowed the claim in full, the OLG München in part. The defendant appealed with permission, and his appeal was allowed. The judgments below were overturned, and the case remitted to the OLG. Reasons A. … 2. (a) … (b) The OLG was wrong to find that the claimant suffered any real injury to her health as a result of hearing of the accident (see BGH, VersR 1966, 283, 285 ff; OLG Freiburg, JZ 1953, 705, 709). Apart from a few special instances not here in point, our law consciously rejects any claim for harm due to psychical pain unless it results from injury to the claimant’s own body or health. This is a policy decision of the legislator. It does not, however, prevent our granting an independent claim to the exceptional person who is ‘traumatised’ by being involved in an accident, or hearing of one, and who in consequence suffers real damage to body or mind. Nor, if we leave aside the cases of ‘purposive neuroses’ and supervening causes, for which special rules have been developed, is it an objection to granting such a claim that the only reason the victim’s reaction was so severe was that he had a preexisting organic or ­psychical weakness which was triggered by the accident. The opposite view is taken by Stoll in his paper for the 45th German Juristentag 1964, 20, but we cannot agree with it, if only because such an unusual reaction normally lies outside the victim’s control as well as the defendant’s. On the other hand, it is a matter of common knowledge that the pain, grief, and fright arising from a very negative experience can have a very marked effect on one’s physiological system and one’s ability to cope. Yet to treat such disturbances as invasions of health in the sense of § 823 I BGB would be inconsistent with the binding decision of the legislator (Stoll, idem, 19 ff). Except in cases where the injury was intended by the actor, liability for

Appendix 2  225 harm psychically occasioned, even though it may be adequately caused according to the traditional formula, must be limited to cases where the man in the street, and not only a medical practitioner, would describe it as injury to body and health [reference omitted]. Under certain circumstances, therefore, injuries which are medically ascertainable but do not amount to a ‘shock’ to the system will go uncompensated. Accordingly, no claim can be made in the normal case of deeply felt grief, which, as everybody knows, may have quite serious effects on a person’s general wellbeing. (c) In the light of these principles, the opinion of the OLG cannot stand. The OLG laid weight on the expert’s finding that ‘the claimant naturally suffered severe psychic shock on first hearing of the death of her husband’. But the court read too much into this. The court had formally asked the expert to report on whether the claimant had suffered ‘a severe psychic shock which altered her personality and made her depressed, unduly excitable, sleepless, tearful, and apt to shiver on the slightest occasion’, taking these terms from the written evidence of Dr C, the claimant’s general practitioner, evidence of which the expert was somewhat critical. In his reply the expert simply confirmed in general terms that there had been a ‘severe psychical shock’, though it is doubtful, in view of what he said immediately thereafter, whether he intended this to constitute a medical finding. As to the other symptoms about which he was asked, he made no positive finding, but rather indicated that he himself had not observed them. It would require stronger evidence than this before the OLG could properly hold that the claimant had suffered an injury to health sufficient to ground a claim. In everyday speech, the phrase ‘severe psychical shock’ denotes a violent temperamental reaction which may have nothing in common with an illness of any kind. Medical men do not use the notion of shock to describe a psychopathological condition. Used to describe a pathological condition (apart from the special case of shock therapy) ‘shock’ denotes simply an acute disturbance of the circulation [reference omitted] which can result from experiencing an accident or, more rarely, hearing of one. This is naturally of a transitory nature, though it can lead to lasting organic damage. It is by no means clear that the expert believed this to have occurred. A person who experiences an accident, and less often a person who hears of one, may also suffer psychopathological effects. Doctors call this ‘neurosis’ (not necessarily a purposive neurosis of the kind for which no compensation may be given) or in serious cases even ‘psychosis’ [reference omitted]. The expert’s affidavit does not suggest that he was testifying to any illness of this kind. It is not enough that he did not say there was none: a positive finding is necessary or the claimant will fail to meet her burden of proof. IV. To the extent, therefore, that it grants the claimant a claim for damages on her own account, the judgment under appeal cannot be sustained. When the OLG re-examines the matter it will need to be convinced, before it can allow the claimant’s claim even in part, that on hearing of the accident she not only experienced the normal reactions of pain, grief, and depression, but also directly suffered a ‘traumatic’ injury to her physical and psychical health. Further expert evidence may be required, and if the expert testifies to such a condition, it will be necessary to ask to what extent he is relying on the evidence of the general practitioner, which is inadmissible in its present form. B. I. If, after further investigation, the OLG holds that the claim should be admitted, the question of the deceased husband’s contributory fault will arise. This must be dealt with in a different manner.

226  Appendix 2 1. The OLG held that in cases like the present one cannot apply § 846 BGB by analogy, and in so holding it was consciously deviating from a view laid down by the RG (RGZ 157, 11; RG DR 1940, 163) and supported by some scholars [reference omitted]. We agree with the OLG on this point: the opinion of the RG is unacceptable in the form in which it was expressed. It was certainly right to emphasise that the basic rule of law is that only the direct victim of a tort may sue, a rule to which exceptions are made by §§ 844 and 845 BGB [partly revised] in favour of surviving dependants and persons entitled to services. But it was in error to treat the claim by a third party who suffers injury to his own health when someone else is injured or killed as if this were another case of ‘indirect injury to a third party’ and to apply § 846 BGB to it by analogy. The difference between this case and those in §§ 844, 845 BGB is essentially that here the third party is affected in one of the legal interests specified in § 823 I BGB and that he is therefore a direct victim with an independent claim of his own under that section. Claims by the indirect victim under §§ 844, 845 BGB presuppose that the primary victim’s harm resulted from a tort done to him (BGH VersR 1961, 846, 847) and that is why § 846 BGB provides that any fault on the part of the primary victim which contributed to the harm suffered by the third party must be taken into account in any claim the third party may bring under §§ 844, 845 BGB. This provision is perfectly sensible in relation to claims brought under §§ 844, 845 BGB, but it cannot apply to an independent claim brought under § 823 I BGB, for it must be irrelevant to a claim for harm done directly to the third party that it occurred by means of an injury to someone else. Indeed, the third party’s rights may arise regardless of whether the primary victim of the accident had or has any claim for damages at all [OLG München NJW 1959, 819; other reference omitted]. 2. Yet we must agree with the result reached by the RG, at least in cases of the kind before us, that in considering the personal claim of the indirectly injured widow one must take account of any contributory fault of the deceased husband. This, however, results from an analogical application of § 254 BGB, itself a specific application of the more general principle of law contained in § 242 BGB (BGHZ 4, 355). (a) This is quite clear in relation to a claim for damages for pain and suffering (­Schmerzensgeld; § 847 BGB) [after 2002: § 253 BGB], to which equitable principles apply. The BGH has held (VersR 1962, 93) that a claim for damages for pain and suffering, unlike a claim for material damage, may be reduced because the victim was especially vulnerable to harm by reason of his bodily or psychical constitution, and that the personal contributory fault of the victim, which does not arise in this case, is only one of the factors to be taken into account in estimating the damages which are equitable in the circumstances (BGHZ 18, 149, 157). The same must be true of other factors in the victim’s area of responsibility which contribute to the harm, such as a close personal relationship to the primary accident victim, as in this case. (b) But even in cases of material harm the result reached by the RG is correct. Where, as here, injury to health is caused at a distance, so to speak, the contributory fault of the damaged must be laid to the claimant’s account. For here the accident to her husband was only able to cause the harm supposedly suffered by the claimant because as a result of their close personal relationship his tragedy became hers. One cannot imagine a person suffering in this manner on hearing of a fatal accident to a total stranger; indeed, if it happened, it would be so unusual that one would decline to impute it to the defendant on the ground that it was unforeseeable. But if the critical reason for the claimant’s suffering this injury to

Appendix 2  227 her health was her close personal relationship to her husband, it is only fair that her claim should be affected by his fault in contributing to the accident. We must apply by analogy the basic idea of § 254 BGB, that a person’s claim for damages must be reduced to the extent that the occurrence of the harm was due to a contributory factor from the claimant’s sphere of responsibility. In this connection, we must make a further observation. If the husband’s death had been solely attributable to his failure to take care of himself, the claimant would have had no claim whatever for compensation for the consequent injury to herself. A person is under no legal duty, whatever the moral position may be, to look after his own life and limb simply in order to save his dependants from the likely psychical effects on them if he is killed or maimed: to impose such a legal duty, except in very peculiar cases, for instance, wherever a person commits suicide in a deliberately shocking manner, would be to restrict a person’s self-determination in a manner inconsistent with our legal system. It will be seen from this that unsatisfactory results follow from the view adopted by the OLG and some writers, which is that the primary victim’s contributory fault is not to be taken into account when shock damage is caused at a distance. We have seen that, contrary to the view expressed by the RG (RGZ 157, 11, 14) and by some of the writers, a tortfeasor cannot claim contribution under §§ 840, 254 BGB from the heirs of the primary victim, since the primary victim is not liable to the shock victim at all, much less as a common debtor. It follows that unless our present view is adopted, the tortfeasor would owe the shocked widow a full indemnity for her lost earnings even if the husband was so much more to blame for his own death than the tortfeasor that in a suit by the husband the tortfeasor would be wholly exonerated under § 254 BGB. This would be quite unacceptable. Now it is true that in principle when a tortfeasor is sued he bears the risk of there being no solvent joint tortfeasor from whom he can claim contribution. But there are exceptions. For example, the courts have held that if, by reason of personal relationship with him, the victim releases one tortfeasor from liability in advance, the other tortfeasor should be protected (BGHZ 12, 213). In our case, the third party has not been exonerated by release or by capricious conduct on the part of the creditor, but it is none the less true that the primary victim has, though involuntarily, had an adverse effect on the health of the shock victim in respect of which he is not liable. Once again, in these peculiar cases, the harm is caused only because of the very close personal relationship between the claimant and the primary victim, thanks to which the claimant adopts as her own the harm done to another, and the loss of his life becomes a loss, a serious loss, to her. In such a case, where it would be wrong to require the primary victim or his heirs to make contribution to the tortfeasor, it is only fair that the primary victim’s causal contribution to the accident should be borne not by the stranger who triggered the harm but by the dependant who was hurt only because of her personal relationship with the primary victim and her identification with him. It was equitable considerations such as these that led the legislator to enact § 846 BGB though, as we have said, it covers a different case. In relation to that paragraph the Protokolle (vol 2, II, 638 ff) explain that to treat the third party’s claim against the tortfeasor as entirely independent is too theoretical and logically extreme, and that to apply that view strictly would lead to unjust and inequitable results; the claims of a dead man’s survivors result from his death, and if his careless conduct conduced to or accelerated his death, it is only right, in view of their relations with him, that the survivors should have to bear the consequences. The claim for shock damage which arises in this distinctive manner is a judge-made claim, and though the OLG would like to extend it beyond the limits set by the RG, we are not

228  Appendix 2 persuaded by any of the objections which its position on this question has elicited. It only remains to say that, contrary to what is stated in a number of the books, the RG was always perfectly clear (see RGZ 162, 321) that cases of shock damage are cases of direct injury to a legal interest protected by § 823 I BGB and not simply instances of indirect harm of the kind covered by §§ 844, 845 BGB. (c) The present case does not raise the issue of how the decision would be if the occurrence of the harm were wholly or partly independent of any personal relationship, or indeed how far a tortfeasor might be liable at all if the persons suffering the damaging reaction were third parties in no way related to the primary victim. Case 2 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 4 APRIL 1989 NJW 1989, 2317 Facts The claimant and her husband had booked a cruise in the eastern Mediterranean scheduled to start on 26 April 26 1984 and paid the organisers the full price of DM 10,130. On 21 April 1984 the claimant’s son C, then aged 22, was killed in a road accident. It is not contested by the parties that the defendant is liable in full for the damage resulting from the accident. On account of the pressures placed upon them, the claimant and her husband were unable to take the cruise which began one day after the funeral. They were not able to claim reimbursement of the DM 10,130 from the organisers. The claimant claimed for the loss of potential support under § 845 BGB [partly revised] arising from her rights as the mother of the victim of the accident and from her husband’s corresponding rights which were assigned to her. In addition she claimed compensation for the expenditure on the lost holiday. Although the LG rejected the claim based on § 845 BGB, it awarded her DM 10,130 as compensation for the holiday expenses. The OLG München dismissed the appeals of both parties, but the defendant’s appeal to the BGH was successful in respect of the lost holiday expenditure. The claimant’s cross-appeal for the loss of support was denied. Reasons I. The OLG accepted the claim brought by the claimant for the recovery of money spent on the holiday booked but not taken and made the following findings of law: As a result of their son’s death, the claimant and her husband were harmed in respect of their ‘right of health’ protected by § 823 I BGB. The general view is that damages for pain and suffering are only available in respect of loss in the form of nervous shock which has the degree of severity of an illness. This does not necessarily mean that psychological impairment can only represent an infringement of a right protected by § 823 I BGB when it has the degree of severity of an illness. On the contrary, any form of invasion of the claimant’s general bodily condition such as the infliction of worry and discomfort is sufficient for there to be damage to the claimant’s health. Furthermore, the court believed the claimant’s assertion that she and her husband were psychologically incapable of going on holiday as a result of the death of their son. The principles developed by the case law on the ‘­Vorhaltekosten’ [costs of maintaining a replacement vehicle whenever the claimant’s own vehicle is out of circulation as a result of an accident] must be applied in this case and, as a result, the expenditure on the holiday must be treated as a recoverable form of damage.

Appendix 2  229 II. The appeal judgment cannot be upheld in law. 1. On the basis of the facts as established, the OLG sees the claimant and her husband as having suffered an injury to their right of health protected under § 823 I BGB as a direct consequence of the accident suffered by their son. As a result, it held that the defendant was under a duty to make good the lost expenditure on the holiday as a consequence of the injury. (a) This approach is not correct as a matter of law. True, the case law has long recognised [references omitted] that the concept of injury to the health within the meaning of § 823 I BGB not only covers physical impairment of the body, but also impairment of a psychological form. However, the law at present denies recovery for mental pain in so far as this is not a consequence of the effects of the injury to the (claimant’s own) body or the (claimant’s own) health. Feelings such as sorrow and pain, which are generated by the negative experience itself, are always linked in serious cases with disturbances in the claimant’s physiological make-up and can, therefore, be directly relevant in a medical sense to the claimant’s bodily state. To recognise these matters in law as injuries to the claimant’s health within the meaning of § 823 I BGB … would contradict the intention of the legislator to limit tortious liability in § 823 I BGB to clearly defined sets of circumstances by restricting the range of protected interests and the prohibited forms of conduct. In particular, the BGB [never intended] to give a remedy, except where §§ 844 and 845 BGB apply, in cases where the interference with the protected interests of a person has an effect on third parties, unless the latter have suffered an injury in their own right. Thus, precisely in cases such as the present one, the close relatives will normally experience an effect upon their psychological and mental condition on hearing of the victim’s death in an accident and as a consequence will suffer not only non-pecuniary, but also pecuniary loss. Nevertheless, the law has restricted recovery for pecuniary loss in the case of the person ‘indirectly’ injured by a death to the more precisely defined types of loss set out in §§ 844 and 845 BGB. This legislative determination in favour of a basic limitation of tortious liability to recovery by the person ‘directly’ injured, would be undermined if those types of psychological and mental effects resulting from the experience of the death of a close relative amounted to recoverable injury to health under § 823 I BGB simply because they are recognised by medical science. Consequently, this court has, since its decision in BGHZ 56, 163 [references omitted], only recognised a right to compensation in these types of cases for those types of psychologically inflicted impairments which have psycho-pathological effects lasting for some time, which exceed by some degree the already not inconsiderable detriment caused by a painful trauma for a person’s general state of health, and which can therefore ‘be regarded in accordance with the general view as injuries to the body or to the health of the victim’ [references omitted]. For this reason it is wrong for the OLG to take the view, in cases such as the present one where the loss is in the nature of psychological pressure upon the relatives as a result of the death, that even in the context of psychological injuries any invasion of the claimant’s general bodily condition, or any infliction of worry and discomfort would suffice even if it did not display the severity of an illness. This point of view is not even supported by the references cited by the OLG itself such as Thomas in Palandt in BGB Kommentar, 48th edn, § 823 BGB note 3b. In that commentary upon the law relating to injuries to mental and bodily health through psychological effects [reference omitted] it is stated that ‘in accordance with the protective purpose of § 823 I BGB a claim for compensation should exist only where the injury to health exceeds, in the type and degree, that which close relatives must expect to suffer by

230  Appendix 2 way of impairment in these kinds of cases’. In making this statement, Thomas also cited the judgment of this court of 11 May 1971 (NJW 1971, 1883 [other references omitted]). The Court confirms the approach taken there according to which the only psychological impairments which will amount to injuries to health under § 823 I BGB are those which display the characteristics of an obvious pathology and which will, therefore, be seen by the general public as injuries to the body or the health of the victim [references omitted]. Findings of fact to this effect were not discussed by the OLG and were not advanced by the claimant. (b) If an injury to the health of the claimant or her husband within the meaning of § 823 I BGB as a consequence of the fatal accident involving their son cannot be established, then it may be left open whether, if such psychological impairments did in the particular circumstances of this case lead to a genuine injury to the claimant’s health in the sense defined above, lost expenditure on a holiday which was booked but not taken could be brought within the scope and purpose of the legal norm which has been violated [references omitted]. There is also no need to decide whether, for example, recovery for such a form of detriment is excluded as a form of recoverable compensation for injury to health because experience would indicate that regardless of whether the psychological and physical impairments which they might have suffered as a result of the traumatic event had the degree of severity of an illness as required by § 823 I BGB, parents would not, normally, go on holiday one day after the funeral of their child. 2. The appeal judgment is further unsustainable on other legal grounds. Consideration should be given in this context to § 844 I BGB. Even if with respect to this claim for damages (which here accrues to a third party due to his duty to bear the funeral costs) one could give the term ‘funeral’ expenses a wide meaning to include all expenditures associated with an appropriate and dignified burial, the presence of proximate cause (­Zurechnungszusammenhang) would be questionable. This is because the claimant, according to her own pleadings, failed to take the holiday because of the psychological pressures she was experiencing as a result of the accident and not because of the timing of the funeral. However, even if the focus were solely upon the funeral, it must be held that expenditure upon a holiday which is booked but not taken falls outside the protective scope of § 844 I BGB. For as exceptions to the general principle of the law of tort, that only persons who are directly injured by an accident will normally have a claim for compensation, §§ 844 and 845 BGB are to be narrowly interpreted. This means that in the context of § 844 I BGB it is the duty of the victim’s heirs to bear the costs of the funeral which must form the focus of attention; but the concept of funeral expenses cannot be extended to cover expenditure which has been wasted because the third party (claimant) had to attend the funeral. Even if, exceptionally, § 844 I BGB can be construed as encompassing also the recovery of the travelling expenses of close relatives to attend the victim’s funeral [references omitted], compensation for the above types of expenditure would go beyond the scope of liability set by the legislator. This court finds itself precluded from giving a wider interpretation of § 844 I BGB both by the terms of the law, itself, and the place of § 844 I BGB within the [wider] systematic framework of the law of tort. Notes to Cases 1–2 1. The previous two and the next case deal with the compensation of what used to be known in English law as nervous shock but nowadays goes by under the name of psychiatric injury. In the United States, the term used is ‘emotional harm’ and this is wider than the English

Appendix 2  231 term since it includes distress, anxiety, and diminished enjoyment of life. German law talks about ‘immaterial harm’. This has always been recognised. For example, in the original Code of 1900, § 825 BGB which clearly grants immaterial damages for sexual harassment. Furthermore, discrimination law recognises both material and immaterial harms: see § 15 AGG. In these notes, we shall focus on the factual situations covered by the three German cases, all of which involve psychiatric injury inflicted as a result of experiencing unusually distressing scenes. Seen in this context, the first two cases raise four important points. 2. The first is connected with the problem of distant shock. Endorsing the view of earlier courts – of which RGZ 133, 270 is reproduced below as case 3 – the court took the view that recovery should not be confined to eye-witnessing relatives but should also be allowed where the injurious effect was distant (Fernwirkung). This point, though never seriously contested, has been reaffirmed by the BGH (BGH, BGHZ 93, 351). In that case, the claimant was en ventre sa mère when the latter was told of her husband’s serious injuries in a traffic accident. As a result, the mother suffered severe physiological and psychological reactions, which affected the birth process and led to the claimant being born seriously impaired. The child’s claim for a declaratory judgment that she was entitled to damages was accepted, the court rejecting the defendant’s argument that there was no causal nexus between the mother’s shock and the claimant’s injury. This is one of the crucial issues in nervous shock cases and is discussed more fully in the notes to the next case. For a summary of German law see chapter two, section II.C. 3. The second point decided by the BGH was that recovery should be limited to cases of psychiatric injury. See: Attia v British Gas plc [1988] QB 304, 317, 320 (Bingham LJ). cf Toms v McConnell, 45 Mich App 647, 207 NW 2d 140 (1973). See also De Franceschi v Storrier (1989) 85 ACTR 1. This includes cases where there is a recognisable medical illness entailing such consequences as sleeping disorders, headaches, vomiting, speech disturbances, inability to concentrate, loss of libido and, in the most serious types of cases, even suicidal mania. (A fuller list can be found in Alcock v Chief Constable of South Yorkshire [1992] 1 AC 310, 317.) Attempts by German lawyers to enlarge the definition of compensatable harm to include life’s general risks – allgemeines Lebensrisiko – such as pain, grief, and other expenses connected with the ‘inconvenience’ suffered as a result of the death of a close relative, were in the past often rebuffed by the courts. (See BGH, NJW 1989, 2317, reproduced above as case 2.) But there was before 2012 a greater willingness to ‘invent’ pain and suffering. The situation has been resolved by the recently introduced Angehörigenschmerzensgeld or Hinterbliebenengeld in § 844 III BGB, more details can be found in the text to chapter two, section II.A. Likewise in English law – Lord Lloyd in Page v Smith [1996] 1 AC 155 – and in most but not all the jurisdictions of the US). However, the dividing line between, on the one hand psychiatric injury with recognised medical symptoms, and on the other, ‘ordinary’ pain and grief is sometimes more easy to state than to apply. An able lawyer and a sympathetic court can also manipulate it in favour of the claimant – especially if operating under a jury system. Case 2 shows how, with the help of a wider, teleological interpretation of all the relevant provisions of the BGB the temptation has been avoided in Germany. In this context, therefore, German law greatly resembles the English approach, though the juxtaposition of the German and English decisions (eg, Hinz v Berry [1970] 2 QB 40, 42) reveals some interesting differences at the level of writing style. On the other hand, in German law, ‘it is not a precondition of the tortfeasor’s liability that the psychological effects had a physical

232  Appendix 2 cause. It is sufficient if it is clear enough that the psychological impairment would not have occurred but for the accident’ (BGH, NJW 1991, 2347; trans Weir taken from van Gerven, Tort Law (2nd edn, 2000) 92). 4. The problem of contributory negligence examined in the leading German case is a difficult one. The German case concerned the deceased’s (primary victim’s) own contributory fault and whether this should be taken into account when calculating the claimant’s damages. (The claimant was the primary victim’s wife who claimed for the psychiatric injury that resulted from her being told of her spouse’s death.) The German court’s decision was affirmative; but its reasoning has to be studied carefully before it is fully understood. Two points thus need to be separated from the outset. First, it is clear that any claim brought by the claimant as a dependant under the English Fatal Accidents Acts (or the German equivalent) will be affected by the contributory negligence of the deceased; in both cases the relevant statutory material says so (§ 846 BGB). The more difficult question is the second one namely, whether the same apportionment should take place in the case of any personal claims which the claimant/secondary victim might have for his or her nervous shock. Now in German law such a claimant’s nervous shock claim will be an independent claim based on § 823 I BGB and not a derivative one based on §§ 843–44 BGB (wrongful death). Put in this way, it is prima facie difficult to see how the primary victim’s own contributory fault could be imputed to his wife/claimant. The German court bypassed this difficulty by basing its decision on the pervading notion of good faith (embodied in § 242 BGB). The KG Berlin has subsequently followed this approach, in its decision of 10 November 1997, VersR 1999, 504, though this solution has not been without its critics. (Thus see the strong doubts expressed about the first decision by the late John Fleming in (1972) 20 American Journal of Comparative Law 485, 488–89.) In case 1, above, the issue was whether the contributory negligence by the primary victim could be imputed to the secondary victim and his claim for damages against a third party accordingly reduced. The rationale seems to be this. If, generally speaking, a person (‘primary victim’) does not owe a duty of care to others (‘secondary victims’) not to harm himself, then ‘it is only fair’ that if a third person causes physical injury to the primary victim, the secondary victim should bear the primary victim’s causal contribution to the accident. This problem has occurred also in other contexts of adjustment among multiple ‘debtors’ and the BGH has (not always consistently) applied similar considerations. (Thus, eg, BGH, JR 1989, 60, but see BGH, BGHZ 12, 213.) Because of special circumstances, characteristic of the relationship between primary and secondary victim, the secondary victim does not have a cause of action against the primary victim (all other conditions of liability for nervous shock being fulfilled). This is because such a cause of action would be contrary to the primary victim’s right of self-determination; but one could easily replace this with an exclusion clause. So the secondary victim sues the third party (case 1). If the third party could subsequently claim contribution from the primary victim, then in the end the primary victim would be held liable for his causal contribution to the accident. (Albeit the risk of insolvency of the primary victim would be transferred from the secondary victim to the third party.) But this result of holding the primary victim liable is regarded as undesirable (because of his right of self-determination). Therefore, the third party cannot claim contribution from the primary victim even if the latter was primarily responsible for the accident (cf Alcock v Chief Constable of South Yorkshire Police [1992] 1 AC 310, 418 (Lord Oliver)). This result may not be

Appendix 2  233 s­ atisfactory. It would not seem fair in such circumstances, the BGH stressed, to impose full liability on the third party, especially if his contribution to the harm was in causative terms very low and that of the primary victim very high. Why should the third party (rather than the secondary victim) bear the primary victim’s causal contribution to the accident? After all, it is because of special circumstances arising out of the relationship between primary and secondary victim, that the primary victim cannot be made liable for causing nervous shock. It is therefore plausible to apply the rationale of § 846 BGB also to claims of secondary victims in respect of nervous shock and to reduce the secondary victim’s claim accordingly. This implies that where the primary victim is solely answerable for the accident, the secondary victim cannot recover. We are thus back to our point of departure. 8. There is a final issue that needs to be considered and it concerns the level of damages that are recoverable. Pecuniary losses caused by the psychiatric illness induced by the accident are, of course, recoverable. (For instance lost earnings, case 1). But an English lawyer will also need to know the level of damages that can be recovered for ‘pain and suffering’ under § 253 BGB. Are they/should they be high or low? And should they be influenced by the level of awards found in other cases? These questions are examined in detail in chapter nine. SPECIAL ISSUE 2: Ricochet Victims Case 3 REICHSGERICHT (SIXTH CIVIL SENATE) 21 SEPTEMBER 1931 RGZ 133, 270 = JZ 1929, 914 (with a note by Bezold and Plum) Facts On 5 October 1929 the second defendant, driving the car belonging to his father, the first defendant, mounted the pavement and killed the claimants’ 7-year-old son. In criminal proceedings he was sentenced to nine months’ imprisonment. The claimants now sued both defendants as joint and several debtors for liquidated damages in respect of the cost of medical attempts to save the child’s life, burial, and loss of business profits, and asked for a declaration of liability in respect of loss of future maintenance and services by the claimants’ son as well as for damages arising from the nervous breakdown of the claimant wife. The defendants paid RM 850 and alleged to have discharged their liability thereby. The LG Köln held the defendants jointly and severally liable to make periodic payments to the claimants to the extent that the deceased would have been obliged during his estimated life-span to provide them with maintenance and services; in other respects it dismissed the claim. On appeal the OLG Köln allowed the claim for RM 1,200 in respect of loss of business profits due to the reduced earning capacity of the claimant wife and held that the costs of attempted medical care and of the burial had been discharged; in addition it held the defendants liable as joint and several debtors to compensate the claimants in respect of the loss suffered by them as a result of the past or future injury to the health of the claimant mother arising from the accident, including the present or future loss of services, until she reached the age of 65. The appeal by the defendants was successful in part. Reasons In this appeal the question is only whether the defendants are also liable for the effects of the claimant wife’s nervous breakdown which she suffered upon receiving the news of the

234  Appendix 2 accident, but which she did not witness herself … the OLG found that the emotional excitement on hearing of her child’s death caused the claimant wife’s nervous breakdown, which had affected her earning capacity and was likely to continue to do so in the future. The OLG has held correctly that the damage in question is not indirect in the sense that it is only covered by the duty to compensate under § 823 BGB in the exceptional circumstances of §§ 844, 845 BGB. Indirect damage is that damage suffered by a person who is not himself a victim of a tort but is only affected by its reflex effect upon his assets. In the present case, however, the claimant wife herself has been injured in her health by the tort, and the claimants sue in respect of this injury to health. It has never been stated in the practice of the RG that the legal interests or rights enumerated in § 823 I BGB must be violated directly and that an indirect violation does not suffice [reference omitted]; the view to the contrary, put forward by the appellants, is unfounded. However, two questions must be examined in such cases; firstly, whether the causal nexus can still be regarded as adequate and, if this question should be answered in the affirmative; secondly, whether the indirect violation could be foreseen. The OLG has examined both questions and has answered them in the affirmative. It is normally to be expected that a fatal accident of her child will greatly excite the mother emotionally, and it is not unusual if a grave emotional excitement of this kind results in a nervous breakdown which affects the capacity to work. Thus adequate causality exists [reference omitted]. One can go even further and add … that this result could be foreseen. The contention of the appellants that the second defendant could not even have known whether the seven-year-old boy had any parents cannot be accepted. The question is not whether the defendant could know but whether he ought to have considered the shock of the parents and the possible effects of the shock. In answering these questions in the affirmative the OLG has not broadened the concept of negligence excessively. These statements only apply to liability according to the general rules of tort. In the case of the second defendant, his liability under § 823 BGB has been sufficiently justified by the judgment of the OLG. For, having regard to findings of fact of the accident, it cannot be doubted that the second defendant caused it negligently … On the other hand, the OLG has not given sufficient grounds for holding the first defendant liable, as it does on the basis of § 831 BGB. The appellants point out rightly that it has not been established at all whether and now the first defendant had appointed the second defendant to carry out this “task” … The fact that the first defendant denied the claim to a limited extent only does not permit the conclusion that he appointed his son to carry out the task. In so far as the claim is based on the injury to her health suffered by the claimant wife, the defendants have denied its substance throughout. The OLG will therefore have to examine again whether the first defendant has incurred liability, which it had held to be the case without restricting it to the provisions of the Act on Motor Vehicles. If the defendant should only be liable under § 7 of the Act on Motor Vehicles, in addition to the conditions set out above in which liability to compensate the claimant wife in respect of injury to her health would exist, the problem would arise whether this injury to her health had occurred ‘in the course of operating’ the motor vehicle. The courts below have held that it did. From their point of view this finding was superfluous, since judgment against the defendants was based on §§ 823, 831 BGB. However, the affirmative answer to this problem cannot be approved. The OLG itself refers to the decision of the RG [reference omitted] where that court refused to regard as an injury to health ‘in the course of operating’ a railway, a mental illness suffered by a father as a result of the shock occasioned by a railway

Appendix 2  235 accident involving his daughter. This decision is in keeping with the constant practice of the RG in applying the Act on the Tortious Liability of the Reich. The onset of the mental illness was not directly connected with the operational process or with a specific installation of the operation; nor could it be traced to a danger peculiar to the operation of railways [reference omitted], but it could have happened as a result of any accident or fright. The OLG believes however … that the words in § 7 of the Law on Motor Vehicles bear a different meaning from the corresponding words in § 1 of the Law on the Tortious Liability of the Reich. The … [reference omitted] legislative history of § 7 shows clearly, however, that in this respect the Law on the Tortious Liability of the Reich was copied deliberately by the Law on Motor ­Vehicles in order to make use of the extensive practice and literature on the law on liability … Nevertheless it is conceivable that in individual cases the determination may differ as to whether an accident is to be regarded as having occurred ‘in the course of operating’, given the technical differences between operating railways and motor vehicles. It is difficult to perceive, however, how a difference can be established in the present case. In both situations, the question is whether the effect of a shock suffered by a relative on the occasion of an operational accident is still to be regarded itself as an injury to health in the ‘course of operating’. The difference in the types of operations is irrelevant for this purpose … Accordingly the first defendant can be held liable under § 831 BGB for the nervous breakdown of the claimant wife if the conditions for its application should have been fulfilled but not under the Law on Motor Vehicles. It is a different question, not in issue here, whether the determination must be different, if the claimant wife had been present where the accident occurred and whether in such a case the opinion expressed in [reference omitted] can be maintained [reference omitted]. It follows that the judgment against the first defendant must be quashed and the case referred back. On the other hand the appeal of the second defendant must be rejected’ Notes to Case 3 For a number of reasons this is a very important case. 1. First, it shows the tendency of German law (and modern civil law in general) to use normative concepts of causation in cases where common lawyers would more evidently have recourse to the notion of duty of care. Note, however, that this was not always so: Victorian Railways Commissioners v Coultas (1888) LR 13 App Cas 222, 226 (the earliest English case on nervous shock, decided before the concept of duty had started its meteoric rise). This equivocation between ‘duty’ and ‘remoteness’ will figure in other cases as well (eg, economic loss, rescue etc) and is discussed, inter alia, by Fleming, ‘Remoteness and Duty: the Control Devices in Liability for Negligence’ (1953) 31 Can Bar Rev 471 (a seminal article) and Lawson and Markesinis Tortious Liability for Unintentional Harm in the Common Law and the Civil Law, Vol 1 (1982), ch 2. 2. Secondly, the German decision addresses itself to the key issue of distant nervous shock and opts for the more liberal view according to which compensation is not limited to persons suffering shock as a result of witnessing the accident. Bystanders or ‘secondary’ victims, may also, under certain circumstances, be compensated. However, it seems that strangers who are not closely related to a primary victim of an accident will have difficulties to prove their case. So we note that in none of the cases 1–3 was the claimant a stranger to the victim. However, as in English law so in German law, this restriction does not apply to primary victims: BGH, NJW 1986, 777. In that case, the claimant was severely injured

236  Appendix 2 in an accident that was negligently caused by another person who had crossed the motorway on foot and who was killed in the accident. The claimant also suffered ‘nervous shock’ and it was this part of his claim that was the subject matter of the dispute. He was allowed to recover damages for pecuniary losses and for pain and suffering from the deceased’s estate. The Court argued that it was immaterial that the claimant did not have any ‘ties of love and affection’ to the deceased who had, through his own conduct, caused the accident because the claimant was directly involved in the accident and suffered physical injury as a result. It was left to a subsequent court to decide whether additional requirements would be necessary as far as ‘secondary victims’ (the Court called them ‘indirect victims’) were concerned. 3. This approach, which has been followed many times since the principal case was decided in 1931, arguably places German law in a more pioneering position when compared with the English and American law. (See, also, RG, RGZ 157, 11; BGH, NJW 1971, 1883, BGHZ 93, 351 = NJW 1985, 1390; von Hippel in ‘Haftung für Schockschäden Dritter’ NJW 1965, 1890; Thora, ‘Schockschaden durch Unfalltod naher Angehöriger - Anmerkung zum Urteil des BGH vom 27.01.2015’ NJW 2015, 1451; Zwickel, ‘Schockschaden und Angehörigenschmerzensgeld: Neues vom BGH und vom Gesetzgeber’ NZV 2015, 214.) But even if one does not like the German approach one must, at least, credit the system with the fact that, in its essentials, it has remained constant. The same cannot be said of the House of Lords, which in 55 years during the last century, revisited the topic five times and – some would say – made it more confusing than ever. Their Lordships tergiversations can be seen when the following cases are read in their chronological sequence: Bourhill v Young [1943] AC 92 (restrictive view); McLoughlin v O’Brian [1983] 1 AC 410 (liberal adaptation to new conditions); Alcock v Chief Constable of South Yorkshire [1992] 1 AC 310 (the beginnings of a retreat to a more cautious approach); Page v Smith [1996] AC 155 (confusion resulting from a well-intended attempt to make use of a sensible distinction); White v Chief Constable of South Yorkshire [1999] 2 AC 455 (back to a conservative position justified by an open appeal to policy). The current law in relation to secondary victims can be seen especially in Markesinis and Deakin, 126–35. 4. Traditionally, the view was that the claimant should have heard or seen the accident with his own unaided senses. In the early 1980s, however, the House of Lords awarded damages to a mother and wife who rushed to the hospital to see her injured family a few hours after the accident had occurred and then suffered shock (McLoughlin v O’Brian [1983] 1 AC 410). The decision though criticised, is remarkable for the frankness of the judicial turnabout vis-a-vis the value of the ‘floodgates’ argument, which up to that point had received an almost exaggerated respect. 5. Finally, readers should note how articulate the Anglo-American decisions are about the policy issues, which have justified first the strict and then more relaxed treatment of claims for nervous shock. The best discussions in America can be found in Amaya v Home Ice, Fuel & Supply Co 59 Cal 2d 295 (1963); Dillon v Legg 68 Cal 2d 728 (1968); and in England, McLoughlin v O’Brian (above) including the judgments in the OLG: [1981] QB 599. By contrast the German decisions give little away about policy. There is no doubt, however, that the same policy reasons are at work in this system as well, and academics have always been prepared to admit that the problem is not one of causation but one of policy.

Appendix 2  237 (See von Hippel in NJW 1965,1890, 1891; Huber in Festschrift E Wahl, 301 ff agrees.) Thus, increasing reliance can be found on more normative theories of causation (like the Normzweck approach). SPECIAL ISSUE 3: Wrongful Life and Wrongful Birth Case 4 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 18 JANUARY 1983 BGHZ 86, 240, JZ 1983, 447 (with note by Deutsch at 651) Facts The first claimant, born on 24 February 1977, is the legitimate daughter of the second and third claimants (henceforth called the claimants). The first claimant suffered severe damage to her health because the second claimant, her mother, had caught German measles (rubella) during the first weeks of her pregnancy. The claimants charge the defendant gynaecologist with having failed to diagnose the mother’s illness with the result that the pregnancy – which had been desired in principle – had not been terminated. The child and her parents ask for a declaration that – subject to a statutory assignment – the defendant is liable ‘to pay compensation in respect of all the damage which they have suffered or will suffer in the future as a result of the second claimant’s infection with German measles during her pregnancy’. The District Court dismissed the first claimant’s claim but granted the parents the declaration which they had sought. The OLG München rejected the first claimant’s appeal and, upon the defendant’s appeal, rejected the parents’ claim as well [reference omitted]. Upon a second appeal by the three claimants the decision of the OLG was quashed in so far as the claims of the parents were concerned for the following. Reasons A. The OLG has held that the claims of all the claimants are unsubstantiated. In particular it has held: I. Even if an error had occurred in the treatment of the patient, the defendant had not injured a protected interest or a right of the first claimant. It was true that according to a constant practice an act could result in damages if the party whose health had been adversely affected had not been born or not been conceived at the relevant time. In the present case, however, the defendant had not caused the injury to the first claimant; instead he was responsible for the fact that the first claimant was alive and enjoyed legal capacity. The foetus had no right to its abortion if only for the reason that, in so far as the abortion was legally admissible, the decision was that of the mother alone. Furthermore, the alternative between existence and no existence could not be expressed in legal terms of damage. Finally, by impeding an abortion the defendant had not violated a law for the protection of the claimant. Admittedly the contract for treatment concluded between the defendant and the second claimant also exercised a protective effect in favour of the first claimant. However, the defendant’s duty to explain to the second claimant the risks in the pregnancy itself and the possible injury to the foetus was only incumbent upon him in the interest of the second claimant.

238  Appendix 2 II. In the opinion of the OLG the claims of the parents amount to a claim for a declaration by the second claimant in respect of non-pecuniary damages (owing to the difficult birth requiring a Caesarean delivery) while the claim of the first claimant was for pecuniary damages. It rejected both claims. (a) Claims of the second claimant (aa) The OLG held that it was not called upon to decide whether the burden of economic maintenance (increased in the present case) could be regarded as damage. In any event, the principles developed by this Senate in the two decisions of 18 March 1980 [references omitted] did not apply in the present case. An error in treatment on the part of the defendant … would of course have adequately caused the second claimant’s burden of maintenance. However, abortion, as distinct from sterilisation was an act of killing [references omitted] and according to some was only not punishable, but remained unjustified. Apart from this, unlike in the case of a request for sterilisation, the defendant was not obliged in the present case also to take into account the financial interests of the second claimant. The defendant was only obliged to explain the medical and eugenic aspects of a pregnancy in so far as the life and health of the second claimant was endangered. In the present case the only concern had been to spare the first claimant a life under the severest conditions. In addition, financial considerations may have played a role, but these alone would not have justified a termination of the pregnancy. An excessive financial burden, which was also considered by some as a justification had not been proved. Consequently, the contractual duties of the defendant did not include the protection of those financial interests which had been pleaded. To this intent, too, the claim for damages was not justified. (bb) Claims of the third claimant Any contractual claims, alone in issue in the case of this claimant, were ruled out for the reasons set out when dealing with those of the second claimant, although the third claimant was included in the sphere of protection created by the contract between the second claimant and the defendant [reference omitted]. B. These conclusions are valid in so far as the first claimant’s (the child’s) appeal is directed against them, but do not as a whole stand up against the appeal by the parents: I. 1. In the light of the undisputed facts it cannot be doubted that the defendant, in his capacity as a medical practitioner, received and accepted the mandate of investigating the danger of serious injury to the first claimant (the child) as a result of the infection of the mother (the second claimant) with German measles during the first weeks of her pregnancy. The District Court has found that he carried out this mandate negligently. The facts as found leave no doubt, moreover, that the second claimant, who had some medical knowledge, was particularly concerned, in consulting the defendant, to prevent any likely serious danger of permanent damage to the infant which had just been conceived, by terminating the pregnancy. It is also to be presumed in this second appeal that if the defendant had acted in accordance with his mandate he would have confirmed this fear and would thus have made a timely termination of the pregnancy possible as the sole remedy. Consequently, in these circumstances the defendant has caused by his negligent breach of the contract to treat the claimant the damage complained of by the latter. 2. It could be doubted whether the defendant had broken his contract, if it were assumed that a termination of a pregnancy, which is only regulated in criminal law (§ 218 ff of the Criminal Code), is merely exempt from penalties, but remains illegal as a crime of

Appendix 2  239 killing. This view is supported generally by Sax [references omitted]. However, as Sax himself observes expressly [references omitted], it seems contrary not only to the view of the legislature but also to generally accepted opinion, as the OLG realised also. This Senate sees no reason for going into this dogmatic dispute. It holds, in accordance with the generally accepted view, that an abortion which is exempt from penalties according to § 218 ff of the Criminal Code is certainly not illegal. This view is borne out not only by the Preparatory Materials accompanying the present statutory provisions but also by the position taken by the BVerfG [reference omitted] which [reference omitted] supports a clear distinction between lawfulness and illegality. Consequently an abortion which is exempt from penalties according to § 218 of the Criminal Code can form the object of a valid contract with a medical practitioner … The OLG does not question that an infection with German measles during the particularly vulnerable period of early pregnancy may justify the mother in deciding to terminate it. Such an infection involves the risk, which is not overwhelming but at least highly likely, that the child will be born with severe or even extremely severe injuries [references omitted]; the evidence in the present case is to the same effect. In these circumstances the future mother must have the right and the possibility, having regard to the present law, to call for an abortion. It is irrelevant in the present circumstances that the medical adviser is not under a direct duty to collaborate. The defendant has not alleged that he would have refused the claimant mother’s request, had the danger been diagnosed. No different conclusions can be derived from the fact that the statute does not concentrate on the prognosis for the welfare of the child but on whether the mother can be required to bear the burden. This does not mean that the test is only restricted to considerations of the danger facing the mother of a severe financial and workload, as well as of the mental anguish through sharing the fate of a severely handicapped child. In addition, the ethical interest of the mother who is the sole person, according to what seems to be the general opinion, entitled to take this decision, must be taken into account. It is not to be held against her and she must not reproach herself for having failed, by a decision placed in her hands, to have spared the child a life which may be often painful and makes integration into society difficult. Consequently it is generally believed, and held on the facts in practice, that an infection with German measles at a period when it may have dangerous repercussions is a ground which entitles the mother to demand an abortion. II. In the opinion of this Senate the negligent breach of contract by the defendant which constitutes at the same time an injury to the second claimant (the mother) may certainly lead to claims by the claimant parents, though not to a separate claim by the child. 1. Claims of the parents In recent literature the predominant view appears to be that, in principle, claims of the parents may arise in the circumstances [references omitted]. However, the decision forming the present appeal is mentioned several times with approval. The possibility of such claims is denied, in particular, by those who hold, for various reasons, that abortion is merely not visited with penalties, but illegal [reference omitted]. This Senate, as stated before, shares the former opinion. (a) Claims of the mother (aa) One starts from the fact that with the birth of the child the danger has materialised which the mother had decided to prevent by having an abortion. The total damage suffered by the child … is so grave that a mother who was prepared to undergo an abortion, if

240  Appendix 2 necessary, would have decided not to give birth to the child, had she been cognisant of the damage in advance. The damage suffered by the mother as a result was caused by the defendant’s breach of contract and, generally speaking, he is therefore liable to repair it. The damage, being pecuniary damage due according to the law of contract, can consist in the additional expenses, financial and material (labour) which the mother will have to assume in toto or in part, possibly for her whole life. Claimant’s counsel has stated expressly that their claim is limited to the additional expenses and is not concerned with the amount of maintenance which a healthy child would have required; therefore this Senate can limit the decision to that claim in the case before it. The fact that this additional expense, too, arises from a duty of support imposed by family law, does not prevent its characterisation as pecuniary damage, in so far as a third-party liability is concerned [reference omitted]. It follows that – as in the case of a child born owing to a failure of preventive measures – also in the case of a child which the mother did not wish to be born in a condition as the present, ie, handicapped, at least the additional expenses caused by the handicap can be claimed as damage to be made good (a point still left open [reference omitted]). Of course, this is true only if and to the extent that the danger to be avoided has in fact occurred, so as to show that the severity of the actual damage – if it could have been foreseen – would have made it unreasonable to let the child be born. This must be assumed in the present appeal. This is the only means of providing reparation for the defendant’s negligence which imposed upon the mother a burden not required by law to be borne by her and which she was entitled to evade. (bb) In addition this Senate holds that, having regard to need for a Caesarean operation, the question must be considered whether the mother is entitled to damages for pain and suffering. As distinct from the other cases referred to above decided by the BGH, the pregnancy, as such, was not due to the medical adviser’s negligence, but was freely chosen or at least accepted by the mother (the second claimant). Thus, the defendant did not interfere directly with the personal health of the second claimant by involving her in an unwanted birth (as distinct from [reference omitted]). Therefore this Senate holds that only that infliction of pain and suffering can justify a claim according to § 847 BGB [after 2002: § 253 BGB] which, as an aspect of damage, exceeds the inflictions which accompany a birth without complications. This may happen if – once again the evidence is not available – the Caesarean operation only became necessary because the child was injured, as the claimants maintain. In assessing damages, it would have to be considered, on the other hand, that thereby the mother was spared an abortion which – as the defendant contends – would not have been without complications, and which she would have suffered if the defendant had fulfilled his obligation. No additional claims of the mother arise by applying § 847 BGB literally or by way of ­analogy. Nor did the OLG discern such a claim in the claimant’s pleadings, a conclusion which remains unchallenged in the present appeal. For this reason, it may be observed in passing only that such a claim based on the mental burden, not amounting exceptionally to an illness, resulting from being burdened with a severely handicapped child would be alien to German law (contrary to several foreign legal systems, as evidenced, eg, by Howard v Lecher, decided by the Court of Appeals of New York, 366 NE (2d) 64 (1977) – ‘mental and emotional suffering’). The practice of the BGH, which grants damages similar to those for pain and suffering within a strictly defined area in respect of the right to one’s personality

Appendix 2  241 [reference], cannot be extended to the present issue. In particular, no pecuniary damages can be awarded, contrary to principle underlying the statutory provisions, in respect of a violation of the ‘right to plan a family’ as an emanation of the general right to one’s personality [references omitted] if a decision involving the personality of the party affected was only frustrated in fact – as was the case here. (b) Claims of the claimant husband The husband is entitled to expenses in money and kind to the same extent as the wife. To this extent he was included in the sphere of protection resulting from the contract for medical treatment; as far as the liability to pay damages of the responsible medical practitioner is concerned it is irrelevant to what extent the burden created by him is distributed between the spouses. The principle laid down by this Senate [reference omitted] apply here as well. The present case shows clearly that normally no other conclusion can be reached for at least according to the allegations of the claimant parents – the father, acting as a ‘houseman’, has now assumed the time-consuming care of the handicapped child, in order to enable the mother to continue her professional career and thus to provide the financial means for maintaining the family. No claims of the third claimant for damages other than financial are in issue. 2. Claims of the child In the present case, the highest German Court is confronted for the first time with the problem which has been described in Anglo-Saxon parlance as ‘wrongful life’. As stated above, the defendant did not cause the child’s deplorable condition; nor is it contended that by taking special measures he could have prevented it. However, in breach of his obligation towards the mother to treat her, he failed to prevent by means of an abortion the birth of a child, the health of which was severely endangered and in whose person this danger materialised in a severe form. To this extent this Senate agrees with the OLG that the child cannot raise any claims based on these facts. As stated above, little German practice has come to light. Apart from the decision under appeal here, an appeal against a judgment of the OLG Hamm of 25 January 1982 [reference omitted] is pending before this Senate in which, however, claims by the child itself were not considered for procedural reasons. Foreign judgments, which for the reason alone that they are based on different laws are only of limited relevance for German law, appear to have been rendered in England and the United States. In England a claim by the child has recently been rejected (Court of Appeal in McKay v Essex Health Authority and Another [1982] QB 1166). In the meantime, legislation has excluded a claim by the child altogether. In the United States, too, this opinion has been generally accepted for some time (Court of Appeals, California, Curlender v Bio-Science (1980) 165 Cal 477). Writers on the law of the Federal German Republic relating to this topic are divided, but the majority denies a claim to the child. Such a claim is, however, advocated by Deutsch [reference omitted] and probably also by Plum [references omitted]. On the other hand, claims by the child itself are denied not only by all those who do not accept failure to facilitate an abortion as a ground for liability, but also by those writers who would allow claims by the parents in these circumstances [references omitted]. In rejecting a claim by the child based on ‘wrongful life’ or ‘wrongful birth’ this Senate is guided by the following considerations: (a) A direct duty, enforceable by an action in tort, to prevent the birth of a child on the ground that in all probability it will be affected by an infirmity which makes its life appear ‘valueless’

242  Appendix 2 in the eyes of society or in its own presumed opinion (for which naturally no evidence can be produced) would be alien to the duties sanctioned by the law of tort which are normally centred on the protection of personal integrity. No such duty exists. This applies even in cases – different from the present – where there exists not only a danger of damage, but, eg, where a fairly reliable prognosis of a serious genetic defect is possible, eg, by means of amniocentesis – as in the case of mongolism. This principle holds good, although according to what is probably the dominant opinion as well as the actual legal practice the birth of such children should be prevented. Human life, which at the conclusion of implantation includes also the foetus, is a legally protected interest of the highest order deserving absolute protection. No third party may determine its value. For this reason it is recognised that the duty to save the life of a sick person or one who is seriously injured must not be made to depend upon a judgment as to the value of the life to be saved. Only when the question is whether isolated single human functions are to be sustained by artificial means without any hope of improvement, this principle may have to yield [references omitted]. Such is not the case here. Quite generally, having regard to the experience under the national socialist regime of lawlessness, the practice of the courts in the Federal Republic does not permit, with good reason, any legally relevant judgment about the value of the lives of others [reference omitted]. (b) Therefore any breach of duty which might render the defendant liable in damages could only be derived from the contract to treat the mother. (aa) On the one hand, it is possible that contractual duties, including those towards third parties, may constitute duties to be accounted for in tort [reference omitted]. In this respect reference may be made to what has been stated before. Neither the fact of bringing life into being nor of failing to prevent it (as distinct from affecting the quality of life by an act of omission) violates the legal interest protected by § 823 BGB. This is not merely a dogmatic consideration. It is also supported by the fact that the ethical evaluation by public opinion of permissible abortions is not uniform (it is true that the defendant has never relied on ethical scruples; if so, he would have had to refuse to advise and to treat the mother). Above all, seeing that no interest of personal integrity is involved, it is impossible to determine with binding effect whether a life affected by serious handicaps as an alternative to absence of existence can be regarded at all in law as damage, or whether it is a better condition that the latter [Stephenson LJ [1982] QB 1166: ‘Man, who knows nothing of death or nothingness, cannot possibly know whether that is so’]. (bb) Thus it remains only to examine whether the defendant is bound by a direct contractual obligation which obliged the latter to protect the child as a result of the protective effect of an agreement (possibly implied only) in favour of the unborn child. Once again this Senate is unable to give an affirmative answer, although such a contract for medical treatment may well have protective effects in favour of the child in other respects, as the OLG has also recognised. It would not be an obstacle that at the time when the defendant committed the act resulting in his liability the claimant child did not yet enjoy legal personality (§ 1 BGB). In the law of tort, too (see above) it is recognised that an act causing liability may be committed before the injured party was born [reference] and even before he was conceived [reference omitted]. The same applies to a claim for damages which is based on a contractual duty in favour of the unborn child.

Appendix 2  243 This Senate is, however, unable to find that such a protective effect was stipulated since the law in force at present expressly authorises the mother in her own interest alone to demand an abortion. This attitude of the law may not be convincing in its reasons; also, as far as can be ascertained, it does not exist in other countries, where the law does not reject abortion in principle. Nevertheless, the attitude taken by German law must be respected within the confines of the Federal Republic, if only for reasons of constitutional law [­reference ­omitted]. Consequently it precludes not only a broad interpretation of the contract to treat the mother so as to benefit the child, the birth of which was to be prevented, but also as already stated, any direct guarantee actionable in tort of the medical adviser towards the child arising from the assumption of the mandate to treat the mother. (cc) Leaving aside the special features of the German rules on abortion, this Senate regards the denial of claims by the child itself as imperative in such cases. Such claims are only admissible if the child’s interest in personal integrity has been violated culpably by human activity which, as stated before, may have occurred even before the child was conceived. For the rest, the question is not so much one of arguments based on formal logic, also relied upon by the OLG, as for instance to the effect that those having legal personality cannot conceivably derive claims from acts which gave rise to the claimant’s existence and legal personality [reference omitted]. Instead, this Senate believes that in cases such as the present the limits within which claims can be adjudicated according to law have been reached altogether and even exceeded. As a matter of principle a human being has to accept his life as nature has endowed him and has no claim against others to be born or to be eliminated. If a mother – and she alone – is nevertheless accorded such a choice by the law, this does not mean either that the child is granted a right as against her not to exist. It is irrelevant that the mother’s decision may legitimately have been influenced by compassion for the severely injured life [reference omitted]. If a decision to the contrary were to be reached against the medical adviser, it would follow that liability would also have to be admitted in other cases; eg, that of parents who, although suffering from severe genetic defects, gave life to a child, and whose liability consists at present, as the case may be, in an increased duty of maintenance; or that of persons who are responsible for those genetic defects, even if these defects were known to the parents, who are primarily liable, when they produced the child (as distinct from the case ­[reference omitted] where the issue was the infection of the mother with lues as a result of a blood transfusion). Thus liability to pay damages could arise for several generations, a possibility which has already led to suggestions to restrict liability to the first generation [references omitted]. These considerations show in the opinion of this Senate, as stated before, that an area has been touched on in which the legal regulation of liability for far-reaching fateful and natural developments is neither reasonable nor acceptable. (dd) This Senate is not oblivious of the fact that as a result seriously handicapped children remain without financial protection, once the duty of the parents to maintain them comes to an end – as for instance when they die. This must be accepted, just as when the mother could not make up her mind to call for an abortion or if the period set by law for having an abortion has been allowed to pass, for no matter what reason. In all these cases a fateful development takes place the interruption of which cannot be demanded by the child and the effects of which must be made good by the community within the bounds of the possible.

244  Appendix 2 Case 5 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 16 NOVEMBER 1993 BGHZ 124, 128 = NJW 1994, 788 Facts The first and second claimants are the parents of a girl born in 1982 with a mental and ­physical handicap. Suspecting that they might have an abnormal genetic disposition, they were, in August 1983, referred by their GP to the Department of Clinical Genetics (run by the first defendant) of the Institute of Anthropology and Human Genetics of the ­University (third defendant), because they wished to be advised, prior to deciding on a second ­pregnancy, of the possibility of an adverse hereditary disposition. The second defendant, a doctor at the Institute’s clinic, made tests and on 27 October 1983 and wrote a report, which was signed by himself and the first defendant. Copies of this report, informing the two claimants that an inherited adverse disposition was very unlikely and that the couple should not be dissuaded from further pregnancies, were also sent to their GP. On 6 March 1985, the third claimant was born with the same mental and physical handicaps as the first child. The claimants, believing that the genetic consultation and advice had been faulty, claimed damages from the defendants. The first and second defendants requested the court to clarify whether they were liable to make compensation for any current and future material losses stemming from the third claimant’s brain damage, as far as these claims have not been transferred to the social security bodies. The second and third claimants also demanded damages for pain and suffering. The LG rejected the claim. On appeal by the first and second claimant, the OLG declared that the first defendant must compensate the (first and second) claimants for all current and future losses originating from the birth of the third claimant, including the entire costs of living. The Court also decided that the first and second defendant are liable as joint and several debtors to pay the second claimant damages for pain and suffering for the birth of the third claimant. The Court rejected all other claims. By this further appeal, the first and second defendants requested that the LG decision be restored; the first and second claimant (hereinafter: ‘the claimants’) claimed that the third defendant should be included in the decision on liability. The third claimant’s further appeal was withdrawn. This Senate only accepted the first defendant’s further appeal in so far as it concerned the claim for financial losses. The further appeal was unsuccessful. Reasons I. The OLG held that the first defendant was liable for his breach of the consultation contract, including his liability for the breach committed by the second defendant as employee performing his obligation (§ 278 BGB) … II. The further appeal fails to challenge the OLG’s reasoning. 1. In respect of the contract of genetic consultation, the further appeal unsuccessfully ­challenges the first defendant’s status as the mainly liable contractual partner … According to the findings of the OLG, the claimants were referred for genetic counselling by their GP to the department run by the first defendant of the institute run by the third defendant. The OLG also correctly ascertained that the first defendant was authorised by the National Health Service to provide this kind of service …

Appendix 2  245 In view of this situation, the OLG followed the principle repeatedly expressed by this Senate (BGHZ 100, 363 [367 ff]; BGHZ 105, 189 [194]; BGHZ 120, 376 [382 ff]) that the first and second claimants only entered into a contract with the first defendant, since the out-patient treatment of National Health patients is not first and foremost the duty of the body running the hospital, but is rather that of the approved National Health doctor or the chief consultant appointed for National Health patients. As a result, a National Health patient only enters into a contract with the chief consultant running the out-patient National Health department, and not with the hospital even where the GP’s referral names the hospital (BGHZ 105, 189 [194]). A genetic consultation is not an alternative to out-patient and in-house treatment but is rather a form of out-patient treatment … The first defendant, not the Institute itself, was the person authorised by the National Health organisation to provide such counselling, … Internal arrangements as to payment between the doctor and the Institute cannot alter the fact that as regards the consultancy contract, the duly appointed chief consultant was the claimants’ contractual partner. 2. The further appeal unsuccessfully challenges the opinion of the OLG that the counselling by the second defendant (for which the first defendant is responsible) was wrong … (a) … According to the undisputed findings of the OLG, the question whether the firstborn child suffered from genetic or prenatal damage was at the time of consultation left unanswered. The OLG, therefore, held that the letter written on 27 October 1983 by the first and second defendants, stating that (a) an adverse inherited disposition was extremely unlikely and an as yet unknown prenatal damage was the most likely cause of the disabilities; (b) a repetition was not to be expected; and (c) a further pregnancy should not be dissuaded, misrepresented this uncertainty. In view of the open-ended medical results, the advice which the parents derived from this letter was not sound enough. The genetic counselling should have made this point clear. The further appeal submits that the letter had been sent to the GP, and the claimants had only been sent a copy of it … In view of the clear statements contained in the defendants’ letter, the further appeal fails to show how the GP could have advised his patients as to possible risks along any other lines … For its opinion that the risks had been assessed too optimistically and that the recommendations had been insufficiently safe, the OLG could unreservedly rely on expert advice … This highest court does not doubt that the lower court’s findings show a connection between the tortious act (the wrongful consultation) and the resulting damage; had the consultation been complete and correct, the claimants would not have had another child. The OLG correctly held that the damage claimed resulted from a breach of duty which the first defendant had under the consultancy contract, since the genetic consultation was intended to prevent the birth of a genetically damaged child by allowing the parents to make a reasoned decision. The OLG held that there existed a sufficient with the protective purpose of the consultancy contract if any kind of genetic damage to the third claimant was at least a factor contributing to any mental or physical handicap. In view of the facts of the case this could be easily ascertained: both children had the same symptoms of damage, suggesting a combination of genetic and exogenic damage. As regards the third claimant, mere prenatal damage could, for all intents and purposes, be ruled out … The fact that the exact nature of the third claimant’s established genetic damage could not be exactly ascertained, prevents neither the finding of a causal connection between the wrongful advice and the birth of a

246  Appendix 2 genetically damaged child, nor the inclusion of the damage to health under the scope of protection of the consultancy contract since by this contract all possible genetic damage was to be excluded … 3. The further appeal fails in so far as it opposes the finding that the claimants’ claim for damages comprises the total costs of living necessary for the third claimant … (b) In view of the findings of the OLG that the claimants would have refrained from having another child if they had fully and correctly been advised on the genetic implications, the opinion of the OLG is in line with the case law of this Senate, according to which the costs of maintenance resulting from the birth of the further child can be claimed from the wrongly advising doctor as damages for breach of the consultancy contract. This Senate has decided this point on a number of occasions for comparable groups of cases, ie, for cases of (a) wrong advice on the prevention of the birth of a severely prenatally damaged child (BGHZ 86, 240 ff; BGHZ, 89, 95 ff; NJW 1987, 2923), (b) failed sterilisation (BGHZ 76, 249 ff; BGHZ 76, 259 ff; VersR 1980, 719; NJW 1981, 630; NJW 1981, 2002; NJW 1984, 2625; NJW 1992, 2961), and (c) failed (permissible) abortions (BGHZ 95, 199; NJW 1985, 2752; NJW 1985, 671; NJW 1985, 2749; VersR 1986, 869; NJW 1992, 1556). The facts of this case provide no reasons why the principles developed for those cases cannot be applied to a case where the parents of a handicapped child, before procreation of another child, undergo genetic counselling in order to prevent the risk of giving birth to a second handicapped child. (c) The Second Senate of the BVerfG in its decision of 28 May 1993 (NJW 1993, 1751 ff), headnote no 14, and in its reasons under D V 6, expressed its doubts as regards the decisions of this Senate. Although the remarks of the BVerfG are not binding on this Court, and this Senate has already repeatedly and critically reviewed its own previous findings (see BGHZ 76, 249 [252] and NJW 1984, 2625), a further detailed analysis of the legal position is called for. The BVerfG decided that the legal possibility that a child’s existence may be a source for damages is constitutionally barred under Article 1 I GG. The duty of all organs of the state to honour every human being in its existence, (and here reference is made to Part I 1 a of the decision) prohibits, in itself, the view that maintenance of a child can be seen as financial loss. The case law of the civil courts on liability for medical errors in counselling on failed abortions should therefore be reviewed. This Senate fails to find this remark of the BVerfG a reason why in the case here under investigation expenses for maintenance cannot be seen as financial loss. (aa) The legal classification of expenses for maintenance proceeds from the contractual liability of the doctor to full all medical requirements in order that the treatment or consultancy undertaken by him be successful. Such legal liability can, however, only be used as a starting point for contracts whose legality is not in question. As regards abortions without legal justification which, as a result of the Constitutional decision of 1993 must now be regarded as illegal (for instance because the previously applied justifications are no longer accepted as valid …), this Senate can here leave undecided, whether in such cases the need to prevent economic loss arising from a child’s existence is at all relevant for the contractual relationship and, even where such need existed, if it could be the starting point for a claim for damages. On the other hand, (a) consultancy contracts intended to prevent, as here, the procreation or, in other cases, the birth of a genetically damaged child; or (b) sterilisation contracts aimed at preventing the birth of any, or any further, children or (c) contracts for the legally

Appendix 2  247 permitted abortion of a pregnancy, (for instance in cases where such termination is undertaken for criminological or embryopathic reasons), are all contracts intended to reach a legally permissible objective. If there are no qualms about the legal validity of a contract for sterilisation (see this Senate BGHZ 67, 48 [51 ff] and NJW 1984, 2625), there should, a fortiori, be none in cases like the present. The claimants’ intended to have a second, but not as handicapped child as their first, and in order to prevent the damage feared as a result of the first child’s handicap, they wished to make procreation dependent on the outcome of a consultation. Such intentions cannot meet with moral qualms. Such behaviour is due to a high degree of parental responsibility. Where a contract is geared to reaching a legally permitted aim, ie, the birth of a child (in this case potentially genetically impaired), the doctor is responsible for obtaining the contractually agreed aim by fulfilling his accepted duties. The Senate cannot see any constitutional doubts. In the cited decision, the BVerfG in its reasons expressly points out that faulty performance of medical duties in respect of treatment or advice can in principle lead to civil liability. The constitutional and general legality of contracts such as the ones described above is reflected in the contents of these contracts in so far as they are geared to prevent economic burdens incurred from the birth of children. Where this was properly contractually agreed, such economic protection is part of the duties which the doctor accepted and the legal order condones. Thus, this Senate adheres to its previously reasoned opinion that the doctor’s liability includes liability for the prevention of this economic consequence where, as part of the specific aims of the contract for treatment and consultation, he had also accepted that of the prevention of such losses. This Senate has affirmed this result for cases of sterilisation for reasons of family planning (BGHZ 76, 249 [256]; 76, 259 [263 ff]; NJW 1981, 630; NJW 1981, 2002 and NJW 1984, 2625). In a case similar to this one, where during pregnancy a consultation took place aimed at preventing the birth of a severely disabled child, this Senate (BGHZ 89, 95 [104 ff] held that even in such cases the prevention of economic burdens is part of the protection envisaged by the consultancy contract, even where this is not its paramount reason, as in cases of sterilisation for economic reasons. Where in the course of such contracts the doctor commits a medical error leading to the birth of a child, his liability includes his duty to reimburse the contractual partner for all economic losses which the contract was intended to prevent. Accepting a medical duty aimed at attaining a permitted contractual purpose makes the doctor legally responsible and has consequences for his liability. In the last instance the protection afforded to the contractual partner, which stems from the doctor’s liability, is a consequence of medical progress which, within the boundaries of the law, opened up the possibility of preventing the birth of a child. (bb) Given these facts, it would be a grave incursion into the parties’ contractual interests if the doctor were free from consequential liability in cases of culpable breach of contractual duties. Even when considering the BVerfG’s opinion, this Senate cannot detect any ­constitutionally-based reason why such a grave incursion into contractual liability is needed. Here, protection of a nasciturus from abortion is not at issue. This point of view is also obviously not the starting point of the BVerfG’s criticisms, which are directed, without differentiation, at this Senate’s jurisdictional principles. Nor can an opposing constitutional reason be derived from the view that the economic burden which must be borne by the doctor as a result of his breach of contract actually consists of the costs of living of a child.

248  Appendix 2 (i) This Senate shares the views underlying the reasoning of the BVerfG in its decision of 28 May 1993 (NJW 1993, 1751 ff) that it is constitutionally prohibited (Article 1 GG) to classify the very existence of a child as damage, even within the laws of contract and tort. This Senate has repeatedly expressed this view (BGHZ 76, 249 [253 ff]; NJW 1984, 2625). But in its leading decision (BGHZ 76, 249) this Senate has already pointed out that to use the slogan ‘child as damage’ is an inappropriate and legally useless way of looking at the problem. Instead, the Court in this and later decisions, especially in its decision of 19 June 1984 (NJW 1984, 2625) declared that the damage consists of the costs of maintenance incurred by the unplanned birth of the child. The Court held that in this respect the distinction between the child’s existence and its undoubted value as a person on the one hand, and the parents’ maintenance burden on the other, does not represent an artificial disintegration or a ‘dissection of the child’s personal integrity’ (see for instance Lankers in FamRZ 1969, 384), but is rather a logical consequence of looking at the problem from the point of view of the law of damages. In order to reach the consequences of the law of damages here under discussion, neither the legal provisions of the law of damages nor those of family law, nor an unrestrained contemplation of the entire facts, require that the very existence of the child is seen as the damaging event. It is only the ensuing financial burden to the parents, ie, the cost of maintaining the child, which represents the damaging economic loss. The provisions on liability do not exonerate the parents from their own duty to provide maintenance for their child. Their own duty to the child and their costs in maintaining the child are only partially met by the doctor’s liability. (ii) According to the opinion of this Senate, considerations of liability and damage are not precluded by the fact that the economic burden takes the form of maintenance for a child. The legally necessary comparison of the economic situation with and without the damaging event does not mean that the child’s existence and its non-existence are compared in the sense that the child’s non-existence is regarded as a positive and its actual existence as a negative economic factor. This point of view would certainly meet with constitutional objections under Article 1 GG. But such a comparison would also be wrong under the law of damages. When the considerations of liability and damage are solely restricted to the economic side of the complex facts which the birth of a child involves, the conclusion is reached that for the person liable to provide maintenance, the comparison of the two economic situations needed to determine the actual loss merely comprises the economic situation with and without the duty to provide such maintenance. In this respect, the Senate is aware that the economic burden is only brought about by the child’s existence. But this is merely a causal link provided by natural science, which in itself is free from value judgements. Even in the case of a ‘longed-for child’, the parents’ duty to provide maintenance is expressed as a burden on their finances without any negative consequence for the relationship between the parents and the child. Moreover, even in cases where the BVerfG has expressly acknowledged the duty to compensate for losses incurred in connection with the birth of a child, the birth must be seen as the ‘source of loss’ intended by the BVerfG, if this expression has any relevance at all to the law of damages (for the different view held by Deutsch, see NJW, 1993, 2361 [2362]). This Senate has also contemplated whether in consultancy cases such as this one or in cases of failed family planning, it could, for constitutional reasons, be necessary to acknowledge a claim to fair monetary compensation for immaterial damages on the basis of breach of the parents’ personal rights, as has been considered in academic literature (see Diederichsen VersR 1981, 693 [696];

Appendix 2  249 Stürner VersR 1984, 305 and FamRZ 1985, 753 [760 ff]; H Lange, Schadensersatz (2nd edn) section 6 IX 7h). However, this point of view does not dispense with a comparison with the situation had the child not been born. A classification as immaterial damage to its parents would have a more direct and graver effect on the child as a person than the ascertainment of the parents’ economic burden for which the doctor must (partially) relieve them. ­Moreover, as regards questions of liability, such a stance seems rather dubious, since the economic burden arising from the birth of the child would indirectly affect the calculation of compensation, since under this legal concept (damages for pain and suffering) compensation for economic losses is not possible. The differences between economic and immaterial losses would be blurred. (c) In cases where the burden of the costs of living was meant to be prevented through a contract with a doctor, an economic approach in assessing the burden does not negatively affect the views of the value of the child’s person and existence. According to the compensatory nature of the law of liability and damages, the doctor’s share of the economic burden is reduced to a mere financial obligation which neither taints the child nor questions its right to live. Neither the law nor the practice on damage and compensation links the term ‘damage’ to such negative value judgements; if this were the case it would necessarily be prohibited to classify the birth of a child as damage. The classification of maintenance costs as losses in the relationship between parents and doctor means, however, neither that a value judgment is made in respect of the child nor that its personality is degraded by connection with the term ‘damage’. According to the opinion of this Senate, the term ‘ damage’ does not include such connotations which, in the light of the Constitution, would in any case be objectionable. When the BGB was enacted, the legislator deliberately refrained from clearly defining the terms ‘financial and economic losses’ and instead left their interpretation to jurisprudence and the courts. From the very beginning the courts interpreted economic losses as the diminution of assets and the increase of debts, calculated by way of a mathematical comparison between the economic situation brought about by the damaging event and the situation which would have existed had the event never occurred (Großer Senat für Zivilsachen BGHZ 98, 212 [217 ff]). This method of calculating the difference through a neutral mathematical operation cannot, however, dispense with an assessment of the various mathematical positions to be employed when calculating the difference; these need to be evaluated according to the protective purpose of all liability and the compensatory function of damages (BGHZ 98, 212 [217 ff]). But where a contract with a doctor was intended to prevent the parents being burdened with maintenance costs, and this burden is incurred as a direct result of a breach of contract, the protective purpose of the contract and the purpose of damages as equalisation of burdens demand that it be seen as economic loss. The fact that this balancing of losses cannot result in a ‘negative value judgement’ of the child as a person follows from the above-outlined restriction of the assessment of losses to the economic aspect of the facts of the case. Nor does this comparison under the law of damages between the two economic situations reduce the human existence in a degrading manner to a mere item of accounting and balancing. The comparison is merely the basically value-free method of calculating economic consequences on which the law of damages always relies and whose classification as a mere tool for establishing facts affects the meaning of term ‘loss’. This is the ultimate purpose of the law of damages; to compare economic situations and to provide economically expressed differences for the purposes of the law of liability which then establishes who is responsible for the creation of the burden and to whom it

250  Appendix 2 must accordingly be attributed. This function of the law of damages does not involve a negative value judgement of the economic difference as ‘loss’. If compensation is nowadays understood as a just allocation of burdens according to the various criteria of liability, and not as a sanction for damaging behaviour, this Senate sees no reason why the classification of maintenance costs as ‘loss’ should be detrimental to the honour of the child. This Senate is rather of the opinion that, especially in cases such as this, granting compensation not only has no detrimental effect on the child, but can rather be beneficial to it, since it improves its financial situation and possibly even its standing within the family. The shifting of the maintenance burden to the attending doctor appears especially satisfactory where, due to his faulty consultation, he is co-responsible for the economic burden which, if a severely handicapped child is in constant need of care, can even threaten the family’s existence. As this Senate has previously stated (BGHZ 76, 259 [266 ff]), even in cases where the doctor is fully liable for all extra expenditure calculated by means of an economic comparison, the parents are still burdened with the total personal care of the child and also with a certain amount of financial losses and sacrifices which they cannot transfer to the person who created the damage. The Court fails to detect any constitutionally objectionable attack on the honour of the child from this partial economic alleviation of the parents’ burden. Should the parents in fact treat the child badly because they blame it for the additional maintenance costs, such behaviour would not be improved by the legal order refusing to shift some of the burden to the person who, by his breach of contract, created it … 4. As regards consultancy contracts of the kind here under investigation, the compensatory purpose of damages prohibits a restriction of the claim for damages to the amount of extra expenditure incurred by reason the child’s congenital handicap … (b) As this Senate has previously stated, a doctor who culpably breaches his duty to provide a proper consultation, and who is therefore liable for maintenance costs, must, within the limits set out by this Senate, pay compensation for the entire maintenance costs of the child and not only for the additional expenditure caused by the handicap. After a further review, the Court has decided to uphold its previous opinion even for cases such as the present. As far as liability is concerned, there are no grave differences between the two cases of consultancy. In both instances the parents required medical advice in order not to give birth to a congenitally damaged child. If, in view of the risk of having a second handicapped child, they intended to forego a second pregnancy if the doctor advised them in that direction, it is clear that they would not have given birth to the child had they been correctly advised. According to the parties’ intentions, the scope of protection afforded by a consultancy contract always includes those losses arising from financial expenditure on severely handicapped children which the parents intended to prevent, for themselves and the child, by consulting a doctor. As this Senate stated in its decision (BGHZ 89, 95 [105]), these maintenance costs cannot be split into those which are legally expected to be incurred by parents of a (hypothetically healthy) child and the additional costs which stem from the child’s handicap. The necessary expenditure for safeguarding the existence of a severely handicapped child is indivisible. Moreover, this Senate is of the opinion that it is irreconcilable with the respect for the child’s person in the sense of Article 1 I GG to measure its existence and the various corresponding needs by using the yardstick of a ‘normal’ child. Compensating the parents for the entire costs of maintenance is thus no disregard of the child’s honour but rather an appropriate means of protecting it from losses, and of guaranteeing such protection.

Appendix 2  251 Case 6 BUNDESVERFASSUNGSGERICHT (FIRST SENATE) 12 NOVEMBER 1997 BVerfGE 96, 375 = NJW 1998, 519 = JZ 1998, 352 Facts and Reasons (constitutional complaints are dismissed) A. The constitutional complaints, joined together for a joint decision, concern the case law of the civil courts, according to which the duty to maintain a child in the case of unsuccessful sterilisation or defective genetic advice can constitute a loss which has to be compensated. I. Case 1 BvR 479/92 1. The complainant is a practising urologist. He advised the husband of the claimant in the original proceedings on questions of family planning and carried out on him a medical operation for the purpose of sterilisation. The sterilisation was unsuccessful and the patient was not told of this. His wife gave birth in May 1984 to their fourth son. The complainant and his liability insurer refused claims for compensation for loss. 2. (a) In the original proceedings the wife asked for compensation for maintenance expenditure for the child as well as compensation for pain and suffering because of the unwanted pregnancy and the birth of the child. The LG ordered the complainant to provide the basic maintenance which would be payable for illegitimate children and to pay a supplement of 70 per cent of that basic maintenance for expenditure on care. As the mother had sued alone, only half of the total maintenance expenditure to be paid was awarded to her, in accordance with the legal concept expressed in § 1360 sentence 2 and § 1606 II 2 of the BGB. Besides this, the LG held compensation for pain and suffering in the sum of DM 6,000 to be appropriate. II. Case 1 BvR 307/94 1. The first and second claimants in the original proceedings are the parents of a daughter who was born in 1982 and was mentally and physically handicapped from birth onwards. Because they feared a genetic disposition to the procreation of handicapped children, in August 1983 they visited the department for clinical genetics of a university institute, which was at that time headed by the complainant, to have the risk of hereditary diseases clarified before deciding to have a further child. The complainant signed a doctor’s letter a copy of which was shown to the two claimants. According to this, a hereditary disorder was extremely unlikely; the couple need not be advised against a further pregnancy. In March 1985, a second daughter was born with the same mental and physical handicaps as her sister. 2. (a) The LG dismissed the claim to compensation for maintenance (by the parents) as well as the claim to damages for pain and suffering (by the mother and the handicapped daughter) on the basis that the claimants had not succeeded in proving that the advice given was in breach of duty. (b) The OLG awarded the parents on their appeal compensation for the material harm which had arisen and would arise for them in the future from the total expenditure on maintenance for the handicapped child. It granted to the mother damages for pain and suffering in addition to this. It refused claims by the child herself.

252  Appendix 2 (c) The child withdrew the appeal in law which had originally been submitted. The appeal in law by the complainant was only accepted and referred back by the BGH in relation to the contractual liability for compensation for harm [reference omitted]. In the grounds, it states as follows. The Senate adheres to its case law that a doctor’s contractual liability can include expenditure on maintenance of a child. This case law was applicable to the case of defective genetic advice before the conception of a child. It was true that the Second Senate of the BVerfG in its judgment of the 28 May 1993 in the 14th p ­ aragraph of the summary, as well as under D V 6 of the reasons [reference omitted] raised doubts about this point. Even if no binding effect is to be attributed to these statements and although the Senate has subjected its case law to critical examination on several occasions, they do however make a further detailed scrutiny of the legal situation necessary. The Senate cannot however infer from this reference by the BVerfG any reasoning which would prevent adjudging maintenance expenses to be loss in the present case. III. The Second Senate of the BVerfG has expressed itself in the form of a decision of the 22 October 1997 on the present case. The majority was of the opinion that the legal view expressed in [reference omitted] to the effect that it was not permissible on constitutional grounds (Article 1 I GG) to see the duty to maintain a child as loss was a legal view fundamental to the decision of the Senate. Further, the majority took the view that the deciding of the preliminary question of whether a legal view was of fundamental importance ought to be by a plenary session of the Court if the Senate which expressed the legal view stated that it was of fundamental importance, whilst the other Senate held it not to be fundamental. An inquiry under § 48 II of the Standing Orders of the BVerfG by the First Senate has not taken place. B. The constitutional complaints are unfounded. The decisions under challenge do not exceed the boundaries which are set constitutionally for the development of the law by judicial decisions (I). They also do not in their material content violate the basic rights (II). I. The decisions under challenge by which the complainants have been ordered to pay compensation for harm and for pain and suffering adhere to the principle that the judge is bound by statute and law, so a violation of the basic rights from this point of view is eliminated. 1. The provisions of the civil law of contract and tort which form the basis of the judgment (in particular §§ 611, 276 and 249 as well as §§ 823 I and 847 of the BGB) [after 2002: § 253 BGB instead of § 847 BGB] are not contentious in constitutional law. They have always served the judge as a sufficiently definite basis for deciding questions of liability. 2. The interpretation of these provisions by the civil courts does not overstep the boundaries of the judges’ authority to make decisions, which arises from Article 20 II, III GG. (a) The interpretation of simple statute law (inclusive of the choice of the method to be used in this connection) is a matter for the specialist courts and not to be investigated by the BVerfG as to its correctness. The BVerfG only has to ensure that the requirements of the Basic Law are observed in this respect. Article 20 II GG gives expression to the principle of separation of powers. Even if this principle was not formulated in the GG in the sense of strict division of functions and monopoly of each power by a single organ [reference omitted], it in any case excludes the

Appendix 2  253 courts from claiming powers which have been conferred unambiguously on the legislator by the GG[reference omitted]. Article 20 III GG binds the judiciary to statute and law. It would be incompatible with this if the courts progressed from the role of applying of norms to that of setting norms and thus, from an objective point of view escaped from being bound by law and statute [reference omitted]. These constitutional principles admittedly do not prohibit the judge from developing the law. On the contrary, in the face of accelerated change in social relations and the limited possibilities of reaction by the legislator, as well as the open formulation of numerous norms, the adoption of applicable law to changed circumstances is part of the tasks of the third power [ie the judiciary]. That applies especially as the distance in time between the statutory command and the judicial decision in the individual case increases. The BVerfG has made this point with regard to the BGB [reference omitted]. The judge certainly cannot escape here from the meaning and purpose of the statute laid down by the legislator. His task is limited to bringing it into effect in the most reliable way under changed conditions. If, in the changed conditions, new possibilities of action or influence are created by scientific and technical progress, finding the law will as a rule consist of widening of the field of application of an interpretation which is already current. The legislator’s prerogative of setting the purpose is not generally affected by this. As the development of the law affects the ordinary law, answering the question of whether and to what extent changed circumstances require new legal answers is likewise incumbent on the specialist courts. The BVerfG is not therefore in principle allowed to replace their assessment by its own. Its control is limited from the point of view of Article 20 GG to whether the specialist court, in developing the law, has respected the basic statutory decision and has followed the recognised methods of statutory interpretation. (b) The decisions under challenge satisfy this standard in relation to contractual liability for the maintenance of children as well as with reference to compensation for pain and suffering because of a pregnancy and birth which have occurred contrary to the woman’s intention. In relation to contractual liability the decisions under challenge are based on the conventional understanding of financial harm, according to which, in principle, duties to maintain can be seen as harm in the sense of § 249 of the BGB. The decisions are also based on the ascertaining of harm according to the ‘difference’ method. The BGH measures contractual liability by contractual purpose – avoidance of conception and birth of a legitimate child on economic grounds as well – and limits the area of protection of the contract to the marriage partner. The decisions rest on the principles on general contractual liability which have been developed over a long period, and which have been extended to new cases of medical professional activity. Whether a development of the case law on compensation for harm would have been possible in another direction needs no discussion here, as the BVerfG does not in principle have to test questions of civil law doctrine in the ordinary law sphere. It corresponds in any case to the consequence of medical liability law as developed over a long period that, in cases of the present kind, the civil law has sought to give appropriate answers to new possibilities of influence and direction in reproductive medicine. It cannot be raised as an objection to this that the BGH has, in laying down the scope of the duty to compensate for harm, held that limitations on the development of the law are necessary. The BGH has, in its case law, restricted the liability of doctors in the light of value decisions at the point

254  Appendix 2 where problems of compensation law and family law meet. That does not call in question the route to ascertainment of harm. The boundaries of judicial discovery of law are also not exceeded by the decisions giving to women who did not want to be pregnant damages for pain and suffering for the pain associated with pregnancy and delivery. The objection that this is an impermissible widening of § 253 of the BGB does not sufficiently take into consideration the fact that § 847 of the BGB expressly permits monetary compensation for non-material harm [after 2002: the newly drafted § 253 II BGB]. The BGH is keeping within the framework of conventional civil law doctrine when as it assesses an undesired pregnancy as a substantial unauthorised invasion of physical integrity and therefore as physical injury. II. The decisions, which are made by permissible judicial interpretation and development of the law, are also reconcilable with the Basic Law in their material content. The subject matter of the examination here is the interpretation of norms which are not open to objection in constitutional law and the outcome and basis of the discovery of law by civil court decisions. The complainants object to the fact that they should have to be liable for the maintenance of a child when they have not fulfilled their contractual duties in relation to sterilisation and a child comes into the world as a result; or when, as a consequence of defective genetic advice, parents refrain from a form of contraception which they would otherwise have chosen and a disabled child is conceived and born. According to their view, for constitutional reasons, neither the duty of the parents to maintain ought to be understood as harm in the sense of contract law, nor the pains associated with pregnancy and birth as harm in the sense of tort law. 1. … 2. The decisions to be examined are likewise not to be measured against the basic right of freedom of vocation under Article 12 I GG. The civil law consequences of defective performance of contracts and liability for harm which arises from tort arise independently of whether the prerequisites for liability in the exercise of the profession are fulfilled or not. Neither the underlying norms of civil law nor their application in the original proceedings concern sanctions specific to a profession. The duty to provide compensation for harm can in any event have indirect effects on the exercise of professional activity as it emphatically underlines the expectation of careful fulfilment of the contract whilst observing professional standards; and it also has an effect on the scope of the required liability insurance. Contract law and tort law are not however norms which only concern in marginal areas those who not acting professionally and which therefore have a close relationship with the exercise of a profession. Objectively they have no tendency to regulate professions [references omitted]. 3. There accordingly remains, as a standard for testing the imposition of requirements to pay money, the general freedom of action which is protected in Article 2 I GG. The basic right is admittedly only guaranteed within the framework of the constitutional order. All the legal norms which are formally and materially compatible with the Basic Law are included in this. Article 2 I GG is violated if, in the interpretation and application of such norms, objective constitutional law is contravened. In this connection, it can remain undecided here how far Article 2 I GG, in its character as guarantee of the general freedom of action, enables a complainant to rely on the violation of objective constitutional law where the protective purpose of the concrete basic right norm cannot be attached to him unambiguously [references omitted]; this purpose is rather intended to protect the legal position of the

Appendix 2  255 successful opponent in the original proceedings. This is because the complainants complain of a violation of Article 1 I GG and therefore of a fundamental principle of the Basic Law and the chief basic value of the free democratic basic order [references omitted]. Whether the complainants could complain of a violation of Article 6 I or II GG needs no final examination because these provision have no independent weight here as against Article 1 I GG. (a) The answer to questions of value in civil law is influenced by the objective decisions of principle which are expressed in the catalogue of basic rights in the Constitution. The specialist courts are accordingly under a duty on constitutional grounds to have regard to the basic rights as ‘guidelines’ in the interpretation and application of civil law provisions. Just as with the interpretation of general clauses, special consideration must be taken of the constitutional law basic decisions in development of the law. If the courts overlook or misjudge their radiation effect in a decision in an actual case, they as exercisers of public power violate the basic rights of the party thereby [reference omitted]. A power of control (limited, though, to questions of constitutional law) arises from this for the BVerfG. It only concerns mistakes in interpretation which reveal a fundamentally incorrect view of the meaning of a basic right, especially of the extent of its area of protection, and are also of some weight in their material scope [reference omitted]. In this constitutional control of civil court judgments, it ought also to be borne in mind here that the protective content of the basic rights can also be required to be put into the balancing process on the side of the person who benefits from the decisions under challenge. In this case it is a question of the point where medical responsibility and the family sphere meet. When the further development of medicine facilitates medical assistance in the extremely private sphere of conception, for which the sexual partners are independently responsible, the tortious and contractual liability law of the BGB acquires in particular the function of safeguarding the personality rights of parent and child thereby endangered, the physical integrity of the wife and the personal right of self-determination of the parents. The detailed balancing of conflicting interests here is left to the judiciary, insofar as existing liability law is open to such a development. It ought to be borne in mind here that the married couple would unilaterally carry the risk of a medical mistake if culpable medical treatment remained to a large extent without sanction in this area. (b) The BGH has taken sufficient account of the radiation effect of Article 1 I GG in the shaping of the conditions for liability. (1) A human being’s social value and claim to respect, which prevents him or her being made a mere pawn of the state or exposed to treatment which in principle puts his or her quality in question, is connected with human dignity as the highest value in the Basic Law and a fundamental constitution principle [reference omitted]. It is inherent in each human being without regard to his or her qualities, achievements and social status. The worth and claim to respect which arises from it is capable of being violated [reference omitted]. What respect for human dignity requires in detail cannot be completely detached from the social circumstances of the time [reference omitted]. A violation of the claim to respect can exist not only in humiliating, denouncing, persecuting or ostracising people [reference omitted] but also in commercialising human existence. (2) The decisions under challenge do not contain any mistake which is relevant here. That applies first of all to the assumption that sterilisation and genetic advice before the conception of a child are to be approved by the legal order and are legitimate. Further, the assumption that a doctor who undertakes such tasks under a contract must take ­responsibility

256  Appendix 2 for culpable mistakes is not open to doubt. The case law of the BGH that the duty to maintain a child on the facts to be assessed here is to be seen as loss does not represent commercialisation which robs the child of its personal worth. The liability structure of civil law does not in principle affect human dignity, even where a claim to compensation for harm is directly linked to the existence of a human being. Human beings are not thereby reduced to objects, ie, replaceable quantities within the framework of contractual or tortious relationships. The civil law provisions and their interpretation by case law are planned on a just division of burdens. They do not result in fundamental areas of personality being commercialised. The application of the law of compensation for harm to personal relationships does not turn the human being as a person or his inalienable rights into a commodity. No more does the – partial – transfer of the burden of maintenance to third parties contain a negative value judgement against the particular person entitled to maintenance. The personal recognition of a child does not rest on the acceptance of duties of maintenance by the parents. Even according to civil law, the existence of a child is only one of the defining conditions for the burden of maintenance arising under §§ 1601 ff of the BGB. Not every child needs maintenance (§ 1602 II of the BGB). The duty of maintenance and parenthood can separate [reference omitted]. A full duty to maintain does not follow the adoption of children who have only lost one parent (§ 1755 I 2 of the BGB in combination with § 48 VI of the Social Code VI). Even the RG differentiated between the existence of a child, which was not seen as loss, and the duty to maintain applying to the father which was classified as financial loss for him [reference omitted]. The BGB forms the basis of relationships in compensation law between the members of a family under a duty to maintain and a person causing harm, without any debasing or objectification of the person entitled to maintenance being expressed thereby (§ 844 II in combination with § 843 IV of the BGB) [reference to the cited provisions partly outdated]. The same concept of compensation is taken up in numerous modern statutes on product, environmental and traffic liability [reference omitted]. The inclusion of the foetus in accident insurance also presupposes that the dignity of the child is not violated by the persons under a duty to maintain it receiving a partial release [reference omitted]. No decision has to be made on what form of compensation for harm would be better to bring it into harmony with civil law doctrine. The BGH has chosen the route of contractual liability for material harm, and not that of compensation for non-material harm, which it also considered. It has taken into account here that determination of harm by the ‘difference’ method, as well as fair indemnification in money for the harm which arose though the unwanted conception, do not relieve the court from comparing the situations in life of parents with or without a child. It is only of importance in constitutional law that the division of burdens which the BGH seeks to achieve, having regard to the statutory duties of maintenance accruing to the parents, does not violate Article 1 I GG. It is also not the task of the BVerfG to examine the arguments of the BGH in all their details. They are not inconsistent with Article 1 I GG. The doctors ordered to pay compensation have freely undertaken contractual duties which are not disapproved of by the legal order. Medical assistance in family planning through sterilisation or advice about genetic risks before the conception of a child do not affect Article 1 I GG. If such advice conflicts with the personal ethical convictions of a doctor, he can refrain from concluding a contract; defective performance of a contractual duty willingly undertaken can find no justification here.

Appendix 2  257 Insofar as doctors are active in this area, their specialist medical competence is in the service of responsible parents, if the parents do not want to have further children because they wish to protect economically children already born or because they are concerned about being overtaxed (here, by the birth of a second severely disabled child). Civil law liability for defective performance can, in cases of this kind, increase the parents’ acceptance of the children who are nevertheless born and accepted into the family, as the BGH has plausibly explained. The arguments presented by the constitutional complaints that the case law of the BGH contradicts the system of maintenance in family law, or that the child could be threatened with psychological harm if it heard that its conception should have been avoided, do not affect the basic concepts of Article 1 I GG. In this respect it is claimed that financial relief for the parents does not prevent different losses in view of the complexity of family relationships. That concerns questions of civil law appraisal which the BGH has tackled in detail. In the original proceedings it was a question of children to whom the parents have committed themselves after conception. Thwarted family planning, which has been used here by the BGH as a basis of liability, can become known to children in many ways. Whether harm is produced by this does not depend on economic relief for the parents but on the parent–child relationship after birth. The claim for compensation for harm which has been allowed does not assume any alienation from the child [reference omitted]. There is also no fear that the judgments under challenge could give rise to or reinforce a negative attitude of the parties against the unplanned life which has been conceived. It cannot be assumed that doctors will advise abortion contrary to their ethical conceptions only because of the threatened liability or its effect on their professional liability insurance. It is even less likely that parents, because of the economic burdens from a further or a disabled child, would decide against the child, if relief is granted to them in this respect. The BGH excludes any duty to reduce harm by means of an abortion. From the point of view of the parents, the case law under challenge here gives effect instead to the necessary protection against risks which are threatened for the parents’ rights of personality and self-determination within the framework of planned parenthood as a result of medical involvement in sterilisation or genetic advice. C. The above judgment does not, in view of the decision of the Second Senate of the 28 May 1993 [reference omitted], require the calling of a plenary session of the BVerfG. The prerequisites of § 16 of the BVerfG Act and of § 48 I of the Standing Orders of the BVerfG are not present. (However, see the decision of the Second Senate of the BVerfG of the 22 October 1997.) D. The decision is made as to section B by 6 votes to 2 and as to section C by 5 votes to 3. Notes to Cases 4–6 1. Case 4 is an important decision both for the purposes of teaching and applying the compar­ ative law method and for the substantive issues it raises. As far as the first is concerned, two things must be noted. First is the German, indeed civil law, tendency to turn to contract rather than tort when trying to solve a new problem. Thus, almost half of the judgment deals with claims based on contract rather than tort – something, which clearly does not happen in the Anglo-American equivalents. The approach adopted by the BGH is to ask whether there was a contractual duty to protect the mother against the economic burden resulting

258  Appendix 2 from the maintenance of the child. (See, for another illustration, BGH, NJW 2000, 1782.) Secondly this, as far as one can tell, is one of a handful of decisions of the BGH which have made an open allusion to a foreign system. Case 4 is even more particular as it is one of the very rare decisions in which the BGH is referring to common law and not to much more ‘similar’ jurisdictions as Switzerland or Austria. (See Siems, Comparative Law (2nd edn, 2018) 183–86.) In the present context this means Curlender v Bio-Science Laboratories 106 Cal App 3d 811, 165 Cal Rptr 477 (1980) and McKay v Essex Health Authority and Another [1982] QB 1166. The ‘suspicion’ of the German court towards the common law is evidenced by its cursory statement that the foreign judgments are ‘of limited relevance [since] they are based on different laws’. This is a surprising statement, not only because the German court admits that the problem of ‘wrongful life’ is novel to German law and, therefore, one would have thought that inspiration from foreign system should have, at least, been permissible. It is also odd given that the German reasoning in the tort section of the judgment reveals similarities with the philosophical opinions expressed by the Anglo-American decisions which we must assume were known to the German judges. One should, perhaps, add that in such cases, it is primarily for counsel to notify national courts of foreign decisions and to press the analogies where such exist and can be of use to the development of national law. (On the impact of foreign and comparative law on German case law see Drobnig ‘Rechtsvergleichendes in der deutschen Rechtsprechung’ RabelsZ 50 (1986) 610 ff; Janssen/Schulze, ‘Legal Cultures and Legal Transplants in Germany’ ERPL 2011 225, 245 ff; Kötz, ‘Der Bundesgerichtshof und die Rechtsvergleichung’ 50 Jahre ­Bundesgerichtshof (2000) 825 ff.) 2. The issue of substance raised by the German decision has proved controversial in that country as it has in the US. The decision of the Second Senate of the BVerfG (BVerfGE 88, 203 = NJW 1993, 1751 ‘second abortion’ case) – known for its conservative tendencies – thus echoes the doubts expressed in the US by those who sympathise with the pro-life position. Some (lower) courts immediately heeded the advice of the BVerfG to reconsider the question of civil damages and took a similar, conservative stance on the issue. (Thus, LG Düsseldorf, NJW 1994, 805, refusing to follow case 5, decided only a fortnight earlier. Likewise, OLG Z ­ weibrücken, NJW-RR 1997, 666). In some instances, they were able to do this on the technical argument that the case before them involved a maintenance claims for a healthy child (whereas the BGH decision of 16 November had been concerned with the claims of the parents of an impaired child). But other courts refused to accept this as a valid distinction and abided by the more liberal position that awarded full maintenance costs to the parents. (OLG Düsseldorf, NJW 1995, 788.) In this steadfastness, these courts found an ally in the BGH. For this court not only had bypassed skilfully the BVerfG by drawing a distinction between the ‘existence of the child’ and ‘the obligation to maintain it’ (case 5); it had also been quick to reaffirm its views in a quick succession of judgments. The subsequent and most recent decision of the First Senate of the BVerfG (BVerfGE 96, 375 = NJW 1998, 519, case 6) – which, unlike the Second Senate, is known for its liberal tendencies – has broadly followed the line of the BGH. And the decision not to refer to the Plenum of the Court the dispute between its two rivalling Senates (BVerfG, NJW 1998, 523) suggests that the status quo is unlikely to be disturbed in the near future. The position in private law thus seems to have settled in the following way. (i) Both parents have a contractual claim for wrongful birth and pregnancy cases; (ii) this entitles them to full maintenance costs (whether the child is healthy or not; if it is not the measure of damages may be greater to

Appendix 2  259 cover the extraordinary medical expenses); (iii) the mother may additionally claim pain and suffering in cases of wrongful birth that result from a complicated birth. In all these actions, the child, itself, had no claims. Before leaving this point one must note the unsatisfactory result of the same issue being decided by two different Senates of the Court each of which is effectively an independent court, each with its own philosophical orientation and traditions. This unsatisfactory result is due to the fact that, for historical reasons, constitutional complaints (Verfassungsbeschwerde) are usually heard by the First Chamber whereas the so-called Normenkontrolle, reserved for the review of legislation, is mainly carried out by the Second Chamber. 3. A few general points will suffice. First, a point of terminology. ‘Wrongful birth’ and ‘wrongful life’, as terms go, are unfortunate. As an American court noted: ‘Any “wrongfulness” lies not in the life, the birth, the conception, or the pregnancy, but in the negligence of the physician. The harm, if any, is not the birth itself but the effect of the defendant’s negligence on the [parents] resulting from the denial to the parents of their right … to decide whether to bear a child or whether to bear a child with a genetic or other defect’ (Viccaro v Milunsky 406 Mass 777; 551 NE 2d 10 n 3). The various terms are also not used consistently in the American periodical literature and this can lead to confusion. It is too late to alter existing terminological practice, however unfortunate it may be; but in order to minimise confusion we have, at the end of this section, provided a glossary of how we think the terms should be understood. The German term ‘ungewolte Schwangerschaft’ – unwanted pregnancy – suffers from no similar defects. However, in its neutrality it could be said to be too opaque in so far as it gives no hint whether the pregnancy was always not wanted or subsequently became so. Related to these questions, is another namely, does it involve a healthy or unhealthy child – a point once taken by some courts but nowadays one that may have lost its significance. It is a weakness shared by most German textbooks that they leave these points (mostly) open and that the brevity of the treatment given to this subject leaves the student unaware how the contradictory German cases can be made to dovetail with one another. Secondly, we must note that here the movement of ideas is from America to Europe and not the other way round. (See the judgments in McKay, above, and Udale v Bloomsbury Area Health Authority [1983] 1 WLR 1098.) Though the imitation in Europe is obvious, it is not slavish. Thus, when noting the differences that exist between American and German law, one must also be ready to seek explanations for them in the wider context of each system. Thus, the Procanik v Cillo 97 NJ 339 (1984) decision to grant the claimant boy ‘special’ damages appears to be more generous than the German which denies them to him. Yet the difference is more apparent than real if one remembers that in German law the parental maintenance does not cease (as it does in most American jurisdictions) upon the child attaining majority. But if the different German law of maintenance helps minimise the differences between case 4 and Procanik, it does not completely eliminate them. We get a clue of this towards the end of the German judgment where the court, itself, accepts that its solution to grant the parents special damages may not be enough ‘once the duty to maintain [the child] comes to an end, as for instance, when they die’. Here, as stated, the American solution appears if not preferable certainly more generous to the child; that is until one notes the way the German court completes the above-mentioned thought. ‘In all these

260  Appendix 2 cases’ says the court ‘a fateful development takes place … and the effects of which must be made good by the community within the bounds of the possible’. An admission here, that the social security net (effectively absent in the US) will thus take over, but also a very important explanation for the fact that American tort law is so often more generous than its European counterparts. For social security will provide only a limited relief – ‘within the bounds of the possible’ – and will thus be less generous than the tort/damages system of compensation. So the verdict at the end of this complicated journey into the recesses of German family and social security law is that the German solution is roughly as good as the American and vice versa! Thirdly, it is clear that the vast majority of courts – both in the US and in Germany – have little or no difficulty in allowing parents to recover at least some elements of damage in ‘wrongful birth’ actions. 2. PROPERTY RIGHTS Case 7 BUNDESGERICHTSHOF (SIXTH SENATE) 21 JUNE 2016 NJW-RR 2017, 219 [Notes on this case are found in relation to the topic of economic loss in chapter four. The case is presented here to reflect the scope of ‘property’ rights.] Facts The claimant is the insolvency administrator for the assets of the R GmbH (limited liability company) (hereinafter insolvency debtor). He brings a claim for compensation against the defendant for locking in ships and other equipment of the insolvency debtor. On ­Saturday 8 October 2011, the second defendant as the responsible shipmaster was going up the Rhine with the motorised tanker (MT) Patmos which was the property of the first defendant. Around 9 pm, he anchored on the left side of the Rhine … in an area marked with the notice A5 where stopping is prohibited. During the anchoring manoeuvre, the MT Patmos ran aground midships around 100 metres away from the river bank and drifted towards the left bank with the bow. The bow was about 20 metres away from the bank, downstream from the confluence of the Xantener yacht harbour. A bow-anchor was put out right in front of the entry to the yacht harbour. The entry provided the only access route to the then construction site 7 of the building project ‘Flood Channel for Rees’ where, according to the claimant’s statement, several ships and other equipment (pontoons, floating dredgers and barges) belonging to the insolvency debtor or being rented by it were located. The MT Patmos was only freed on 10 October at 2.45 pm with the aid of two push boats and its own manoeuvring. The claimant demanded the downtime costs for the period from 10–13 October 2011. The AG in the formation as the Court for Navigation on the Rhine declared the action justified on its merits in so far as the claimant seeks compensation for the period between Monday 10 October 2011, 1 am to 6 pm. The OLG in the formation as the Appeal Court for Navigation on the Rhine rejected the claimant’s appeal. Pursuant to the cross-appeal by the defendants, it amended the AG’s judgment and dismissed the lawsuit. With the appeal admitted by the Senate, the claimant further pursues his claim for compensation in full.

Appendix 2  261 Reasons I. [4] According to the view of the court below whose judgment is published, inter alia, in NJW 2015, 129 the claimant is not entitled to a claim for compensation against the defendants. The requirements of § 823 I BGB are not fulfilled according to the court. In accordance with the result of hearing of evidence, it is merely clear that on 8 October 2011, the insolvency debtor’s ships and equipment were located in the area of the flood channel R and on Monday 10 October 2011 had been prevented from leaving the Xantener yacht harbour by the anchor cable of the MT Patmos and the removal of silt conducted after. The navigable channel was not usable that day. It is not clear that the equipment had been locked in there beyond the 10 October 2011. The testimonies of the witnesses do not, according to the court, provide indications for a locking in beyond 10 October 2011. Notably, it is not clear that the harbour exit was blocked after 10 October 2011. Neither did the witnesses confirm the claimant’s assertion the Waterways and Shipping Office (Wasser- und ­Schiffahrtsamt) had prohibited the use of the entrance to the flood channel in the time from 10–13 October 2011. [5] In this situation, an infringement of ownership or possessory rights within the meaning of § 823 I BGB is to be denied according to the court. Without material damage, an infringement of ownership rights is only present when the thing is deprived of its intended use in a way that it is equivalent to the dispossession of the thing. This is, for example, the case when a ship is locked in by an obstacle in a way that it loses any ability to move and its function as a means of transport for a, in practice, considerable period. In order to preserve the characteristic of an infringement of ownership rights by deprivation of the use, it is necessary that a threshold of materiality is crossed mainly related to the duration of the deprivation. A rigid time limit cannot be drawn to identify a significant interference. Certainly, a downtime of more than one day is required. The materiality threshold for the duration serves to differentiate attribution under tort law from the general risk of ordinary life which is to be accepted without compensation. Based on experience, the obstruction of shipping traffic caused by accidents occur from time to time so that a temporary closure of the waterway is to be considered as normal. Not being able to pass through a waterway is an interference with the exercise of the common use of the waterway which is to be accepted without compensation. This is principally also true when the ships are not ‘locked out’ but ‘locked in’ and thereby lost any ability to move. In this dispute, the insolvency debtor’s ships and equipment were locked in the harbour on 10 October 2011 but the deprivation of use lasting for only one day does not cross the materiality threshold and so an infringement of ownership rights is to be denied. A claim for the interference with an established and operating business is equally excluded, according to the court. A direct business-related interference is missing. Claims under § 823 II BGB fail because the provisions of the Rhine Navigational Policing Regulations (Rheinschifffahrtspolizeiverordnung) do not protect others’ proprietary interests. II. [6] These remarks do not withstand scrutiny on appeal in all respects. The claimant’s claim for compensation under § 823 I BGB, § 3 Inland Navigation Act (Binnenschiffahrtsgesetz)

262  Appendix 2 against the first defendant (ship owner) and against the second defendant (ship’s master) under § 823 I BGB cannot be denied with the explanations given by the OLG. [16] 3. The appeal successfully challenges the OLG’s assessment that locking in the ships and other equipment belonging to or being rented by the insolvency debtor in the harbour for only one day is not to be classed as an infringement of ownership or possessory rights within the meaning of § 823 I BGB. [17] (a) In line with the established case law of the BGH, the infringement of ownership rights over a thing can not only occur through the interference with the substance of the thing, but also through a different actual impact on the thing affecting the ownership rights which objectively prevents its use. This is to be presumed, for example, when a vehicle temporarily loses its ability to move, is therefore deprived of its function – eg, as a means of transport – and withdrawn from its intended use (cf BGH, judgments of 21 December 1970 – II ZR 133/68, BGHZ 55, 153 margin no 15 on locking in a ship; of 21 October 1974 – III ZR 85/73, BGHZ 63, 203, 206 on locking in a car which is parked in the garage by unlawfully performing building works in front of the driveway). An infringement of ownership rights was also found by the Senate in a case in which (company) premises could not be used for a period of two hours because of an acute risk of fire and an evacuation order by the police (judgment of the Senate of 21 June 1977 – VI ZR 58/76, VersR 1977, 965, 966 ff). These situations are characterised by the effective ability to use the thing being removed temporarily. The infringement of the ownership rights through the deprivation of their intended use has the same effect as temporarily removing the thing [references omitted]. [18] (b) What must be distinguished are the cases in which the thing is not deprived of its intended use but the possibility of its use is merely temporarily restricted or only one particular form of use or several forms of use which do not exhaust the application potential of the thing are excluded (cf judgment of the Senate of 18 November 2003 – VI ZR 385/02, VersR 2004, 255, 257; of 11 January 2005 – VI ZR 34/04, VersR 2005, 515, 516; and BGH, judgments of 21 December 1970 – II ZR 133/68, BGHZ 55, 153, 160; of 15 November 1982 – II ZR 206/81, BGHZ 86, 152, 154 ff; Münchener Kommentar BGB/Wagner (6th edn, 2013) § 823 BGB margin nos 181, 187; Larenz/Canaris, loc cit; NK-BGB/Katzenmeier (3rd edn) § 823 BGB margin no 60, each with further references). The latter is, for instance, to be presumed if a vehicle, while it retains its ability to move, is prevented from completing a specifically planned journey and its use is thereby merely temporarily restricted (cf Judgment of this Senate of 18 November 2003 – VI ZR 385/02, VersR 2004, 255, 257; of 11 January 2005 – VI ZR 34/04, VersR 2005, 515, 516; BGH, judgment of 21 December 1970 – II ZR 133/68, BGHZ 55, 153, 160: through an action not specifically aimed at the vehicle, a determined route or determined location becomes temporarily impassable for it. Similarly BGH, judgment of 15 November 1982 – II ZR 206/81, BGHZ 86, 152, 154 ff: the storage and handling facilities which are also accessible overland could not be reached by ships for the duration of the closure of the Elbe by-channel, as well as BGH, judgment of 28 September 2011 – IV ZR 294/10, VersR 2011, 1509 margin no 8: temporary restriction of the possibilities of use of a motorway through an articulated lorry situated on the deceleration lane and partly protruding into the right lane). In these cases, an interference with ownership rights is to be denied.

Appendix 2  263 [19] (c) If the ownership rights are restricted through the actual impact on the thing in such a way that its capacity to be used is in practice temporarily suspended, it is, contrary to the OLG’s view, not necessary for the finding of an infringement of ownership interests to overcome a materiality threshold defined in terms of time. In this case, the required intensity of the restriction of the use already follows from the deprivation of the intended use. [20] (d) These principles apply analogously to the interference with the rightful possession of a thing (cf judgments of this Senate of 21 June 1977 – VI ZR 58/76, VersR 1977, 965, 966; of 4 November 1997 – VI ZR 348/96, BGHZ 137, 89, 98; of 11 January 2005 – VI ZR 34/04, VersR 2005, 515, 517; of 9 December 2014 – VI ZR 155/14, VersR 2015, 250 margin no 17, each with further references). [21] (e) On the basis of the findings made, an infringement of ownership or possessory rights within the meaning of § 823 I BGB cannot be denied pursuant to these principles. According to the OLG’s findings, ships and other equipment belonging to or rented by the insolvency debtor were locked in the Xantener yacht harbour as a consequence of the average of the MT Patmos. They could not leave the harbour on 10 October because the anchor cable of the MT Patmos blocked the entry and shallows created by the average and the manoeuvring of the ship had to be identified and removed. The ships and the equipment were therefore deprived of their function as means of transport and work and withdrawn from their intended use. [22] The challenged judgment is therefore to be reversed and the matter to be remitted to the OLG for new hearing and decision. The OLG will there have the opportunity to deal with the parties’ further objections in the notice of appeal. This is notably true for the cross complaint of the respondent’s submission that the OLG had not considered the submission of the defendants according to which the entry to the flood channel was at no point fully blocked and the debtor’s equipment and ships could, indisputably, already, at least in an unladen state, have left the flooding channel on 10 October 2011. 3. ‘OTHER RIGHTS’: ‘ESTABLISHED AND OPERATING BUSINESS’ A. ESTABLISHED BUSINESS Case 8 REICHSGERICHT (FOURTH CIVIL SENATE) 27 FEBRUARY 1904 RGZ 58, 24 Facts Three designs were entered in the Register of Designs on behalf of the defendant firm … In the summer of 1901 the defendant, under threats of an action for damages and a criminal prosecution, forbade the claimant to copy the designs. He did so, at all events by a letter of 2 September concerning carpets, mats, and rugs made of jute pile and, under the same date, by letters to two of the claimant’s weaving managers. The claimant alleged that the defendant had also forbidden the manufacture at an earlier date. In consequence the claimant had already, on 10 June 1901, discontinued the manufacture of jute pile in his business. On 15 September 1901 the defendant prosecuted the claimant for an offence against section 10 of the Act of 1 June 1891, whereupon a preliminary enquiry was instituted against the claimant.

264  Appendix 2 Before that enquiry was concluded the claimant sued the defendant claiming that he should (i) agree to a cancellation of the design and (ii) pay compensation for the damage arising from the prohibition against manufacture and the prosecution. The claim under (i) was based on the fact that the design was already, at the time of the notice, a matter of common knowledge. The defendant admitted that claim. The LG Ratibor granted the claim. On appeal by the defendant the OLG Breslau made the order to pay compensation depend on the failure of the proprietor of the defendant firm to deny on oath his knowledge of the design when the notice was sent. On application for review that judgment was set aside for the following. Reasons The OLG starts with the statement that the claimant ceased manufacturing the Articles corresponding to these designs in consequence of the defendant’s demand referring to their registration and that, as a result, the defendant was not entitled to contend that the claimant was not forced to accede to his demand. No precise moment is indicated when the demand and the cessation occurred and it is left undecided whether they had not, as the claimant alleged, already taken place before the defendant’s letter of 2 September 1901 to the claimant and his weaving managers. The OLG finds that the defendant’s designs had been wrongly registered since they were not entitled to protection and that, therefore, the defendant had no right to prohibit the claimant’s business activity. For the damage, however, occurring to the claimant from the stopping of production and the prosecution, the Court is prepared to make the defendant liable only if there was knowledge of the lack of justification and not merely negligent ignorance. It considers that the evidence so far obtained does not point to knowledge at the critical time and so decides to tender an oath to the defendant proprietors of the firm. According to the original form of the oath, each of the two partners was to swear that on 2 September 1901 he did not know that the registered article was a matter of previous knowledge. The form of the oath was later modified to read that each of them should swear that ‘It is not true that at the time when the claimant was required by our company to stop manufacturing the objects protected by our designs nos 156083, 156084 and 156465, I knew’. Even if one assumes that the appellate judge’s view of the law is to be approved, this form of oath must still give rise to doubt. For no precise moment is indicated to the swearer as to which he must affirm on oath the truth of the fact of his ignorance; it is left to his conscience to consider which moment to specify among several possible incidents to which his sworn ignorance would refer. Thus the formulation of the oath contains a serious degree of subjective uncertainty. Whether that alone would suffice to justify setting aside the appellate decision may be left undecided. But there are further grounds. The compensation to which the claimant is entitled as a result of the prosecution also depends on the oath. According to the accompanying criminal records the prosecution bears the date 4 ­September 1901. Hence that moment is decisive for liability under the prosecution. The present uncertain form of oath has its basis in the fact that so far there has been no finding about the factual correctness of the disputed allegation of the claimant that the stopping of production consequent on the defendants’ demand had already taken place on 10 June 1901. If now the oath is refuted, so that the bad faith of the defendant partners is established, there is clearly no interest in specifying more closely the moment when their knowledge began. Assuming, however, that the oath is sworn and also that the request mentioned in the oath occurred before 4 September, in particular on 10 June 1901, it is obvious that the earlier

Appendix 2  265 moment of ignorance would be quite irrelevant to the claim for compensation arising out of the prosecution. These considerations would be enough to lead to a setting-aside of the contested judgment. The setting-aside, however, must also result for a second and more comprehensive reason. The OLG makes an error of law when it denies the applicability of § 823 I BGB and, therefore, is prepared to make the defendants’ liability depend only on their knowledge that their design lacks protection. At the time when the defendants, invoking their right to have their design protected and threatening civil and criminal proceedings, forbade the production of the jute pile in question, the claimant had already taken up the manufacture of those objects in its business, although there is up to now no certainty of the extent to which that had happened. The defendants, therefore, are chargeable with having encroached on the established business of the claimant by virtue of a right that did not belong to them and hence in a manner contrary to law. The claimant, who claimed that he already at that time had 10 looms devoted to the manufacture and would, but for the prohibition, have extended the application to 50 looms, believes that the defendant’s conduct constitutes also an invasion of his property rights, in that it had unlawfully hindered the full use of manufacturing installations owned by him. That view can indeed not be approved. Against the property itself of the claimant, which was never in question, no invasion was intended or directed. It was and remained in its content and legal signification the same as if the claimant had done his manufacturing not on his own but on someone else’s looms. On the other hand, it is both accurate and to the point when the appellant, associating itself with the claimant’s explanation of first instance, adopts the point of view that the business was disturbed. § 823 I BGB obliges anyone who recklessly or negligently injures the life, body, health, ­freedom, property, or other right of another contrary to law to make good all damage that ensues. It is acknowledged that it is not the liability for doing economic damage as such that is here in question, but only that economic damage which is a consequence of the violation of the particular legal interests and rights specified by the Code. Hence the question is whether the defendants have violated such a particular legal interest or right of the claimant. One can first of all consider the injury as an interference with the claimant’s freedom inasmuch as the claimant was reduced by outside interference with his will to discontinue the manufacture of jute pile. But this point of view would not lead to the desired result. Admittedly, in the dispute about the meaning attached to freedom by the Code, notable authors have expressed the view that it must be understood quite generally as the free exercise of the will. But even if one were willing to follow that broadest interpretation, finding a basis for compensation would always presuppose an unlawful injury to the free exercise of the will, and it is out of the question that the Code intends to declare the encroachment on another’s will unlawful for the reason only that there is no particular right so to encroach. The encroachment on the free exercise of the will would acquire the character of unlawfulness only through the form in which it occurs, such as deceit, threats, force, and these facts would also have to include, as in § 826 BGB (which was applied by the OLG), at least the defendant’s consciousness of the legal invalidity of the registration of the designs. (cf RGZ 48, 123.) Then there is the view that the law raised the interests mentioned by it (life, body, health, and freedom) to the status of objects of an especial right to them and through the words ‘or a similar right’ intended to extend its protection beyond those expressly mentioned to other vital interests. This did not find favour in the case law of the RG. It has been held already that

266  Appendix 2 the theory which wished to construct from the not yet limited range of particular interests, special rights to personality and individuality to an extent which has not yet been determined finally does not appear particularly suitable as a basis for interpreting the law. Thus, for instance, it has been denied that either the freedom to do business or the faculty to exploit one’s labour without hindrance is protected by § 823 I BGB. There is no need to go further into this matter. For as distinct from the legal possibility of pursuing the occupation of one’s choice, as it is accorded generally by § 1 of the Gewerbeordnung, it has already been accepted in several decisions of different Senates that a subjective right is to be recognised to an actually established and active business which is capable of being directly infringed. And, it has already been held that attacks on the exercise of a business can lead to an injunction [references]; but they can also found a claim for compensation arising from injury to the exercise of a business. This view formed the basis, in part, of the judgment delivered by the Senate on 25 June 1891 (RGZ 28, 248, especially 247, 249) before the enactment of the Wettbewerbsgesetz (Act on Unfair Competition). That the exercise of a business can be the object of legal advice under § 823 I BGB was decided by the IV Civil Senate in a judgment of 6 March 1902 and the VI Civil Senate in a judgment of 29 May 1902 (RGZ 51, 369, in particular 373), and also in a judgment of 14 December 1903 (RGZ 56, 271) though with some reservations. This Senate believes that it ought in principle to take the same position. That the established independent exercise of a business not only involves the free manifestation of the will of the person exercising it, but that will has also found in it its embodiment as an object, is the firm foundation for the acceptance of a subjective right to that exercise. Disturbances and encroachments aimed directly against the exercise of a business may therefore be looked upon as injuries falling under § 823 I BGB. Such an attack, directed against the exercise of a business, clearly exists when the legal admissibility of that exercise is denied to a certain extent and its restriction demanded on the ground of an industrial property right to the contrary. That attack is, however, contrary to law when the alleged protected industrial property right does not in truth exist, because it is no longer a question of permitted competition. The law under certain conditions puts at the disposal of persons exercising a business valuable exclusive rights in the form of the protection of patents and designs, by virtue of which they can secure the products of their inventive activity against attacks by way of parallel competition and reserve them for their own advantage. It is only a counterpart of their privileged position that they also answer for the existence of the right they enjoy to the self-seeking restriction of the free exercise of their business by their opponents, and must not only enjoy the advantages but also bear the risks that are involved in the assertion of such exclusive rights to patents and designs. In taking that view this Senate believes that it does not dissent from the opinion expressed by the VI Senate especially in the second of its decisions, mentioned above. Admittedly the protection of the exercise of a business against unfair competition is said in that decision to be found according to positive law in the provisions of the Wettbewerbsgesetz, of § 823 II BGB in combination with the penal rules concerning defamation and undermining credit, as well as in §§ 824 and 826 BGB, whereas the notion is rejected that any disturbance or encroachment on another person in the exercise of his business constitutes a violation of a law falling, as contrary to law, under § 823 I BGB. That, however, is not to deny that in some circumstances such an attack may be seen to be an injury contrary to law. The VI Civil Senate did not, as now, have to decide the particular case where the encroachment of another’s exercise of his business was based on an alleged exclusive industrial property right that did not in reality exist.

Appendix 2  267 Accordingly, the contested judgment cannot be upheld, since by not applying § 823 I BGB it contravenes the law. But on the merits itself no decision is possible. The OLG has so far only found that, apart from the results of the submission to the oath, the knowledge of the invalidity of their design on the part of the defendants has not been proved. On the other hand the question whether that ignorance is to be treated as negligence or whether there is a sufficient excuse has not yet been examined. Even so the OLG has indeed affirmed the causal connection between the demand of the defendants which, as stated before, remained somewhat uncertain, and the suspension of the claimant’s business. It will, however, have to be investigated in addition whether on this occasion the claimant’s conduct also constitutes contributory negligence that would justify the application of § 254 BGB. Wherein the legal defect in the defendants’ design consisted has not yet been sufficiently elucidated. According to certain indications it does not appear to be excluded that already from the start the claimant at least suspected the invalidity of the registration and in course of time soon obtained a more exact knowledge of it. Case 9 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 15 MAY 2012, NJW 2012, 2579 Facts The claimant requests that the Federal Republic of Germany tolerate his occupation as the figure skating coach of soldiers of the Bundeswehr (German armed forces) sports promotion section. The claimant was a top-ranking athlete in figure skating until 1998, first in the German Democratic Republic (GDR), later in the reunited Germany. At the moment he is a successful coach for pair figure skating. He has been training Aljona Savchenko and Robin Szolkowy who achieved numerous national and international successes in pair figure skating between 2004 and 2011 for several years. The defendant promotes top athletes in the Bundeswehr according to the ‘Regulations for the promotion of top athletes in the Bundeswehr’ of 3 July 1992. According to this, after the basic training, top athletes are transferred to sports promotion sections. There, the military training accounts for 30 per cent of the service and the athletic training and the competitions for 70 per cent. National coaches or coaches instructed by the central associations, not the defendant, draw up schedules for the service training and the competitions. As a result of his application of 23 May 2003, the claimant had been a sport soldier (­Sportsoldat) of the rank of a sergeant for a limited-term service relationship in the Bundeswehr’s sports promotion section in the capacity of a pair figure skating coach. With the notification of 31 March 2006, the claimant was dismissed from the service relationship. At his recruitment and his appointment to the service relationship of a soldier for a limited term, he had untruthfully answered the questionnaire queries on working for the Ministry of State Security of the former GDR in the negative. The claimant’s administrative action against his dismissal has (hitherto) been unsuccessful. After his dismissal from the Bundeswehr, the German figure skating Union (DEU) being the national professional association for figure skating and ice dance in Germany, no longer accredited the claimant as a trainer for some time and refused to work with him. Subsequently, the union and the claimant agreed, in the course of several lawsuits that the latter remains the coach of

268  Appendix 2 the mentioned figure skating couple. The claimant also coached foreign figure skating couples. To the claimant’s enquiry of 31 January 2007 to the responsible military sub-district command as to whether any concerns existed about him ‘acting as a coach if the athletes trained by him are members of the sport promotion section and (he) is nominated as the responsible coach by the union’, the responsible military sub-district command replied in September 2007 that the commander in his military district would not permit the training of the sport soldiers under his command in the claimant’s line of duty; by way of explanation reference was made to the order of dismissal of 31 March 2006 and to the complaint of 5 May 2006. Since autumn 2003, the pair figure skater Robin Szolkowy was a sport soldier for a limited term in the service of the defendant. He held onto the claimant as his coach. Because the German Ice skating Union did not name a coach responsible for him at first (and no national coach was available for him) – which is a requirement for the service as a sport soldier – the service relationship between Robin Szolkowy and the defendant was not renewed and therefore ended in summer 2006. His application for reinstatement of 3 September 2009 which the German Ice Skating Union and the German Olympic Sport Confederation (GOSC) supported was dismissed with the justification that the naming of the claimant as the private coach of his choice meant that, no national coach or a coach instructed by a central organisation had been named. In this legal dispute, the claimant most recently sought to have the defendant ordered to accept him as a figure skating coach for soldiers of the sport promotion section, discipline pair skating, if and when sport soldiers have him or choose him as coach, he is instructed by the central organisation and the GOSC supports his work. The LG Frankfurt/Oder dismissed the action. Upon the claimant’s appeal, the OLG ­Brandenburg condemned the defendant as asked. The defendant’s appeal admitted by the OLG was unsuccessful. Reasons [17] II. … The OLG approved without erring in law the claimant’s action against the defendant not to obstruct his work as figure skating coach for sport soldiers subject to the conditions enumerated in the operative part of the judgment. [18] The appeal unsuccessfully opposes the OLG’s assessment that the defendant’s conduct the claimant complained about constitutes an infringement of his established and operating business and is therefore to be refrained from (§§ 823 I, 1004 I BGB). [19] 1. According to the case law of the BGH, the protection of § 823 I BGB is afforded to any interference with the right to an established and operating business if it constitutes a direct interference with the sphere of business activities. The right to an established business is not only protected against direct interferences in its actual existence by § 823 I BGB but also in its individual manifestations in which the entire sphere of business activity is to be included. For the purposes of § 823 I BGB, the term of business is to be understood as including everything which, as a whole, enables the business to expand and operate in the economic system, ie, not only the indoor and outdoor working areas, machines and equipment, fixtures and stock, but also business relations, the clientèle and outstanding financial obligations. Through the protection granted to the established and operating business by the case law and gradually expanded, the enterprise is supposed to be protected against

Appendix 2  269 unlawful interferences in its economic activities and in its operation (Senate, BGHZ 29, 65 [69 ff] = NJW 1959, 479). Thereby, the right to an enterprise is not limited to businesses in the sense of commercial law but is also due to members of independent professions [references omitted]. [20] According to this, the OLG’s view that the claimant – insofar as his activities as an independent coach who gains an income with this work, are in question – can principally defend himself against an interference with his enterprise pursuant to § 823 I BGB by reference to the right to an established and operating business is accurate. [21] 2. Direct interferences with the right to an established business against which § 823 I BGB provides protection, are only those which are directed against the business itself, ie, are business-related and do not concern rights or protected interests which can easily be detached from the business (this Senate, NJW 1959, 479). This can also be the case if only individual business activities of the enterprise are being interfered with (cf, eg, BGH NJW 1983, 2195 [2196]). [22] Thereupon the OLG judges, without erring in law, the defendant’s conduct complained about by the claimant to be business related. The defendant does not want to accept as sport soldiers athletes who are trained by the claimant. The OLG in this respect rightly takes into account that the defendant, in response to the enquiry by the claimant, informed him that Major General O will not tolerate the claimant training sport soldiers under his command in the line of duty. According to the sound findings of the OLG, it can be gathered from this message that it is the defendant’s intention to want to prohibit a sport soldier who wants to train with the claimant from doing so and either to enforce the corresponding behaviour with disciplinary measures or, if he does not want to adhere to this, to discharge him from the sport promotion section. From this, the OLG further rightly infers the intention not to accept an athlete into the sport promotion section if he chooses the claimant as a coach. The fact that the defendant is willing to push through its intentions is shown by the case of Robin Szolkowy. [23] Through this course of action, the claimant’s activity as an independent coach is considerably impaired. The institution of the sport soldier is an important part of the promotion of athletes by the German state. Following the OLG’s findings, the promotion of sport by the state is conducted – beside the promotion through the police and the customs authorities – through the Bundeswehr. The sport soldiers receive military wages, only provide military services to a lesser extent and spend the greater part of their term of service in training. In this way, they maintain a regular income and social security which enables them to practise sport at a high level without being reliant on a job for their living. Winter sport is a focus of this type of sport promotion. According to the claimant’s undisputed submission, figure skating in Germany is only supported in this way. All top athletes in this field are sport soldiers with the exception of the figure skating pair the claimant trains. The claimant’s potential clients, ie, the top athletes on whom he is focused after his qualification as a coach are thus, at least to a very considerable part, in the service of the defendant. [24] According to the view of the defendant, athletes who choose the claimant as their coach would be allowed to be reprimanded by denying them the possibility of being a sport soldier so that they cannot enjoy the associated advantages described above and have to fund the

270  Appendix 2 expenses for the employment of the claimant with earnings obtained in some other way insofar as this is even possible for them. The OLG rightly explains that the defendant de facto closes a market demand for the claimant because sport soldiers can only engage his services if they accept delicate economic disadvantages. The demanders for the claimant’s services are the sport soldiers insofar as they choose to reward him directly or the central organisations insofar as they intend to pay the claimant for the training of sport soldiers. [25] It is possible that for the multiple German champions, European champions, and world champions Aljona Sacchenko and Robin Szolkowy such financing through other earnings is possible and that the claimant, through his work, generates the earnings for them which he would also have if Robin Szolkowy was a sport soldier. The OLG, however, rightly takes into account that the conduct of the defendant has a deterrent effect for such athletes who want to achieve top performances only in the future and who cannot go without the income as a sport soldier. For them, engaging the claimant as an international top-class coach is made impossible in practice. In this respect, his enterprise is considerably affected. It is not decisive that he could, if necessary, gain adequate earnings through other coaching work. [26] 3. The appeal turns against the OLG’s remarks that, in the present case, a ‘boycott’ by the defendants against the claimant exists. Meanwhile, it does not depend on this and on the question whether the ‘boycott’ exists ‘in the legal sense’ or is a ‘simple’ boycott. An interference with the business can also be present in the case of boycott-like measures to which the conduct of the defendant in the present case undoubtedly belongs. It is only decisive in this respect that the entrepreneurial activity of the injured person is being interfered with. In the course of this, it must be kept in view that by qualifying a conduct as a ‘boycott’ or boycottlike, nothing has yet been as to its unlawfulness. In a free social and economic order calls for boycotts or boycott-like measures can often be justified if they are underpinned by true facts and sufficient factually motivated reasons [reference omitted]. [27] 4. As, according to this, the objective requirements for the assumption of an infringement of the established and operating business are present it is – as it was done in the OLG judgment – to be verified whether the defendant’s conduct is to be classed as unlawful. The right to a business requires a clear set of facts, the content and scope of which only result from the weighing of interests and legally protected interests against the spheres of interests of others specifically clashing in the individual case (cf Senate, BGHZ 74, 9 [14] = NJW 1979, 1350; BGHZ 90, 113 [124 ff] = NJW 1984, 1607; BGHZ 138, 311 [318] = NJW 1998, 2141; each with further references). The interference with a gainful activity is only unlawful if the affected party’s interest in protection outweighs the other side’s interests worthy of protection (similar to where the personality right is concerned, cf, eg, Senate, BGHZ 183, 353 margin no 11 = NJW 2010, 757 – online archive I; NJW 2010, 2432 = VersR 2010, 673 margin no 14 – online archive II; NJW 2010, 2728 = MMR 2010, 571 margin no 12, each with further references). [28] Here, the weighing up shows that the claimant’s interest in protection prevails. In this process the following circumstances are of importance: [29] (a) It can be assumed that the defendant based its decision not to accept the claimant as the coach for sport soldiers on the latter’s false statements at his appointment and also on his work for the Ministry of State Security. It can also be implied that the untruthful

Appendix 2  271 denial of having acted for the Ministry of State Security justified the claimant’s dismissal as a sport soldier from a point of view of the law on the armed forces. These circumstances can be introduced into the weighing up and it can be taken as a basis that their consideration, contrary to the view of the respondent’s submissions, are not excluded under § 21 III 1 and III Law on the Documents of the State Security of the former GDR (Gesetz über die Unterlagen des Staatssicherheitsdienstes der ehem. DDR), old version. [30] (b) The assessment is not to be guided by what measures the defendant was allowed to adopt in its sphere of competence and authority against the employment of the claimant with a view to his activities for the Ministry for State Security. The claimant does not, in the present legal dispute, object to the service disciplinary measures taken against him. He merely objects to the defendant preventing an activity which … is not a matter of basic and advanced military training but of ‘sporting education/competition’ of the sport soldiers for which the national coaches or the coaches instructed by the central organisations are responsible (cf nos 13, 16 and 17 of the Regulations for the Promotion of Top Athletes in the Bundeswehr of 17.5.1991 – VMBl 1992, 257). In the system of sport promotion, this area is largely separated, by the institution of the ‘sport soldier’, from the defendant’s sphere of authority in the area of armed forces law. The planning of the training resides with the responsible sporting associations and the athlete himself. Usually, the training does not take place in the barracks but in the Olympic centres or the training centres of the central organisations within and outside the country (cf no18 I 1 of the aforementioned regulations). [31] (c) A prevailing interest in protection of the defendant can only be affirmed if, by accepting the claimant’s activity as the coach of sport soldiers, legally significant interests, in particular the reputation of the Bundeswehr could be infringed in a significant way. The interference with the claimant’s exercise of his occupation in the area of athletic training, far from the Bundeswehr’s mind, would need to appear justified for reasons found in the person of the claimant and endangering the Bundeswehr’s legally protected interests. This, however, is not the case. [32] (aa) The claimant’s work for the Ministry of State Security of the former GDR and the false statements on the occasion of his appointment as a sport soldier may in no way be trivialised. Yet this conduct dates back years. The weightiness of such transgressions for today’s assessment of the personality diminishes with the increasingly greater distance to the system of the GDR; attitude and performance after the Reunification can come to the fore more and more. [33] (bb) The claimant became involved in the system of the Stasi when he was young. According to the OLG’s findings, he did not cause any notable damage. [34] (cc) After the Reunification, the claimant acted for the defendant as a sport soldier for twelve years. He was honoured several times for loyal services and outstanding achievements by the Bundeswehr. As an athlete and a coach, he achieved significant international successes for the Federal Republic of Germany and thereby contributed significantly to the reputation of the Federal Republic of Germany. [35] (dd) The central German organisations responsible for figure skating, according to the findings of the OLG, no longer have any objections to the claimant training top athletes. The German Olympic Sports Confederation’s Stasi Commission supported the

272  Appendix 2 claimant’s participation in the 2010 Winter Olympic Games in Vancouver. Its chairman at the time had already supported the claimant’s continued employment as a coach a few years before. [36] (ee) Under these circumstances, the defendant is not justified in excluding the claimant from training its sport soldiers. A legally significant negative impact on the Bundeswehr’s reputation by the claimant training sport soldiers as an independent coach is not apparent) in view of an unbiased, reasonable consideration and is also unlikely in light of the claimant’s development after the reunification and the positive circumstances in his favour. Case 10 BUNDESGERICHTSHOF (SIXTH SENATE) 10 DECEMBER 2002, NJW 2003, 1040 Facts The claimant is a figure skater (female). Together with her couple skating partner, she makes up an experienced, internationally successful and well-known figure skating couple. In December 1997, the claimant’s partner was injured in a road traffic accident. Consequently, the two could temporarily not practise pair skating together because of the injury of the partner. The defendant is the liability insurer of the injuring party. It is fully liable for the damage caused by the road traffic accident. It paid DM 300,000 to the claimant’s partner as part of which damages resulting from the temporary limitation on exercising the sport were also taken into account. With the present action, the claimant seeks compensation for the damage arising for her (cancellation of competitions, lower ranking, loss of sponsorship and prize money). The LG rejected the claim. The OLG Dresden dismissed the claimant’s appeal against this … The claimant’s objection directed against this was unsuccessful. Reasons II. The claimant did not demonstrate a reason to allow the appeal (§§ 544 II 3, 543 II 1 ZPO). The claimant believes the reason for admission to appeal is the general importance of the legal matter (§ 543 II 1 no 1 ZPO; a clarification in principle is necessary according to her, as to whether one partner of a couple who is working in high-performance sport – for the exercise of which each partner is necessarily depending on the other – can, in the case of an injury to the other partner caused by a third party, make a claim for damages against the latter. This cannot be upheld. The reason for the admission to appeal under § 543 II 1 no 1 ZPO is just as elusive as the one under § 543 II 1 no 2 ZPO which was implicitly mentioned in the grounds of appeal. The legal matter is neither of fundamental importance nor does the further development of the law require a decision by the final appellate court. The BGH has already decided the questions which are essential for the resolution of the dispute. 1. For deciding on the case, it can be left open whether a sports group, such as a figure skating couple, where each partner is indispensable for the optimal and financially

Appendix 2  273 lucrative exercise of the sport and depends on the participation of the other partners can be considered an ‘established and operating business’ (‘eingerichteter und ausgeübter Gewerbebetrieb’) within the meaning of the case law [references omitted]. 2. In any case – as the OLG rightly assumed – what is lacking in a situation like the present one according to the constant case law is a direct, business-related interference with its business operations. The Senate has already repeated several times that the delictual protection of the established and operating business developed by case law may not escalate to a general delictual protection of economic assets for tradesmen which would contradict the elements of delictual offences which are governed in a casuistic manner in the German legal system (BGHZ 29, 65 [74] = NJW 1959, 479; BGHZ 66, 388 [393] = NJW 1976, 1740). Therefore the appropriate limitation of liability needs the requirement of a direct interference in the sense that the interference is directed against the business as such, ie, that it is business-related and does not concern rights or legally protected interests which can readily be detached from the business operations (BGHZ 29, 65 [74] = NJW 1959, 479; BGHZ 66, 388 [393] = NJW 1976, 1740; Senate, NJW 1983, 812 [813]; cf also, eg, BGHZ 55, 153 [161] = NJW 1971, 647; BGHZ 69, 128 [139] = NJW 1977, 1875; BGHZ 86, 152 [156] = NJW 1983, 2313; [further references omitted]). Following the case law of the BGH, there can be no question of such a defined infringement if disturbances in the business occur due to a damage-causing event which has no connection with the business, even if a person or thing is affected which is essential for the operation of the business. In particular, the damage caused to a person belonging to the business does therefore not constitute a business-related interference (BGHZ 29, 65 [73 ff] = NJW 1959, 479; Senate, LM § 823 [Da] BGB no 4; LM § 249 [Hd] BGB no 21; NJW 1983, 812 [813]; NJW 2001, 971 [972]; also BGHZ 7, 30 [36] = NJW 1952, 1249 [further references omitted]). A person who, through conduct contrary to road traffic regulations, causes a traffic accident, can, in doing so, injure a random person as well as an important employee of a business. The injuring act can hit anyone. The injuring party therefore does not breach a standard of conduct which is incumbent on him with regard to the particular business’ need for protection (cf Senate, NJW 1977, 2264 [2265]). The present case clearly also belongs to this group of cases. The claimant’s figure ­skating partner was injured in a traffic accident in December 1997. No absolute rights of the ­claimant were infringe by this. The accident for which the defendant is liable also lacks any connection to the sporting activities of the claimant and her partner, ie, to the relevant ‘business’ the existence of which is meant to be assumed here (cf 1 above). In the grounds for the appeal, the claimant presents no viable points as to how the connection could be established. The reference to the fact that the partners are absolutely dependent on each other for the successful and profitable sporting activity does not help. In the matters decided in the case law, the claimants who were indirectly injured but not affected in their absolute rights, regularly had to accept considerable losses without compensation. This is a consequence of the legal system (which does not know a general clause of liability for suffering financial losses. As the exceptions of §§ 844, 845 BGB clearly show, the law of delict does not proscribe liability going beyond this for losses which do not harm the third-party’s protected interests but were, through the damage-causing event, only inflicted on indirectly injured parties. The liability for the interference with the business serves as a backup offence (Senate, NJW 1977,

274  Appendix 2 2264 [2265]; NJW 1980, 881 [882]; also BGHZ 69, 128 [138 ff] = NJW 1977, 1875 [further references omitted]) which can merely supplement the statutory protection and fill in the gap in liability. It does not offer a starting point to expand liability exactly where the law denies it (Senate, NJW 1980, 881 [882] [further references omitted]). This, however, is the case with financial losses suffered indirectly through a damaging event. Neither is it justified to create a special right for those operating a business in this area while other indirectly injured persons remain without compensation (Senate, NJW 1977, 2264 [2265] [further references omitted]). The present case therefore does not provide the occasion to deviate from the established case law and by way of developing the law create a ground for liability which is specifically not intended by the law. Notes to Cases 8–10 These cases deal with the ‘right of an established and operating business’ which the German courts have added to the list of protected interests mentioned in § 823 I BGB. A brief account of the emergence of this judge-made right can be found above in chapter 2, section II.E.iii. As in all judge-made rights one finds here, on the one hand due to the limitations of § 823 I BGB the desire to expand the tort law liability and, on the other, the need to set workable and reasonable limits. The element of ‘directness’ is here relied upon and is extensively discussed in case 35 below. In the end, however, there is little doubt that policy dictates the results. Case 37 below, is also interesting in so far as it shows that the courts treat this as a residual right to be invoked only where there is no other remedy available to a deserving claimant. (A point clearly established in the important decision of 21 June 1966, BGHZ 45, 296 = NJW 1966, 1617 = JZ 1967, 174.) If, however, a particular factual situation is covered by a specific statutory rule (say, § 824 or § 826 BGB), then that rule must be applied as the ‘right of an established and operating business’ requires a legal gap to be applicable. As already stated, only ‘business-connected’ interests will be protected by this right. What exactly this means is difficult to say and, ultimately, it is for the courts to decide. Thus, in case 10, the other skater was obviously essential to the success of the business which they both were undertaking. But the injury to the partner was not a harm to the business as such. The harm must be ‘business-related and does not concern rights or legally protected interests which can readily be detached from the business operations’. At the same time, the reasons for the interference need not be economic. This in the Sports trainer case (case 9), the boycott of the claimant resulted from his past work with the East German Secret Service (the Stasi). But it had an effect on his business for which he was allowed to bring an action under § 823 I BGB. In order to establish liability, the element of unlawfulness has to be established positively in each case. Paragraph [27] shows that such a decision involves a balancing act of interests at stake. In this case, the protection of the Bundeswehr and its reputation might have involved, but the events held against the claimant were far back in history and had little contemporary impact (see para [31]). The issues had been known for some time and had not prevented him participating in the 2010 Olympics. So there was no contemporary justification for a boycott of the claimant’s business. As is pointed out, the balancing of interests is similar to that in relation to privacy (see below). The common law has no exact equivalent of the protection of an established business. All the same, specific forms of wrongful conduct which affect a business may give rise to

Appendix 2  275 tort liability. Thus torts like passing off, malicious falsehood, inducing breach of contract and so on may serve a similar purpose. For example, the problem in case 8 would have been handled by a claim for malicious prosecution in England (see Quartz Hill Consolidated Gold Mining Co v Eyre (1883) 11 QBD 674). But there is no general tort of abuse of process: Land Securities plc v Fladgate Fielder [2010] Ch 467. Case 10 would have received the same answer in England: Burgess v Florence Nightingale Hospital for Gentlewomen [1955] 1 QB 349 in which a husband was not able to recover damages for the death of his wife in relation to her work as his dancing partner. Case 9 would have been treated as an unlawful interference with the claimant’s trade by unlawful means (see Markesinis/Deakin, 484–91). The solutions are found in the rules of a multiplicity of torts, rather than in the more straightforward solution of German law’s protected interests. 2. THE ‘CONSTITUTIONALISATION’ OF PRIVATE LAW A. THE ROLE OF THE BASIC LAW IN REINTERPRETING PRIVATE LAW RULES Case 11 BUNDESVERFASSUNGSGERICHT (FIRST DIVISION) 15 JANUARY 1958 BVERFGE 7, 198 = NJW 1958, 257 Lüth case The decision of the LG Hamburg of 22 November 1951 infringes the complainants’ basic right under Article 5 I 1 GG and is therefore vacated. The matter is remitted to the LG Hamburg. Facts At the opening of ‘German Film Week’ on 20 September 1950 the complainant, then a Senator of the Free and Hanseatic City of Hamburg and Head of the State Press Office, gave an address, in his capacity as President of the Hamburg Press Club, to an audience of film distributors and directors. He said, inter alia: The person least likely to restore the claim to morality which the German film forfeited during the Third Reich is the man who directed ‘Jud Süss’ and wrote the script for it. If this very man is chosen to represent the German film industry, who can tell what harm we may suffer throughout the world? True he was acquitted in a formal sense in Hamburg, but substantially the judgment was a condemnation. We must call on the distributors and cinema owners to show character – not cheap, but worth the price. And I want the German film to show character as well. If it shows character in its imagination, visual daring and sterling craftsmanship, it will merit every assistance and achieve what it needs in order to survive: success with the public here in Germany and abroad. Domnick-Film-Produktion GmbH immediately challenged the complainant to justify these charges against Veit Harlan, under whose direction and with whose screen-play they were making ‘Unsterbliche Geliebte’. On 27 October 1950 the complainant released an ‘open letter’ to the Press by way of reply which contained the following: The Court did not gainsay the fact that for much of the Hitler régime Veit Harlan was the ‘Nazi film-director no 1’ or that his film ‘Jud Süss’ showed him to be a committed exponent of the Nazis’ murderous purge of the Jews. Some businessmen here and abroad may not be opposed to Veit Harlan’s re-emergence, but the moral integrity of Germany must not

276  Appendix 2 be destroyed by hard-faced moneymakers. Harlan’s return can only reopen wounds barely healed, and resuscitate diminishing distrust fatal to German reconstruction. For all these reasons it is not only the right but the duty of all decent Germans to protest against, and even to boycott, this ignominious representative of the German film industry. Domnick-Film-Produktion GmbH and Herzog-Film GmbH (the distributor of ‘Unsterbliche Geliebte’ in the Federal Republic), obtained an interlocutory injunction from the LG Hamburg … and the OLG dismissed the complainant’s appeal. At the complainant’s request the two film companies were required to bring suit within a certain time. They did so, and on 22 November 1951 the LG Hamburg issued the following judgment: The defendant is ordered, on pain of fine or imprisonment as determined by the court, to refrain (1) from calling on theatre managers and film distributors not to programme the film ‘Unsterbliche Geliebte’ and (2) from calling on the German public not to go to see the film … Reasons B. I. The complaint is admissible since the preconditions for the application of § 90 II, 2 BVerfGG are satisfied (decision before exhaustion of legal remedies). II. The complainant alleges that the LG’s judgment infringes his basic right to free expression of opinion as laid down in Article 5 I 1 GG. The judgment of the LG, an act of the public power of judicature, could infringe the complainant’s basic right by its content only if the court was bound to take account of the complainant’s basic right. By enjoining the complainant from making statements apt to lead others to endorse his views about Harlan’s re-emergence and to follow him in discriminating against Harlan’s films, the judgment clearly restricts the complainant’s freedom of expression of opinion. The LG granted the injunction as a matter of private law order on the basis that the complainant’s statements were tortious under § 826 BGB. Thus the public power has restricted the complainant’s freedom of expression on the basis of the claimant’s private law claim. This can constitute an infringement of the complainant’s basic right under Article 5 I 1 GG only if the applicable rules of private law are so substantially affected that they can no longer support the judgment. The question whether basic rights affect private law, and if so in what manner, is much debated [references omitted]. The extreme positions are, on the one hand, that basic rights constrain only the state, and, on the other, that basic rights (or at any rate the most important of them) prevail against everyone in private legal relations. Previous decisions of this Court support neither of these extreme positions, the conclusions drawn by the BAG in its decision of 10 May 1957 (NJW 1957, 1688) from our decisions of 17 and 23 January 1957 (BVerfGE 6, 55 and 6, 84) being unwarranted. Nor is it necessary today to deal with all aspects of the debated question of the ‘effect on third parties’ (Drittwirkung) of basic rights. The matter can be properly resolved by the following considerations: 1. There is no doubt that the main purpose of basic rights is to protect the individual’s sphere of freedom against encroachment by public power: they are the citizen’s bulwark against the state. This emerges from both their development as a matter of intellectual history and their adoption into the constitutions of the various states as a matter of political history: it is true

Appendix 2  277 also of the basic rights in the Basic Law, which emphasises the priority of human dignity against the power of the state by placing the section on basic rights at its head and by providing that the constitutional complaint (Verfassungsbeschwerde), the special legal device for vindicating these rights, lies only in respect of acts of the public power. But far from being a value-free system [references omitted] the Basic Law erects an objective system of values in its section on basic rights, and thus expresses and reinforces the validity of the basic rights [references omitted]. This system of values, centering on the freedom of the human being to develop in society, must apply as a constitutional axiom throughout the whole legal system: it must direct and inform legislation, administration, and judicial decision. It naturally influences private law as well; no rule of private law may conflict with it, and all such rules must be construed in accordance with its spirit. The legal content of basic rights as objective norms informs private law by means of the rules which directly control this area of law. Just as new rules must conform to the valuesystem of the basic rights, so existing and older rules receive from it a definite constitutional content which thereafter determines their construction. From the point of view of substantive and procedural law a dispute between private citizens on the rights and duties that arise from rules of conduct thus influenced by the basic rights remains a dispute of private law. It is private law which is interpreted and applied even if its interpreters must follow the public law of the constitution. The influence of the value-system of the basic rights is clearest in those rules of private law which are mandatory (zwingendes Recht) and form part of ordre public in the wide sense, ie, those rules which in the public interest apply to private legal relations whether the parties so choose or not. Such provisions, being functionally related and complementary to public law, are especially exposed to the influence of constitutional law. ‘General clauses’, such as § 826 BGB, by which human conduct is measured against extralegal standards such as ‘proper conduct’ (gute Sitten), allow the courts to respond to this influence since in d ­ eciding what is required in a particular case by such social commands, they must start from the value-system adopted by the society in its constitution at that stage of its cultural and ­spiritual development. The general clauses have thus been rightly described as ‘points of entry’ for basic rights into private law [references omitted]. The judge is constitutionally bound to ascertain whether the applicable rules of substantive private law have been influenced by basic rights in the manner described; if so, he must construe and apply the rules as so modified. This is what is meant by saying that the civil judge is bound by the basic rights (Article 1 III GG). If he issues a judgment which ignores this constitutional influence on the rules of private law, he contravenes not only objective constitutional law by misconceiving the content of the objective norm underlying the basic law, but also, by his judgment, in his capacity as a public official, contravenes the Basic Law itself, which the citizen is constitutionally entitled to have respected by the judiciary. Quite apart from any remedies he may have to correct this error in the courts of private law, the citizen can invoke the BVerfG by means of a Verfassungsbeschwerde. The BVerfG must determine whether the reach and effect of the basic rights in private law has been correctly ascertained by the regular courts. But this is also the limit of its investigation: it is not for the BVerfG to check judgments of civil courts for errors of law in general; the BVerfG simply judges of the ‘radiant effect’ of the basic rights on private law and implements the values inherent in the precept of constitutional law. The function of the Verfassungsbeschwerde is to test all acts, whether of the legislature, the executive or the

278  Appendix 2 judiciary, for ‘compatibility with the Constitution’ (§ 90 BVerfGG). The BVerfG is certainly not to act as a court of review, much less over-review, for the civil courts, but neither may it abjure consideration of such judgments entirely or leave uncorrected any instance which comes to its notice of the misapplication of the rules of basic rights. 2. The basic right to freedom of expression of opinion (Article 5 GG) seems to pose special problems with regard to the relationship between basic rights and private law. As in the Weimar Constitution (Article 118), this right is constitutionally guaranteed only within the limits of ‘general laws’ (Article 5 II GG). Before enquiring what laws are ‘general laws’ in this sense, one might suppose that the constitution’s reference to such laws must be to such laws as judicially construed, with the result that no judicial construction of such a law which limited the basic right could be regarded as a ‘breach’ of the basic right. This is not, however, the sense of the reference to ‘general laws’. The basic right to freedom of expression, the most immediate aspect of the human personality in society, is one of the most precious rights of man (Declaration of the Rights of Man and Citizen (1789) Article 11). It is absolutely essential to a free and democratic state, for it alone permits that constant spiritual interaction, the conflict of opinion, which is its vital element (BVerfGE 5, 85 (205)). In a certain sense, it is the basis of freedom itself, ‘the matrix, the indispensable condition of nearly every other form of freedom’ (Cardozo). Given this fundamental importance for the free democratic state of freedom of expression of opinion, it would be illogical for a constitution to make its actual scope contingent on mere statute (and thus necessarily on the holdings of courts construing it). What was said earlier about the relationship between basic rights and private law applies here also: general laws which have the effect of limiting a basic right must be read in the light of its significance and always be construed so as to preserve the special value of this right, with, in a free democracy, a presumption in favour of freedom of speech in all areas, and especially in public life. We must not see the relationship between basic right and ‘general laws’ as one in which ‘general laws’ by their terms set limits to the basic right, but rather that relationship must be construed in the light of the special significance of this basic right in a free democratic state, so that the limiting effect of ‘general laws’ on the basic right is itself limited. In its function as ultimate guardian of the basic rights through the medium of the ­Verfassungsbeschwerde, the BVerfG must therefore have the power to supervise the decisions of courts whose application of a general law in this area may unduly restrict the scope of the basic right in the individual case. This Court must be competent to uphold as against all organs of public power, including the civil courts, the special value it represents for a free democracy, and thus to reconcile, as required by constitutional law, the conflicting restrictive tendencies of the basic right and the ‘general laws’. 3. The concept of ‘general’ law has always been controversial. Leaving on one side the question whether the concept may not be due to an error in the drafting of Article 118 of the 1919 Constitution [reference omitted], we may note that it was then construed to include all which ‘do not forbid an opinion as such and do not envisage the expression of opinion as such’, but rather ‘serve to protect a legal interest which deserves protection without regard to any particular opinion’, and protect ‘a community value superior to the activity of freedom of opinion’ [reference omitted]. Exponents of the Grundgesetz agree with this [reference: ‘laws which do not inhibit the purely intellectual effect of a mere expression of opinion’]. If the term ‘general laws’ is so understood, we may state the protection of the basic right as follows:

Appendix 2  279 It is unacceptable to hold that the Basic Law protects only the expression of opinion, and not its inherent or intended effect on others, for the whole point of an expression of opinion is to have ‘an effect on the environment of ideas’ [reference omitted]. Thus value judgements, which always have an intellectual aim, namely to persuade others, are protected by Article 5 I, 1 GG; indeed it is the stance of the speaker as expressed in the value-judgment by which he hopes to affect others which is principally protected by this basic right. To protect the expression and not to protect its effect would be a nonsense. In this sense, the expression of opinion is free in so far as its effect on the mind is concerned; but that does not mean that one is entitled, just because one is expressing an opinion, to prejudice interests of another which deserve protection against freedom of opinion. There has to be a ‘balance of interests’; the right to express an opinion must yield if its exercise infringes interests of another which have a superior claim to protection. Whether such an interest exists in a particular case depends on all the circumstances. 4. From this point of view, the rules of private law may perfectly well be ranked as ‘general laws’ in the sense of Article 5 II GG. If this has not been done by commentators hitherto [reference omitted], that is simply because basic rights have been considered good only as against the state, so it was natural to consider as ‘general laws’ having limiting effect only those laws which regulated state activity vis-a-vis the individual, that is, laws of a public law nature. But if the basic right to free expression of opinion affects relations of private law as well and favours free expression of opinion against the fellow-citizen also, then rules of private law which operate to protect superior legal interests must also be taken into account as possibly limiting the basic right. After all, if provisions of criminal law designed to protect honour or other essential aspects of human personality can set limits to the exercise of the fundamental right to freedom of expression, it is not obvious why similar provisions of private law should not equally do so. Notes to Case 11 1. The constitutionalisation of private law by national and European law is an important and modern development of the law which, on the whole, though studied by national lawyers (especially in Germany and the US) has only gained the attention of comparative lawyers in the last 30 years. The Drittwirkung (horizontal effect) debate was almost totally ignored in England until the Human Rights Act 1998. The German law was considered as a possible at that time (see Ralf Brinktrine, ‘The horizontal effect of human rights in German constitutional law: the British debate on horizontality and the possible role model of the German doctrine of ‘mittelbare Drittwirkung der Grundrechte’ (2001) 4 European Human Rights Law Review 421), and some articles written on it, made lawyers wake up to the prospect of Drittwirkung coming to our shores. The current position in the United Kingdom is well summarised in books on constitutional law (eg, Elliott/Thomas, Public Law (3rd edn, 2017) 800–04). On one view, which they consider to be dominant, the rights under the European Convention only apply between the individual and the state (see especially Buxton, ‘The Human Rights Act and Private Law’ (2000) 116 LQR 48 and Wade, ‘Horizons of Horizontality’ (2000) 116 LQR 217). But others consider that there is a duty on the courts to develop the body of private law (including the common law) compatibly with Convention rights, and this could, in effect, change the common law of tort (Phillipson and Williams, ­‘Horizontal Effect and the Constitutional Constraint’ (2011) 74 MLR 878; see also Beatson et al, Human Rights: Judicial Protection in the United Kingdom (2008) 371–90). The approach of

280  Appendix 2 the courts does not limit itself to applying the narrow view that, formally, Convention rights only apply against public authorities. Rather, they have adopted an approach which ensures that the Convention is respected, in practice, by all branches of English law (see Campbell v Mirror Group Newspapers Ltd [2004] 2 AC 457; [2004] UKHL 22). This is the effect of the Human Rights Act 1998 being, in effect, a ‘constitutional statute’ and so operating in a manner similar (in some respects) to the statement of fundamental rights at the beginning of the German Basic Law. The reader should thus read these three decisions in conjunction with the brief comments contained in chapter 1, section IV and treat them as providing the constitutional background to the privacy cases discussed in the next section. For in all of these we see a clash of the rights of one individual against another and yet the outcome is largely determined by the Constitution. 2. Though the significance of the Drittwirkung doctrine has been felt strongly in the area of speech and privacy rights in Germany, the importance of the Lüth case (case 11), goes beyond the facts of the dispute which that Court had to resolve. Indeed, the ramifications of the ruling are gradually engulfing much of the traditional area of private law. Arguably, the most important part of Lüth is its ‘doctrine of interaction’ (Wechselwirkungslehre) which shows that the basic human rights contained in Articles 1–19 GG do not directly affect relations between private citizens. Rather, the impact is indirect and is manifested largely through the mandatory rules (ius cogens) of private law and, especially, the various general clauses of private law (eg, §§ 138, 242, 823 I BGB and to a lesser extent also § 826 BGB) which must be interpreted in conformity with the fundamental values of the Constitution. The practical result is that the judge balances the various competing interests before reaching his decision, freedom of expression (Article 5 GG) being a cardinal but not absolute value (as this is made clear by para II of that same article, as well as by A ­ rticle 20 GG). The Lüth doctrine was finally and conclusively incorporated into the civil law by the Höllenfeuer decision of 1966 (BGHZ 45, 296 = NJW 1966, 1617 = JZ 1967, 174). The case, involving the right of an established and operating business, shows how this (private law) right had to cede precedence to free speech when the latter is exercised in the public interest. The result of the above is that, in a public law action between an individual and the state, a constitutional right will directly override an otherwise applicable rule of public law. The constitutional right will also override a statutory provision of private law, if it contravenes a constitutional right. This has occurred for instance in the 1950s with regard to (pre-constitutional) family law provisions which could not be reconciled with Article 3 GG (equal treatment). However, in private law disputes between individuals, where the applicable provisions are not unconstitutional as such, constitutional rights are said to ‘influence’ rules of civil law rather than actually to override them. It is the duty of the court to adopt an interpretation of private law provisions which is in conformity with the constitutional rights. A certain intellectual content ‘flows’ or ‘radiates’ from the constitutional law into the civil law and affects the interpretation of existing civil law rules. In such cases the rules of private law are to be interpreted and applied in the light of the applicable constitutional norm, but it is nonetheless the civil law rules that are ultimately to be applied. This is very similar to the position that the laws in the United Kingdom have reached through the Human Rights Act 1998, as outlined above. 3. A doctrine such as the above, may be condensed (with dangers) within a few lines; but its birth still needs an explanation. More precisely, does it find any basis in the Constitution? There is little doubt that the traditional understanding of human rights is that they apply

Appendix 2  281 vertically, ie, bind the state in its relations with its citizens but do not have any horizontal effect, affecting the relations of private individuals. Most German scholars would accept this, and they would also agree that the text of the Basic Law is ambiguous on the question whether its Human Rights articles (mainly Articles 1–19 GG) are also meant to regulate the relations between private individuals. Apart from invoking the wider ­philosophical argument that it was not for the state to interfere with the rules of private law which enshrine the belief in ‘private autonomy’, opponents of any horizontal extension also argued that where constitutional rules were meant to cover private relationships as well, the constitutional draftsman had said so explicitly. But this argument cuts both ways; and the fact that a horizontal extension was not meant to be prohibited by the Basic Law is reinforced by the positive and declarative form given to many of its key articles. (For instance A ­ rticle 2 I GG: ‘Everyone has the right to the free development of his personality’. ­Likewise with Article 1 I GG.) This point is backed by the discussions of the Herrenchiemsee ­drafting committee for the Basic Law, which are all the more significant given that the same debate (about horizontally) had plagued the previous Constitution of Weimar (Bericht über den Verfassungskonvent auf Herrenchiemsee vom 10 bis 23 August 1948, 2 Akten und Protokolle, 513, 580). On the one hand, Hermann von Mangoldt’s authoritative Das Bonner Grundgesetz, vol I (1953) 34–42, argued that the Constitutional Convention, which from 1 September 1948 continued in Bonn the work of the Herrenchiemsee Committee of experts, did not believe that the Basic Law was meant to apply to relations between individuals. On the other hand, the underlying issues, as we are now coming to realise also in other countries, are not susceptible to unequivocal answers. In retrospect, it was thus not surprising that a storm of protest broke out when the BAG, under the influence of its first President Nipperdey, jumped the gun and declared that freedom of expression had an unmittelbare Drittwirkung – ie, a direct limiting effect – on the acts of private parties (BArbGE 1, 185, (1954)). In actual fact, Nipperdey the judge was only following Nipperdey the scholar who, four years earlier on, had in a seminal and still cited article argued in favour of direct horizontality: ‘Gleicher Lohn der Frau für gleiche Leistung. Ein Beitrag zur Auslegung der Grundrechte’ RdA 1950, 121 ff. The literature, which followed the decision of the BAG, was enormous. Ehmke was sharply critical in Wirtschaft und Verfassung 1961, 78 ff. But Nipperdey struck back in ‘Grundrechte und Privatrecht’ in Festschrift Molitor 1962 17–33. In its subsequent decisions, however, the BAG has modified its language and brought it closer to that used by the BVerfG in Lüth (see: BArbGE 47, 363 (1984)). So, what was the reasoning that brought such a sea change? In its barest outlines, Nipperdey’s argument posited that since the eighteenth and nineteenth centuries new threats have arisen to human rights. Whereas before the industrialisation of our society the function of human rights was to protect the freedoms of the individual from incursions by the state, by the time the twentieth century had arrived, new forces had established themselves within society. These were often as powerful as the state, itself; and certainly equally able to determine (adversely) people’s lives. This was certainly true of the modern Press and large employers who, through their action, could stifle speech rights. Thus, for Nipperdey, ‘The basic right to free expression … would be rendered largely ineffective … if … individuals and others with economic and social power … were in a position by virtue of that power to restrict it at will’. (BArbGE 1, 185, 192.) The fact thus was that in the twentieth century, in parallel with industrialisation, the democratisation of society and the rise of popular sovereignty had changed the role and scope of constitutions.

282  Appendix 2 For, where formerly they had been ‘granted’ (oktroyiert) by the monarch (or, in the traditionally decentralised Germany, the college of reigning princes), constitutions were now seen as the freely agreed fundamental norm which regulated all life in society. Constitutional provisions, therefore, had to be given the widest possible application. In principle, therefore, no area of life could be exempt from their scope. Nipperdey’s second argument pointed out that in some cases the Basic Law itself expressly provides for the horizontal application of human rights. Article 9 III GG is a case in point: ‘Agreements restricting or intended to hamper [the right to form associations in order to safeguard and improve working and economic conditions] shall be null and void; measures to this end shall be illegal’. The open-ended wording of Article 3 III GG – ‘no one shall be prejudiced’ – could be taken to point to the same conclusion: what is illegal need not expressly be declared void. Moreover, in the light of what immediately preceded the Basic Law of Bonn was it possible for discrimination based on race, political opinion, faith, or sex, to be accepted under any circumstances? In any event, as the state nowadays employs decreasing numbers of civil servants, and the majority of the population works in the private sector, to exempt the terms of private employment from the application of the relevant article would reduce its significance to an unacceptable level. If this sounded convincing in 1950 it is all the more so now. The latter (teleological) argument is reinforced rather than contradicted by the provisions of Article l GG which is, by its position at the beginning of the Basic Law no less than because of its content, marked out as the bedrock of the whole Basic Law: ‘(I) Human dignity is inviolable. To respect and protect it is the duty of all state authority. (2) The German people therefore uphold human rights as inviolable and inalienable and as the basis of every community, of peace and justice in the world’. These sonorous proclamations conclude with the more pragmatic order contained in Article 1 III GG which states that ‘The following basic rights shall bind the legislature, the executive, and the ­judiciary as directly enforceable law’ [italics supplied]. Since the judiciary is, according to Article 1 III GG, bound by Article 3 III GG it cannot, Nipperdey argued, uphold contracts or unilateral acts discriminating on grounds outlawed by the Basic Law without itself violating its provisions. The fact that the German people, not merely the German State, uphold human rights as the basis of their community must also mean that each and every individual must respect the human rights of others. Similarly, given that the state has to protect human dignity, from which all, specific human rights flow, no public authority could endorse any practice that violated human dignity. The same is true of agreements between private parties; as human rights are inalienable, they must not be abrogated by contract. These conclusions are not, however, limited to Article 3 III GG and the principle of equal pay for equal work. Every single human right protected by the Basic Law has to be scrutinised with a view to determining whether it is directed exclusively against the state. This would certainly be the case where incursions by private parties are inconceivable. For instance, individuals can neither grant nor withdraw citizenship, retention of which is protected under Article 16 I GG. Where, on the other hand, this is not the case but, on the contrary, freedom needs protection against wider societal forces, the basic rights have to inform private law relationships as well. 4. Lüth accepts that even in such cases the dispute ‘remains substantially and procedurally a dispute of civil law’ (BVerfG, BVerfGE 7, 198, 205–6). What, then, is the precise role of the

Appendix 2  283 BVerfG? The answer is not, apparently, entirely clear. According to the important Mephisto case (BVerfG, BVerfGE 30, 173, 197) the ‘evaluative’ process of the competing interests was to be left to the civil law judges, with the BVerfG retaining the right to intervene only if the civil law decision was based on a fundamental misconception of the basic rights and their radiating effect. In some subsequent decisions, however, the BVerfG has permitted itself greater latitude for review, especially whenever there was a ‘serious’ invasion of a basic right. See the Deutschland-Magazin case (BVerfG, BVerfGE 42, 143) where the civil court’s decision was not disturbed and the Echternach decision (BVerfG, BVerfGE 42, 163) where the State Court decision was reversed. As the court put it (BVerfG, BVerfGE 42, 163, 168), ‘The more a civil court’s decision infringes the predicates of free existence and action that are protected by a basic right, the more searching must be the BVerfG’s investigation to determine whether the infringement is constitutionally justified’. (Translation by P Quint, Ex Iure (Gouda 1989) 322.) Such a willingness to ‘intervene’ has been manifested in ‘speech cases’ with the result that this interest has received growing protection during the last 30 years or so. These and subsequent important decisions (notably in the Böll case (BVerfG, BVerfGE 54, 208) and the Wallraff case (BVerfG, BVerfGE 66, 131); Franz Josef Strauss case (BVerfG, BVerfGE 82, 43 (1990); and Soldiers are Murderers case (BVerfG, BVerfGE 93, 266 (1995)), are discussed in Markesinis, ‘Privacy, Freedom of Speech and the Horizontality of the Human Rights Bill’ (1999) 115 LQR 47–88. 5. Lüth, still regarded as the leading case, can be compared with NAACP v Claiborne Hardware Co, 458 US 886 (1982). Note, however, that the careful evaluative process advocated by case 11 Lüth (and also found in case 14 Lebach is absent from Claiborne. This preference for ad hoc balancing techniques has not, on the whole, found much favour with American courts in first amendment disputes. However, note that American law may, at times, be achieving Drittwirkung results via different concepts. On this suggestion, see Markesinis, ‘Our Debt to Europe: Past, Present and Future’ in The Coming Together of the Common Law and the Civil Law, The Clifford Chance Millennium Lectures (2000) 37–66 where cases such as BArbGE 1, 185 are compared to factual American equivalents such as Novosel v Nationwide Insurance Company, 721 F 2d 894 (1983). 6. The Lüth and Mephisto cases give some indication of how the balancing between fundamental rights is carried out. The first case deals with speech which may affect – indeed aims at affecting – another person’s economic interests; the second involves reputation. There is a third category of cases which deals with internal security, treason, and sedition in relation to free speech. This is exemplified by the Spiegel seizure case of 5 August 1966 (BVerfG, BVerfGE 20, 162). Cases like this, as well as decisions banning extreme political parties, eg, the neo-Nazi party (BVerfG, BVerfGE 2, 1) or the Communist party (BVerfG, BVerfGE 5, 85) invite comparison with Anglo-American law. Many could be taken to suggest that the suppression of extreme political activity, even in the absence of ‘imminent lawless action’ (cf Brandenburg v Ohio, 395 US 444, 447 (1969)), may be the result of the German experience in the 1930s. Clearly, at first sight German law appears to be less tolerant than American law; but, it must be stressed again, the decisions of the BVerfG must always be seen against the background of the German experience between the two Wars and Article 21 II GG, which enables the banning of political parties which aim at abolishing the existing liberal-­ democratic order. Lack of space makes the further examination of this topic impossible. 7. The Lüth decision (case 11), as stated, was a case dealing with an invitation to boycott films made by a former Nazi sympathiser. Lüth won, and in the balancing process the

284  Appendix 2 ‘purity’ of his motives (the wish to protect the cultural interests of the community rather than to make money for himself) seemed to have weighed heavily in his favour. In other instances, however, where excessive economic pressure was applied and monetary gain was at stake, the courts, though following the Lüth dictate that the relevant interests should be balanced, in the end showed less favour for free speech. The Blinkfüer case of 26 February 1969 (BVerfG, BVerfGE 25, 256) is a case in point where the Axel Springer Publishing House tried to stop news dealers from handling a left-wing periodical by threatening to stop supplying them their papers if they continued to handle the periodical in question. The action for damages by the owners of the periodical – desisted on grounds that it impinged on Springer’s freedom of expression – failed in the civil courts but succeeded in the BVerfG for the reasons indicated above. Other cases, dealing with boycotts and illustrating the courts’ balancing process, include BGH, NJW 1985, 1620 = JZ 1985, 587; BGH, NJW 1984, 1956. Case 12 BUNDESGERICHTSHOF (FIRST CIVIL SENATE) 25 MAY 1954 BGHZ 13, 334 = NJW 1954, 1404 = JZ 1954, 698 (with an approving note by Helmut Coing) Facts The D Company published on 29 June 1952 in its weekly journal … an article by KB with the title ‘Dr HS & Co’ and the sub-title ‘Political considerations concerning the foundation of a new bank’. The article contained a comment concerning the new Bank for Foreign Trade founded by Dr S in H, and expressed itself in that connection in opposition to Dr S’s political activity during the national-socialist regime and the years after the war. On the instructions of Dr S the claimant, an attorney, sent to the defendant company a letter of 4 July 1952, saying, inter alia: I represent the interests of Dr S. In terms of § 11 of the Press Act I hereby require the following correction of the above-mentioned article in your issue of Sunday the 6th instant: 1. It is incorrect that … 2… This claim for correction is made under the Press Act, in combination with the BGB, and also the law of copyright. I ask you to inform me by telephone or in writing on or before midday Saturday 5 July 1952, of your confirmation of the unrestricted execution of the required correction, failing which legal proceedings will be taken. The defendant company gave the claimant no answer. But in the issue of 6 July it published, along with sundry expressions of opinion by readers on KB’s article, the following under the heading ‘Letters from Readers’. Dr HS & Co. To the … [name of journal] I represent the interests of Dr HS 1. It is incorrect … 2. … Dr M, Attorney

Appendix 2  285 In the contents of 1 there was no reproduction of or extracts from the appropriate Nuremburg judgment concerning Dr S which the claimant had introduced in his letter of 4 July 1952. Otherwise they were unaltered. The claimant sees in this kind of publication an injury to his right of personality. The publication of his letter, written in his capacity of attorney for Dr S, under the heading ‘Letters from Readers’ and with its contents falsified by the omissions and the choice of title, constitutes a deliberate misleading of the public. The incorrect impression was thus created that this was a mere expression of opinion by a reader on the previous article on Dr S, as was the case with other readers’ letters printed under the same rubric. The claimant, however, had kept clear of taking any political attitude and had acted only as an attorney within the scope of his instructions. From a professional standpoint alone the conduct of the defendant company was intolerable. An attorney must be able to ensure that demands for correction made in his client’s name must not be circulated in a misleading manner. The claimant demanded that the defendant company be ordered to recall in its next issue under ‘Letters from Readers’ its statement that the claimant had sent a reader’s letter to the defendant company in the matter of ‘Dr HS & Co’ … The defendant company takes the view that it was not bound to agree to the claimant’s demand for a correction, because his letter did not conform to the requirements set out in § 11 of the Press Act. It lay therefore within its discretion whether and at what place in its journal to print the communication. The LG granted the claim under § 823 II BGB, in combination with §§ 186, 187 StGB. The OLG Hamburg rejected the claim. According to the OLG’s opinion there was, in the abbreviated publication of the claimant’s letter under the rubric ‘Letters from Readers’, no lawful disparagement of the claimant. The method of this publication certainly contained an incorrect statement of fact. The incorrect statement that the claimant had sent a reader’s letter to the defendant company was, however, not apt to injure his credit, nor to bring him into contempt or lower his dignity in public opinion. The appeal led to a restoration of the LG’s judgment for these Reasons The OLG was in error in failing to examine whether the claimant ‘s claim was justified on the basis of a disparagement of his personality rights. It dismissed the action only because it did not consider as proved the objective presuppositions (elements) of a delict in the sense of §§ 823 II, 824 BGB in combination with §§ 186, 187 StGB. This objection is rightly made in the appeal. It can be left undecided whether the claimant’s letter of 4 July 1952 was a written work in the sense of § 1 of the Copyright Act and hence fell within the protection of copyright. The RG has, indeed, constantly made the protection of correspondence to depend on whether it showed the individual form required for the protection of copyright (RGZ 41, 43 [48]; 69, 401 [403]). On the other hand it has been rightly pointed out in the academic literature that a need for the recognition of a personality right in respect of the use of one’s own notes exists equally even when that protection cannot be derived from the personality right of the author, on the ground that they do not possess the form given by an individual intellectual activity … The RG believed that it must deny such a protection of personality independent of copyright to publications of correspondence because the German law then in force

286  Appendix 2 contained no positive statutory provisions on a general personality right (RGZ 79, 397 [398]; 82, 333 [334]; 94, 1; 102, 134; 107, 277 [281]; 113, 414; 123, 312 [320]). It has indeed, in many decisions on § 823 BGB, approved of the protection of personality rights (RGZ 72, 175; 85, 343; 115, 416; 162, 7), but in principle it has recognised personality rights with an absolute power of exclusion only for certain specified personality interests. In the literature, Gierke and Kohler had already pleaded for the recognition of a comprehensive personality right … [reference omitted]. Moreover, now that the Basic Law has recognised the right of a human being to have his dignity respected (Article 1 GG), and also the right to free development of his personality as a private right, to be universally respected in so far as it does not infringe another person’s right or is not in conflict with the constitutional order or morality (Article 2 GG), the general personality right must be regarded as a constitutionally guaranteed fundamental right. No further discussion is needed here of whether and how far the protection of this general personality right, the limitation of which requires a balancing of interests, is restricted in particular cases by justified private or public needs, which outweigh the interest in the inviolability of the exclusive sphere of personality; for in this present case it is not evident that the defendant company has any interests worth protecting, which it could use to justify the conduct objected to by the claimant. On the contrary, by the defendant company’s choice of a way of publishing the request for correction, omitting essential parts of the letter, interests of the claimant in the nature of personality rights have been infringed. Every verbal expression of a definite thought is an emanation from the author’s personality, even when the protection of copyright cannot be attributed to its form. It follows that in principle only the author is entitled to decide whether and in what form his notes are communicated to the public; for every publication of the notes of a living person under his name is rightly regarded by the public as proceeding from a corresponding direction of his will. The nature of the notes and the method of their communication is subject to the criticism and valuation of public opinion, which draws conclusions from those circumstances about the author’s personality. While an unauthorised publication of private notes constitutes – as a rule – an inadmissible attack on every human being’s protected sphere of secrecy, a modified reproduction infringes the personality rights of the author because such unauthorised alterations can spread a false picture of his personality. In general, not only unauthorised omissions of essential parts of the author’s notes are inadmissible, but also additions through which his notes presented for publication only for certain purposes acquire a different colour or tendency from what he expressed in the form chosen by him and the kind of publication he had allowed. In so far as they concern works protected by copyright, those legal principles have long been inferred by the courts from the creator’s enjoyment of the personality right of an author, which is only a particular phenomenon of the general personality right (RGZ 69, 242 [244]; 79, 397 [399]; 151, 50). As regards the protection of personality the interest of the author in notes which are protected by copyright is essentially the same. In the present case the claimant had unambiguously sent to the defendant company only a demand for correction and, indeed, in his character as attorney for Dr S. Thereby the defendant company was only empowered by the claimant either to publish the text in an unshortened form or, restricting itself to the required correction, to make clear that there had been a demand for correction. Since the claimant does not ask for his original desire for correction to be carried out, it is unnecessary for the purpose of this decision

Appendix 2  287 to consider whether his letter of 4 July 1952 conformed to the conditions of the Press Act. If, in agreement with the OLG, this had to be denied, the only consequence would be that the defendant company had a right to refuse altogether to publish the letter. But it was not entitled to publish it under the rubric ‘Letters from Readers’ and, moreover with the omission of the passages that would clearly show that the claimant was not putting forward his personal opinion in favour of Dr S but wished to obtain a correction under the Press Law. The LG’s decision is to be approved, that this mode of publication – and also the placing of the correction side by side with five other letters on the article on Dr S published by the defendant company – was bound to produce the impression on an impartial reader that the claimant’s letter gave his personal attitude to the controversy about Dr S. That misleading impression was also not dispelled by the literal reproduction of the claimant’s introductory sentence; for that sentence, in its generally accepted character, told the reader only that the sender was Dr S’s attorney. It did not make sufficiently clear that the content also of the letter in question referred to his instructions as attorney and that it had been composed by him not as a private person but in the exercise of his profession. Accordingly the OLG was not in error in holding that the publication of the letter of corrections in shortened form under the rubric ‘Letters from Readers’ contained an untrue statement of facts. This also means that through the mode of publishing it, the letter acquired a meaning not in conformity with its original composition and that this form of publication did not correspond to what the claimant had alone given permission for, namely broadcasting to the public the letter of correction in the form he had chosen. The LG was right in regarding the publication complained of, which according to its findings had become known to an extraordinarily wide circle of persons, as a continuing disparagement and therefore that the demand for revocation was justified. Case 13 BUNDESGERICHTSHOF (FIRST CIVIL SENATE) 14 FEBRUARY 1958 BGHZ 26, 349 = NJW 1958, 827 (with a partially approving and partially critical note by Larenz in JZ 1958, 571 and an approving article by Coing in JZ 1958, 558) Facts The claimant is co-owner of a brewery in X. He is active as a gentleman (amateur) showjumper (‘Herrenreiter’). The defendant Limited Partnership is the manufacturer of a pharmaceutical preparation which is widely reputed as being able to increase sexual potency. To advertise this preparation in the Federal Republic, and in particular in K, it disseminated a poster with the picture of a show-jumper. Its basis was an original photograph of the claimant, which had been taken by a press agency at a show-jumping competition. The claimant had not given permission for the use of his portrait. The claimant claimed damages from the defendant for the damage which he suffered as a result of the dissemination of the poster. He alleged that in the given circumstances he could only claim as damages what he would have obtained if he had allowed the defendant to use his portrait. As his professional and social position did not allow him, and his financial means did not compel him, to dispose of his portrait for advertising purposes, and in particular for the defendant’s preparation, he would have done this, if at all, only for a fair price, at a rough estimate DM 15,000 at the very least.

288  Appendix 2 The claimant applied for an order that the defendant pay by way of damages a fair sum to be fixed by the court. The defendant denied any fault and pleaded that, after touching up, the claimant’s features were not recognisable in the poster; and that it had not itself designed or produced the poster nor obtained the portrait from S, but had ordered it from the H advertising agency, which it had trusted as a respectable, competent, and reliable firm, not to injure the rights of third persons. The defendant could not have known that the poster had been designed on the basis of a photograph, or that the photograph showed a ‘gentleman’ rider. Only as the case developed did it discover that it really concerned a portrait of the claimant. Thereupon it prohibited without delay any further use of the advertisement. The LG ordered the defendant to pay DM 1,000 to the claimant by way of damages. The OLG Köln ordered the defendant to pay DM 10,000 to the claimant. The defendant’s further appeal was unsuccessful for these Reasons I. The OLG, in agreement with the LG, found that the depiction of the rider in the poster allowed the claimant’s person to be recognised despite the retouching. It rightly concluded that the dissemination of the poster without the claimant’s permission injured his personality rights, namely his right to deal with his portrait, and that the defendant must compensate him under § 823 II BGB in combination with § 22 of the Act on Artistic Creations (KUG), if it was found to blame (cf RG JW 1929, 2257, BGHZ 20, 345, 347 ff). The OLG came to that conclusion seeing that the defendant had not observed the care required in the circumstances, since it had obtained in the course of its business the poster prepared by the H advertising agency without making certain that the person depicted had agreed to the intended use of his portrait. The appellant’s attacks on these findings must fail … II. In awarding compensation to the claimant the OLG had in mind the licence fee which he could have demanded if a suitable contract had been arrived at between the parties. It held that it was justified in applying a method of assessing damages developed for breaches of copyright, because it was hard for the claimant to show whether and to what degree there had been any pecuniary loss. In contrast to the LG, which had thought DM 1,000 to be sufficient, the OLG decided that DM 10,000 was the more appropriate figure. Although the appeal is unsuccessful in the result, it must be conceded that the OLG’s reasoning is not entirely appropriate to the peculiar facts of the case. 1. The appellant does not dispute that, even where there is an injury to the personality right to one’s portrait, the damage can be estimated according to the payment that would presumably have been arranged if there had been a contract. Nevertheless the appellant argued that this method of assessing damages, which the Senate in its judgment of 8 May 1956 (BGHZ 20, 345 ff, Dahlke) declared admissible for the unauthorised publication of a portrait, could not be used if it was established that the person portrayed would, for special reasons, never have allowed his portrait to be used for advertising purposes. If in the case under appeal pecuniary damage had actually been in question, this attack would not have been well founded. For according to settled case law and academic opinion, where a claim to an appropriate compensation, is recognised, it is not a question of applying the general provisions of the law of damages but of its customary supplementation to make good injury to valuable exclusive rights, based on the equitable consideration that the

Appendix 2  289 defendant should not be better off than he would have been if his application for permission had been granted. The claim to appropriate compensation is therefore granted in all cases of unpermitted invasion of exclusive rights where permission is usually made dependent on payment and where, having regard to the kind of the right which has been violated, the invasion is habitually allowed according to the customs of daily life only – if at all – against compensation (BGHZ 20, 345, 353 ff). It is not at all necessary for a contract actually to have come into existence if the invader’s conduct was otherwise unobjectionable. 2. It must, however, be agreed that the OLG, by the method of assessment it chose, did not really try to work out the economic loss to the claimant, but rather to adjust the satisfaction due to him to his non-material disparagement. In particular the reasoning by which it arrived at the amount of the damage to the claimant shows that according to its opinion also he did not suffer any tangible pecuniary loss. In truth he claims not compensation for a non-existent pecuniary loss but an appreciable satisfaction for an unlawful attack on his personality protected by § 22 of the Act on Artistic Creations and Articles 1 and 2 GG. He demands satisfaction for the fact that a widely disseminated poster, by making him, one might almost say, ‘ride’ for the purpose of advertising the defendant’s tonic – and a sexual one at that – humiliated him and made him an object of ridicule. In such a situation it is absurd to award damages on the basis of a fictitious licence agreement. This way of estimating damage is appropriate only if one can start with the doing of some kind of pecuniary damage and all that is left is to alleviate the often difficult task of proving its amount. It fails if no pecuniary prejudice at all is in question. It fails also in the present case because it would assume that the claimant had done something that not only he, but all others of the same professional and social standing, must consider harmful and as a continuing degradation of his personality. It must convey an imputation that the claimant would, after all, voluntarily and for a large sum of money place himself in the unworthy position against which he is defending himself. The claimant’s claim therefore cannot be supported by the OLG’s chosen method of assessment, helped out by the fiction of a loss of licence fee. 3. Moreover, basing the claim on unjustified enrichment is precluded because the claimant did not experience any pecuniary disadvantage and there is thus no pecuniary shift of the kind envisaged by §§ 812 ff BGB. 4. If, therefore, the kind of assessment adopted by the OLG fails, and it is shown that the claimant in truth suffered no pecuniary damage, the decisive question comes to be whether he can demand compensation for the immaterial damage which he has suffered as a result of the invasion of his personality following the appearance of his picture in the advertisement. On the facts before it the Senate answers that question in the affirmative. This Senate has already said in its decision in BGHZ 13, 334, 338 that the sacredness of human dignity and the right to free development of the personality protected by Article 1 of the Basic Law are also to be recognised as a civil right to be respected by everyone in daily life, in so far as that right does not impinge upon the rights of others and is not repugnant to constitutional order or the moral law. This so-called general right to one’s personality also possesses legal validity within the framework of the civil law and enjoys the protection of § 823 I BGB under the designation of ‘other right’ (cf also BGHZ 24, 12 ff). Articles 1 and 2 GG protect – and indeed must be applied by the courts in the administration of justice – what is called the concept of human personality; they recognise in it one of the supra-legal basic values of the law. Thereby they are directly concerned with the

290  Appendix 2 protection of the inner realm of the personality which, in principle, only affords a basis for the free and responsible self-determination of the individual and an infringement of which produces primarily so-called immaterial damage, damage expressed in a degradation of the personality. To respect this inner realm and to refrain from invading it without authorisation is a legal command issuing from the Basic Law itself. And it follows from the Basic Law that in cases of invasion of this sphere, protection must be given against damage characteristic of such an invasion. On the limited field of portrait protection this was established in 1907 by the special rules contained in §§ 22 ff of the Act on Artistic Creations, long before the Basic Law came into force and at a time when the civil law did not as yet protect a general personality right. For the protection afforded by § 22 of the Act on Artistic Creations, according to which portraits may be distributed or shown publicly only with the subject’s consent, rests in essence on the fundamental principle of a person’s freedom in his highly personal private life, in which the outward appearance of human being plays an essential part. The unauthorised publication of a portrait constitutes, as has long been recognised in legal literature, an attack on the freedom of self-determination and the free expression of the personality. The reason why a third person’s arbitrary publication of a portrait is not allowed is that the person portrayed is thereby deprived of his freedom to dispose by his own decision of this interest in his individual sphere. Once the violation of the right to one’s picture is seen as affecting one’s personality it is possible to seek an answer to the question how to compensate immaterial damage in § 847 BGB [after 2002: § 253 BGB]. This allows an equitable compensation in money for non-pecuniary loss in cases of ‘deprivation of liberty’. It is true that deprivation of liberty is here understood to mean deprivation of freedom of bodily movement, as well as compulsion to act, by means of force or threats, whereas § 22 of the Act on Artistic Creations deals with deprivation of the free and responsible exercise of will. Already, however, before the Basic Law came into force, the opinion was often expressed that any attack on the undisturbed exercise of the will was to be regarded as an injury to freedom in the sense of § 847 BGB. Now that the Basic Law guarantees a comprehensive protection to the personality and recognises human dignity and the right to free development of the personality as a fundamental value, it has done away with the dogma held by the original draftsmen of the BGB that there can be no civil law protection of general personality right; and since a protection of ‘inner freedom’ without a right to compensation for immaterial damage would be in great part illusory, it would be intolerable to refuse compensation for that immaterial damage. Moreover, there is no obvious reason why § 847 BGB should not be extended by analogy to such attacks as injure the right to free exercise of the will, especially where that deprivation of intellectual liberty, just like deprivation of bodily freedom, renders natural restitution impossible. Where such blameworthy depreciations of the personality right are in question, the effective legal protection offered by the Basic Law can, in the absence of any special legal provision, be attained only through its inclusion in the injuries mentioned in § 847 BGB, since their injurious consequences are of necessity primarily immaterial. This view is not at variance with the sense of § 35 of the Act on Artistic Creations. Of course the injured party can claim under it a penalty for the injury to his right to his portrait, and with it to have his immaterial loss made good, only in criminal proceedings and on condition that the injury was intended; but that special provision shows only that as early as 1907 the legislator regarded an infringement of § 22 of the Act on Artistic Creations as

Appendix 2  291 so far-reaching and threatening that it was considered necessary to grant expressly to the injured party a claim to compensation for the disparagement. The restriction of the criminal law claim for a penalty to intentional injuries accords with the legislator’s limitation of the threat of punishment for an infringement of § 22 of the Act on Artistic Creations to intentional interference. However, that does not mean that the same must apply to the civil law claims to compensation that are not regulated in the Act on Artistic Creations. On the contrary, since the Basic Law now recognises the general personality right as significant for civil law and has afforded a general civil law protection appreciably exceeding the narrow regulation of § 35 of the Act on Artistic Creations, the special provision of § 35 of the Act on Artistic Creations can no longer be cited in opposition to a more extensive civil law protection of the right to one’s portrait. The general provisions of the BGB concerning delicts come into operation instead. That means that, at any rate since the Basic Law came into force, by an analogous application of § 847 BGB, any blameworthy injury to the right to one’s own portrait involves a duty to make good immaterial damage also. In so far as the Senate, following the case law of the RG, decided in the Dahlke case (BGHZ 20, 345, 352 ff) that immaterial damage cannot give rise to a money claim in the absence of express legal provision, its opinion cannot be upheld in the light of the foregoing discussions. The statement was obiter, since the facts disclosed pecuniary damage, which could be estimated on the basis of the usual licence fee. III. The compensation to be paid to the claimant was fixed by the OLG at DM 10,000. Although starting from a possible assessment according to the satisfaction that might have been paid in a case of contract on the usual terms, the court’s arguments fully apply also to fixing the amount of an equitable compensation under § 847 BGB. They also show that the court really awarded the claimant compensation for the immaterial damage that had resulted. As the Grosse Zivilsenat explained in its decision of 6 July 1955 (BGHZ 18, 149), the claim for damages for pain and suffering offers the injured party an appropriate compensation for the depreciation of life (or personality) which is not of a pecuniary kind. But it also takes account of the notion that the doer of damage owes the injured party satisfaction for what he has done to him. It was emphasised in the decision that ‘satisfaction’, which forms an integral part of the award for compensation for immaterial damage, must take into account all the relevant circumstances. This Senate adheres to this view in this present case. If one therefore moves on from that position, it follows that the OLG was not in error in taking all the relevant circumstances into account in fixing the amount of damages. In particular, that court explained that the fact that the claimant had never been ready to take part in any advertising must be a factor in deciding the amount to be paid. It considered it especially serious that the advertisement was for an aphrodisiac, and so was not to be compared with advertisements for other products. The court was right in taking the view that persons would be unlikely to allow their likeness to be used on a poster for this purpose and so run a risk of being recognised by a wider or narrower public, exposing themselves to the innuendos to which the defendant’s preparation would give rise. The OLG also took the claimant’s social and business position into account, pointing to the fact that he moved in a social circle the members of which were for the most part known to each other and where the risk of making oneself an object to ridicule was especially great. When, after considering and giving weight to all these special circumstances relevant to amount of damages for pain and suffering, the OLG regarded the sum of DM 10,000 as appropriate compensation (§ 287 ZPO), it cannot be found to have acted contrary to law.

292  Appendix 2 Case 14 BUNDESVERFASSUNGSGERICHT (FIRST DIVISION) 5 JUNE 1973 BVerfGE 35, 202 = NJW 1973, 1227, Lebach Facts The petitioner had participated in an armed robbery of an arsenal of the German armed forces in the course of which several soldiers on guard duty were killed or severely wounded. The culprits were arrested after a prolonged search and were convicted. The petitioner was convicted as an accessory and sentenced to six years’ imprisonment. A German television station commissioned a documentary play based on the crime, its planning, and detection and the background of the culprits, including the petitioner whose homosexual tendencies were stressed. The play showed a likeness of the petitioner and mentioned him frequently by name. The petitioner who had served two-thirds of his sentence and was soon to be released sought an injunction prohibiting the television company from broadcasting the play pending a decision on the merits of his claim that the play violated his right of personality. The LG Mainz dismissed the action for an injunction on the grounds that the petitioner was ‘relatively a personality of contemporary history’ and could therefore not rely on the right to the protection of his personality. The OLG Koblenz [reference omitted] affirmed this decision by weighing the respective interests of an individual to be protected against the unauthorised publication of his likeness in accordance with §§ 22 and 23 of the Act on Artistic Creations (KUG) as a projection of the right to his personality covered by Articles 1 and 2 I GG on the one hand and the need for objective pictorial information concerning persons in public life, which is recognised in § 23 KUG and must be interpreted in the freedom to express opinions and the liberty of broadcasting stations to provide information, protected by Article 5 I GG on the other hand. The OLG held that in this conflict the right to provide information must prevail, especially since the trial had been concluded. The petitioner was ‘relatively a personality of contemporary history’; his interest in social reintegration had to give way to the interest of the public in general to receive a truthful account of the facts and the persons involved … The BVerfG quashed the decisions of the two courts below on the ground that Article 2 I in conjunction with Article 1 I GG had been violated and issued a temporary injunction prohibiting the broadcasting of the play in question to the extent that it mentioned the petitioner by name and reproduced a likeness of him. Reasons A. … B. … II. For the present case the OLG has held correctly that several fundamental rights affect the application of private law and that they lead in opposite directions. The right to one’s personality guaranteed by Article 2 I in conjunction with Article 1 I GG conflicts with the freedom of broadcasting stations to provide information, in accordance with Article 5 I, sentence 2 GG. 1. On the one hand, a televised broadcast of the kind in issue here concerning the origins, execution, and detection of a crime which mentions the name of the criminal and contains a representation of his likeness necessarily touches the area of his fundamental rights

Appendix 2  293 g­ uaranteed by Article 2 I in conjunction with Article 1 I GG. The right to the free development of one’s personality and human dignity safeguard for everyone the sphere of autonomy in which to shape his private life by developing and protecting his individuality. This includes the right ‘to remain alone’, ‘to be oneself ’ within this sphere [reference omitted], to exclude the intrusion of or the inspection by others [reference omitted]. This includes the right to one’s likeness and to one’s utterances [reference omitted] and even more to the right to dispose of pictures of oneself. Everyone has the right in principle to determine himself alone whether and to what extent others may represent in public an account of his life or of certain incidents thereof. However, according to the constant practice of the BVerfG, not the entire sphere of private life enjoys the absolute protection of the above-mentioned fundamental rights [references omitted]. If an individual in his capacity as a citizen living within a community enters into relations with others, influences others by his existence or activity, and thereby impinges upon the personal sphere of other people or upon the interests of communal life, his exclusive right to be master of his own private sphere may become subject to restrictions, unless his sacrosanct innermost sphere of life is concerned. Any such social involvement, if sufficiently strong may, in particular, justify measures of public authorities in the interest of the public as a whole – such as the publication of pictures of a suspect person in order to facilitate a criminal investigation (§ 24 KUG). However, neither the interest of the State to clear up crimes nor any public interest always justifies an infringement of the personal sphere [reference omitted]. Instead, the pre-eminent importance of the right to the free development and respect of personality, which follows from its close connection with the supreme value enshrined in the Basic Law, ie, human dignity, demands that any intrusion of the right of personality which may appear necessary to protect such interest, must always be balanced against the protective rule laid down in Article 2 I in conjunction with Article 1 I GG. ­Accordingly, it must be determined in the individual case by weighing the particular interests whether the pursuit of the public interest merits precedence generally and having regard to the features of the individual case, whether the proposed intrusion of the private sphere is required by this interest in this form and extent, and whether it is commensurate with the importance of the case [references omitted]. These principles, which were developed by the courts in respect of measures taken by public authorities, must be observed equally when the courts have to determine conflicting interests on the basis of private law. In the course of such a determination the courts are not precluded from taking into account the special position accorded to the media represented by broadcasting and television by virtue of their organisation regulated by public law and their public functions. 2. In this respect the consideration is decisive, as the OLG has pointed out correctly, that the broadcast in dispute serves a function, the free exercise of which on its part is directly protected by a provision in the Basic Law. Freedom of information by broadcasts in accordance with Article 5 I, second sentence GG (freedom to broadcast), like the freedom of the press, of expression and information is a basic constituent element of a liberal-democratic order [references omitted] … Only when the exercise of the freedom to broadcast conflicts with other protected legal interests, the purpose of the individual broadcast, the manner of its presentation, and its actual foreseeable effect may become relevant. The Basic Law has regulated possible conflicts between the freedom to broadcast and the interests of individual citizens, of groups and of

294  Appendix 2 the community as a whole, by referring to the legal system as a whole; according to Article 5 II GG the emission of broadcasts is subject to the restrictions imposed by the general law. According to the constant practice of the BVerfG the need expressed by this provision to take other protected legal interests into account must not render the freedom to broadcast a relative one; instead the laws which restrict the freedom to broadcast must in turn be interpreted in the light of the constitutional guarantee and must, if necessary, be equally restricted in order to ensure that the freedom of broadcasting is safeguarded adequately [reference omitted]. Consequently the opposing protected legal interests must be balanced against each other in each individual case in the light of general and specific considerations. III. 1. The general laws referred to by Article 5 II GG include also the provisions of §§  22,  23  KUG 1907 (RGBl. 1907) maintained by § 141 no 5 of the Copyright Act of 9 September 1956 (BGBl. I 1273), which formed the basis of the judgment in issue before this court. These provisions, the wording and the original purpose of which related originally to the right to one’s own likeness, have for a long time been interpreted by the courts and by writers to apply also to reproductions of one’s likeness, whether accompanied by the person’s name or not, as well as to the representation of a person by an actor on a stage [references omitted]. The general approach to these provisions has changed since the Basic Law came into force to the effect that the right to one’s likeness is regarded as an aspect, as a special feature of the general right of personality which was derived from Articles 1 and 2 GG [references omitted]. These provisions are in accordance with constitutional law; their somewhat flexible character gives sufficient scope for applying them in keeping with the Basic Law and it has been shown in practice that it is possible, in balancing the interest, as required by § 23 KUG, to take sufficient account of the reflex effect of the relevant fundamental rights. In this context, it is irrelevant from the point of view of constitutional law which factual element of § 23 KUG serves as the balancing factor [references omitted]. 2. In cases of conflict, such as the present, the general principle applies, on the one hand, that in applying §§ 22 and 23 KUG to televised broadcasts the freedom to broadcast must not be restricted excessively. On the other hand, as distinct from other general laws in the meaning of Article 5 II GG, it is a special feature of the present case that the restriction of the freedom to broadcast serves in turn to protect an important concern of the Basic Law; the interest of the person affected to prohibit the publication of his likeness or any representation of his person, which must be protected with the framework of § 23 KUG, is directly enhanced by the constitutional guarantee of the protection of personality. In solving this conflict, it must be remembered that according to the intention of the Basic Law both constitutional concerns are essential aspects of the liberal-democratic order of the Basic Law with the result that neither can claim precedence in principle. The view of humanity taken by the Basic Law and the corresponding structure of the community within the State require both the respect for the independence of individual personality and the ­guarantee of a liberal social atmosphere; the latter cannot be realised at the present time unless communications are unimpeded. In case of conflict both concerns of the Basic Law must be adjusted, if possible; if this cannot be achieved it must be determined which interest must be postponed having regard to the nature of the case and to any special circumstances. For this purpose, both concerns of the Basic Law, centred as they are on human dignity, must be regarded as the nucleus of the system of constitutional concerns. Accordingly, the freedom to broadcast

Appendix 2  295 may have the effect of restricting any claims based on the right of personality; however, the damage to ‘personality’ resulting from a public representation must not be out of proportion to the importance of the publication upholding the freedom of communication [reference omitted]. Furthermore it follows from these guiding principles that the required weighting of interests must take into account the intensity of the infringement of the personal sphere by the broadcast on the one hand; on the other hand, the specific interest which is being sensed by the broadcast and is capable of being thus served, must be assessed and examined as to whether and to what extent it can be satisfied even without any interference – or a less far-reaching interference – with the protection of personality. IV. 1. In the light of these general principles the following criteria are relevant from the point of view of constitutional law in assessing televised broadcasts of the kind in issue here. (a) A public report of a crime in which the name, a likeness, or a representation of the culprit is provided will always constitute a severe intrusion of his personal sphere, seeing that it publicises his misdeeds and gives from the outset a negative slant to his person in the eyes of those to whom the report is addressed. It may be different if the report is designed to create sympathy for the culprit, as for instance in order to achieve a new trial, a pardon, or some other assistance … (b) Disregarding the possibility of an additional infringement by the manner of the representation (polemics, falsification), even a report which seeks to be objective and factual, if televised constitutes normally a much greater invasion of the private sphere than an oral or written report published in the press or over the radio. This is so, in the first place, because the visual impression and the combination of a picture and word is much stronger, but mainly because television commands a much greater audience than the cinema and the theatre, resulting in a special position. Consequently, there is a special reason ‘for watching over the observation of the limits established by the law and to prevent an abuse [sic] of the right of personality which had become more vulnerable. In this respect the law must not give way to technical developments’ [reference omitted]. (c) If for the above-mentioned reasons alone a special need exists for protection against violations of the right of personality by televised broadcasts reaching such a wide audience, it must be remembered that the broadcast performance of a documentary play entails specific dangers … In conclusion it can be stated that television broadcasts reporting on a crime naming, depicting, or representing the culprit, especially in the form of a documentary play, will normally constitute a serious invasion of his sphere of personality. 2. On the other hand weighty considerations suggest that the public should be fully informed of the commission of crimes including the person of the culprit, and of the facts which led to them. Crimes, too, are part of contemporary history, the presentation of which is altogether the task of the media. Moreover, the violation of the general legal order, the infringement of protective legal interests of the citizens involved or of the community, sympathy with the victims and their relatives, fear of the repetition of such crimes, and the desire to prevent them create a fully justified interest in receiving detailed information concerning the deed and the criminal. This interest will be all the greater the more the criminal act is unusual having regard to the special features of the object of the attack, the manner in which it was carried out, or the severity of the consequences. Where serious crimes of violence are involved, such as that represented in the play in issue, the interest to receive information is based not only on general curiosity and sensationalism but on serious reasons for asking

296  Appendix 2 who were the perpetrators, what were their motives, what was done to detect and to punish them, and for preventing similar crimes. For this purpose, the desire to know only the facts will be predominant, but as time passes the interest increases to receive a more searching interpretation of the deed, its background, and its social setting. Not least is the legitimate democratic desire in determining to control the organs of the State and public authorities responsible for security and order, the prosecution and the criminal courts … 3. In balancing generally the interest in receiving information as circumscribed above by televised reporting within these limits against the invasion of the sphere of personality of the culprit which must follow inevitably, the interest in receiving information must generally prevail in so far as current reporting of crimes is concerned. He who breaks the peace established by law, attacks or violates by his act and its consequences his fellow citizens or legally protected interests of the community, must not only suffer the criminal punishment provided by the law. He must also accept, as a matter of principle, that the public interest in information caused by himself by his own deed is being satisfied in the usual manner in a community which observes the principle of freedom of communication. Moreover, the control of the prosecution and of the criminal proceedings which is assured thereby also benefits the culprit. However, the interest to receive information does not prevail absolutely. The importance of the right to personality, which is a cornerstone of the Basic Law, requires not only that account must be taken of the sacrosanct innermost personal sphere [reference omitted] but also a strict regard for the principle of proportionality. The invasion of the personal sphere is limited to the need to satisfy adequately the interest to receive information, and the disadvantages suffered by the culprit must be proportional to the seriousness of the offence or to its importance otherwise for the public. Consequently, it is not always admissible to provide the name, a picture, or any other means of identifying the perpetrator. It is obvious that the right of personality is only postponed if the reporting is objective and if the interpretation is serious; it is different if the account seeks to be sensational, is intentionally one-sided or misleading. On the other hand, objective reporting of a serious crime justifies not only the publication of the name or of a likeness of the perpetrator; it also includes his personal life in so far as it is directly connected with the act, provides clues about his motive or the setting, and seems relevant for assessing the guilt of the perpetrator in the light of modern criminal law. The actual question as to where the limits are to be drawn in fact seeing that in principle the interest to receive information by reports of contemporary events must prevail, can only be answered having regard to the circumstances of the individual case. 4. The reflex effect of the constitutional guarantee of personality does not, however, allow the media of communication, apart from contemporary reporting, to deal indefinitely with the person of the criminal and his private sphere. Instead, when the interest in receiving information has been satisfied, his right ‘to be left alone’ gains increasing importance in principle and limits the desire of the mass media and the wish of the public to make the individual sphere of his life the object of discussion or even of entertainment. Even a culprit, who attracted public attention by his serious crime and has gained general disapproval, remains a member of this community and retains his constitutional right to the protection of his individuality. If with the prosecution and conviction by a criminal court the act attracting the public interest has met with the just reaction of the community demanded by the public interest, any additional continued or repeated invasions of the personal sphere of the culprit cannot normally be justified.

Appendix 2  297 5. (a) The time-limit when the reporting of current events which is admissible in principle becomes subsequently an inadmissible account or discussion cannot be stated generally; certainly it cannot be stated in months and years so as to cover all cases. The decisive criterion is whether the report concerned is likely to cause the culprit considerable new or additional harm, compared with the information which is already available. (b) In order to determine the time limit more clearly, the interest in reintegrating the criminal into society and to restore his social position may be treated as the decisive point of reference. (c) Altogether a repeated televised report concerning a serious crime which is no longer justified by the interest to receive information about current events is undoubtedly inadmissible if it endangers the social rehabilitation of the culprit. The vital chance necessary for the existence of the culprit and the interest of the community to restore his social position must prevail in principle over the interest in a discussion of the crime. Whether and to what extent any exceptions are conceivable such as in the case of an overriding historical interest, of scholarly or other broadcasts which are addressed to a limited range of viewers need not be examined here. V. 1. Examined in the light of the criteria of constitutional law, the decisions appealed against cannot be maintained. The district court has sought to balance the interests of the petitioner and the broadcasting station exclusively by reference to §§ 22, 23 KUG without taking notice of the reflex effect of the fundamental rights contained in Article 2 I in conjunction with Articles 1 and 5 I GG. The OLG did realise that a conflict exists between the freedom to broadcast by virtue of Article 5 I GG and the guarantee of personality by virtue of Article 2 I and Article 1 GG; in balancing, having regard to § 23 KUG, between the right to one’s likeness and the interest of the public to receive information it did take the reflex effect of these fundamental rights into consideration. In solving this conflict, it did not, however, apply correctly the criteria which are to be derived from the existing constitutional provisions for the determination of cases such as the present, but have not been formulated hitherto by the BVerfG; above all, it did not attribute to the interest in rehabilitation the importance which it deserves from the point of view of constitutional law. 2. If sufficient account is taken of the effect of the provisions of the Basic Law which are relevant in the present case upon the general law the conclusion must be reached that the petition of the complainant must succeed … Case 15 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 19 MARCH 2013, NJW 2013, 1681 Facts With his demand for an injunction, the claimant opposed online coverage on the internet portal ‘www.bild.de’ operated by the defendants during criminal proceedings conducted against him. The claimant had worked as a television presenter and journalist until his arrest in March 2010. He also operated an enterprise which gathers and sells meteorological data. The public prosecutor investigated him for suspicion of rape in a particularly serious case together with grievous bodily harm. He was accused of forcing his then girlfriend to have intercourse on 9 February 2010. Between 20 March 2010 and 29 July 2010, he was in

298  Appendix 2 i­nvestigative custody. At the trial lasting from 6 September 2010 to 31 May 2011 he was acquitted. After the proceedings were instigated, but before the opening of the main trial, the defendant reported on 13 June 2010 on its internet portal under the headline ‘Der K-Krimi: Neue Indizien aus der Tatnacht?’ (‘The K crime thriller: new evidence from the night of the crime?’) among other things as follows: ‘The case K (51) is getting more juicy all the time: according to the news magazine Focus a recovered tampon is supposed to prove the alleged rape! The magazine now published new intimate details about the supposed night of the crime. Among other things, it is said about the meeting between Jörg K and Sabine W (37): The weather presenter’s ex-girlfriend had “waited for him with her knitted dress pulled up”. And further: “as usual she had put out handcuffs and a riding crop”’. This information comes from the claimant’s testimony at his first questioning by the judge during the preliminary proceedings. The transcript of the questioning, among other things, contains the following passage which was read out in the publicly conducted main trial for purposes of evidence: ‘What happened was, it was the usual process for the meetings, that I rang the doorbell, slowly went up the stairs, opened the door which was ajar and she was already waiting for me, undressed or in this case with her knitted little dress already pulled up. Handcuffs which she was already holding in one hand in this case were in her possession and belonged to her household and also a riding crop which belonged to her household too, which was always with her and which she then always got ready when she felt like it’. The LG Köln, in line with the claim, ordered the defendants to refrain from publishing or otherwise circulate that: ‘the ex-girlfriend of the weather presenter had “waited for him with her knitted dress pulled up”, “as usual she had put out handcuffs and a riding crop”, when this happens as on bild.de in the article from 13 June 2010 entitled “The K crime thriller: new evidence from the night of the crime?”’. The OLG Köln rejected the appeal of the defendants. With its appeal admitted by the OLG, the defendant further pursues its motion for dismissal. The second appeal (Revision) pursued by the claimant and admitted by the OLG was successful. Reasons [10] II. … Contrary to the view of the OLG, the claimant is not entitled to the claimed injunctive relief pursuant to §§ 823 BGB, 1004 I 2 BGB analogously in conjunction with Article 1 I GG and Article 2 GG. [11] 1. With good reason, however, the OLG, contrary to the view of the appeal, approved the admissibility of the action. [14] 2. The action is, however, not well founded because the claimant is not entitled to the asserted claim for an injunction. [15] (a) The OLG rightly proceeded from the assumption that the remarks complained against infringe the claimant’s general right of personality. The reporting of sexual practices which the claimant allegedly used in his relationship with the complainant affects the right of personality. [16] (b) As a starting point the legal principles on which the OLG bases its assessment are also right.

Appendix 2  299 [17] (aa) The OLG rightly considered it necessary to decide on the claim for an injunction on the grounds of a balancing of the claimant’s right to the protection of his personality and the respect for his private life under Article 1 I GG; Article 2 GG in conjunction with Article 1 GG, Article 8 I ECHR with the defendant’s right to freedom of opinion and freedom of the media rooted in the articles of Article 5 I GG and A ­ rticle 10 ECHR. Due to the unique character of the right of personality as a framework right, its scope is not fixed absolutely but must first be determined through a weighting of the conflicting constitutionally protected interests in which the particular circumstances of the individual case as well as the affected fundamental rights and the guarantees of the European Convention on Human Rights are to be considered to guide the interpretation. The infringement of the right of personality is only unlawful if the affected person’s interest in being protected outweighs the other side’s interests worthy of protection (this Senate, NJW 2012, 2197; Senate NJW 2013, 790, para 11). [18] When it comes to reporting the suspicion of a criminal offence, it is to be accepted that criminal offences are part of current affairs and that it is the function of the media to report them. The violation of the legal order and the infringement of individual protected interests, the sympathy with the victims, the fear of the recurrence of such criminal offences and the endeavour to forestall them, principally found an interest of the public in being provided with details about the offence and the offender which is to be recognised. This will be all the greater the more the deed distinguishes itself from ordinary criminality in its way of being committed and its seriousness. In the case of serious violent crimes, an interest going beyond mere curiosity and a craving for sensation in further information about the crime and its development, about the person of the offender and his motives as well as the criminal prosecution is normally to be recognised (cf Senate, BGHZ 143, 199 = NJW 2000, 1036; BGHZ 183, 353 = NJW 2010, 757, para 14; NJW 2012, 2197; BVerfGE 35, 202 = NJW 1973, 1226; BVerfGE, NJW 2009, 3357, para 18.) [19] If it is about the coverage of ongoing criminal proceedings, what must also be considered as part of the assessment is the presumption of innocence speaking in favour of the affected person which follows from the rule of law (Article 20 GG) and is recognised in the articles of the ECHR (Article 6 II ECHR: cf Senate, NJW 2013, 229; BVerfGE 35, 202; NJW 2009, 350 and NJW 2009, 3357.) It demands an appropriate measure of restraint, and, at the very least, balanced coverage (cf BVerfGE 35, 202; NJW 2009, 350). Moreover, the likely pillory effect which can be caused by the media coverage, is to be taken into account (cf BVerfGE 119, 309; BGH NJW 2009, 350). With this in mind, the right to the protection of the personality and respect for private life can often outweigh the freedom to report until an acquittal at first instance (BGH NJW 2009, 3357, para 20; BGHZ 190, 52, para 25). [20] (bb) The OLG correctly judged the coverage to be unlawful at the time of publication. [21] (1) The OLG rightly classed, contrary to the view of the respondent’s submission, the disputed remarks as part of the claimant’s sphere privacy. [22] Even if the preconditions for the coverage of a suspicion … are met, the media may not unrestrictedly report about the person of the suspect. Instead, it must be decided on the basis of a weighting of interests, for every single fact in the personal sphere which is the subject of the media coverage complained of, whether the interest in protecting the affected

300  Appendix 2 person outweighs the interest in the coverage. In assessing the weight which is due to the right of personality in this, it is of decisive importance – as it is in other contexts of media coverage of facts related to specific individuals (cf Senate, NJW 2012, 771) – whether the subject of the coverage is to be attributed to the intimate sphere, the private sphere or the social sphere. [23] Whether the facts belong to the core area of the highly personal, private way of life depends on whether the affected person wants to keep them secret, whether they are of a highly personal character due to their content and the manner and intensity in which they themselves touch on the sphere of others or the interests of the community (Senate, NJW 2012, 767, para 11). Whether an instance concerns the intimate or private sphere also depends on the extent to which the details are reported (cf Senate, NJW 1999, 2893; [further references omitted]). Expressions of sexuality principally belong to the inviolable core area (cf Senate, NJW 2012, 767; BVerfGE 119, 1, 29 ff; BGH NJW 2009, 3357, para 35 ff). [24] Sexual offences, however, do not belong to the suspect’s intimate sphere with absolute protection because they entail a violent attack on the sexual self-determination and often also on the right to bodily integrity of the victim (BGH NJW 2009, 3357, para 26). [25] According to this, the reported events do not fall under the core area of the right of personality with absolute protection. [26] (2) The public’s interest in being informed is – as the OLG did not fail to recognise – increased by the claimant’s high-profile job. Even the claimant’s high-profile job alone can justify the public’s interest in information about his everyday life, even if his behaviour does not manifest itself in a scandalous nor in a morally objectionable course of conduct (BVerfGE 120, 180 = NJW 2008, 1793). Due to his celebrity status, the behaviour of the claimant affects the community’s interests even more when an accusation of having committed a crime is made than it would in the case of persons who are not celebrities (cf BGH NJW 2009, 3357, para 28). [27] (3) However, for the benefit of the claimant, what carries weight is that the disputed remarks come from his testimony at the private hearing for the confirmation of the arrest warrant. The interrogation by a judge outside of the main proceedings are not only private; it is in principle also prohibited to permit media representatives to be present at such hearings [reference omitted]. [28] (4) Because the reporting took place during ongoing criminal proceedings, for the benefit of the claimant the presumption of innocence ensuing from the rule of law is to be considered in the assessment (cf Senate, NJW 2013, 229; BVerfGE 35, 202, para 20). This demands some restraint in the disclosure of details about the private sphere of life the knowledge of which is not strictly necessary for the satisfaction of the legitimate interest to be informed. Here, a particular importance is attached to the presumption of innocence because the disputed publication occurred before the commencement of the main trial, therefore at an earlier stage in the criminal proceedings. [29] That the disputed remarks do not concern the criminal offence the claimant is accused of itself but true allegations of fact from his testimony about the criminal charge, does not stand in the way of considering the presumption of innocence as part of the appreciation.

Appendix 2  301 Because a true allegation of fact can also infringe the right of personality of the affected person if it threatens to cause an infringement of the right of personality which is out of proportion with the interest in spreading the truth. This can, in particular, be the case if the statement is capable of developing a considerable, broad effect and entail a particular stigmatisation of the affected person such that it threatens to become a starting point for social exclusion and isolation (Senate, NJW 2012, 771with further references). Therefore, as part of the assessment, the OLG rightly took into account – to the benefit of the claimant – that he is portrayed as a person with sadomasochistic inclinations and that this can be damaging to his reputation with the public. The general right of personality principally guarantees to keep one’s own expressions of sexuality private and to experience them in a free space to which others are denied access (cf Senate, NJW 2012, 767; BVerfGE, NJW 2009, 3357, para 26). [30] (c) However, contrary to the view of the OLG, the claimant’s demand for an injunction is nevertheless not justified. Injunctive relief is not available because the danger of repetition as required pursuant to § 1004 I 2 BGB no longer exists after the reading of the transcript of the claimant’s questioning by the custody judge in the public main trial of 13 September 2010. [31] (aa) The danger of repetition is a substantive precondition of injunctive relief. If it no longer exists, the future-orientated claim for injunctive relief is also extinguished (cf Senate, NJW 2005, 594; also BVerfGE NJW 2006, 3406). As a rule, an unlawful infringement in the past establishes the actual presumption of a danger of repetition (Senate, NJW 1986, 2503). The danger of repetition cannot automatically be presumed on the basis of an already past rights violation if the coverage is now to be considered legal due to the change of the factual circumstances (cf Senate, NJW 2005, 594, para 18). A person whose rights were violated in the past does not have a right to conduct being suppressed which is, in the meantime, is no longer treated as unlawful (cf Senate, NJW 2005, 594, para 17). This comes into consideration here because the future publication of the statement objected to would only make public in a different form what the press permissibly reported by reason of the reading of the interrogation transcript in question (cf BVerfGE, NJW 2006, 3406). [32] (bb) Because, according to the OLG’s findings, the coverage in the media following the reading of the interrogation transcript took place during the ongoing main trial, what is also to be considered in particular in the assessment for the benefit of the claimant, is the presumption of innocence – ensuing from the rule of law – which demanded the appropriate restraint in reporting. It is in turn to be taken into account that a true allegation of fact can also infringe the right of personality of the affected person if it threatens a violation of rights which is out of proportion with the interest in spreading the truth, for example, when there is a fear of stigmatisation, social exclusion or a pillory effect (cf Senate, NJW 2012, 771). In this case, it was reported in a few sentences that, according to the account of the claimant, his meeting with the complainant was arranged for consensual sexual intercourse – also in a sadomasochistic form. It can be alleged that considerable social disapproval could affect the complainant because of the coverage. Meanwhile, the daily coverage alone – which ends with the conclusion of the proceedings – does not cause such a serious stigmatisation of such a broad scope that a permanent or long-lasting social exclusion is to be feared which would need to prevail over the interest in reporting in the weighting (cf BVerfGE, NJW 2009, 3357, para 29).

302  Appendix 2 [33] On the part of the defendant, the public’s great interest in the criminal proceedings, and in particular in the main trial, against the high-profile claimant who is well known as a television presenter and which the intense coverage in the media reflects, is to be considered. In the case of criminal proceedings, the familiarity with the defendant’s testimony is usually of considerable importance for assessing the future progression of the proceedings as well as the appreciation of the results of evidence in the main trial … Balanced coverage of the case can therefore hardly dispense with an account of the testimony. In particular, in the case of the allegation of serious rape raised here, the testimony was of crucial importance for the coverage and the shaping of public opinion with respect to the possible course of events on the night of the crime and the assessment of the credibility of the parties involved, in a way that a close link exists to the actual criminal charge. Under these circumstances, the danger of repetition no longer persists because the claimant’s overwhelming interest in being protected is no longer an obstacle to the up-to-date coverage regarding the complainedof remarks originating in his testimony after the reading in the main trial as they became known to a broader public through the reading of the latter in the public main trial. Hence, the claim for injunctive relief no longer existed from this point in time. [34] (cc) Insofar as the claimant seeks to prohibit the publication like in the article of 13 June 2013 by the defendant, the claim for injunctive relief fails due to the lack of a danger of repetition or first infringement which is a prerequisite – to be shown by the claimant – for the claim (cf Senate, NJW 2005, 594). In this respect, the danger of an imminent violation of rights can arise again after the claim has previously been extinguished. However, the mere possibility of a renewed infringement of the claimant’s right of personality by the defendant without concrete evidence for it does not suffice. The imminent rights-infringing act would, on the contrary, need to stand out so definitely with respect to the facts that a reliable assessment from a legal point of view would be possible … The claimant did not show an imminent violation of rights on the side of the defendant such as is required for this. Neither is one evident. In any case, the mere circumstance that the claimant was acquitted in the criminal trial cannot justify the concrete danger of a rights violation by the defendant as required for the claim for an injunction. Case 16 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 10 JUNE 2008, NJW 2008, 2587, Esra Case Facts The second claimant and her daughter, the first claimant who is no longer a participant in the suit on the main issue, have opposed the publication of the novel ‘Esra’ by Maxim Biller (hereafter: author) published by the defendant. The book describes the love affair between the title character Esra and the first-person narrator, the writer Adam. The first claimant who maintained an intimate relationship with the author for one-and-a-half years and her mother represented the view that the content of the novel violates their general right of personality because the description of the fictional characters Esra and Lale is closely guided by their life. On the petition by both claimants, the defendant was prohibited from circulating the book ‘Esra’ in its original version by way of an interim injunction. The defendant offered several undertakings with different content.

Appendix 2  303 The LG München I (GRUR-RR 2004, 92) sustained the action for an injunction for the version remaining after the fourth undertaking of 18 August 2003 and besides declared the main issue as settled. The OLG München (NJOZ 2005, 4343) rejected the appeal of the defendants. The appeal admitted by the OLG with which the defendant, whilst accepting the declaratory judgment, pursued its motion for dismissing the claim was dismissed by the relevant Senate of the BGH (NJW 2005, 2844 = VersR 2005, 1403). Pursuant to the constitutional complaint of the defendant, the BVerfG (NJW 2008, 39 = GRUR 2007, 1085) overturned this judgment and remanded the case to the BGH insofar as the second defendant’s action had been upheld. The defendant’s motion for dismissal with respect to the second claimant was successful. Reasons [4] I. The OLG overall deemed the injunction suit admissible and justified despite the undertakings of the defendant because the publication of the book ‘Esra’ infringes both claimants’ right of personality. According to the court, the latter are identifiable for a considerable readership as the fictional characters Esra and Lale and in the plot and relationships of the book. This is on the one hand based on the fact that the first claimant was awarded the Federal Film Prize and the second claimant the Alternative Nobel Prize. The change of name of the prizes to ‘Fritz-Lange-Preis’ and ‘Karl Gustav-Preis’ used in the book under dispute is unable to remove the recognisability because of the described accompanying circumstances. ­Moreover, the claimants’ appearance and their live stories and careers largely correspond to those of the fictional characters. [5] A sufficient alienation of the portrayal compared with the original is lacking. It is said that such remarkable similarities are present that the reader cannot distinguish between reality and fiction. Even if the fictional character of the book is taken into account, it is not clear that no real people are portrayed due to the cumulation of identifying features. That the novel is fiction is neither made sufficiently clear by the postface nor by the preface inserted because of the first undertaking. The book not only infringes the first claimant’s right of personality but also encroaches on the second claimant’s sphere of privacy to a great extent. Because it paints a negative image of the character of the fictional character Lale. Readers who identified the second claimant would equate Lale’s character traits with those of the second defendant. Through this, the latter’s right to her own image would be infringed. Such a serious misrepresentation is not covered by the artistic freedom. [6] II. The judgment appealed against does not withstand the re-examination insofar as it awarded the second claimant an injunction. [7] 1. As the BVerfG decided, both claimants’ right of personality is affected by the publication of the book ‘Esra’. They are recognisable as the model for the characters in the novel, however, without that recognisability in itself amounting to a violation of the right of personality. However, the claimants are not affected in such a minor way that their right of personality must, a priori, give way because actions and features are attributed to the fictional characters which are able to seriously infringe the formers’ right of personality if the reader can relate them to the claimants. The right of personality is limited by the artistic

304  Appendix 2 freedom. If it is clear that the exercise of the literary artistic freedom infringes the right of personality of third parties, adequate regard is to be had to the artistic freedom in deciding on the civil-law action based on the general right of personality. It is therefore necessary to clarify whether the infringement of the right of personality is so serious that the artistic freedom must give way. A minor infringement or a mere possibility of a serious infringement do not suffice given the great importance of the artistic freedom. Meanwhile, if a serious infringement of the right of personality can be established unequivocally, it cannot be justified even with the artistic freedom (cf BVerfGE 67, 213 [228] = NJW 1985, 261 [262 ff]. [8] According to the judgment of the BVerfG, the seriousness of the infringement of the right of personality depends on the extent to which the artist prompts the reader to make connections between the content of his work and real persons as well as the intensity of the infringement of the right of personality if the reader makes this connection. It is one of the distinctive features of narrative art forms such as novels that they may often draw on reality but that the artist creates a new aesthetic reality through them. This requires an artspecific examination to determine the relationship to reality suggested to the reader by the novel through the relevant narrative context in order to be able to assess, on this basis, the seriousness of the infringement of the general right of personality. A work of art pursues a ‘more real reality’ – independent of the ‘real’ reality – in which the actual reality is experienced more consciously on an aesthetic level in a new relationship with the individual. The artistic representation can therefore not be measured against the standard of the real world but only against an art-specific, aesthetic standard. The more the author removes a fictional character from the model and makes it take on a life of its own (‘alienate’; cf BVerfGE 30, 173 [195] = NJW 1971, 1645 [1647] (Mephisto)), the more an art-specific treatment will benefit the author. In this, such fictionalisation is not necessarily about the absolute removal of the recognisability but about making it clear to the reader that he is not to presume that what is told is fact. It is decisive for the assessment with what intensity the right of personality is affected. Concerning this, the BVerfG has explained that an interdependency exists between the extent to which the author creates an aesthetic reality detached from the actual reality and the seriousness of the violation of the right of personality. The more the artistic portrayal and the model resemble each other, the more serious the infringement of the right of personality. The more the artistic portrayal affects the specially protected dimensions of the right of personality the stronger the fictionalisation must be to exclude a violation of the right of personality. [9] 2. Following these principles, the BVerfG has approved the relevant Senate’s assessment that the first claimant is entitled to an injunction because she is so clearly recognisable as ‘Esra’ that the latter’s portrayal violates her sphere of privacy and because the novel also infringes the first claimant’s right of personality in a serious manner through the account of her daughter’s actually existing life-threatening illness. By contrast, the decision on appeal concerning the second defendant does not live up to the required art-specific assessment in every regard; in this respect, there is a violation of the guarantee of the artistic freedom under Article 5 III 1 GG. [10] 3. The renewed weighting of the second defendant’s rights and the defendant’s artistic freedom required thereafter leads to the constitutionally protected interests of the defendant meriting priority.

Appendix 2  305 [11] (a) According to the requirements set out by the BVerfG, the artistic freedom requires, in the case of a novel, a presumption that the text is fictional. It is characteristic for a literary piece of work which draws on reality that it combines actual and fictional descriptions. The fundamental rights protection of such literature makes it impossible to consider as a violation of the right of personality the recognisable inspiration on the one hand and the negative traits of the fictional character on the other hand. Such an interpretation of the right to one’s own image would not cater for the needs of the artistic freedom. What would instead be necessary is the proof that the reader is prompted by the author to consider certain parts of the narrative as actually having occurred and that these parts, in particular, constitute a violation of the right of personality either because they bring up defamatory, untrue allegations of fact or do not belong in public at all because of they affect the core area of the personality. This is, taking into account the requirements of the BVerfG, not the case. [12] (b) Even though Lale’s character can let the image of a depressed, mentally ill alcoholic arise in the reader’s mind. She is a woman who oppresses her daughter and her family; who is overbearing and aggressive, has neglected her children, poured the prize money into her bankrupt hotel, stole land from her parents and set the Mafia on them. She has only fought against gold mining because no gold was to be found on her own property she obtained through fraud, concluded a high fire insurance before her hotel went up in flames, coerced her daughter into an abortion, was betrayed by her first husband and beaten by her equally alcoholic second husband. This negative portrayal of the fictional character Lale, however, does not justify in itself the assumption that the second claimant’s right of personality is affected in such a serious way that the artistic freedom must give way to it. Such a view, as the BVerfG has explained, only insufficiently satisfies the required art-specific examination especially because the cited remarks could even be permitted as statements of facts, for example, in an autobiography or as criticism of the recipient of an Alternative Nobel Prize. Because the artistic freedom requires that, in the case of a novel, the fictionality of the text is to be presumed to begin with, the one who considers his right of personality infringed has to prove the false or defamatory character of the passages he contests because, if the artist had to produce the proof that it is true, something would be expected of him which he cannot accomplish by way of his self-conception because he himself assumes the fictionality of the account. Under this approach, a work of art drawing on reality would have less protection than a documentary report where the proof of the truth would remain open. [13] The novel ‘Esra’ is realistic literature in the sense that the novel is set at real-life locations and has individuals as main characters who have realistic features. The author plays with the entanglement of truth and fiction and in this respect wants to blur boundaries. Nevertheless, a reader with literary knowledge is capable of discerning that the text is not limited to a report-like description of real people and events but that it possesses a second level beyond this realistic plane. The fictional character of Lale, which only partly overlaps with the second claimant, plays an important role in the overall plot of the novel when it comes to searching for the fault for the breakdown of the relationship between Adam and Esra. The novel does not, because of this functionalisation of the fictional character of Lale, turn into an insult with respect to the second claimant. The author instead reveals his own flaws in the same way, represented by the character of the first-person narrator who equally fails with regard to his daughter and is defined by great inner conflict and jealousy. In particular, posing the question of fault with special emphasis on the difficult relationship

306  Appendix 2 between the lover man and the mother of the loved woman shows the existence of a second level of the novel. [14] This also applies, as the BVerfG has further elaborated, with respect to the character of Lale because the author overwhelmingly does not describe her, unlike Esra, from his own experience. Lale’s life story is an extensively described novel within the novel. Especially the contents of the novel attacked by the second claimant are clearly narrative, to some extent also only told with some detachment as an account from other stories, rumours and impressions. The alienation or dissociation, as the appeal asserts with good reason, is much more evident in the case of the character Lale than in the case of the character Esra. The present infringement of the second claimant’s right of personality is therefore far less serious. Under these circumstances, the necessary weighting of the second claimant’s right of personality and the defendant’s artistic freedom must lead to the result that the artistic freedom merits priority. The remarks of the respondent in the submissions of 13 May 2008 can lead to no other result. They mainly refer to press reports which were published before the publication of the novel. Moreover, procedurally it concerns a new submission of facts which cannot be considered on appeal (§ 559 I ZPO). Case 17 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 14 MAY 2013, NJW 2013, 2348 Google auto-complete Facts The first claimant, a corporation selling food supplements and makeup on a ‘network marketing system’ on the internet as well as the second claimant, its founder and chairman, make a claim for injunctive relief and pecuniary compensation against the defendant based in the US which runs an internet search engine under the internet address ‘www.google.de’. By entering search terms into the search engine of the defendant, users can access content uploaded to the internet by third parties (via a hit list which is displayed). Since April 2009, the defendant has integrated an ‘autocomplete’ function in their search engine with the aid of which various ‘predictions’ in the form of word combinations varying with the order of letters entered, are displayed to the user in a window which promptly opens automatically while he is entering the search term. The terms displayed in this search completion function are determined on the basis of an algorithm which, among other things, takes into account the number of search requests entered by other users. The second claimant noticed in May 2010 that on entering his name, R.S., the word combinations appearing as suggested search terms in the window opening as part of the ‘autocomplete’ function, were ‘RS (full name) Scientology’ and ‘RS (full name) Betrug (fraud)’. The claimants consider this to be an infringement of their personality rights and their business reputation. Among other things, they asserted that the claimant is neither in any way associated with Scientology, nor can he be accused of fraud, nor have relevant investigation proceedings been initiated against him. A connection between the claimant and ‘Scientology’ or ‘fraud’ is not evident in a single search result. By way of an interlocutory order, the claimants obtained an interim injunction from 12 May 2010 onwards by way of which the defendants were prohibited from suggesting the

Appendix 2  307 completing combination terms ‘Scientology’ and ‘fraud’ within the ‘autocomplete’ function on the website of their search engine when the name of the second claimant is entered as a search term. Following the notification of the court order on 27 May 2010 to the defendant’s administrative contact person in Germany at the time, the completion suggestions objected to no longer appeared. The defendant refused to give a final statement. In the main proceedings at hand, in addition to the injunction already claimed as part of the preliminary legal protection, the claimants demand compensation for the pretrial legal costs and the second claimant additionally demands the payment of pecuniary damages. The LG Köln dismissed the case. The claimant’s appeal against this was rejected by the OLG Köln. With the appeal permitted by the OLG the claimants pursue their claim for relief further. Reasons I. [4] The OLG (judgment published among others in GRUR-RR 2012, 486 and ZUM 2012, 987 note Seitz) affirmed both the international jurisdiction as well as the application of German law. It did not, however, consider the case to be established because no distinct significance is to be attributed to the automated completion predictions upon entering the second claimant’s name in the search engine of the defendant. The displayed completion predictions ‘RS Scientology’ and ‘RS fraud’, according to the OLG, do not contain a (distinct) statement of the defendants with the content that RS is a member of Scientology or is even favourably inclined towards this cult or is the perpetrator of or participant in a fraud. It already approaches with doubts whether such connotations or such a meaning on its own terms can be attributed to the combinations of terms. In the end, this could be left open though because, according to the experience of the defendant’s search engine’s users, it is absurd to understand the disputed completing search terms as a statement with which content-related connections are created between the entered search term and the completion predictions displayed for it. No different appreciation results from either the manipulation attempt brought forward by the claimants, nor from the press coverage on similar instances, nor from the results of the survey the claimants submitted with the files. There is no reason to obtain opinion poll conducted by an expert as the claimant requested because the members of the relevant Senate belong to the circle of addressees, namely the unprejudiced and rational average recipient of the disputed completion predictions. From the viewpoint of such an average recipient, the only thing that can be gathered from the display of the completion predictions is the defendant’s search engine’s own statement that other previous users have entered the chosen combination of terms for their inquiries or that the completion predictions can be found in this way on linked third-party content. This statement is true, according to the court, and is therefore to be tolerated by the claimants. II. [5] The OLG judgment does not hold up to the review on final appeal. [6] 1. The OLG has, however, rightly deemed the case to be admissible. [7] (a) The OLG correctly affirmed the international competence of the German courts by appropriate application of § 32 Code of Civil Procedure (ZPO). It may not suffice, according to the case law of the relevant Senate, for the justification of the international competence

308  Appendix 2 of the German courts within § 32 Code of Civil Procedure that the claimant has the focus of his interests in the country; rather what is required is that the content complained of as a rights violation, objectively presents an obvious connection to the country to the effect that the clash of the conflicting interests – the interest of the claimant in the respect for his personality rights on the one hand, the interest of the defendant in the design of his internet presence on the other – has actually occurred or can occur in the country under the circumstances of the particular case, especially because of the content of the particular communication (cf judgments of this Senate of 29 March 2011 – VI ZR 111/10, NJW 2011, 2059 and of 2 March 2010 – VI ZR 23/09, BGHZ 184, 313) … [11] (b) The OLG erred in law in denying the claimants’ claim for an injunction under §§ 823 I, 1004 BGB in conjunction with Article 1, 2 GG against the defendant as the ­operator of the internet search engine. [12] (aa) Contrary to the OLG’s view, the completion predictions ‘Scientology’ and ‘fraud’ when entering the first name and surname of the second claimant into the defendant’s internet search engine involve an interference with the claimants’ personality rights because an offensive meaning is inherent in them. [13] (1) The meaning conveyed by the term ‘Scientology’ in connection with the name of an actually existing person can be adequately specified – as the OLG already considered – insofar that there is a connection between that sect about which particular perceptions exist in public – not least because of earlier press coverage – and the person mentioned by name. This connection is able to provoke a metal image which is expressive on its own terms. [14] (2) The OLG cannot be followed insofar as it wants to deny the term of fraud a contentrelated expressiveness with the justification that a diverse, unspecific range of meanings is connected with this term. The determination of its objective meaning from the point of view of an unbiased and reasonable audience is essential for the construction of a statement (cf BVerfGE 93, 266, 295). Admittedly, it may be true that the average internet user does not need to understand ‘fraud’ as the attainment of a legally precisely defined criminal offence. Nevertheless, the average reader associates at least a morally reproachable advantage over another with the use of this term and thus confers a sufficiently concrete meaning (cf BVerfG, NJW 2012, 1643 margin no 42). [15] (3) The OLG only extracted the message from the completion predictions displayed by the defendant’s search engine that other previous users had entered the chosen combination of terms for their inquiries or that the completion predictions can be found as such in linked third-party contents [references omitted]. To this, this Senate cannot accede. [16] The internet user who is searching for information by means of the defendant’s search engine expects the completing predictions displayed to him after entering the search term to have a certain connection to the search term he used, at least considers this to be possible. The searching internet user is not presented with any old completing predictions by the search engine from the ‘ocean of data’ which only coincidentally yield ‘hits’. The search engine is, to be as attractive as possible to internet users – and therefore to open up as large an audience as possible for the business customers of the defendant – geared towards completing predictions with content which leads somewhere. The search programme controlled by the algorithm takes into account the requests already raised and presents the internet

Appendix 2  309 user with those word combinations which had been entered most often in connection with the search term in question as the completion suggestions. This happens in practice in the often confirmed expectation that the word combinations related to the search term could be useful – the more often the more likely – for the currently searching internet user because the word combinations displayed to complete the search term reflect connections as to the content. The OLG did not consider this expectation in determining the meaning of the completion suggestions displayed by the defendant’s search engine. In the present case, this expectation leads to having to conclude from the completing predictions ‘RS scientology’ and ‘RS fraud’ displayed automatically on entering the first name and surname of the second claimant the assertion that there is a factual connection between the second claimant and the – negatively connoted – terms ‘Scientology’ and/or ‘fraud’. [17] (bb) This infringement of the claimants’ personality rights can also be directly attributed to the defendant. With the computer programme it created, it analysed the user behaviour and offered the users of the search engine the relevant suggestions. The link between terms are produced by the defendant’s search engine and not by a third party. They are held on the web by the defendant, ready to be accessed, and therefore stem directly from it. [18] (c) It does, however, not yet follow from this that the defendant is liable for all infringements of personality rights due to predictions. [19] (aa) The defendant is not freed from responsibility for the content of the website it operates merely according to § 10 Teleservices Act (Telemediengesetz, hereafter TA). 20 The OLG rightly qualified the defendant as a service provider (§ 2 sentence 1 no 1 TA) who keeps its own information ready for use and is therefore responsible under the general law pursuant to § 7 I TA – therefore also according to §§ 823 I, 1004 BGB (cf judgment of this Senate of 23 June 2009 – VI ZR 196/08, BGHZ 181, 328 marginal no 13 ff, further references omitted). The claimants do not have recourse against the defendant because of the conveyance, the intermediate storing or the retention of other’s data but for personal information, namely for the search term completion suggestions displayed to the user of its search engine as results of its autocomplete tool. It is therefore about ‘own’ content offered by the defendant’s search engine and not about making available and/or presenting thirdparty contents for which the service provider, pursuant to §§ 8 to 10 TA, only carries limited responsibility. (bb) Due to the unique character of personality rights as a framework right), an appreciation of the conflicting constitutionally protected interests is required in which the special circumstances of the particular case as well as the relevant basic rights and the guarantees of the European Convention on Human Rights are to be considered to guide the interpretation … The encroachment of a personal right is only unlawful if the protected interest of the person affected outweighs the other side’s interests worthy of protection [references omitted]. [22] (cc) Accordingly, the claimants’ interest in the protection of their personality rights on the one hand and the defendants’ rights to freedom of opinion and commercial freedom to act protected by Articles 2, 5 I and 14 GG on the other hand, have to be weighed up. In doing so, it is to be taken into consideration that the defendant admittedly operated the search engine in the way described in its own commercial interest to bind the users with the

310  Appendix 2 efficiency of the search. Yet the users, for their part, derive the benefit of a concept-orientated search for data and information. Even the claimants do not oppose that personal data such the name of the second claimant and his relationship to the first claimant can be found by using the search engine. On the part of the claimants, it is crucial for the assessment that the linked terms have an untrue meaning because the second claimant – as it must be assumed for the purposes of the appeal following the submission of the claimants – can neither be connected to a fraud nor is he a member of Scientology or is even associated with it. Utterances of untrue facts do not have to be tolerated [reference omitted]. [23] (d) If one is therefore to assume, according to the above principles, that the contested completion predictions infringe the claimants’ personality rights, the defendant’s liability as the interferer cannot be denied in a priori. [24] aa) Anyone is to be considered as an interferer within the meaning of § 1004 BGB – without regard as to whether he is culpable – who has brought about the interference or whose behaviour causes an interference to be feared. If several people are involved in an interference, when it comes to the question whether a claim for an injunction is available, it does principally not depend on the type and extent of the contribution to the interference or the interest of the individual participant in the realisation of the interference. It is generally speaking irrelevant whether he would be considered as the principal or accessory according to the type of his contribution to the offence [references omitted]. Anyone can be liable as a (co-interferer who in some way wilfully and sufficiently causally played a part in bringing about the unlawful interference provided that the person against whom the claim is made had the legal possibility for the prevention of the action. It does not stand in the way of the claim for an order to cease and desist that the person against whom the claim is made lacked knowledge of the circumstances constituting the elements of the offence and the illegality. Likewise, culpability is not necessary [references omitted]. [25] (bb) This does, however, not mean that the defendant is therefore liable in full and irrespective of considerations of reasonableness. Because according to the special circumstances of the case, the focus of the reproach is an omission. [26] (1) The defendant is not to be reproached for the development and the use of the software generating the predictions: it is rather a case of a commercial activity protected by Articles 2 and 14 Basic Law. Neither does the defendant offering a search engine a priori pursue a breach of the law through an untrue allegation of fact aimed at a particular person. Only with the addition of a certain user behaviour can defamatory connections of terms occur. On the other hand, the defendant’s activity is, however, not only of a purely technical, automatic and passive nature (unlike the ECJ case Google France/Louis Vuitton, judgment of 23 March 2010 – C-236/08 to C-238/08, NJW 2010, 2029, para 114 and the BGH judgment of 29 April 2010 – I ZR 69/08, BGHZ 185, 29, para 39 – preview picture – each on the privilege of the host pursuant to Article 14 I of the Directive 2000/31/EG). It is not exclusively limited to the provision of information for access by third parties. The defendant, in fact, processes the users’ search requests in a programme which generates connections between terms. The defendant is principally responsible for offering them in the shape of a prediction due to the generation which is attributable to it. The defendant can therefore principally only be reproached for not having taken adequate precautions to prevent that the predictions generated by the software infringe the rights of third parties.

Appendix 2  311 [27] (2) In the case of interferences which are caused (or also caused) by an omission in breach of a duty of care, a case-by-case approach is necessary to avoid the liability going too far. The responsibility of the person committing the omission is limited by the criteria of what is possible and reasonable to prevent the outcome. [28] In such an instance, the opportunity of eliminating an interference can arise from the fact that the relevant person controls the source of the interference or can influence someone who is capable of ending the interference [reference omitted]. If this is the case, a duty to supervise incumbent on the relevant person can be relevant for the reasonableness of the duty to eliminate the interference [reference omitted]. [29] The precondition for the liability of the operator of the search engine with the relevant support function is therefore – just like in the case of the liability of a host provider for the distribution of a third party’s comment on a blog (cf on this the judgment of the Senate of 25 October 2011 – VI ZR 93/10, BGHZ 191, 219) – an infringement of the auditing duties. Their existence as well as their scope depends, in the individual case, on the weighting of all affected interests and relevant legal valuation. Extreme demands cannot be made considering that this is a case of permitted participation in commercial transactions. Pursuant to the principles developed for interference liability it is of decisive importance whether and to what extent it is reasonable in the circumstances to impose an assessment on the person claimed against. [30] The operator of a search engine is therefore principally not obligated to check the completion predictions generated by a software in advance for possible infringements of the law. This would unreasonably complicate the operation of a search engine with a search completion function serving the user’s quick search if not even make it impossible. An appropriate preventative filter function may be necessary and feasible for certain areas such as, eg, child pornography, it cannot, however, guard against all conceivable cases of an infringement of personality rights. The operator of an internet search engine is therefore principally only faced with an auditing duty when he acquires knowledge of the infringement of rights. If an affected person points out an unlawful infringement of a personality right to the operator of an internet search engine, the operator of the search engine is obligated to prevent such infringements in future (cf judgment of the Senate of 27 March 2012 – VI ZR 144/11, VersR 2012, 992 Rn 19). Case 18 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 23 JUNE 2009, NJW 2009, 2888 Facts The parties are in a dispute about the legitimacy of saving and publishing the name of the school, the subjects taught, a mark and quotes of the claimant on the internet platform www.spickmich.de. The website designed as a portal for students is maintained by the fourth defendant, its managing director and the company members who are the first to third defendants. It is a case of a so-called ‘community-portal’, in which the content is created by the individual user within the framework given by the operator. Registered users have access to this portal. Registration takes place after entering the correctly spelt name

312  Appendix 2 of the school, the location of the school, a user name and an email address. A password which opens access to the Portal is sent to the email address. The users can make information about themselves available on different pages of the website, send messages to other users or establish their own social network of contacts comprised of ‘friends’, ‘members of a year group’, and ‘clubs’. Beside the sections ‘my page’, ‘my friends’, ‘messages’, ‘my town’ and the like, there is a section ‘my school’. There, aspects such as the school facilities, the school buildings but also factors such as the ‘party factor’ and the ‘flirting factor’ can be evaluated with grades. On this page, under the menu item ‘staffroom’, names of teachers who are teaching at the school can be entered. With a click the user gets to a subpage on which the real name and the subjects taught by the teacher are recorded. Next to this, in an evaluation module, criteria are listed such as, eg, ‘cool and funny’, ‘popular’, ‘motivated’, ‘human’, ‘good lessons’ and ‘fair marks’. By using the evaluation criteria, marks between 1 and 6 – of the value commonly used in school2 – can be awarded. After what used to be a minimum of four and is nowadays a minimum of ten individually submitted evaluations, an overall grade is calculated from the average. Evaluations with only the mark 1 or 6 are taken out and do not contribute to the final mark. On the teacher page, there is also a button ‘Something is wrong here’, by way of which the users can draw the operator’s attention to discrepancies. The result of the evaluation is displayed in the form of a report and can be printed. Further, the users can allegedly reproduce teachers’ quotes under the section ‘quotes: All … has already spouted out (funny stuff, mean stuff)’. If no new evaluation for the teacher takes place within 12 months, the evaluations submitted before and the entered quotes are deleted. The claimant learnt in May 2007 that a report is saved on the fourth defendant’s relevant website under her name, the specification of the school where she teaches and German, the subject she teaches in which she was evaluated – on the basis of four evaluations by students – with the average final mark of 4.3. No quotes are cited there. Moreover, the claimant’s name, school and subjects taught can be accessed online on the school’s homepage. After the LG, in its decision of 15 May 2007, pursuant to the claimant’s claim against the first to third defendants, had banned the evaluation site, the ban was reversed after the objection by the first to third defendants and the claim was rejected. The appeal against this was unsuccessful. In the present proceedings on the main issue, the claimant has requested to order the defendants to delete and to impose an injunction on publishing her name, the school and the subjects taught, in connection with the final or individual evaluation with marks from 1 to 6 in the categories listed by the website ‘spickmich.de’ as well as with the quotes and report function. The LG dismissed the claimant’s demands nos 1 to 3 to have the information deleted as inadmissible due to a lack of a legitimate interest and, as for the rest, rejected the claim as unfounded. The claimant’s appeal against this [OLG Köln] was without success. With the appeal admitted by the OLG, the claimant pursues her demands.

2 In the German school system children are awarded marks from 1 to 6, 1 being the best, 6 the worst. A 4 is still a pass but a 5 is a fail.

Appendix 2  313 Reasons I. [4] The OLG … considers – in agreement with the regional court – the action to delete the information under dispute from the databases of the website www.spickmich.de to be inadmissible … A claim for an injunction is available neither because of an infringement of the claimant’s general personality right nor because of the infringement of data protection provisions. Stating the claimant’s name, her professional activity and the subjects she teaches concern true factual claims. The evaluations of the claimant constitute expressions of opinion or value judgements. After the necessary consideration of the basic right of freedom of opinion which is in conflict with the claimant’s personality right, the evaluations do not represent a prohibited infringement of the claimant’s general personality rights. It is not abusive criticism nor pillorying someone. The criteria of ‘good lessons’, ‘technically competent’, ‘motivated’, ‘fair marks’, ‘fair exams’ and ‘well prepared’ the claimant attacked relate to the professional activity. The evaluation options ‘cool and funny’, ‘human’, ‘popular’ and ‘exemplary appearance’ may be personal attributes of the claimant but allegedly also play a role within her professional work. Within the work-related sphere, the individual, it is said, must embrace that his behaviour is watched by the public at large due to the impact his actions have on others. The ratings could serve students and parents as guidance and lead to desirable communication, interaction and increased transparency. The school domain and the professional career of teachers are characterised by marking so that – also in view of the feedback – it suggests itself to return them in form of an evaluation. The stated access criteria are claimed to be sufficient to guarantee that the portal is primarily used by the pupils of the looked-up school and by interested parents and teachers. The evaluation pages, it is claimed, cannot be found with a search engine by entering the name of the teacher. Neither is it promising to search for the evaluation of the teacher by only entering the teacher’s name on the student portal www.spickmich.de. [5] The publication of the evaluation is not inadmissible just because it is submitted ­anonymously. The anonymous use of the internet is said to be envisaged by § 4 VI 6 of the Teleservices Data Protection Act (Teledienstdatenschutzgesetz) (rendered inoperative on 28 February 2007). Due to the hierarchical relationship of sub- and super-ordination of teachers and pupils, the latter supposedly refrain from making their opinion known for fear of negative consequences if their name is published. As long as the aggrieved party can take up proceedings against the operators of the forum in the case of unacceptable (insulting, untrue or abusive) comments, the interest in individualisation of the person submitting the evaluation steps under the protection of the freedom of a broad communication process on the quality of educational work. Neither does the danger that users log in as pupils with untrue details make the evaluation site unlawful. The possibility of spreading supposed quotes of the claimant does not infringe her personality right. So far, no incorrect quote has been put up. [6] The personal data of the claimant namely her real name, the school at which she was teaching and the subjects taught are easily gathered from a publicly accessible source, namely the school’s homepage. Relief by way of injunction equally does not exist under § 823 II BGB in conjunction with § 4 Federal Data Protection Act (FDPA) (Bundesdatenschutzgesetz,

314  Appendix 2 BDSG) corresponding to § 1004 BGB. Admittedly, the grading could be data within the meaning of § 3 FDPA to the publication of which the claimant did not consent pursuant to § 4 I FDPA. However, the transmission and retention of the data is lawful under § 28 I no 3 FDPA. The defendants, it is said, pursue their own business interest with advertisements and similar things on the website they operate. A prevailing interest of the claimant and one worthy of protection to deny the distribution or the use of the data does not exist according to the necessary weighing of interests. II. [7] The appeal judgment holds up to the re-examination on the second appeal. Neither a claim to delete not a claim for an injunction against the defendants is due to the claimant. A. … B. [9] The lawsuit … is unfounded. [10] I. Nevertheless, the defendants are not freed from liability for the content of the website they operate merely because of § 10 Teleservices Act (Telemediengesetz, henceforth TA) … [12] According to this, the defendant’s website can neither simply be classed as ‘telecommunication’ nor does it fulfil, with regard to the content, the requirements of a broadcasting service. Instead, it constitutes an information and communication service within the meaning of the provisions of the Teleservices Act. [13] 2. According to § 10 I TA, the providers are not responsible for external content if they had no knowledge of the unlawfulness of the information, the information is not obviously unlawful or if they immediately block it as soon as they become aware of its unlawfulness … [16] II. 1. The claimant is not entitled, under § 35 II 2 no 1 FDPA, to a claim to have the information in question deleted from the database of the website www.spickmich.de. Under § 35 II 2 no 1 FDPA, personal data is to be deleted if their retention is forbidden. In the present case, this is to be denied … [29] (cc) In raising and retaining the grading with mention of her name, the school and the subjects taught by her, the claimant is undoubtedly affected in her right to informational self-determination, irrespective of the presence of libel. Whether this is a case of interests worthy of protection which are contrary to the raising and retention of data by the defendants, must be determined through consideration of the defendants’ and users’ equally constitutionally guaranteed freedom of communication (Article 5 I GG) … [41] 2. Neither does the claimant have a claim under § 823 II, or under § 1004 BGB in conjunction with § 4 I FDPA for an injunction against publication of the relevant information by transmission to the requesting users. The latter is moreover permissible according to § 29 II no 1 a and 2 FDPA. [42] (a) In principle, the permissibility of the transmission of data pursuant to § 29 II no 1 a and 2 FDPA is tied to the recipient of the data credibly demonstrating a valid interest in

Appendix 2  315 knowing the data and there being no reason for the assumption that the person concerned has an interest worthy of protection in the exclusion of the transmission. This being the case, according to the wording of § 29 FDPA, the transmission of data of the present sort could be unlawful because it takes place anonymously and such a demonstration is therefore already lacking … Meanwhile, in this respect, a construction of the provision in conformity with the constitution is required which gives due consideration to the basic right of freedom of expression. For this purpose, it must be remembered that exchange of information on the internet organised by the operator of a portal was neither technically possible nor was anything of the sort conceivable when § 29 FDPA was incorporated into the Federal Data Protection Act on 1 June 1991. Rather, § 29 FDPA was intended to regulate the ‘classic’ handling of business data such as, eg, the commercial dealing with personal data in the address trade or the upkeep of trade and credit reference files [reference omitted]. In the case of data requests from evaluation forums, the literal application of the provisions under § 29 II no 1 a and 2 FDPA then leads to a contradiction with the right to unrestricted freedom of communication arising from Article 5 I GG. Neither is it consistent with the internet user’s right to anonymity guaranteed by § 4 VI Teleservices Data Protection Act (Teledienstdatenschutzgesetz) until 28 February 2007 and since 1 March 2007 by §§ 12 ff TDPA. A construction in conformity with the constitution is also necessary insofar as § 29 II 4 FDPA obliges the recipients of the data to record the reasons for the presence of a valid interest and in which manner this is convincingly demonstrated [references omitted]. [43] (b) The right to freedom of opinion also comprises the right to make one’s opinion heard and to spread it. The maxim of the free exchange of opinions is not just for matters which are of particular importance for the public (cf BVerfGE 20, 56, 97; 20, 162, 177; BVerfG NJW 2008, 1793, 1797). If the constitutionally protected dissemination of contributions to the formation of opinions in the form of participation in an opinion forum on the internet were only admissible provided that no personal data is transmitted, the freedom of opinion and information would be restricted to comments with content without protected data unless the consent of the relevant person was available. Evaluations would be made nearly impossible because all negative comments – for the transfer of which the consent of the affected person is generally absent – would need to be removed from the system [reference omitted]. Evaluation portals generally move in a context of tension in which the affected person has an interest in the exclusion of the use of his data in the case of a negative evaluation. Restrictions of the constitutionally protected freedom of opinion and information are only lawful if they are proportionate (BVerfG NJW 2001, 503, 505). The admissibility of the transmission of data to the requesting user must thus be assessed based on a comprehensive weighting between personality rights of the affected party and the interest in information of the person to whom the data is transferred via the internet. In doing so, the interests worthy of protection of the person affected are to be contrasted with the interest of the requesting party in the knowledge of the data and the interest of the person who has transmitted the data in passing it on. The type, content and significance of the data complained about are to be measured against the function and the purpose their retention and transmission serves (cf this Senate, 17 December 1985 – VI ZR 244/84 – NJW 1986, 2505, 2506).

316  Appendix 2 [44] (c) It follows that in the dispute, in view of the access restrictions for the users, the modest significance and interference of the data as well as the circumstance that the collection of this information was carried out in a lawful manner for the purpose of transmitting it, the latter is also permissible while safeguarding the defendants’ basic right to providing and acquiring information. The transmission cannot be prohibited generally because the specific circumstances which could currently exclude the transmission, are not presented by the claimant. The concerns about a general pillory effect for the graded teacher cannot justify an interest worthy of protection of the claimant as long as no indications for such an effect are present in view of her person. Neither can potential negative repercussions on the performance of the school justify a subjective legal position of the claimant which is worthy of protection. [45] 3. If the claimant has to tolerate the transmission, raising and retention of the data under consideration, she cannot forbid the defendants to present it in the form of a school report either. The fact that a comparison with the pupils’ reports handed out by the school, employers’ references or staff reports – such as the appeal draws it – is far-fetched ensues already from the outer appearance of the report which is signed with ‘spickmich’. [46] 4. The appeal also remains unsuccessful insofar as it opposes the quotation function on the evaluation page of the defendants’ homepage. Indeed, the general law on personal rights under Article 2 I in conjunction with Article 1 I GG protects against words someone did not say and which damage the social claim for validity that person has defined himself, from being put in this person’s mouth (cf BVerfGE 54, 148, note Eppler). The claimant has not, however, substantiated a present or imminent threat of injury to her personality rights as analogously required for a claim for an injunction under § 1004 BGB. Such a threat is unlikely simply because, as yet, no quote has been entered. PRIVACY: THE CAROLINE OF MONACO CASES Case 19 and 20 form part of the extensive Caroline of Monaco case law. Read also the groundbreaking case 95 (in Germany known as ‘Caroline of Monaco I’ decision), which brought the amount of immaterial damages for personality rights infringement to a next level. Case 19 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 19 DECEMBER 1995 BGHZ 131, 332 = NJW 1996, 1128 = JZ 1997, 39 Facts In these proceedings the claimant, Caroline of Monaco, is objecting to the publication of certain photographs distributed in Germany and France by the defendant, the publishers of the magazines F and B. In issue no 30 of the F magazine, dated 22 July 1993, the defendant published a total of five so-called ‘paparazzi’ photographs which show the claimant with the actor Vincent Lindon in a garden restaurant in S (France). On the front page, next to a large photograph of the claimant (the use of which is not impugned in these proceedings) is a photograph of her, accompanied by reference to an Article entitled ‘The most tender photographs of her romance with Vincent’. The series of four photographs on pages 4 and 5 is entitled ‘These photos are proof of the most tender romance of our time’. In issue no 32,

Appendix 2  317 dated 5 August 1993 of the illustrated magazine B, the defendant published on page 88 a photograph of the claimant on horseback and on page 89 a photograph of the claimant with her children P and A; these photographs belong to an Article entitled ‘Caroline: I don’t think I am the ideal wife’. In issue no 34 of the B magazine, dated 19 August 1993, the defendant published an Article with several photographs entitled ‘Simple happiness’, showing the claimant with her daughter in a paddling boat, going for a walk alone, carrying a wicker basket, riding a bicycle, together with Vincent Lindon in a pub, with Lindon and her son P, and, finally, with another woman in the market. After a lengthy dispute over the admissibility of these publications, the defendant brought an action against the claimant before the LG München requesting that the Court make a declaratory judgment to the effect that the defendant need not in future abstain from publishing these photographs. By these proceedings the claimant, who claims that the publication of these photographs infringes her right to personal privacy, requests under German and French law that the defendant in future abstain from any further publication of the photographs. The claimant claims that even as an ‘absolute person of contemporary history’ she does not have to put up with the publication of photographs of herself. All of these photographs had been taken from a great distance, without her knowledge, and are said to belong to her private life. The claimant is constantly followed by photographers leaving her in no peace outside of her home. Even for her, there must be a protected private area outside of her own home. The LG found in favour of the claimant as far as the distribution within France is concerned but otherwise rejected the claim. The claimant appealed against this decision, and the defendant cross-appealed. The OLG Hamburg has rejected the claim. The further appeal, in so far as it was accepted, is partially successful. Reasons III. The reasoning of the OLG is, in legal terms, partly flawed. The further appeal rightly claims that the photographs which show the claimant in an outdoor restaurant with Vincent Lindon fall into the sphere of her private life. Their publication infringes her right to personal privacy and is thus prohibited. The other photographs are legally unobjectionable. A. 1. As far as the distribution of the magazines in Germany is concerned, the OLG has rightly based its decision on German law. According to the principles of international private law, for claims based on tort and therefore, as here, claims to desist from certain actions (Unterlassungsanspruch) said to violate the right to one’s own personality [reference omitted], the law of the place where the tort was committed applies. For products of the newspaper industry, the place of commission is the place where the product was published and every other place where it was distributed (Senate, NJW 1977, 1590 with further references). As regards the magazines distributed in Germany, the place of commission and the place where the effects of the tort were felt are both in Germany, so that German law applies at least for the German area of distribution … 2. According to German law, the distribution of the photographs referred to above is illegal. In particular, it is not covered by the guarantee of press freedom set out in §§ 22, 23 of the Act on Artistic Creations (KUG) or Article 5 I GG. (a) In principle, pictures of a person may only be distributed with the permission of the person depicted (§ 22 KUG). The right to one’s own image forms a particular aspect of the general right to one’s own personality. It follows that basically only the person depicted

318  Appendix 2 is entitled to decide whether and in what way his picture will be shown to the public [reference omitted]. There is no doubt that the claimant has not given such permission. (b) Pictures belonging to the sphere of contemporary history may, however, be distributed or shown without permission of the person involved, unless legally protected interests of the person depicted are thereby infringed (§ 23 I, no 1, II KUG). Pictures of persons regarded as ‘absolute contemporary persons’ form part of contemporary history. The claimant belongs to this group of persons. The further appeal wrongly disputes this fact. Decisive for the classification of a person as an absolute person of contemporary history is the fact that the public regards his pictures as important and worthy of note just because of the particular person shown. The public has a justified interest, based on a real need for information, in seeing pictures of these persons (BGHZ 20, 345, 349 ff; Senate, NJW 1996, 985). In particular Monarchs, Heads of State, and eminent politicians belong to this group (see KG JW 1928, 363 – Kaiser Wilhelm II; AG Ahrensbök DJZ 1920, 596 – Reichspräsident Ebert and Reichswehrminister Noske; Senate NJW 1996, 593 – Bundeskanzler; OLG München UFITA 41 [1964] 322 – Kanzlerkandidat). As the eldest daughter of the reigning Prince of Monaco, the claimant belongs to this circle of persons as she, herself, has acknowledged. The Senate’s decision of 12 December 1995 (NJW 1996, 985) is based on this view. (c) There are, however, limits to the publication without permission of pictures of persons who form part of contemporary history. According to § 23 II KUG publication is prohibited where the justified interests of the person shown outweigh the other interests at stake. Whether or not this is the case here, must be decided through a process of weighing up the various rights and interests involved so that in each individual case it is established whether the public interest in information protected by the freedom of the press (Article 5 Basic Law), which the defendant can cite as justification, has precedence over the claimant’s right to her personality (Article 2 GG) to which she refers. (BVerfGE 34, 269, 282; BVerfGE 35, 202, 221; Senate, NJW 1994, 124; BGHZ 128, 1, 10.) (aa) The protection of a person’s private sphere of life is of special importance when the two legal interests are weighed against each other. The right to respect one’s own private sphere of life is an emanation of the general right to one’s own personality, which grants every person an autonomous area of personal life within which he can develop and experience his own individuality, free from the interferences of others. The right to be left alone and ‘to belong to oneself ’ forms part of this area (BVerfGE 34, 238, 245 ff; BVerfGE 35, 202, 220; for the right to be left alone as part of the right to privacy under American law see Katz v United States 389 Supreme Court (1967) 347, 350 ff; Warren/Brandeis, 4 Harv L Rev [1980] 193 ff; Götting Persönlichkeitsrechte als Vermögensrechte, 1995, 168 ff, 174). As a result, since 1954, the German courts have, especially in the area of civil law consistently given particular weight to the right to respect one’s own private sphere of life, ie, treated it as a basic right, guaranteed by the constitution, which includes the right to one’s own image (BVerfGE 27, 1, 6; BVerfGE 34, 269, 282 ff; BVerfGE 35, 202; BVerfGE 44, 353, 372; BGHZ 24, 200, 208 ff; BGHZ 27, 284, 285 ff; BGHZ 73, 120, 122 ff; Senate, JZ 1965, 411, 413 – Gretna Green; OLG Hamburg UFITA 78 [1977] 252, 257; OLG Hamburg UFITA 81 [1978] 278, 285; OLG Hamburg, NJW 1970, 1325 – Haus Hohenzollern). (bb) The right to respect one’s own sphere of private life can be claimed by anyone, and can therefore be claimed by the claimant, even if she is a person of contemporary history. For even such persons need not tolerate pictures which depict central aspects of their private life, for instance their domestic surroundings, being taken for later publication without

Appendix 2  319 their permission (BGHZ 24, 200, 208; BGH GRUR 1962, 211, 212 – Hochzeitsbild; BGH NJW 1965, 2148 – Spielgefährtin). Only in exceptional circumstances, can the distribution of pictures from this area be permissible, ie, where an overriding public interest justifies such an intrusion (see Senate, JZ 1965, 411, 413 – Gretna Green; OLG Hamburg UFITA 78 [1977] 252, 257 – Grace Kelly; OLG Hamburg UFITA 81 [1978], 278, 285; OLG Hamburg NJW 1970, 1325; OLG München UFITA 41 [1964] 322, 324). (d) The OLG applied these principles. But it was of the opinion that the public’s justified interest in information ends ‘at the doorstep’ of the person depicted and, therefore, extends to places open to anyone, eg, as here,’in front of ’ a garden restaurant which is open to public view. The OLG, therefore, restricted the private sphere of life to places inside people’s homes from which the public is excluded. This view has been widely adopted by the courts and is shared by the legal literature (KG in, Schulze UrhRspr. KGZ 14; Schricker/Gerstenberg, UrheberR, 1987, § 23 KUG, n 35; Wenzel Das Recht der Wort-und Bildberichterstattung, 4. edn [1994], n 5.46 and 5.60; Evers, Privatsphäre und Ämter für Verfassungsschutz, 44.) This Senate cannot share this view. A spatial restriction of the private sphere of life to the domestic area cannot have been intended under the KUG, since the explanatory notes to that Act state that the safeguards of the justified interests of the person depicted, set out in § 23 II KUG, were intended ‘especially to prevent events being shown to the public which pertain to the personal and domestic life’ of that person [reference omitted]. This formulation in no way limits the protection of the private sphere of life to the domestic area but, rather, leaves room for a wider interpretation. The necessity of protecting the private sphere of life outside the domestic area is also partially recognised by legal writers, though for different reasons and with varying intentions (Allfeld DJZ 1920, 702; Evers Privatsphäre und Ämter für Verfassungsschutz, 44; Hubmann Das Persönlichkeitsrecht (2nd edn, 1967) 322; Helle Besondere Persönlichkeitsrechte im Privatrecht, 1991, 180; Paeffgen JZ 1978, 738, 740; Prinz NJW 1995, 817, 820; Siegert DB 1958, 419, 421; Siegert NJW 1963, 1953, 1955. Likewise LG Köln AfP 1994, 166, 168; see also BGHSt 18, 182, 186 – Callgirl Case). This Senate shares the view that there is a private area worthy of protection outside that of the purely domestic area. This is the case, where a person has retreated to a place of seclusion where he wishes to be left alone, as can be ascertained by objective criteria, and in a specific situation, where he, relying on the fact of seclusion, acts in a way in which he would not have done so in public. An unjustified intrusion into this protected area takes place where pictures of that person are published if taken secretly or by stealth. (aa) Like anyone else, persons who are part of contemporary history have the right which must be respected by all third persons to retreat to places outside their own home where they wish to be alone or, at least, left secluded from the general public. This can even occur in places which are open to the public, ie, in public places. But this presupposes that in the place and at the point in question the person ‘shut himself off ’ somewhat from the public at large; and this seclusion from the public must have been objectively obvious to third persons. This can, for instance, be the case in separate rooms of a restaurant or in hotels, sports grounds, telephone booths, under certain circumstances even in the open, as long as the person does not appear more than just another member of the public. (bb) Moreover, the right to demand that other persons respect one’s privacy presupposes that the situation in which the person [observed] finds himself is one of a typically private nature. This is the case where a person, relying on the seclusion of the specific place where he

320  Appendix 2 finds himself in, behaves in a manner which he would not normally adopt in full view of the public. This may be the case whenever [the observed person] expresses personal emotions which are clearly not intended for the eyes of third persons or is acting in an ‘unrestrained’ manner. Only in such situations can it be assumed and objectively verified that the person did not intend to allow other persons sharing the moment. In such circumstance he is entitled to have the chosen seclusion respected. (cc) It is an unjustified infringement of the sphere of privacy which is worthy of protection if, for reasons of personal gain, pictures are taken/published which exploit the innocence of the person depicted who believes himself unobserved. This is always the case where the person is observed almost as if through a keyhole, or is surprised by the surreptitious taking of the pictures. The same applies where the picture is taken openly but so suddenly that the person photographed has no time to prepare himself. A restriction of the prohibition to these particular circumstances is justified because protection of the private sphere of life is here extended to places which are in theory open to everyone. In these cases, the person’s privacy is only unjustly infringed where the intrusion happened surreptitiously or by surprise. The courts have always held that the surreptitious taking of photographs by secret means is illegal (BGHZ 24, 200, 208; other references omitted). Up to now, this only applied to the private domain within one’s home, where the depicted person’s consent was always required for the taking of photographs. But the same protection can legitimately be demanded in circumstances where persons, so to speak, transfer their private sphere of life to a place outside of their home. For the same reasons, photographs may then and there be taken, and later published, only if prior consent was given. 3. In the light of these principles, the weighing up of the rights and interests involved in this case leads to the conclusion that the claimant’s protected sphere of privacy was violated by photographs taken in a garden restaurant and published in issue no 30 of the magazine F under the headline ‘These photos are the proof of the most tender romance of our time’. The claimant can prohibit any future publication of these pictures … (b) When weighing up the various interests involved, the information value of the events depicted plays a significant role. The greater the interest of the public in being informed, the more the protected interests of the person of contemporary history must recede in favour of the public’s need for information. Conversely, the need to protect the depicted person’s privacy gains in weight as the value of the information which the public obtains from the photographs decreases. In this case, the photographs which show the claimant with Vincent Lindon in a garden restaurant contain little, if anything of value. Here, according to the OLG, mere prying and sensationalism, and the public’s wish to be entertained, outweighed all other considerations. Such motives, especially the mere wish of the public to be entertained, which is to be satisfied by pictures of totally private events of the claimant’s life, cannot be recognised as worthy of protection. Our courts have repeatedly acknowledged this. (BVerGE 34, 269, 283; BGHZ 24, 200, 208; BGHZ 128, 1, 12; BGH NJW 1965, 2148, 2149; BGH JZ 1965, 411; OLG Hamburg AfP 1992, 376, 377.) 4. However, the further appeal is unsuccessful in respect of the photographs in the other magazines since these are not concerned with the claimant’s protected private sphere of life. (a) … The claimant cannot prohibit the publication of such pictures. As a person of contemporary history, she must accept that the general public has a justifiable interest in knowing where she goes and how she behaves herself in public, be it during shopping trips in the

Appendix 2  321 market square, in a cafe or during sporting or other activities of daily life. This includes the picture reproduced in the issue no 34 of the magazine B, taken in a restaurant and showing the claimant sitting at a table with other persons. This picture differs from the ones taken in the garden restaurant because here the characteristics which made the other ones an unjustifiable intrusion are missing. For here, the claimant had not retreated to a place secluded from the general public, and secondly the situation in which she was photographed was not of a somewhat private nature in the sense outlined above. The fact that the claimant was not aware of being photographed does not, in itself, provide a reason for demanding that the photo remain unpublished, since persons of contemporary history must normally tolerate unnoticed or even clandestine photographs of themselves if they appear in public [reference omitted]. (b) However, what all these pictures have in common is the fact that they do not show the claimant performing a public function. They are, instead, concerned with her private life in the wider sense of the term. The claimant wishes to prohibit generally the publication of these photographs in Germany and France. But this is not possible under German law. In France under Article 9 of the Code Civil, which is intended to protect private life (vie privée), the publication of a picture requires in principle the consent of the person shown. This can even apply to monarchs and other public figures, unless they are shown performing a public duty (see Cour de cassation, Bulletin des arrêts Chambres civiles, no 98, 67 – Farah Diba; Tribunal de grande instance de Paris, D 1977, Jur, 364 ff – Caroline de Monaco; see also Hauser, GRUR Int. 1988, 839, 840; Ehlers/Baumann ZvglRWiss 1978, 421 ff; Codes Dalloz, Code civil, 92 ed, [1992–1993], Article 9, n 9). Under German law (§ 23 KUG), this result is not possible. As this Senate stated in its judgment of 14 November 1996 (NJW 1996, 539), under German law the public can have an undisputed interest in seeing photographs of an ‘absolute person of contemporary history’. There is no further requirement that that person be performing a public function. As a consequence, within the scope of § 23 I no 1 KUG, the public’s interest in information which is worthy of protection can be assumed even where the photograph merely shows how a well-known person acts in normal public surroundings, ie, when not performing public functions. This interest in being informed only needs to give way where, in quite specific situations, the justified interests of the person shown take precedence (§ 23 II KUG). This does not, however, apply to the photographs shown in issues nos 32 and 34 of the magazine which are in fact quite flattering. B. As far as distribution of the magazines in France is concerned, contrary to the claimant’s contentions in this further appeal, the Court need not decide whether or not the claimant’s claim would succeed if French law were applied. 1. As the OLG rightly held, to apply French law in deciding in favour of a claim for an order to abstain from an action is barred by Article 38 of the Introductory Act to the Civil Code (EGBGB). According to this provision, claims based on tortious acts committed abroad against a German citizen are limited to the remedies available under German law. This principle also applies in favour of the defendant, a legal person domiciled within Germany (RGZ 129, 385, 388; OLG Hamburg IPRspr. 1930, no 155; see also BGHZ 86, 234, 237). A comparison of the results under German and French law is thus superfluous when it is clear, as here, that German law provides no basis for a claim BGHZ 71, 175, 177; BGHZ 86, 234, 237; BAG NJW 1964, 990, 991; von Bar JZ 1985, 961, 963.

322  Appendix 2 Case 20 BUNDESVERFASSUNGSGERICHT (FIRST DIVISION) 15 DECEMBER 1999 BVerfGE 101, 361 = NJW 2000, 1021 = VersR 2000, 773 Dictum 1. The private sphere protected by the general right of personality in Article 2 I in combination with Article 1 I GG is not limited to the home. The individual must in principle have the opportunity of moving around in other places which are obviously secluded without being pestered by press photographers. 2. The general right of personality is not guaranteed in the interest of commercialisation of that personality. The protection of the private sphere from the taking of pictures takes second place insofar as someone shows himself to be in agreement with certain material usually regarded as private being made public. 3. The protective content of the general right of personality of parents or a parent is ­strengthened by Article 6 I and 2 GG, insofar as it concerns publication of pictures which have as their object specific parental attention to children. 4. The guarantee of press freedom contained in Article 5 I 2 GG includes publications and contributions in the nature of entertainment as well as their illustrations. This also applies in principle to the publication of pictures which show people in public life in everyday or private contexts. Judgment The judgments of the BGH of 19 December 1995 – VI ZR 15/95 –, of the Hanseatic Oberlandesgericht Hamburg of 8 December 1994 – 3 U 64/94 – and of the LG Hamburg of 4 February 1994 – 324 O 537/93 – infringe the complainant’s basic right under Article 2 I in combination with Article 1 I GG insofar as her claim in relation to three pictures published in the Illustrated ‘Bunte’ no 32 of 5 August 1993 and no 34 of 19 August 1993 which show the complainant with her children was refused. In this respect and in relation to the decision about costs the judgment of the BGH is quashed and the case referred back to it. In other respects the constitutional complaint is rejected. The German Federal Republic must reimburse the complainant for a third of the necessary expenses. Reasons A. The constitutional complaint concerns the publication of photographs from the everyday and private lives of prominent figures. I. 1. The defendant in the original proceedings, Burda GmbH, publishes the magazines Freizeit Revue and Bunte. In these magazines, photographs of the complainant Princess Caroline of Monaco were published in various articles. She claimed an injunction to prevent publication of these. The subject of the original proceedings included at first five photos which were printed in the Freizeit Revue no 30 of 22 July 1993. The complainant could be seen in them together

Appendix 2  323 with the actor Vincent Lindon at a table in a garden café in Saint-Rémy (France) in the evening. The photos are advertised on the title page as ‘The tenderest photos of her romance with Vincent’ and show Vincent Lindon kissing the complainant’s hand. As the complainant was successful in obtaining from the BGH an injunction to prevent future publication of these photos, they are not the subject of the constitutional complaint. The defendant then published in the Illustrated Bunte no 32 of 5 August 1993 the article ‘Caroline: I don’t believe that I can be the ideal wife for a man’, in which parts (mostly in indirect speech) of a book about the complainant which appeared in Spain are reproduced. Several photos illustrated the article. A photo on page 88 shows the complainant riding a horse in a paddock. No other people can be seen in the picture. It has the caption: ‘Caroline and melancholy. Her life is a novel with countless misfortunes, says the author, Roig’. P 89 contains a photo of the complainant with her children Pierre and Andrea with the caption ‘Caroline with Pierre and Andrea, her children’. In the photo, three people are visible in the foreground; in the background there are vehicles. The complainant is wearing sunglasses. In no 34 of the Illustrated Bunte of 19 August 1993, an article under the title ‘Simple Happiness’ appeared on pages 44–52 with several photos. On the first page of the article, the complainant can be seen together with her daughter in a canoe, in a close up. The accompanying text to the side states: ‘It is a hot day this summer. Princess Caroline paddles with her daughter on the Sorgues. This is a small river not far from St-Rémy, the village in Provence where Caroline lives. From New York to London, the rich and beautiful whisper about the Caroline style. A canoe instead of a yacht. A sandwich instead of caviar’. A further photo shows her with a basket slung round her on her way to the market. It includes an accompanying text in small print. ‘Housewife Caroline Casiraghi. She loves doing the shopping herself ’. The accompanying text at the side in large print states: ‘On Wednesday, it’s market day. The Caroline style is copied world-wide. Her strap sandals which she wears to the flower market, her pareo which she wears as a skirt’. In other photos – not the subject of challenge – within this frame, there are two shops in which the complainant allegedly make purchases, the bistro in which she usually drinks coffee and her country house. The next photo objected to shows the complainant and the actor Vincent Lindon sitting side by side in a guest house, with other guests around them. The text in small print in the right hand lower corner says: ‘Every Saturday evening table no 3 here on the right of the entrance is reserved for Caroline’. The accompanying text in large print states: ‘In the evenings, people sit in the “Sous les Micocouliers” and drink the light red summer wine. Caroline and Vincent Lindon are guests like the baker, the olive farmer or Father Philippe of the Church of St Martin’. A photo also shows the complainant cycling alone on a track across the fields. The text in small print for this photo says: ‘Caroline cycles home. Her mas (house or farm in southern France) lies at the end of the bumpy track, the “Chemin du Pilou”’. It is supplemented by the larger accompanying text: ‘The end of loneliness approaches. The Caroline style attracts the beautiful and the rich. Lady Di should have instructed an estate agent to find a property for her. Julio Iglesias is also looking’. The photo on page 51 shows the complainant together with Vincent Lindon, her son Pierre and another child. It is a close up and shows these persons from behind or from the side as they turn to the child. The text in small print says: ‘Caroline’s youngest, Pierre, 6, has bumped himself. Vincent and Caroline comfort him’.

324  Appendix 2 The last photo shows the complainant wearing sunglasses with a female companion in the market by a flower stall. The text accompanying the photo states: ‘Caroline’s bodyguard is a woman. She even looks like the princess. They mostly go to the market together’. 2. The determining factor for the assessment of these photos by the civil courts was §§ 22 and 23 of the Act on Artistic Creations 1907 [KUG, reference omitted] …These provisions state as follows: § 22: Pictures of people can only be disseminated or displayed publicly with the consent of the persons portrayed. In cases of doubt, consent is to taken as having been given if the person portrayed received a payment for letting himself be portrayed. After the death of the person portrayed, the consent of the relatives of the person portrayed is needed until 10 years have elapsed … § 23: (1) The following may be disseminated and displayed without the consent necessary in accordance with § 22: 1. Pictures of people from the realm of contemporary history; 2. Pictures in which the persons only appear as accessories near a landscape or other locality; 3. Pictures of meetings, processions and similar events in which the persons depicted have taken part; 4. Pictures of people which are not made to order insofar as the dissemination or display serves a higher interest of art. (2) The authorisation does not however extend to dissemination or display which violates a justified interest of the person portrayed or, if he has died, his relatives. (a) The LG allowed the claim insofar as it concerned the publication of the photos in magazines sold in France. In other respects it rejected the claim … (b) The OLG rejected the appeal of the complainant, revised the judgment at first instance on the cross appeal of the defendant and rejected the claim insofar as the LG had allowed it [reference omitted]. 3. The BGH quashed the judgment of the OLG in part, and revised the judgment of the LG in part, so that the defendant in the original proceedings was ordered to refrain from fresh publication of the photographs printed in the magazine Freizeit Revue with the picture of the complainant. The remainder of the appeal in law was rejected … II. The complainant contests all the civil court decisions, insofar as future dissemination of the photos was not forbidden, on the ground that they are violations of Article 2 I in combination with Article 1 I GG, in particular of the right to pictures of oneself and the right to respect for the private sphere … B. The constitutional complaint is in part well founded. I. The judgments under challenge affect the complainant’s general right of personality under Article 2 I in combination with Article 1 I GG. 1. The protection of the general right of personality extends to pictures of a person by third parties. (a) The basic right has the task of guaranteeing elements of the personality which are not the object of the special guarantees of freedom in the Basic Law but which are just as important as these in their constitutive significance for the personality [references omitted]. There is a need for such a guarantee to close up the gaps, particularly in view of new types of danger to

Appendix 2  325 the development of the personality which mostly arise with scientific and technical progress [references omitted]. The assignment of an actual desire for legal protection to the different aspects of the right of personality must therefore be made with the danger to the personality to be deduced from the actual circumstances of the case primarily in mind. (b) Authority to publish photographs showing persons in private or every day contexts is to be measured by the right to pictures of oneself and the guarantee of the private sphere which are concrete forms of the general right of personality. (aa) Contrary to the view of the complainant, Article 2 I in combination with Article 1 I GG does not contain a general and comprehensive right of control over pictures of oneself. Insofar as she seeks to deduce such a right from earlier decisions of the BVerfG ­[references omitted], this is an incorrect generalisation of the protective content of the basic right guarantee which is formulated in the light of the actual cases. As the BVerfG has already emphasised many times, the general right of personality does not give the individual a claim only to be portrayed by others in the way in which he sees himself or wants to be seen [references omitted]. A wide protection of this kind would not only exceed the objective of avoiding endangering the development of the personality, but would also make deep inroads into the area of freedom of third parties. The complainant also does not find any fault with the way she is portrayed in the disputed photos, which the civil courts have regarded as in every respect favourable. She is much more concerned with whether photographs of her ought to be taken and published at all, when she was not acting in an official function but in a private capacity or every day context in public. The answer to this question is to be deduced from those expressions of the general right of personality which protect the right to pictures of oneself and the private sphere. (bb) The right to pictures of oneself [references omitted] guarantees to the individual the opportunity to influence and make decisions about the making and use of photographs or drawings of himself by others. Whether these show the individual in a private or public context does not in principle play any role here. The need for protection arises instead principally from the possibility of removing the image of a person in a certain situation from this situation, recording it as data, and reproducing it at any time before an enormous number of people. (This is similar to the ‘right to one’s own words’, and the right to pictures of oneself entered the constitutional case law following on from that right.) This possibility has grown even further through progress in photographic technology, which permits the taking of pictures from a great distance (recently even from satellite) and in bad light. With the help of reproduction technology, the kind of public before which the individual appears can be changed. In particular, the visible public in which one moves in normal public appearances can be replaced by the media public. Thus for instance the public in court, ie the audience present in the court room, differs from the media public produced by television, because the audience experiences events itself and can itself be seen and assessed by the parties to the proceedings [references omitted]. Besides this, the message conveyed by pictorial statements can change, or even be intentionally changed, with the change of the context in which a picture is reproduced. Out of the different protective aspects of the right to pictures of oneself, though, the only one which is significant here is the one which concerns the production of certain photos and conveying them to a larger public. It is not a question of manipulated photos or falsifications by a change of context, which is the primary object of the protection. On the contrary, the complainant takes as a basis the fact that the photos which are the subject of the dispute

326  Appendix 2 (and the accompanying article, which is likewise relevant to their content) reproduce situations from her life accurately and in a manner in which observers who were present could have seen them. She merely does not wish these situations to be recorded in pictorial form and presented to a wider public, because in her opinion they belong to her private sphere. (cc) In contrast to the right to pictures of oneself, the protection of the private sphere (which is also rooted in the general personality right) does not refer specially to pictures but is determined thematically and spatially. It includes on the one hand matters which are typically classified as ‘private’ because of their information content, because public discussion or display of them is regarded as improper, or because revelation of them is felt to be embarrassing or produces adverse reactions from the surrounding world, as is for instance the case with soliloquies in diaries [references omitted], confidential communications between married couples [references omitted], the realm of sexuality [references omitted], socially deviant behaviour [references omitted] or illnesses [references omitted]. If there is no protection from the desire of others for knowledge here, soliloquies, uninhibited communications between close relations, sexual development or the obtaining of medical help would be interfered with or made impossible even though conduct protected by a basic right was involved. On the other hand the protection extends to a spatial area in which the individual can sort himself out, unwind or even let go [references omitted]. It is true that this area also gives the opportunity to behave in a manner which is not intended for the public and for it to be seen or portrayed by outsiders would be embarrassing or disadvantageous for the person concerned. But in essence it is a question of a space in which the individual can be free from public observation and therefore from the self-control which this imposes, but without him necessarily behaving differently there than in public. If such areas of retreat no longer existed, the individual could be psychologically overtaxed, because he would always have to be paying attention to the effect he has on others and whether he is behaving correctly. He would lack periods for being alone and adjusting which are necessary for the development of the personality and without which it would suffer lasting damage. Such a need for protection also exists for people who are subject to special public attention because of their rank or reputation, their office or influence, or their capabilities or actions. A person who, whether willingly or unwillingly, has become a figure in public life does not thereby lose the right to a private sphere which remains concealed from the eyes of the public. This also applies for democratically elected office holders, who admittedly are publicly accountable for the conduct of their office (and must put up with public attention in this area), but not for their private lives in so far as these do not affect the conduct of their office. The home is generally recognised as constituting such a protected sphere. But because of the reference to the development of the personality, the area of retreat cannot from the outset be limited to it. This is so because the functions which it serves are only fulfilled if it does not end at the walls of the house or the boundaries of the garden. The free development of the personality would be substantially hindered if the individual could only escape from public curiosity in his own house. Necessary relaxation from a public which is marked by the pressure of functions and the presence of the media is to be obtained in many cases only in the seclusion of a natural environment, perhaps in a holiday resort. The individual must therefore in principle be able also to move in open but secluded countryside or in places which are clearly secluded from the general public in a manner free from public observation.

Appendix 2  327 That applies in relation to photographic techniques which surmount the spatial seclusion without the person affected being able to notice this. It cannot be determined in a general and abstract manner where the boundaries of the protected private sphere run outside the house. They can only be determined on the basis of the nature of the place to which the person affected goes. The decisive factor is whether the individual finds or creates a situation in which he may reasonably (and therefore in a manner recognisable to third parties) proceed on the basis that he is not exposed to the eyes of the public. Whether the prerequisites for seclusion are fulfilled can only be assessed in the situation in question. The individual can in one and the same place justifiably feel himself to be unobserved at times and not at other times. Being in an enclosed area also definitely does not always equate with seclusion. As the question is whether the individual may reasonably expect to be unobserved or whether he has gone to places where he will be in the public eye, seclusion, which is the prerequisite for protection of the private sphere outside one’s own home, may also be lacking in enclosed areas. Places in which the individual finds himself among many people lack from the outset the prerequisites for private sphere protection in the sense of Article 2 I in combination with Article 1 I GG. They cannot fulfil the need for retreat and therefore do not warrant the basic right protection, which this need serves on the grounds of development of the personality. The individual also cannot define such places as part of his private sphere by, for instance, conduct, which would typically not be exhibited publicly. It is not his conduct, either alone or with others, which constitutes the private sphere, but the objective facts about the locality at the time in question. If he therefore behaves as if he was not being observed, in places which do not have the characteristics of seclusion, he will himself remove the need for protection for types of behaviour which do not in themselves concern the public. The protection of the private sphere from public attention also does not apply when the individual himself indicates his agreement with certain matters, which usually count as private, being made public, for instance by concluding exclusive contracts about reporting on his private sphere. The protection of the private sphere in constitutional law under Article 2 I in combination with Article 1 I GG is not guaranteed in the interests of a commercialisation of the personality. Certainly no one is prevented from such exploiting of private areas. But he cannot simultaneously appeal for the protection of the private sphere, which is concealed from the public. The expectation that the outside world will not, or will only to a limited extent, take note of matters or types of behaviour in an area which has the function of a retreat must therefore be expressed in a manner which is consistent and covers situations comprehensively. That also applies for the case where the decision to allow or to accept the reporting of certain events relating to one’s own private sphere is made retrospective. (dd) The BVerfG has not yet decided what the protection of the private sphere means for family relationships between parents and children. But it is recognised that children need special protection because they must first develop into autonomous persons [references omitted]. This need for protection also exists in view of the dangers resulting from the interest of the media and users of the media in portrayal of children. This can disturb the development of their personalities more severely than those of adults. The area in which children feel themselves free from public observation and may develop must therefore be more comprehensively protected than that of adult persons.

328  Appendix 2 Parents are primarily responsible for the development of the personalities of children. Insofar as upbringing depends on undisturbed relationships with children, the special basic right protection of children does not merely have a reflexive effect in favour of the father and the mother [references omitted]. Instead specifically parental turning attention to the children falls in principle within the protective area of Article 2 I in combination with ­Article 1 I GG. The protective content of the general right of personality is then strengthened by Article 6 I and II GG which puts the state under a duty to secure those conditions of life for children which are necessary for their healthy development, and to which, in particular, parental care belongs [references omitted]. How the strengthening of protection of the personality by Article 6 GG should take effect in detail cannot be generally and abstractly determined. Certainly there will as a rule be no need for protection if parents deliberately enter the public arena with their children, for instance by participating together in public events or even taking a position in the centre of such events. In this respect they lay themselves open to the conditions of public appearances. In other respects the protection of the general right of personality can also however apply in principle in favour of specific parent–child relationships where the prerequisites for local seclusion are absent. 2. The decisions under challenge interfere with the complainant’s general right of personality. As the pictures enjoy the protection of this basic right, the judicial finding that they may be published against her will curtails the protection which she can claim the courts should respect even in private law disputes (see BVerfGE 7, 198 [207]). II. The judgments under challenge do not completely fulfil the requirements of Article 2 I in combination with Article 1 I GG. 1. The provisions of §§ 22 and 23 of the KUG on which the civil courts have based their decisions are certainly reconcilable with the Basic Law. According to Article 2 I GG, the general right of personality is only guaranteed within the framework of the constitutional order. The provisions about the publication of photographs of persons in §§ 22 and 23 of the KUG are included in this. The regime goes back to a scandal (photographs of Bismarck on his deathbed [reference omitted]) and the ensuing legal and political debate [references omitted]and seeks to establish an appropriate balance between regard for the personality and the interests of the general public in information [reference omitted]. According to § 22 sentence 1 of the KUG, pictures may only be disseminated or publicly displayed with the consent of the person portrayed. § 23 I of the KUG exempts, among other things, pictures from the realm of contemporary history (no 1) from this principle. However, according to § 23 II of the KUG, this does not apply for a dissemination by which a justified interest of the person portrayed is violated. By this graduated concept of protection, the regime takes sufficient account of the need for protection of the person portrayed as well as of the public’s wishes for information and the interests of the media who satisfy these wishes. That has already been established by the BVerfG [references omitted]. The view of the defendant that the regime contravenes the freedom of the press, because it amounts to a ban with a proviso for permission, gives no cause to assess the matter differently. There is no such ban, simply because the norms merely balance different legally protected interests of private persons. The regime here does not give a one-sided preference to protection of the personality. Admittedly it takes account primarily of the need for

Appendix 2  329 protection of the person portrayed at the first and third stages (§ 22 sentence 1 and § 23 II of the KUG). But the interests of press freedom (and the freedom to form opinions which lies behind this) come into play sufficiently at the second stage (§ 23 I of the KUG). Likewise it offers with its open formulations sufficient room for an interpretation and application which is in accordance with the basic rights. 2. The interpretation and application of the provisions do not however satisfy the requirements of the basic requirements in every respect. (a) The interpretation and application of provisions of the civil law which are in accordance with the constitution is a matter for the civil courts. They must however, in this connection, have regard to the meaning and scope of the basic rights affected by their decisions, in order that the significance of those rights in prescribing values is preserved even at the level of application of the law (see BVerfGE 7, 198; constant case law). For this purpose a balancing is necessary between the conflicting protective interests under the basic rights. This is to be undertaken within the framework of the features of the civil law provisions which are capable of being interpreted and has to take into consideration the special circumstances of the case [references omitted]. But as the legal dispute remains, in spite of the basic right influence, a private law one, and finds its solution in private law (interpreted as guided by the basic rights) the BVerfG is limited to examining whether the civil courts have had sufficient regard to the basic right influence [reference omitted]. On the other hand, it is not the business of the BVerfG to dictate to the civil courts how they have to decide the case in question in its outcome [reference omitted]. A violation of the basic rights will only lead to objection to the decisions under challenge if the fact that basic rights were to be complied with in interpreting and applying provisions of private law which were in conformity with the Basic Law has been overlooked; or if the protected area of the basic rights to be complied with has been determined incorrectly or imperfectly or their weight has been incorrectly assessed so that the balancing of the legal positions on both sides within the framework of the private law regime suffers as a result [references omitted]and the decision is based on this mistake. (b) In the present case, not only is the general right of personality but also the freedom of the press guaranteed in Article 5 I 2 GG (which is likewise affected by these provisions) to be taken into consideration in interpreting and applying §§ 22 and 23 of the KUG. In the centre of the basic right guarantee of freedom of the press is the right freely to determine the type, orientation, content and form of a publication [references omitted]. Included in this is the decision whether and how a publication is to be illustrated. The protection is not limited to certain subjects for illustration. It also includes the portrayal of persons. The protection does not depend on the particular nature or the level of the publication or of the report in detail [references omitted]. Every difference of this kind would amount in the end to assessment and control by state authorities which would contradict the essence of this basic right [reference omitted]. Press freedom serves the free, individual and public formation of opinion [reference omitted]. This can only succeed under conditions of free reporting for which certain objects or methods of presentation are neither prescribed nor excluded. In particular, formation of opinion is not limited to the political realm. It is true that it is of special importance there in the interest of a functioning democracy. Yet the political formation of opinion is embedded in a comprehensive multiply interlinked communication process which cannot be split into relevant or irrelevant zones either from the point of view of personal development or

330  Appendix 2 from that of democratic government [reference omitted]. The press must be able to decide according to journalistic criteria what it considers to be worthy of the public interest and what it does not. The fact that the press has to fulfil a function of forming opinion does not exclude entertainment from the constitutional functional guarantee. Formation of opinion and entertainment are not antitheses. Even contributions of an entertaining kind can form opinions. They can in certain circumstances stimulate or influence the formation of opinion even more permanently than exclusively factual information. In addition a growing tendency can be observed in the media of removing the division between information and entertainment in relation to a publication as a whole as well as in the individual contributions and to disseminate information in an entertaining form or to mix it with entertainment (‘infotainment’). Many readers consequently obtain the information which appears to them to be important or interesting from entertaining contributions [reference omitted]. But the reference to freedom of formation of opinion cannot be denied from the outset even to mere entertainment. It would be unbalanced to assume that entertainment merely satisfies the wish for diversion, relaxation, flight from reality and distraction. It can also convey images of reality and makes available subjects for conversation. Ongoing discussions and unifying events which refer to attitudes to life, stances about values and behaviour patterns can be linked into this. Entertainment in this respect fulfils important social functions [references omitted]. Entertainment in the press, measured by the protective purpose of freedom of the press, is therefore not insignificant or even worthless and is also included in the basic right protection [reference omitted]. This also applies to news reports about people. Personalisation forms an important journalistic means for arousing attention. It awakens interest in problems in many cases for the first time, and creates the wish for factual information. Participation in events and situations is also mostly communicated by personalisation. Besides this, prominent people stand for certain value concepts and stances about life. They therefore provide many people with a means of orientation in relation to their plans for their own lives. They become crystallisation points for agreement or disapproval and fulfil the functions of a model or a contrast. The public interest in the most varied aspects of such persons’ lives is based on this. For persons in political life, such an interest on the part of the public has always been recognised as legitimate from the point of view of democratic transparency and control. It cannot however in principle be disputed for other people in public life. In this respect, description of people which is not confined to certain functions or events is in line with the tasks of the press and therefore likewise falls within the protected area of press freedom. Balancing against the conflicting rights of personality is needed to determine whether there is a serious and relevant discussion of questions which substantially concern the public or merely dissemination of private matters which only satisfy curiosity [reference omitted]. (c) The judgment of the BGH overwhelmingly satisfies constitutional law examination in the end result. (aa) There is no objection in constitutional law to the fact that the BGH has determined the prerequisites of the definition in § 23 I no 1 of the KUG according to the standard of the general public’s interest in information; and on this basis has regarded publication of pictures of the complainant even outside her representative function in the principality of Monaco as permissible.

Appendix 2  331 § 23 I no 1 of the KUG exempts the publication of pictures of people from the area of contemporary history from the requirement of consent in § 22 of the KUG. The provision according to its legislative intention [reference omitted] and according to the sense and purpose of its regime takes into consideration the general public’s interest in information and the freedom of press. The interests of the public are therefore to be observed in the interpretation of the features of this definition. This is because pictures of people who are not important in terms of contemporary history may only be made freely available to the public, with the consent of the persons affected. The further feature contained in the definition in § 23 II of the KUG of the ‘justified interest’, which is open to the influence of the basic right, only refers from the outset to persons of importance in terms of contemporary history and cannot consequently sufficiently uphold the interests of press freedom if these interests have been left out of consideration previously by the delimitation of that group of persons. The concept of contemporary history in § 23 I no 1 of the KUG does not, according to the standard of a judicial determination as to its content, only encompass for instance events of historical or political importance, but is determined by the interest of the public in information [reference omitted]. This takes account of the meaning and scope of freedom of the press without cutting down disproportionately on protection of the personality. It is part of the core of freedom of the press and free formation of opinion that the press possesses sufficient leeway within the statutory boundaries within which to decide, according to its journalistic criteria, what the public interest claims; and that it will emerge in the process of formation of opinion what a matter of public interest is. Contributions in the form of entertainment are not, as has been explained, excepted from this. There are further no grounds for objection to the fact that the BGH also allocates to the ‘area of contemporary history’ in accordance with § 23 I no 1 of the KUG pictures of persons who have not attracted the public interest to themselves by a certain isolated event of contemporary history but who attract general public attention on the basis of their status and importance, independently of individual events. In this connection, the increased importance which applies to photographic reporting today, in comparison to the time when the KUG was enacted, is significant. The concept of an ‘absolute person of contemporary history’, which is usually regarded as related in this connection by the case law and the literature, admittedly does not necessarily arise either from statute law or from the Basic Law. It is understood by the OLG and the BGH as shorthand for persons whose image the public finds worthy of attention because of the person portrayed. The concept is not however open to objection from the point of view of constitutional law as long as there is a balancing related to the individual case between the public’s interest in information and the justified interests of the person portrayed. The general right of personality does not require limitation of publications not needing consent to pictures which show persons of importance in the context of contemporary history exercising the function which they fulfil in society. A frequent characteristic of the public interest which such persons claim is that it does not only hold good for the exercise of the function in the narrower sense. Instead it can, because of the distinctive function and the effect which this has, extend to information about how these persons generally behave in public, and therefore outside their respective functions. The public has a justified interest in learning if such persons, who are often regarded as idols or examples, bring their functional and personal behaviour convincingly into line.

332  Appendix 2 A limitation of publication of images to the function of a person of importance in contemporary history would on the other hand not take sufficient account of the public interest which such people justifiably arouse. It would also encourage a selective presentation which would prevent the public from making assessments which are necessary in respect of persons of socio-political life because of their role function as models and their influence. This does not open up to the press unlimited access to pictures of persons of contemporary history. Instead § 23 II of the KUG gives the courts sufficient opportunity to put into effect the protective requirements of Article 2 I in combination with Article 1 I GG [reference omitted]. (bb) In principle, the criteria which the BGH has developed in interpretation of the feature of ‘justified interest’ in the definition in § 23 II of the KUG are not open to objection in constitutional law. According to the judgment under challenge, the private sphere which deserves protection (which the so-called absolute person of contemporary history is also entitled to) presupposes a secluded space into which someone has withdrawn in order to be on his own there in a manner recognisable to others; and in which, trusting in this seclusion, he behaves in a way in which he would not when in the public eye. The BGH assumes a violation of §§ 22 and 23 of the KUG if pictures are published which have been taken of the person affected in such a situation secretly or by using surprise tactics. The criterion of spatial seclusion takes account on the one hand of the purpose of the general right of personality of securing for the individual a sphere outside his own home in which he knows he will not to be under continual public observation. He does not therefore have to control his behaviour in view of this observation, but has the opportunity to relax and come to himself. On the other hand it does not restrict the freedom of the press excessively, because it does not completely remove the everyday and private life of persons of contemporary history from photographic reporting, but only makes it accessible for portrayal where it takes place in public. In a case of paramount public interest in receiving information, freedom of the press can even take precedence over the protection of the private sphere, according to this case law [references omitted]. The BGH might also regard the behaviour of the individual in a certain situation as having the indicative effect that he obviously finds himself in a sphere of seclusion. It is true that protection from portrayal in this sphere does not only start when the person affected behaves in a way in which he would not when in the public eye. The spatial seclusion only fulfils its protective function for the development of the personality when it secures for the individual a place for relaxation regardless of his behaviour at the time, in which he does not have continually to expect the presence of photographers and cameramen. But it does not matter in the present case because according to the findings on which the BGH based its decision, the first condition for protection of the private sphere is absent. Finally there are no grounds for objection in constitutional law to the fact that, in the balancing exercise between the public interest in information and protection of the private sphere, importance is attached to the method of obtaining information [references omitted]. There are doubts however about whether the private sphere outside the home can only be violated by photography by secrecy or surprise. In the light of the function which this sphere should fulfil from a constitutional point of view and in the light of the fact that it often cannot be seen from a picture whether it has been taken secretly or by surprise, an impermissible invasion of the private sphere can be found even when these characteristics are not present.

Appendix 2  333 As the BGH has however already denied that there was a sphere of seclusion for the disputed photographs, these doubts do not affect the outcome of its decision in this respect. (cc) The constitutional law requirements are not however fulfilled insofar as the decisions challenged have paid no attention to the fact that the complainant’s protected position in relation to her right of personality is strengthened by Article 6 GG in the case of family contact with her children. (dd) The following details result from this for the different photographs: The decision of the BGH in relation to those photographs which show the complainant on her way to the market, with a bodyguard at the market and with a companion in a well patronised café gives no cause for objection by the BVerfG. In the first two cases it is a question of places visited by the general public, which are not secluded. In the third case it is admittedly a question of an area which is spatially enclosed; but it is one in which the complainant is under the eyes of the members of the public who are present. For this reason the BGH did not dispute the prohibition on dissemination of photos from the garden café which are admittedly a subject of the decisions challenged, but not of the constitutional complaint. The place which the complainant occupied there with her companion showed all the characteristics of seclusion. The fact that the photographs have obviously been taken from a great distance additionally points to the fact that the complainant might assume she was not exposed to the eyes of the public. The decision is also not open to objection insofar as it concerns the photos in which the complainant is shown alone when riding and cycling. The BGH on the basis of its view of the matter likewise attributed them not to the sphere of local seclusion but to the public sphere. That is not open to objection in constitutional law. The complainant herself counts the photographs as belonging to the secluded private sphere only because she let her wish be known to be alone. But according to the criteria which have been explained, it does not merely depend on her will. On the other hand, the three photos in which the complainant is shown together with her children call for a renewed scrutiny from the constitutional law viewpoints which have been set out above. It cannot be ruled out that scrutiny on the basis of these standards will lead to a different result in relation to individual photos or all of them. In this respect the judgment of the BGH is to be quashed and the case referred back to it for a new decision. (d) As to the judgments of the LG and the OLG which have been challenged, a violation of the basic right follows from the fact that they have limited the private sphere protected by Article 2 I in combination with Article 1 I GG – admittedly in harmony with the case law at the time – to the area of the home. But it is not necessary to quash the decisions because the violation has been cured in this respect by the BGH and the matter is in other respects been referred back to it. Notes to Cases 12–20 1. The first of these cases marks a real turning point in German tort law by creating the new all-embracing right of personality and privacy, the so-called Allgemeines Persönlichkeitsrecht. One might therefore argue that the Schacht-decision reproduced here as case 12 is the most important case in German tort law since the enactment of the BGB in 1900. The right of personality and privacy is derived from a somewhat strained – but in the event successful – interpretation of the Basic Law, especially Article 1 and Article 2 GG. The l­inking of the development of private law with the Basic Law has already been noted

334  Appendix 2 (see above chapter two, section II.E.iv). Here suffice it to mention two further points of interest. First, it reveals that in Germany (as in the United States) the constitutional background has had a marked but different influence on the law of defamation and privacy. Thus, whereas in Germany this has often led to a greater protection of the personality and privacy, in America the emphasis on freedom of speech has often had the reverse effect. We shall return to this important point later on. Secondly, the interaction of public and private law has been maintained through these years, the Bundesverfassungsgericht often being called to decide disputes which involved privacy and personality rights questions. Thus, in Soraya decision of the BVerfG in BVerfGE 34, 269, it was called upon to consider the constitutionality of the award of monetary compensation in cases of infringement of this new right. A further relevant decision of that Court can also be found above as case 20. 2. At the risk of becoming repetitive, one must stress that these judgments, and indeed the constitutional provisions mentioned above, can only be fully understood if one bears in mind the utter contempt shown towards human dignity by the Nazi regime. It was ironical therefore that the breakthrough decision of Schacht (case 12) in 1954 was indirectly connected with one of its former sympathisers. (The Lüth judgment reproduced as case 11 and the Mephisto judgment of the BVerfG in BVerfGE 30, 173 also involved former Nazis.) For the mysterious Dr S of that judgment was Dr HHG Schacht, an undoubtedly distinguished economist and financier who played an important role in the restoration of a stable currency after the devastating German inflation of 1923. From 1923 to 1930 he served as president of the Reichsbank and became a supporter of the Nazi Party, even urging the ageing President Hindenburg to appoint Hitler as Chancellor of the Reich (which, eventually, happened in 1933). When Hitler came to power, Schacht played a leading role in the rearmament programme, but from 1938–39 onwards he was urging Hitler to reduce expenditure for armaments as the only way to balance the budget and reduce inflation which had begun to rise again. In July 1944, he was confined to a concentration camp until the end of the war and then he was one of the principal accused at the first Nuremberg trial. He was acquitted at the trial only to be brought subsequently before the German People’s court at ­Stuttgart under the ‘denazification’ laws which attempted to try ‘lesser’ collaborators of the Nazi regime. Sentenced to eight years’ detention in a labour camp, Schacht successfully appealed against his conviction and resumed a highly successful and respected career as a financier. 3. Soon after the Schacht decision, the BGH reaffirmed its stand in an interesting case brought as a result of the publication of Cosima Wagner’s private letters and diaries (BGH, BGHZ 15, 249); and, again, two years later in the Dahlke case (BGH, BGHZ 20, 345). A year later, the BGH declared its willingness to take the same stand when the interference with the claimant’s personality rights was merely negligent. There followed the landmark case of the Gentleman rider (Herrenreiter) (case 13). This decision, along with the Ginsengwurzel case of the Professor of Canon law (BGH, BGHZ 35, 363, previous edition, case 41), settled the problem of the theoretical basis of monetary compensation for violations of the new right, which had not been decreed until that moment. They also completed the judicial revolution started by the Schacht case for now the courts had given teeth to the new right allowing the claiment to ask for compensation beyond the restrictions of the BGB with regard to immaterial damages. During these years litigation increased at a considerable rate and in the process a number of issues were clarified. The following are but illustrations. BGHZ 24, 72 (communication of medical reports without the patient’s consent may amount to a

Appendix 2  335 violation of the right). BGHZ 27, 284 (recording a conversation with the speaker without his knowledge and consent may also infringe the new right). BGH, NJW 1965, 685 (fictitious interview with a well-known figure of international society). BGHZ 39, 124 (statements made about a television broadcaster can be actionable under this heading even though they could also have founded an action on defamation (§ 185 StGB in conjunction with § 823 II BGB)). Vis-a-vis this last point, however, there is a view (BGH, BGHZ 30, 7, 11) that argues that an action for violation of the right of a personality right has a residual character and will, normally, be available only if there is no other specific rule (the so-called besondere Persönlichkeitsrechte) that covers the point (eg, protection of name (§ 12 BGB); artistic creations, etc § 97 of the Copyright Act). For further amusing instances see OLG Frankfurt, NJW 1982, 648: defendant produced a sticker depicting two cranes, copulating, accompanied by, inter alia, the word ‘Lusthansa’; Lufthansa, which has a crane as an emblem, sued but failed. In OLG Frankfurt, NJW 1985, 1649 a different company produced a sticker with the letters BMW accompanied by the words ‘Bumms Mal Wieder’. In one sense this could be taken to mean ‘Bump [or bang] once again’, but bummsen can, in colloquial German, mean ‘to fuck’ so the famous motor car company successfully sued for an injunction. Though the decision was reversed on appeal (see BGH, BGHZ 91, 117; 98, 94), the extension of these rules to cover legal (as well as physical) persons is not in doubt: BVerfG, BVerfGE 21, 362; BGH, NJW 1974, 1762; BGH, NJW 1975, 1882; BGH, BGHZ 78, 24; BGH, ZIP 1994, 648. 4. English law has not recognised a person’s private life as a protected interest. The invasion of privacy is not a distinct tort (see Wainwright v Home Office [2004] 2 AC 406, commented by Morgan (2004) 120 LQR 393 and Johnston [2004] CLJ 15). Instead, breach of confidence has long been recognised as a wrong (Prince Albert v Strange (1849) 1 De G & Sm 652; Coco v AN Clark (Engineers) Ltd (1969) RPC 41). This has been extended gradually in the last 30 years to include the ‘misuse of private information’ which has been recognised as a tort (Vidal-Hall v Google Inc [2016] QB 1003). As the House of Lords case of Campbell v Mirror Group Newspapers Ltd ([2004] 2 AC 457, commented by Morgan (2004) 120 LQR 563) makes clear rights under the Human Rights Act 1998 were pivotal in bringing about this development. The English test asks first whether the information is ‘private’ and then whether any countervailing right or interest is sufficiently weighty to prevent its disclosure. The latter aspect usually involves a balance between Article 8 ECHR rights under the Convention (to family or private life) and Article 10 ECHR rights (freedom of expression). In this balancing, the views of the Strasbourg Court in dealing with the Caroline of Monaco/ Hannover cases coming from the German courts has been significant (Von Hannover v Germany (59320/00) (2005) 40 EHRR 1 and Von Hannover v Germany (No 2) (40660/08 and 60641/08) (2012) 55 EHRR 15: see, eg, HRH Prince of Wales v Associated Newspapers Ltd [2008] Ch 57). It is through the Strasbourg Court that ideas arising in different national courts are being shared. 5. In Germany, if it is established that the claimant’s claim can proceed on the grounds that his personality right has been interfered with, then the court is obliged to consider the merits of the claim in the light of all the surrounding circumstances. The difficulties involved in balancing competing values are fully exposed and considered in case 14 which shows, inter alia, that not only celebrities but also ex-convicts have personality rights which can be violated. Finding the via media in such circumstances is by no means an easy task; but it is one which, overall, is performed with admirable clarity and courage of opinion by

336  Appendix 2 the BVerfG. The approach in such matters being casuistic, it is difficult to state hard and fast rules. Nevertheless, three threads of thought are discernible in the judgments. First, freedom of expression expressed in Article 5 GG will, on the whole, prevail over the personality rights of third persons where the publication, broadcast, etc aim at educating and informing the public rather than pursuing mere sensationalism or trying to satisfy the public’s taste for gossip. However, when human dignity is (grossly) violated and not only incidentally affected there is no room for a balancing process and the personality rights prevails. (See, eg, BVerfG, NJW 2001, 2957, 2959.) Secondly, the chances of success of a personality rights infringement claim tend to decrease as the public profile of the claimant increases. But even public figures can seek protection of their privacy in appropriate circumstances. (See the Caroline of Monaco cases 19 and case 20. See also §§ 22, 23 of the KUG.) Finally, not every kind of speech receives the same, preferential treatment. Thus, speech that promotes the public good or is in the public interest will receive much greater protection than self-serving speech. (For instance, see the Höllenfeuer decision of 21 June 1966 (BGHZ 45, 296.) The above comments are noteworthy because they call into question any suggestion that German law does not protect free speech. Here, however, are some notable extracts that give the lie to such assertions. (i) ‘The basic right to freedom of expression, … is one of most precious rights of man. [This right] is absolutely essential to a free and democratic state, for it alone permits that constant spiritual interaction, the conflict of opinion, which is its vital element. In a certain sense it is the basis of freedom itself … freedom of expression is the matrix, the indispensable condition of nearly every other form of freedom’. Lüth judgment of the BVerfG, case 11. (ii) ‘Especially in public debate, criticism, even in exaggerated and polemical form must be accepted if one is to avoid limiting the process by which public opinion is formed’. Stern-Strauss judgment: BVerfGE 82, 272. (iii) ‘Where the person expressing the opinion is not pursuing objectives of selfinterest, but rather contributing to the public debate on a question of substantive concern to the public, then there is a presumption that the expression of opinion is permissible; an interpretation of the laws restricting freedom of opinion which makes excessively high demands as regards the permissibility of public criticism is not compatible with ­Article  5  I  GG. BGH, NJW 1994, 124 (translation N Sims from van Gerven, Tort Law (2nd edn, (2000) 149). (iv) ‘Contrary to the view of the complainant, Article 2 I in combination with ­Article 1 I GG does not contain a general and comprehensive right of control over `pictures of oneself. Insofar as she seeks to deduce such a right from earlier decisions of the BVerfG … this is an incorrect generalisation of the protective content of the basic ­guarantee, which is formulated in the light of actual cases. As this court has already emphasised many times, the general right of personality does not give the individual a clam only to be portrayed by others in the way in which he sees himself or wishes to be seen by others … A wider protection of this kind would only exceed the objective of avoiding endangering the development of the personality, but would also make deep inroads into the area of freedom of third parties’. Caroline judgment of 1999, BVerfGE 101, 361 (case 20).

Appendix 2  337 6. Monetary compensation is often the claimant’s main demand. The difficulties created here by the old (pre-2002) version of § 253 BGB – overcome by case 13 (and approved by the BVerfG in case 14). The BGH first started out to work with an analogy to the old § 847 BGB, but today damages for immaterial harm in this area are directly based on Article 1 I and Article 2 GG. This claim is a claim sui generis. But the violation into the claimant’s personality right must also be grave and objectively serious, otherwise the courts would be inundated with frivolous claims. FAULT Case 21 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 27 October 2009, NJW 2010, 537 Facts The claimant brings a claim for the payment of damages for the loss caused and compensation for pain and suffering as well as a finding of a duty of replacement for future pecuniary and non-pecuniary losses. On 18 March 2007, the claimant, as a member of the football club MTV R, played against the team of the FC E of which the defendant was a member. During the match, there was a tussle for the ball in which the claimant suffered a fracture of his shinbone and fibula. The claimant alleged the defendant had attacked him from behind with an outstretched leg after he had already passed the ball. The defendant claimed that both parties had run after the ball. He had allegedly reached the ball first. The claimant allegedly stretched out his leg for the ball and thus disturbed the defendant’s running. In this move, both parties had fallen. The claim was unsuccessful in both previous courts. The claimant’s admitted appeal was not successful either. Reasons [5] 1. The OLG Celle (VersR 2009, 1236) denies the defendant’s liability for the claimant’s damage caused by the accident. It held that a claim for damages by one participant of a competitive sporting activity against a fellow player requires proof that the latter did not act in conformity with the rules. Injuries which could also occur in the case of behaviour compliant with the rules (regular conduct) are accepted by every participant in the game which is why it is in any case contrary to the prohibition of bad faith self-contradictions if the injured person makes a claim against the injuring party – even though he could just as well have been in the same situation in which the defendant finds himself – but then (and with good reason) contests that he should pay damages despite having adhered to the rules of the game. The claimant, it said, has not delivered the proof of a rule violation of relevance. The statements of the witness, O, nominated by the claimant are not more believable than those of the other witnesses. The question whether the defendant has a liability insurance does not matter according to the OLG. The BGH’s decision according to which the exemption from liability is not to be presumed in the case of sporting competitions with significant risk potential provided that insurance coverage exists (cf this Senate, NJW 2008, 1591), was held not to be applicable to the present case. This decision concerns an injury at a motorsports event at which all participants were compulsorily insured. An extension of the

338  Appendix 2 principles in this judgment to private liability insurances, in contrast, is to be denied. The question whether and under which preconditions one participant in a sporting competition is liable towards the other would otherwise have to be answered differently for the players involved according to whether liability insurance cover is present or not. [6] II. These remarks ultimately hold up to an examination on appeal. [7] 1. The question for the clarification of which the OLG admitted the appeal, however, does not arise. [8] (a) The OLG admitted the appeal because of the question whether – in pursuance of the judgment of this Senate of 29 January 2008 (NJW 2008, 1591) – an exemption from liability does not come into consideration in the case of sporting competitions with significant risk potential even when a private liability insurance is present. In this judgment – which is based on a rear-end collision during a motorsport event at the Hockenheimring – the relevant Senate decided that, as a rule, one can neither proceed from an implied exemption of liability nor consider the assertion of a claim for compensation to be bad faith if there is insurance coverage for the damage which is expected or arises due to the special risk potential of a sporting event. If the existing risks are covered by liability insurance there is neither a reason for the assumption that the participants wanted to waive potential claims for damages against each other nor does it appear against good faith if the injured party claims for the damage covered by the insurance (cf this Senate, NJW 2008, 1591). The Senate has therefore ascribed the existence of insurance coverage a claim-maintaining function. [9] (b) The question whether the defendant’s liability was impliedly waived or the assertion of claims made against him are contrary to good faith does not matter in this dispute. The liability of the defendant is already not established because the requirements of the only available ground for a claim in the present case, § 823 I BGB, are not fulfilled. The defendant’s necessary culpability is missing in any case. [10] (aa) The OLG rightly assumed initially that a sportsman’s liability under § 823 I BGB requires proof that the same has culpably infringed the rules of the sporting competition and in doing so injured another (cf this Senate, BGHZ 58, 40 [43]; BGHZ 63, 140 [142]; BGHZ 154, 316 [323]). In contrast, liability is excluded if it is about an injury which a sportsman sustains in the case of his opponent’s action which complies with the rules and the requirements of fairness which is always to be respected in exercising a sport (cf this Senate, BGHZ 63, 140 [143]; BGHZ 154, 316 [323]; OLG Köln, NJW-RR 1994, 1372). In such a case, the injuring party certainly did not behave in a careless manner (§ 276 BGB, cf this Senate, BGHZ 63, 140 [147]; NJW 1976, 957; NJW 1976, 2160; OLG Düsseldorf, NZV 1996, 236, [further references omitted]). The requirements for diligence incumbent on the participant of a competition are determined according to the realities of the sport where the accident occurred (cf this Senate, BGHZ 58, 40 [43]; NJW 1976, 2160). They are to be adjusted to the actual situation and the competition’s participants’ reasonable safety expectations and are fleshed out in the rulebook applicable for each competition (cf this Senate, BGHZ 63, 140 [142 ff]; NJW 1976, 2160; OLG Düsseldorf, NZV 1996, 236 [further reference omitted]. [11] The burden of proof for an infringement of a duty of care by the injuring party is carried, according to general principles, by the injured party (cf this Senate, BGHZ 63, 140 [148]; NJW 1976, 957 [further references omitted].

Appendix 2  339 [12] (bb) The OLG did not determine facts which would permit the legal assessment that the defendant culpably infringed rules of the game serving for the protection of the claimant or the requirement of fairness. After its own appreciation of the evidence and in a way which is not objectionable on appeal, it concurs with the regional court’s (LG) appreciation of the evidence that the testimonies of the witnesses named by the two parties are contradictory so that it may not draw a reliable conclusion as to the accuracy of the claimant’s account. The statements of the witness, O, named by the claimant, it says, are no more believable than those of the other witnesses, especially of the witness K working as a referee. The fact that the witness O does not have a completely accurate memory of the incident is shown by his indisputably incorrect statement the referee had shown the defendant the red card. It is said that the witnesses B and S did not notice an infringement of the rules but a fair tussle for the ball. As part of the consideration of the evidence, special importance is attached to the testimony of the referee K. The latter did precisely not confirm the claimant’s assertion that he had not bothered with the red card because the match was being interrupted anyway, but stated that both players had tackled fairly. The defendant supposedly did not commit a slide tackle, otherwise he would have blown the whistle. Nevertheless both had fallen. How exactly this had happened, he did not know. In the game report he had also only stated that the players had fallen during a tackle. [13] The struggle for the ball between two players during which one or both players fall from time to time is, however, part of the very nature of a football match and therefore does not constitute a breach of duty in itself. [14] (c) Because the necessary requirements of § 823 I BGB are not fulfilled, it does not matter whether the defendant had liability insurance. The existence of liability insurance cover cannot replace the defendant’s missing culpability. Insurance coverage does not function as the foundation of a claim as a matter of principle (cf BGHZ 23, 90 [99]; This Senate, NJW 1958, 1630; NJW 1979, 2096; cf for the exception in the case of the existence of compulsory insurance for a special claim regardless of culpability for reasons of fairness pursuant to § 829 BGB Senate, BGHZ 76, 279 [283]; BGHZ 127, 186 [192]). This corresponds to the general principle that the insurance depends on the liability and not the other way around, the liability on the insurance (Trennungsprinzip [principle of separation between question of liability and the question of solvency]). Note to Case 21 Case 21 deals with two important and widely discussed topics of German Tort (and Insurance) Law: the question in which circumstances a participant of a sporting competition who got injured during the competition by another sportsman can claim damages for material and immaterial loss under § 823 I BGB (and § 823 II BGB); and the question whether the existence of a defendant’s liability insurance has any impact on his tort liability. The key issue to answering the first question is whether the defendant acted recklessly or negligently under § 276 I BGB – negligence requires that the defendant did ‘not exercise the care expected in daily affairs acts negligently’ (§ 276 II BGB). Here the BGH sheds some light on the problem of ‘fault’ in § 823 I BGB and stresses that this element is not fulfilled if the defendant’s actions comply with the rules and the requirements of fairness. That the borderline can, despite this judgment still, be blurry goes almost without saying – hence it remains to some extent a case-by-case decision.

340  Appendix 2 In English law, a distinction is drawn between the duty of care which is owed by the participant in a sport to other participants and the standard of care against which breach of that duty is assessed. All players of a sport owe each other a duty to take reasonable care not to cause injury. That is an invariable duty. But the standard against which the performance of the duty is assessed is variable. As Mark James (Sports Law, 3rd edn, 2018, no 4.4.2.1) writes The standard of care owed is that of the reasonable player in the circumstances in which the incident took place; this requires the defendant to be judged against the standard of the reasonable player who is playing the same sport at the same level of the sporting pyramid as they are. So, in Pitcher v Huddersfield Town Football Club [2001] All ER (D) 223, the standard used by the judge was that of the reasonable professional First Division footballer. But in Richardson v Davies [2006] 1 Current Law 405, a different player was judged against the care and skill expected of a player in an amateur Sunday league. As in case 21, breach of a duty of care does not flow from a mere error of judgment or a momentary lapse of skill (Caldwell v Maguire and Fitzgerald [2001] EWCA Civ 1054). So, in Pitcher, a mistimed tackle which was a foul under the rules of football was not enough to constitute a breach of a duty of care. A foul which is also a breach of the safety rules of the game (eg, that a hockey stick should not be raised above knee height) would constitute negligence: Leatherland v Edwards (High Court unreported 1998, see James, Sports Law, 3rd edn, 2018, no 4.4.1.3)). At the end of the decision the judges reconfirm a long-standing position of the BGH, namely that the existence of a defendant’s liability insurance cannot replace his missing culpability (Trennungsprinzip). The sole fact of the insurance coverage cannot function as the foundation of a tort liability, or in the words of the BGH: the insurance depends on the liability and not the liability on the insurance. However, it is interesting to note that despite the confirmation of the Trennungsprinzip by the BGH, there seems to be a (hidden and by the courts disputed) tendency in case law to impose liability more readily on the defendant if he is insured than in cases where he is not (see Janssen, Präventive Gewinnabschöpfung (2016) 133 ff). The fact that the defendant is insured is formally irrelevant to a tort action, so the German Trennungsprinzip is also recognised in English law (Winfield and Jolowicz on Tort (19th edn by Peel and Goudkamp, 2014) no 1-023). But in sports law, insurance matters. First, most insurance policies exclude liability for intentional acts, so the claimant will normally sue for negligence, rather than for an (intentional) trespass to the person. Secondly, the availability of insurance is one reason which supports the vicarious liability of sports clubs for the acts of their players (see Gravil v Carroll and Redruth Rugby Football Club [2008] EWCA Civ 689). CONTRIBUTORY FAULT Case 22 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 9 JUNE 1967 JZ 1968, 103 = VersR 1967, 808 Facts On 6 January 1961 early in the morning, while it was still dark and raining slightly, R, a miner aged 27 years, was cycling to his place of work on an illuminated road. Shortly before he had reached a turning, the defendant motorist ran into R from behind, ­catapulting

Appendix 2  341 him onto the side of the road where he was hit and killed by a motor car travelling in the opposite direction. The claimants, assignees by subrogation of the claims of R’s widow born in 1936 and of his two children born in 1954 and 1958, sued the defendant on the ground that he was alone responsible for the accident, having driven without due care and with a dirty windscreen. The defendant denies any responsibility. He had been blinded by an oncoming car owing to defective vision, of which he had been unaware hitherto and therefore failed to see R. Moreover, R was himself to be blamed because he was cycling without an illuminated rear light and was too far left on his side of the road. The LG, relying on the Road Traffic Act, gave judgment for the claimants, limited to the amount payable under that Act, and granted a declaration asked for within the limits of liability set by the Road Traffic Act. On appeal by the claimants the OLG Hamm held the defendant liable to pay full damages on the ground of liability for negligence and rejected the plea of contributory negligence. A second appeal by the defendant was unsuccessful for the following. Reasons I. 1. The OLG starts from the premise that prima facie the defendant appears to have been negligent. The defendant, driving with dimmed lights, ran into the cyclist because he did not see him. In these circumstances common experience leads to the conclusion that the defendant acted negligently inasmuch as he drove either without sufficient care or at a speed incompatible with his field of vision. 2. The defendant does not contest this prima facie evidence. He only questions the view taken by the OLG that the defendant had not discharged the burden of proof incumbent upon him thereafter to show as a serious possibility that the events may have taken place without any negligence on his part. (a) The OLG assumes in favour of the defendant that owing to the special light conditions at the time of the accident he was blinded due to a defect of vision of which he was ignorant. Nevertheless it held that he had not discharged his burden of proof. The OLG held correctly that the test is whether the defendant could at least realise the limits of his vision, and it is convinced that he could. This conclusion is based on the consideration that like every motorist the defendant must at least be aware of his individual powers of vision [references omitted]. In determining negligence it is therefore irrelevant in law what the circumstances are which affect an abnormal individual vision. Thus a motorist so affected is treated no differently from one whose vision is perfect. The latter, too, is expected to know the limits of his vision, a knowledge obtained not by means of exact figures, but through his own experience. In determining whether the defendant was negligent the question is therefore not whether he knew or ought to have known of his defect of vision … but whether he ought to have known the effect of this defect and therefore the limits of his individual capacity to see. The OLG has answered this in the affirmative without committing an error of law. This determination is all the more valid since according to the experts the defendant was born with this defect of vision and as he had driven a motor car since 1956. If, however, the defendant could recognise that his personal vision was limited he could and should have so adjusted his driving, especially his speed so as to satisfy the requirements of traffic and to be able to stop, if necessary. The OLG has held correctly that the defendant has not shown that he has complied with this requirement.

342  Appendix 2 II. The OLG rules out any contributory negligence on the part of the cyclist R. 1. The OLG was unable to find that the rear light of the bicycle did not show. It has also not blamed R for having ridden too far left on his side of the road. The judge of fact adopted the allegation of the claimants that R wanted to turn left into the side street and had therefore moved to the middle of the road. The LG had pointed out that R took this route daily on his way to work … 2. The further allegation of the defendant that R had not indicated his intention to turn left by raising his left arm was rejected as irrelevant by the OLG because on the defendant’s own admission he had not seen R at all. The defendant objects that the presumed conduct of R had been dismissed as the cause of the accident. He argues that it was not decisive that he had failed to see the cyclist but that it was decisive whether he would have seen R if he had indicated his intended change of direction by raising his left arm. Common experience supported this conclusion; moreover a presumption operated against the cyclist since the latter had violated § 11 I of the Road Traffic Regulations (StVO), ie, had failed to indicate his direction. In the result the OLG was right. The purpose of § 11 I of the Road Traffic Regulations is to eliminate the dangers which threaten – apart from the person making the turn – the traffic behind and in the opposite direction. It is intended to draw the attention of these road-users to the imminence of the traffic manoeuvre, to make them use care, and thereby to avoid the danger of accidents. This was not the case here. The collision did not occur because the defendant in his motor car overtook the cyclist on his left side without noticing the latter’s intention to turn; it occurred because in proceeding straight ahead he did not see the cyclist … It is not, however, the purpose of the protective rule which imposes the duty to indicate a change of direction, to ensure that the person subject to this duty is noticed in the traffic irrespective of his intention to make a turn. Case 23 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 17 JUNE 2014, NJW 2014, 2493 Facts The claimant seeks damages after a road traffic accident which took place on 7 April 2011. Around 3.45pm she was riding her bike on the C-road in G in the direction of the centre on the way to her place of employment located there. The first defendant was parked on the right edge of the road, with her car covered by liability insurance from the second defendant. The first defendant opened the driver’s door directly in front of the approaching claimant. The claimant could no longer avoid it, crashed into the door, dropped to the ground and fell on the back of her head. As a result, the claimant who was not wearing a cycle helmet incurred a serious concussion. It is undisputed that the first defendant alone caused the accident. The defendants, however, accuse the claimant of a contributory fault of 50 per cent because she had not worn a helmet. The second defendant has acknowledged its obligation to indemnify for half outside court. The LG Flensburg allowed the declaratory action. On appeal by the defendants, the OLG Schleswig partially amended the judgment of the regional court and – in dismissing the claim as for the rest – matched the action for a declaratory judgment with a liability share of (only) 80 per cent. The claimant’s appeal admitted by the OLG was successful.

Appendix 2  343 Reasons [5] II. The OLG’s view that the claimant’s claims for compensation for material and immaterial damages pursuant to the paragraphs of the Road Traffic Act (RTA) (Straßenverkehrsgesetz) §§ 7, RTA and 18 RTA are reduced due to contributory fault according to § 9 RTA and § 254 I BGB because the claimant did not wear a cycle helmet does not stand up to the re-examination on appeal. [6] 1. The decision about the apportionment of liability for the purposes of § 254 BGB, is in principle, however, a matter for the trial judge and, on appeal, is only to be checked for whether the latter fully and correctly took into account all circumstances coming into consideration and based the assessment on legally admissible considerations. First and foremost, according to the constant case law of the BGH, what is of importance for this, is the extent to which the participants contributed to the causation of the damage (Senate, NJW-RR 2012, 157, para [14] with further references). Pursuant to the findings made by the OLG and not attacked by the appeal, not wearing a cycle helmet was the cause of the severity of the head injuries suffered by the claimant. A helmet could, admittedly, not have prevented the concussion suffered because of the fall. A helmet does, however, have the function of a crumple zone which absorbs the bluntly impacting energy. The force of the impact is spread over a larger area and therefore moderated. In the present case, a cycle helmet could have, at least to some extent, lessened the consequences of the injury. [7] 2. The objective contributory causation founded on not wearing a cycle helmet with regard to the severity of the injuries suffered by the claimant does not, however, contrary to the view of the OLG, lead to the reduction of the claim under § 254 I BGB. (a) § 254 BGB is based on the general policy consideration that the injured person is jointly responsible for any damage to the occurrence of which he has contributed in a way that can be ascribed to him (cf BGHZ 135, 235 with further references). § 254 BGB is a manifestation of the principle of good faith (Treu und Glauben) defined in § 242 BGB (this Senate, BGHZ 34, and NJW 1982, 168 with further references). Because the legal framework does not prohibit self-endangerment and self-harm, in the context of § 254 BGB it is not about an unlawful breach of a legal duty owed with regard to another or to the general public, but about a violation of what is required for the protection of one’s own interests, ie about the infringement of an obligation owed to oneself (cf Senate, NJW 2010, 927 para [16] with further references). The possibility of a reduction of the injured party’s damages which is envisaged by the law rests on the idea that someone who disregards the diligence which seems necessary in the situation to protect himself from injury must also accept the loss or the reduction of his claims (cf this Senate, BGHZ 9, 316), because in the relationship between the injuring and injured party, it appears unfair that someone demands full compensation for damages suffered despite his own shared responsibility. A reduction in damages pursuant to § 254 BGB does not depend on the injured party having breached a legal duty [reference omitted]. Notably, it is not necessary that he contravened a statutory provision (cf this Senate, NJW 1979, 980) or another conduct requirement such as, eg, an accident prevention regulation. [9] (b) The injured party’s contributory fault within the meaning of § 254 BGB is already to be assumed if he disregards the diligence a reputable and reasonable person usually exercises to prevent injuries to himself (constant case law, cf, eg, this Senate, BGHZ 9, 316;

344  Appendix 2 BGHZ 35, 317, 321; NJW 1965, 1708 and NJW 1978, 2024). He must behave ‘correctly for traffic’ which is not only defined by the written rules of the Highway Code, but by the specific circumstances and dangers of traffic, as well as by what is reasonable to require of road users to keep that danger as low as possible (this Senate NJW 1979, 980 and 1367). According to this, it would be sufficient for the joint liability of the claimant if, at the time of the accident in 2011, wearing a protective helmet was necessary for cyclists for their own protection according to the general traffic awareness. [10] (c) The OLG presumes that this had been the case. It holds that the general traffic awareness with respect to the wearing of a protective helmet when cycling has greatly changed in recent years as a result of which, according to the current state of knowledge, it can be assumed as a matter of principle that a reputable and reasonable person wears a helmet when cycling to prevent damage to himself when he enters the public road traffic. The appeal successfully opposes this assessment. [11] (aa) The OLG largely bases its judgment on considerations regarding the particular risk of injury to which cyclists are exposed in road traffic nowadays. The risk of injury and knowledge of it alone do not, however, establish behaviour appropriate for road traffic. Even today’s level of knowledge) with respect to the possibilities of meeting the risk of injury with protective measures does not justify the conclusion that a cyclist only behaves appropriately for traffic if he wears a helmet. In this respect, the advancement of safety features and equipment may be taken into account to some extent [reference omitted]. But the technical development only has a limited significance for the assessment of the question of what really corresponds to today’s general traffic awareness. [12] (bb) The relevant Senate has, in a decision which was about the question of the contributory fault of a motorcyclist who suffered a head injury in a traffic accident in 1974 because he was not wearing a helmet, commented in more detail on the requirements for the acceptance of conduct appropriate for traffic (Senate, NJW 1979, 980). To this end, it explained that neither the dangerousness nor the moped riders’ awareness of such dangers which is possibly enhanced with respect to the past – not least because of the increasing density of traffic – suffices to judge riding without a helmet as inappropriate for traffic. Survey results, statistics and official or unofficial surveys which are, however, not present, can be used for the assessment of a general opinion, according to the Senate. Without such sufficiently reliable documents, there can be no talk of a general opinion that it is always necessary for a reputable and reasonable moped rider to wear a protective helmet for his own protection on his rides because even the legislator – of whom careful reflections and inquiries on this question can be expected – at the end of 1975 still put the relevant dangers into perspective and considered the obligation or the moped riders’ relevant acquisitions with respect to this as unreasonable. Under these circumstances, it was not obvious for the injured moped rider at the time that he must put on a helmet for his protection. Apart from this, it is not clear whether precisely in the area in which he lived, such a practice already existed among moped riders. [13] (cc) These considerations can also be drawn on for the assessment of traffic-appropriate behaviour in the present case. Unlike then, there are, as the appeal points out, official statistics on the effective acceptance of cycle helmets. Since the mid-1970s, the Federal Highway Research Institute regularly carries out representative traffic monitoring in the whole of the

Appendix 2  345 federal territory as part of which, among other things, the wearing of protective helmets and protective clothes by riders of two-wheeled vehicles is recorded annually. According to this, in 2011 11 per cent of cyclists across all age groups wore a protective helmets in urban areas (Federal Highway Research Institute, compact research 06/12, published on www.bast.de). Hence, according to the assessment of the Federal Highway Research Institute at the time, the proportion of people wearing helmets has risen slightly by comparison with the previous year (9 per cent) but is still at a modest level. Under these circumstances the assumption the necessity of wearing a cycle helmet corresponded to the general traffic awareness in 2011, is not justified. [14] However, the working group IV of the 47th Traffic Courts Convention 2009 decided on a recommendation which, inter alia, reads: ‘participants of cycle traffic are recommended to wear a helmet as well as to urgently conclude a liability insurance’ (47. TCC 2009, 8). The legislator has, however, due to traffic policy considerations deliberately refrained from introducing an obligation for cyclists to wear a helmet. The federal government has, in 2012, explained on the topic of traffic safety for bicycle traffic in response to a ‘short survey’ of parliamentarians and the parliamentary group Bündnis 90/Die Grünen that the voluntariness of wearing a cycle helmet is the approach of the freshly adopted programme for traffic safety 2011 (BT-Drs. 17/8560, 13). The introduction of an obligation to wear a helmet is not yet being pursued by the current federal government either. Thus, it instead says in the coalition agreement ‘Shaping Germany’s Future’ between the CDU (Christian Democratic Union), CSU (Christian Social Union) and the SPD (Social Democrats), 18th parliament ([internet reference]) on the subject of bicycle traffic one wants to work towards significantly more cyclists wearing a helmet. Such remarks and recommendations may, in the long term, contribute to increasing the acceptance of wearing a helmet. They are unable to provide proof for corresponding general traffic awareness) in 2011. [15] (d) Contrary to the view of the OLG, is should therefore be maintained in line with the past case law of the OLGs and the overwhelming view of academic writing that the claims for damages of a cyclist who suffered head injuries – which could admittedly not have been prevented by wearing a protective helmet but could have been mitigated – in road traffic due to a traffic accident are, in principle, at least for accidents before the year 2011, not reduced due to contributory fault pursuant … There is no need for a decision as to what extent not wearing a protective helmet can constitute contributory fault in the case of the cyclist’s sporting activity [16] 3. In the light of the foregoing, the challenged judgment cannot stand as was recognised to the disadvantage of the claimant. As no further determinations are required, the relevant Senate can, pursuant to § 563 III ZPO, decide the matter itself. The defendant’s appeal against the regional court’s judgment is, all things considered, to be rejected as the claimant’s request for a declaratory action turns out to be justified in its entirety. Notes to Cases 22 and 23 1. Case 22 illustrates certain problems that German law discusses under the headings of ‘unlawfulness’ and ‘culpa’ (very loosely translatable as fault). Their theoretical treatment has been sketched above (chapter two) but it is, again, at the level of concrete cases and specific issues that concept is concretised and the similarities become obvious and any comparison with the common law becomes meaningful. A number of points call for special comment.

346  Appendix 2 2. The standard of care expected of the defendant is discussed in cases 22 and 23. In case 23, the issue is whether the harm would have occurred even if the defendant had been wearing a helmet. In other words, the defendant’s negligence is not even a condition (let alone a legal cause) of the harm. But the evidence was not presented that was conclusive here. The standard of care will be determined objectively by reference to the behaviour of ‘a reputable and reasonable person’. Here, the basic idea is the same in American, English, and French law, though many formulations have been proposed and the terminology is slightly different. In practice, however, these are merely expressions of the anthropomorphic conception of justice as perceived by judges and/or juries. 3. Numerous statements can be quoted showing that no legal system expects the behaviour of the model citizen who is the paragon of all true virtue. Equally, however, no system is prepared to countenance the attitudes of the most callous, timorous, or indecisive members of its society. As Harper, James Jr, and Gray put it (The Law of Torts, 2nd edn (1986) 389–90): ‘As everyone knows, this reasonable person [sic] is a creature of the law’s imagination. He is an abstraction. He has long been the subject of homely phrase and witty epigram’. However, the reader must also take note of the clear trend discernible in all systems to raise standards in an effort to keep abreast with the quicker tempo and increased hazards of modern life. Thus, in certain areas of tort law – notably traffic accidents that account for a major part of litigation in all advanced legal systems – the presence of obligatory insurance may be the reason of an almost complete equation of negligence with near-strict liability. Case 22 is a good illustration of this tendency and one can find even clearer examples in French (Grenoble, JCP 1980.II.19340) and English law (Roberts v Ramsbottom [1980] 1 WLR 823). In the latter case the English court held ‘negligent’ a 75-year-old man who had a stroke a few minutes before setting off on a drive that was to lead to a series of accidents culminating in him being taken to hospital where his brain haemorrhage (of which he had had no previous forewarning) was finally discovered. In the Court’s view, nothing less than a complete loss of consciousness would have sufficed to exculpate him from liability. But case 23 shows that the decision about appropriate community standards may be influenced by professional, political and public debate. It is interesting to note that (at least at the time of writing), no definitive decision has been made by the courts reducing damages for the failure to wear a cycle helmet in the same way that Froom v Butcher [1976] QB 286 created a general rule on contributory negligence for the failure to wear seatbelts, even before this became legally compulsory. Case 24 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 19 FEBRUARY 1991 NJW 1991, 2340 = VersR 1991, 559 Facts The claimant sues the defendant for breach of his duty of safety. On 17 May 1986, when the claimant was barely six years old, he was playing on an undeveloped building plot of land belonging to the defendant and suffered serious injuries in an accident when a concrete ring on the land, about 1.2 metres broad and weighing 750 kg, fell on him. The land was readily accessible at the time. The claimant suffered a double fracture of the pelvis and damage to his urinary tract. The injury to his sphincter has caused incontinence. The claimant claimed

Appendix 2  347 DM 50,000 as damages for pain and suffering in addition to a further appropriate sum of at least DM 50,000. In addition, he claims DM 12,209.10 in respect of costs incurred by his parents in visiting him in hospital (travel DM 6,463.10, increased maintenance expenses DM 5,246 and overnight accommodation DM 500) as well as DM 40,800 lost earnings by the father and DM 9,768 as the value of the housework foregone by the mother while making the visits. For private medical treatment as an outpatient, not made good by the Krankenkasse, he claims DM 1,759.56, and a lump sum of DM 500 for incidental expenses. He also claims a declaration that the defendant is liable for any further harm, material or immaterial. The LG rejected the claim. The claimant’s appeal succeeded in part: the OLG München granted the declaration, and awarded the claimant DM 25,000 as damages for pain and suffering plus a lump sum DM 200 for incidental costs. His further appeal was also successful in part. The case was remanded for reconsideration of the unliquidated claim for damages for pain and suffering as well as the special damages of DM 38,968.66. Reasons 1. The court below accepted that the defendant was in breach of his duty of safety to the claimant (§ 823 I BGB): The defendant’s land was dangerous to children, since wedges holding the concrete ring could easily be removed and the ring set in motion. It was the dangerous insecurity of the concrete ring which injured the claimant. The land was readily accessible, either by a garden gate from the property leased by the claimant’s parents, or by a lane. Furthermore, the fence dividing it from the highway was broken at this point, and cars were actually being parked on the land. 2. On the view that the defendant’s fault was not very grave, the court below held that DM 25,000 was an appropriate sum for damages for pain and suffering, notwithstanding that the claim had been certified at first instance as worth DM 100,000. There was no sufficient legal basis for the mother’s claim for the value of the housework she had been prevented from doing, and the court below held that the claimant must further specify and prove the other unadmitted items of loss. Some of the appellant’s criticisms of the judgment of the court below are sound. The grounds on which court below concluded that the defendant was liable under § 823 I BGB were quite correct. If the owner of land knows or ought to know that, notwithstanding his prohibitions, children use his land as a playground and may play with dangerous objects there and get injured by them, he must take effective steps and lasting precautions to save them from the consequences of their inexperience and fecklessness [references omitted]. The facts found by the court below justify the conclusion that the defendant, who admitted to knowing that children often played on the land and climbed over the things on it, was in breach of this duty of safety. He should also have realised that the concrete ring which injured the claimant was so placed and so insecurely fixed that despite its great weight children could set it in motion, as occurred, and be exposed to great danger, and it should have been obvious that notwithstanding the danger, children would play with so inviting an object. As to the material loss claimed, the court below was correct to reject the claim in respect of the father’s loss of earnings and the value of the housework the mother was unable to do.

348  Appendix 2 However, the total rejection of the claims for travel costs, increased maintenance, and overnight accommodation was not justified. The law of tort is based on the principle that a claim may be brought only by the person whose interests are protected by the rule infringed, and then only to the extent that he personally suffers harm. Only in the exceptional cases provided by §§ 844, 845 BGB [partly revised] may there be compensation for economic losses resulting ‘indirectly’ from the invasion of the interests of others. The BGH has, however, regularly made an exception for the cost of visits by close relatives to the sickbed of the injured party and, because of their intimate connection with the cost of the victim’s recovery, treated them as part of the injury to his health (most recently BGHZ 106, 28 [30]). We adhere to the principle of these decisions, especially as it has long become established in practice. It remains the case, however, apart from the exceptional cases where a third party has a statutory right to sue (§§ 844, 845 BGB), that the victim’s claim for damages in tort basically covers only compensation for harm suffered by him personally, so claims for expenditure by a visitor depend essentially on who the visitor is. The mere fact that a third party is affected economically is not enough. Clearly no claim lies in respect of visits by persons not in the near family who attend out of a sense of social or similar duty. The rule of tort is not intended to compensate for such expenditures. But even as regards the expenses of those within the class of ‘near family’ there are limitations. It must always be borne in mind that such expenses, which do not cost the injured victim himself anything, are only exceptionally and on special factual grounds chargeable to the person causing the injury, for otherwise the door would be opened, contra legem, for the compensation of mere economic harm suffered by persons only ‘indirectly’ affected by the tort. Previous decisions have therefore always restricted compensation to claims by the ‘nearest family’ in respect of visits to a patient actually hospitalised, for only such visits can properly be regarded as both necessary for the recovery of the victim and also intimately connected with the cost of his cure, and so distinguished from expenses incurred either in law or in fact by those ‘indirectly’ affected as a result of the injury to the victim, which are not compensable under the law of tort. Indeed, the only visiting costs incurred by close relatives which can be compensated consistently with the Code are those which are medically necessary for the recovery of the patient in his existing condition, and only those which are unavoidably incurred. Where there is no such medical necessity, hospital visits even by close relatives cannot be compensated, however desirable as regards the psychic or physical condition of the patient, and the same is true of expenses which might have been avoided. Here the general rule laid down in §§ 249 ff BGB is not the sole consideration; the limits must be more tightly drawn because the law of tort is in principle restricted to the ‘direct’ victim. Previous decisions of this Senate which go any further than this will no longer be followed. The detailed result of this in relation to the holdings below which are criticised by the appellant is as follows: (aa) Travel costs form an expense necessarily involved in hospital visits, provided the cheapest means of transport is used and other economies observed. The court below regarded such expenses as harm to the claimant only to the extent that they had been met by the Krankenkasse, but as the appellant argues, this is inconsistent with § 287 Code of Civil Procedure, as the court did not ask why the Krankenkasse limited its payments or whether its limits were in line with the criteria of tort law as explained. The vouchers tendered by the

Appendix 2  349 claimant in support of this claim seem an adequate basis for evaluation under § 287 Code of Civil Procedure, at any rate so far as the number of visits is concerned. (bb) Exceptionally a claim may be made for overnight accommodation in connection with visits, provided it is unavoidable. The documentation of such expenses tendered by the claimant is sufficient to permit evaluation under § 287 Code of Civil Procedure. (cc) The cost of meals taken by close relatives while visiting hospital out of town depends essentially on the individual needs of the visitor. These determine whether in fact the cost of meals was ‘greater’ than those taken at home. In order to respect the non-compensability of the loss incurred by ‘indirect’ victims, compensation here must be limited to the unavoidable increase in the cost of meals. Only such increase is intimately enough connected with expenditures for the cure of the primary victim to be brought within § 823 I BGB. From this point of view the court below must evaluate the harm under § 287 Code of Civil Procedure, on further evidence supplied by the parties, if necessary. (dd) As to the claim for DM 40,000 in respect of the father’s loss of earnings, the following applies: This Senate has repeatedly held that loss of earnings suffered by the visitor is capable of being regarded as part of the cost of cure of the injured party for which the person causing the injury must pay, subject to the general duty to mitigate damage, which requires, inter alia, that a self-employed person change his hours of work within reasonable limits (see NJW 1985, 2757). Recovery for such losses is however limited to those so closely related to the cost of curing the victim that they can be seen as being truly costs of the visit; examples might be the loss by an employee of remuneration or perquisites if he can take time off work only on unpaid leave and cannot make it up later, or loss by a self-employed person directly attributable to the hospital visit and incapable of being made good in any other way. Beyond this, loss of income resulting from the fact that visiting hospital made the work more difficult cannot be treated as part of the victim’s costs of cure to be made good under the law of delict, for this would, contrary to the Code, amount to liability for harm suffered by persons only indirectly affected. In the present case, according to the claimant, the father, in employment as a manager, lost income because the hospital visits hindered him in developing a parallel practice as an independent accountant and tax adviser. Such a loss cannot be treated as part of the loss to the claimant which has to be made good. Leaving aside the question whether it was medically necessary for the patient to have the father by his side at the very time the latter needed to devote to his practice, losses such as these which are attributable to the fact that the visits to hospital left less time for the rapid development or extension of his business cannot be regarded as costs of the visit in the sense mentioned. The same would be true of delay in advancement or preferment in office. Such economic losses are harm suffered by third parties which is not compensable by the law of delict. (ee) Nor can interruption of housework by the mother be taken into account. The appellant refers to the decision of the Senate of 10 October 1989 (VersR 1989, 1247), but in that case the expenditure claimed was in respect of nursing the victim, an increase in his need which was compensable under § 843 BGB. Here the claimant claims compensation for the time his mother could not spend on housekeeping because she was visiting him in hospital. In accordance with the principles just laid down for treating lost time at work as one of the costs of the visit, compensation in tort cannot be given when work lost through the visit can be made up before or afterwards. This was obviously possible in this case, since no substitute home help was employed.

350  Appendix 2 (ff) In rejecting the claimant’s claim for damages in respect of the cost of private medical treatment the court below insisted on too stringent a proof of the expenditures and thus misapplied § 287 Code of Civil Procedure. Whether a person who has statutory health insurance may claim the cost of private medical treatment depends on the circumstances of the individual case (VersR 1970, 129; VersR 1989, 54), and the decisive point is whether a reasonable man in the position of the victim would regard such private medical treatment as necessary. The nature of the injury and the victim’s standard of living are especially relevant, but the court below did not consider these points, nor did it investigate the claimant’s assertion that doctors had advised him to go to a ‘special clinic’ for private medical treatment. (gg) The fact that the court below allowed the claimant a lump sum in respect of incidental expenses of only DM 200 discloses no errors of law in the claimant’s disfavour, and his appeal made no further mention of it. 3. The appellant is correct in arguing that as regards the quantum of damages for pain and suffering the court below misapplied § 287 Code of Civil Procedure. It is true that the judge of fact has a good deal of discretion in determining damages for pain and suffering, and his award cannot normally be criticised simply as being too high or, as here, too low. But this judicial discretion has its limits: the judge must show that in trying to reach a figure appropriate to injuries of that kind and duration he took all the relevant circumstances into account, and he must respect rules of law, canons of logic and the teachings of experience. The judge must also state the factual basis of his evaluation so that it may be seen that he has kept within these limits (invariable holdings, most recently NJW 1989, 773). The appellant is right to complain of the way the court below dealt with his claim for damages for pain and suffering. This is especially true as regards the declaration of the LG on 21 August 1989 when it gave full reasons for adopting the figure of DM 100,000 as the value of his claim under this head. On the claimant’s appeal, the court below agreed that this sum was appropriate, thereby adopting the reasons given, which thus ceased to be the mere assertions of the claimant, as the court below later held in the judgment under appeal. While it was not finally bound to this sum, the court should certainly have indicated in the judgment under appeal why it had come to so very different a conclusion on unchanged evidence. If in the absence of different evidence a later evaluation of the damages differs widely from an earlier one, the law of procedure as well as candour to the parties requires the court to indicate at least the critical points of difference. Only so can a court on appeal ascertain whether the court below regarded its earlier judgment as lying outside the discretion proper to the judge of fact or whether both sums lay within it (see NJW 1989, 773). Since such considerations are lacking in the judgment of the court below, it must therefore be vacated as inconsistent with § 287 Code of Civil Procedure, without prejudice to the power of the court on remand, if it gives sufficient reasons, again rejecting the claim for unliquidated damages for pain and suffering. Notes to Case 24 1. This line of cases demonstrates a degree of judicial creativity which common lawyers do not often ascribe to civilian judges. To understand the problem let us restate the basic stance of German tort law: negligently inflicted pure economic loss is not recovered under § 823 BGB. Relational economic loss of third parties, consequent upon injuries to one

Appendix 2  351 of the interests of another – the direct – victim are also not covered by § 823 BGB. The BGH always emphasised the importance of this general rule (NJW 2001, 971). The case concerned a claim for economic loss brought by the parents of a young man killed through the defendant’s negligence. Because of his death, the farm run by the victim ceased to operate and this, in turn, caused pecuniary loss to the parents. Given there was no interference with the right of an ‘established and operating business’ since the accident did not involve a direct interference (see chapter two, section II.E.iii), and since this was not the type of loss envisaged by §§ 843 ff BGB, the suing parents were denied recovery. However, in some cases interfering with a person’s physical integrity may cause economic loss to third parties and it would not be ‘fair, just and reasonable’ to deny this person any recovery. This was recognised by the fathers of the BGB; and they introduced limited exceptions to the above-mentioned general rules found in §§ 843–46 BGB (wrongful death situations. The most important is that the tortfeasor is liable to those of the dependants of the deceased victim who were entitled to receive maintenance from him. The victim’s injuries prompt close relatives to come to his aid in various ways such as visiting him in hospital, helping him cope with his disabilities and otherwise looking after him. As the present case demonstrates, if the recovery period of the victim is long, the relatives who provide this assistance may suffer considerable losses. However, the authors of the BGB did not provide for this eventuality as they did for the cases envisaged by §§ 843–44 BGB (wrongful death). These exceptions, being by their very nature exceptions to a given rule, cannot be applied by analogy to a different situation. Nevertheless the BGH has got round this difficulty by pretending that the costs incurred by the relatives can be seen as being part and parcel of the injury to the victim himself. 2. English courts have experienced similar difficulties in establishing a duty of care in comparable cases. (See Markesinis/Deakin, 831–32.) They also analyse the problem as one of the extent of the duty of care owed to the ‘direct’ victim. It should be noted that in England these cases are usually discussed in relation to the principle of res inter alios acta. The general rule appears to be that services provided by close family members (especially nursing care) do not diminish the loss of the direct victim (here the loss is analysed as that of the victim: see Cunningham v Harrison [1973] QB 942) More recently, a source of difficulties has arisen in connection with the question whether there is an obligation to account to the third party. Such an obligation (which – not surprisingly – has been found to stem from a trust) proceeds on the footing of a more realistic view and accepts that the victim is in fact recovering damages in respect of a third party’s (financial) loss. (See Hunt v Severs [1994] 2 AC 350, which makes recovery dependent on such an obligation, and, earlier, Lord Denning’s approach in Cunningham v Harrison and Others [1973] QB 942.) This latter aspect does not appear to have surfaced in the German case law, presumably because recovery is limited to losses sustained by close relatives. 3. German courts have allowed recovery of travel expenses, cost of staying at a hotel (and the like) and lost earnings, caused by the visits to the hospital. Even the cost of a ­babysitter has been held to be recoverable (For references to the rich case law see, Emmerich JuS 1992, 75). The present – restrictive – decision, however, shows that the BGH feels uneasy with the current state of affairs, largely because of the doubtful theoretical basis of such claims. It is thus at pains to stress the exceptional nature of the recovery. Accordingly, this tends to be limited in the following way. First, costs incurred by close relatives by visiting

352  Appendix 2 the victim (travel, overnight accommodation, increased maintenance costs, loss of earnings) can be included as part of the cost of the victim’s treatment and claimed under § 823 I BGB provided such visits are medically necessary and the expense unavoidable. The guiding (legal) principle is that of causation. Secondly, loss of earnings and housework done for the victim is compensatable only if the work could not be done before or after the visit. Finally, further economic losses are not compensatable. Whether these restrictions introduce greater consistency into the rich case law remains open to doubt. Thus, some authors have criticised the decision for being overly restrictive and argued that we have not yet heard the last word on this matter. CAUSATION Case 25 REICHSGERICHT (THIRD CIVIL SENATE) 13 OCTOBER 1922 RGZ 105, 264 Facts On 2 January 1920, as the claimant’s husband was about to alight from a tram, he was shot in the arm above the elbow by a policeman aiming at an escaping criminal. He was taken to hospital, contracted influenza (then prevalent in the hospital), and died on 18 March 1920 of a suppuration which developed in the chest in connection with the influenza. The claimant claims from the Prussian State under the Act of 1 August 1909 compensation for the loss arising from the death of her husband, caused by the fault of the policeman. The LG Berlin granted her claim in part; [on appeal,] the KG Berlin rejected it completely. The claimant’s application for review succeeded for these reasons. Reasons The KG agreed with the LG in finding it proved that the policeman who shot the claimant’s husband was guilty of a negligent breach of his official duty. Unlike the LG, however, it denied the causal connection between that shooting and the husband’s death. It regarded the influenza, from which the victim died, as a mere ‘subsequent accidental illness’ and continued: At a time when the influenza epidemic was so widespread throughout Germany, no particular causal significance can be attached to the fact that at that time the influenza was fiercely raging in the hospital and especially in the ward into which the claimant’s husband was taken. The risk of infection was the same inside the hospital as it was outside. Moreover, it is generally accepted that in hospitals the better hygienic arrangements and the continuous medical assistance if anything reduce such risks. Further, the applicant’s case was not strengthened by the argument that the weakening of the victim’s system by the shooting affected his resistance to infection or the illness that followed it. The applicant rightly complains that in this way the KG makes too rigorous demands for the acceptance of a causal connection. There is no doubt that between the shooting and the death of the claimant’s husband a causal connection in the natural, mechanical sense does exist: the claimant’s husband was taken into the hospital because he was shot. In the hospital he was attacked by the outbreak of influenza and succumbed to that illness. That causal connection was not excluded by the mere possibility that he could have contracted influenza elsewhere, and also without the shooting.

Appendix 2  353 Moreover, according to case law the causal connection – the so-called adequate connection – exists here. The taking of the injured person to the hospital was an unobjectionable (even though not absolutely necessary), appropriate, and normal consequence of the injury. However, once in hospital he was, contrary to the opinion of the KG, exposed to the risk of infection by a complaint prevalent to a particularly high degree because he could not escape from the company of the sick, as he might otherwise have done. He had to stay night and day in the ward where the influenza raged. That fact involved an enhancement of the risk of infection, according to human experience, and cannot be outweighed by any hygienic arrangements in the hospital or the care of the doctors and nurses. It must also be accepted that an injury, such as here existed, even if its cure progressed favourably, is in general not without effect on the resistance of the injured person against otherwise injurious influenza and that, therefore, the risk of an infection and its consequences is much greater than if there had been no injury. Accordingly, in agreement with the LG, the shooting must be in law found to have been a contributory cause of the death of the claimant’s husband. Case 26 BUNDESGERICHTSHOF (FIRST CIVIL SENATE) 23 OCTOBER 1951 BGHZ 3, 261 = VersR 1952, 128 Facts On 27 July 1948 six ships entered downstream the Datteln lock of the Lippe Side Canal. The first, the tug Dollart, was moored to barges Gesine and Heinrich Hirdseg (HH9), which were moored behind each other to the south wall. In the fourth place followed the MS Edelweiss, laden with 360 tonnes of wheat, on the way from Bremen to Rüdesheim. The Edelweiss lay on the starboard side of the HH9 and was moored to the north wall. Finally came the motor ships Weser I and Nixe moored behind each other to the north wall. The walls of the Datteln locks are strengthened towards the bottom so that their chambers have a conical instead of a rectangular cross-section. As the water-level then stood, with a difference of 7.46 m between high and low water, the clear distance between the wall diminished from 12.77 m above to 12.31 m below. For that reason the lock personnel were instructed to pass through ships side by side of the overall breadth of 11.75 m only. In the absence of the lock-keeper, the lock was operated by the subordinate T. He asked the skippers of HH9 and Edelweiss beforehand about the breadth of their craft. Edelweiss gave her breadth correctly as 6.67 m, whereas the skipper S gave the breadth of HH9 incorrectly as 5 m. It was actually 5.87 m. The pump operator M received the same answers to his questions. The subordinate T accepted the declared overall breadth as satisfactory, shut the upper gate, and emptied the lock chamber. As the water dropped, Edelweiss and HH9, which originally floated freely, were pressed together and also left rubbing marks on both walls. They were disregarded and the process was continued until the lower water level was reached. It was only when the skipper of the tug Dollart tried to drag the barges Gesine and HH9 that it was noticed that the latter was stuck fast to the Edelweiss and could not be moved. So Dollart dragged only Gesine out. Thereupon T and M, in the lock-keeper’s absence, decided to free the ships by raising the level of water in the lock chamber. The lower gate was shut and the sluice-boards of the upper gate raised 19 cm. The water level rose at a rate of 25 cm in a minute and a half. But the boats that were stuck together did not float

354  Appendix 2 up evenly. They were lifted like a roof along their common surface of contact but with their other surfaces listed, hanging on the lock walls. The Edelweiss, which had only a 15 cm freeboard, was threatened with flooding. Despite persistent danger signals the lock personnel failed to stop the rush of water in time. The Edelweiss filled with water and sank. Only the crew could be saved. The claimant, who had insured the owner of the Edelweiss, indemnified him and claimed DM 103,605 as compensation from the defendant as owner of the HH9, on the ground that the damage had been caused by its skipper’s incorrect statement of its breadth. The defendant rejected the claim, disputing the causality of the incorrect statement and attributed the damage exclusively to the unskilful steps taken by the lock personnel. The Navigation Court declared the claim (originally only for a part claim amounting to DM 10,000) against the defendant and the skipper S justified in full against the latter, but limited as to the defendant to the ship and cargo or their value. Only the claimant and the defendant appealed. The OLG allowed in full the claim, extended in the second instance to the total damage, and now directed only against the defendant, and rejected the defendant’s appeal. The application for review resulted in the decision being quashed and the case being referred back for the following. Reasons The OLG holds that the master’s incorrect statement of the HH9’s breadth was the immediate and adequate cause, not only of the jamming together of the ships, but also of the additional damage that arose from the loosening of the ships from the jam. It went on to say that jamming on leaving a lock, though infrequent, was not extraordinary, and that the instructions to the lock personnel took account of such an occurrence. In any case, the removal of the jam by letting the water in was not an extraordinary but the only solution. Risks in operating locks are always a matter of practical experience. These risks are multiplied if one of the foreseen dangers, here the jamming, intervenes and must be removed in a usual way, in accordance with practical experience. In so doing increased account must be taken of a failure, at the same time both human and technical in character. That is not at all improbable and should, according to general human experience, have been recognised by the bargemaster. Accordingly, the failure of the lock personnel was not enough to break the causal connection between the incorrect information about the breadth and the sinking of the Edelweiss. It must be conceded to the applicant that the statements concerning the causal connection as a presupposition of the defendant’s liability are not free from legal error. To begin with, the assumption that the blameworthy conduct of the master S was the immediate cause of the damage is not correct. S did nothing to lay Edelweiss alongside HH9 and thereby provide the first condition for the subsequent jamming. The choice of the berth depended on the free decision of the master of Edelweiss. Likewise, the placing of the boat at that spot depended on the decision of the lock personnel, who alone had to determine the occupation of the lock and approved the laying side by side, so as to make better use of the space. However, S’s incorrect statement of the breadth led to that decision and in that way indirectly caused the jamming. It is certain that the lock personnel would not have allowed the boats to be placed side by side, if they had known the correct breadth of the HH9.

Appendix 2  355 The incorrect information was therefore, in spite of its merely indirect operation, a conditio sine qua non of the further course of events. However, this alone does not prove that S caused the damage in such a way as to incur liability. It has long been undisputed in legal literature and case law that the scope of such natural logical causes is commonly far too wide for all their consequences to be imputed to the person causing them. Hence the jurists have elaborated the concept of adequate causation, which, according to the RG’s decision of 18 November 1932 [reference omitted], should make it possible to exclude some conditions, which from the point of view of natural science were conditions of a certain consequence, and without whose existence the consequence would not have occurred, for the purpose of causal connection in a legal sense; and the conditions which are logically most remote from the consequence should be excluded, because a consideration of those conditions would also lead to legal results that are at variance with equity. Adequate cause has been formulated mainly by von Kries, Rümelin, and Traeger (cf summary in Lindenmaier, ‘Adequate cause and proximate cause’ in Festschrift für Wüstendörfer, Zeitschrift für das gesamte Handelsrecht und Konkursrecht Heft 3/4 (­Stuttgart, 1950)) 113. Common to these formulations is the valuation of a concrete conditio sine qua non on the basis of its tendency to favour the consequence according to general standards. They differ according to the point of view from which the valuation is undertaken. While von Kries, the creator of the concept of adequate cause, prefers to undertake a valuation on the basis of all circumstances known or knowable individually to the originator of the condition at the time of its entry (ex ante), and also taking into account general practical knowledge (ex post) based on experience, Rümelin puts forward the theory of ‘objective hindsight’. For the formation of a judgment of possibility he prefers to have regard to the whole empirical knowledge of mankind and all the circumstances anywhere to hand at the time the condition occurred, whether they were recognisable by the most superior discernment or had first become recognisable ex post from events following the condition in question. Von Kries’s individual foresight proved to be too narrow for private law cases of objective strict liability and contractual liability, Rümelin’s objective hindsight too wide, to exclude with certainty the inequitable results of the condition theory. Rümelin himself accordingly found it necessary to curtail his doctrine, in so far as by the condition in question the injured party was brought into contact in time or in space with the damage-producing event. Traeger avoided the defects in both formulations with the following formulation (Kausalbegriff im Zivil- und Strafrecht (1904) 159): An event is an adequate condition of a consequence if it has in a general and appreciable way enhanced the objective possibility of a consequence of the kind that occurred. In making the necessary assessment account is to be taken only of: all the circumstances recognisable by an ‘optimal’ observer at the time the event occurred, the additional circumstances known to the originator of the condition. The factual situation so established is, according to Traeger, to be examined by applying the whole human experience available at the time a decision is made to see whether it appreciably favoured the occurrence of the damage-producing event (cf Lindenmaier, op cit, 223–26).

356  Appendix 2 Traeger’s formulation has been followed in essentials by the RG since the decision in RGZ 133, 126, 127, more recently in the form that there is an adequate connection ‘if a fact in general and not under special peculiar quite improbable circumstances, to be disregarded according to the regular course of things, was apt to produce a consequence’. This formulation expressed until now unaltered in essentials in many decisions (RGZ 133, 126; 135, 154; 148, 165; 152, 49; 148, 38; 168, 88; 169, 91) has also been followed by this Senate, maintaining the grounds for decision laid down by Traeger. Admittedly – as Lindenmaier points out (op cit, 239, 241) – one must not forget the starting point of the inquiry: namely the search for a corrective that restricts the scope of the purely logical consequences, in order to produce an equitable result to the imputable consequences. Only if the courts are conscious of the fact that it is a question here not really of causation but of the fixing of the limits within which the originator of a condition can equitably be presumed liable for its consequences, and therefore of establishing in reality a positive condition of liability (Larenz, Vertrag und Unrecht 12, 14; Lindenmaier, op cit, 239, 241–42), will the danger of a schematisation of the formula be avoided and correct results be guaranteed. That in the case before us the jamming of the boats was an adequate consequence of the incorrect information (concerning the breadth of the vessel) was accepted by the OLG without error of law. But the jamming produced no provable damage, since matters were at a standstill and the boats lay quietly on an even keel in the lock chamber. However, the first real damage-producing consequence came later, and in assessing them the OLG did not pay sufficient attention to the possibly necessary restriction of liability, when, while recognising it the court declined to consider the failure of the lock personnel. It is true that the RG has repeatedly recognised that anyone who has caused an accident must also answer for such consequences as are first produced in the course of conduct made unavoidable by the accident, through an intervening lack of skill, because according to human experience it must be taken into account that not all conduct will necessarily be perfect and accompanied by the desired result (RGZ 102, 230; 105, 264; 119, 204; RG HRR 28, 831; RG JW 1911, 755). This principle, however, does not apply without exception and cannot lead to saddling the person responsible for an accident indiscriminately with all consequences that, without his doing, are brought about in a completely unusual and inappropriate way by persons who are completely unauthorised to intervene (cf the aforementioned decisions RGZ 102, 230 and JW 1911, 755). The defendant had pointed out that such an unusual and grossly incorrect intervention of the lock personnel did occur and the OLG should therefore have made a detailed examination of their behaviour, instead of contenting itself with the remark that ‘no matter how significant the signs of the failure of the lock personnel they did not suffice for a break in the causal connection, above all because there could be no question of the accident being intentionally brought about by the lock personnel’. The question raised by the concept of intentional conduct has no place in this connection, which is concerned only with the concept of causation. It requires only an examination of whether an ‘optimal’ observer would normally have been able to take into account the behaviour of the lock personnel as it is presented – and, for the most part, undisputed – at the moment the condition on which liability was based – ie, the incorrect declaration of breadth – occurred. The omission of that examination not only justifies the procedural objection raised by the application for review that the factual situation was not exhaustively

Appendix 2  357 dealt with, but leads to a recognition that the OLG did not apply the correct standard for distinguishing between imputable and inadequate consequences. Among the circumstances which could form independent causes of damage according to the factual situation, the following were to be examined: the fact that the lock-keeper neglected, contrary to § 2 no 2 of the service instructions, to supervise the operation of the lock in person, that he left the operation to the subordinate who had not been appointed as his representative and who had continued it although the marks of rubbing on the lock walls ought to have made him notice that the boats were jammed; the fact that after the jamming the lock personnel and the pump engineer had, of their own volition and contrary to an express prohibition in the service instructions, tried to break the jam by letting in the water, without warning the lock-keeper, who was alone empowered to do so by the instructions, and leaving to him the removal of the obstacle, and all of it although there was no occasion for precipitate action, since the course of events had come to a standstill once the lower water-level had been reached; the fact, asserted by the defendant and established by evidence, that the lock-keeper would have been able to break the jam without danger to the boats, as he had done on several previous occasions, perhaps by removing obstacles created by good fenders and coverings and by carefully raising the water-level, if need be by manually working the sluice-boards; the fact that the raising of the water-level was so quick that within one and a half minutes the freeboard of the Edelweiss, which was only 15 cm high, was bound to be flooded if the jam were not broken and the boats did not float up as intended; the fact of the failure in the electricity supply, which remains unexplained, when and why it happened … It may be that one or even several of these facts fall within the scope of the dangers which experience would lead one to expect, so that their foreseeability, taken one by one, could be affirmed. Nevertheless it should have been examined whether the coincidence of these manifold conditions, in part possibly accidental, were not unusual and outside the scope of normal risks. In that connection it should be noted that conditions were under consideration which reinforced each other and only in combination led to the perilous aggravation of the situation that had little to do with the original creation of the jam. The OLG’s findings of fact do not go far enough to enable the court of review to decide finally the question of causal connection. The part played by the lock personnel in the course of the accident must be elucidated, if need be with the help of independent experts, and then a fresh conclusion reached on the responsibility of the defendant. Case 27 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 12 MARCH 1996 BGHZ 132, 164 = NJW 1996, 1533 = JZ 1996, 1178 Facts The claimant Land (‘the claimant’) is suing the defendant (on the basis of a right acquired by subrogation from the police officer W) for costs of medical treatment (DM 77,572.73) salary (DM 67,191.43) and damaged uniform (DM 300). The police officers W and M had brought the defendant (then nearly 17 years old) and Ü (also a juvenile) before a magistrate.

358  Appendix 2 They had been arrested on suspicion of car break-ins and house thefts. They had numerous previous convictions. After their judicial examination, they escaped through a window about 4 metres above the ground on the first floor of the court building. Ü jumped first. M ran down the stairs in pursuit but W ran to the window. The claimant says he could have caught the defendant there, but the defendant pulled him down with him. The defendant claims that he was about 10 metres away from the building when W jumped after him. Ü was uninjured but the defendant broke his arm. W fractured both legs. He was treated in hospital for about six months, and was unfit for work for about a year and a half altogether. The LG allowed the claim. The appeal of the defendant was unsuccessful. His appeal in law [to the OLG Oldenburg] led to quashing and reference back. Reasons The OLG left undecided the question of whether the defendant pulled W down with him through the window opening, or whether W jumped after the defendant. Even in the latter case it considered that the defendant would be obliged to provide compensation for harm under § 823 I of the BGB in combination with § 95 of the Niedersächsisches ­Beamtengesetz (NdsBG). This was because W would then have been provoked by the defendant, in such a way as to give rise to liability, to jump after him. The defendant should in all the circumstances have reckoned on the police officer jumping after him. Admittedly, W also laid himself open to the accusation of negligence, as he must have known that he was exposing himself to a substantial risk by jumping from a height of 4 metres. But this did not lead to a limitation of the defendant’s liability, because he had created the quite decisive cause of W’s injury. The OLG judgment does not withstand the arguments against it in the appeal in law in every respect. On the basis of the defendant’s claim, assumed by the OLG to be correct, that W jumped after him through the window opening when he was escaping, the OLG’s view that W’s injuries arising from the jump were to be attributed to the defendant in liability law admittedly reveals no error of law. But the OLG’s reasoning, that W was not guilty of any contributory fault which would affect the outcome of the case is not legally tenable. According to the constant case law of the Senate, someone who by his reprehensible conduct provokes another person to behaviour which endangers that other person can be obliged in tort law to provide compensation to him for the harm which has arisen as a consequence of the risk which was increased by the provocation [references omitted]. The claimant’s voluntary decision must however be based on motivation which deserves approval at least to some extent. The Senate has found tortious liability on such a basis, in particular in cases in which someone seeks to escape from arrest, or provisional arrest, by police officers, or other persons authorised to make an arrest, by flight. The flight has provoked these persons in a reprehensible manner to a pursuit which endangers them and in which they have then suffered harm because of the increased risk [references omitted]. In these kinds of cases, motivation deserving approval causing the pursuer to rush after the fugitive in spite of the special associated dangers, can, as the Senate has repeatedly emphasised, can be based, among other things, on the official duties of the officer responsible for guarding the fugitive [references omitted]. The Senate adheres to this case law. The appeal in law unsuccessfully objects reference omitted] to the fact that, in cases of the kind present here, the risk associated with the pursuit by the police officer is part of the risks

Appendix 2  359 of his employment commitment, and that duties to compensate for harm cannot therefore be based on the behaviour of the fugitive. Undoubtedly for a police officer, the risk involved in the employment commitment covers the ‘normal’ risk of injury which is not especially based on the circumstances of the pursuit (and therefore is part of the general risks of life) and the harm which may result to the pursuer. For a police officer therefore there may be no transfer of the risks to the escaping criminal unless the necessary internal connection with the pursuit exists [references omitted]. On the question of transferring to the fugitive an ‘increased’ risk associated with pursuit, (and the case in dispute is only about the realisation of this) it admittedly must be borne in mind that an officer whose official tasks include pursuing criminals in the public interest may feel himself called on to undertake greater risks, in his efforts to fulfil his duty carefully to a greater extent than other people [references omitted]. But, in the Senate’s view, this does not lead, when the necessary boundary is drawn between the areas of risk of the pursuer and the pursued, to an unreasonable transfer of risks to the fugitive, if he knows that his pursuer, or potential pursuer, is a person whose job requires him to act in this way. This is because the fugitive must in this case take into account that the pursuer may undertake a higher risk and this may possibly result in the fugitive having to assume an increased responsibility. He can take that into account by behaving in a way which prevents such risks arising. Admittedly on a just division of the risks of a pursuit, it should not be forgotten that the transfer of the increased risk will not lead to the fugitive being liable for the realisation of those dangers to which it was completely inappropriate for the pursuing officer to expose himself [references omitted]. The assumption of responsibility for physical injury which arose from increased risk of this kind would not be covered by the protective purpose of § 823 I of the BGB. Whether and to what extent an escaping criminal or suspect has accordingly to bear an increased risk of pursuit is determined by the peculiarities of each individual case; the prerequisites for a division of loss in accordance with § 254 of the BGB can also be fulfilled here. This will need more precise application in the case in question at a later juncture. It must however be emphasised here that, contrary to the view of the appeal in law, even with officers (in particular police officers), the risk they bear because of their work commitment does not exclude the transfer of the increased risk associated with pursuit to a fugitive. The appeal in law argues that the fugitive, could not be made responsible for harm which befell his pursuer during the pursuit, because action in one’s own interest is not criminal. This objection is misconceived. Admittedly a criminal has no legal duty to give himself up to criminal prosecution. But the ground for civil law liability does not lie in the escape as such, as the appeal in law in the end does not fail to recognise. It is based instead on the fact that the fugitive, by the manner of his flight, has in a reprehensible manner provoked the pursuer to a reaction which endangers himself. The conduct of the fugitive which is contrary to duty consists in this pressure at a psychological level, causing the decision to make a pursuit which is required by duty (or which is at any rate desired by the legal order) with the special potential for danger which it holds [references omitted]. 2. In the case in dispute, the factual findings of the OLG support its legal assessment that W’s injuries caused by the pursuit are objectively to be attributed to the defendant. Admittedly (and the appeal in law uses this as an argument) the Senate making the decision in its judgment of the 13 January 1976 [references omitted] approved the decision at previous instance in that case, that a juvenile sought for the serving of a weekend detention who

360  Appendix 2 fled from a toilet window situated at a height of 4.05 metres did not have to assume liability for the fracture of the heel bone of a police officer who leapt after him, which this officer had sustained on impact with the asphalt yard. But this is not inconsistent with an affirmation of the defendant’s liability in the present case. For one thing, the facts of each case differ. Apart from the fact that the OLG did not establish the presence here of an asphalt or similar hard landing surface, there is a substantial difference from the above mentioned Senate’s judgment. In the present case it was not merely a matter of arresting a juvenile whose home and place of residence were known for the serving of a weekend detention, but of resolving and punishing serious crimes, namely breaking into cars and house theft. As the two persons arrested had been punished for such crimes on numerous occasions, the commission of further crimes of the same kind was likely following a successful escape. The appropriate relationship between purpose and means, ie, that the risks of pursuit should not be out of proportion to the goal of apprehending the fugitive, is, however, the essential gauge when examining the prerequisites for provocation to pursue and the transfer of the increased risk of injury to the fugitive [references omitted]. If such proportionality is not maintained, physical injury of the pursuer, as already stated, will not fall within the protected area of the liability norm. When comparing the present case with the Senate’s decision of 13 January 1976 [references omitted], it must finally be considered that the Senate making the decision did not actually deny objective attribution of the physical injury, in spite of the fact that the jump was from a height of 4.05 metres, but left the issue undecided. It let the liability on the part of the fugitive fail on subjective grounds, namely for lack of fault. On the question of the objective attribution, cases of the kind present here can on other grounds as well take into account other factors besides the height of the jumping-off point (which would in this respect perhaps be entirely a matter of a certain number of centimetres). Admittedly the transfer of the risk of injury to the fugitive is dependent on whether the pursuer should have felt himself called on to jump in pursuit, which, with unusually great heights, is not the case. In the critical area, which covers the present case of a height of about 4 metres, the special circumstances of the case in question must however in the end be the decisive factor. In this connection, besides the nature of the jumping-off point already mentioned above, among other things the age and physical condition of the person jumping in pursuit are also of importance. According to the findings of the OLG, these factors in the present case gave no cause for the 31-year-old W to refrain from jumping. In examining the question of objective attribution, the court must finally also bear in mind (as did the OLG) that W, in pursuing the defendant, had to make up his mind very quickly about whether to jump after him; and that therefore, as the OLG explains, there was scarcely any time and opportunity left for him to weigh up the risks of a jump. On that account also, the requirements for deciding whether he was justified in feeling called on to act cannot be too high. For W, the way the situation presented itself was that two people had already jumped out of the window in front of him and both had then still been able to run away. The fact that in these circumstances W thought the danger of a substantial injury was not great enough to prevent him from jumping justifies (contrary to the view of the appeal in law), in the context of the peculiarities of the present case set out above under a and b, the

Appendix 2  361 OLG’s view that W could have felt himself to be called on to pursue in the sense of the case law on this subject. 3. The OLG made no legal error in also attributing the physical injuries of W to the defendant in a subjective sense. The subjective side of the liability, ie, the accusation of having culpably caused the physical injury of his pursuer, assumes that the fugitive had to take into account that he was being followed, and that he could also foresee that his pursuer might be harmed in the pursuit. It is not a necessary prerequisite for his liability that the fugitive was actually aware of the pursuit as such [references omitted]. The conduct which has provoked a pursuer (prepared to pursue out of motives deserving approval) to a reaction which endangers himself is no less in breach of duty just because the fugitive rushes away so fast that he cannot see whether the person he provokes actually commences pursuit. The fugitive can also be the ‘controller of events’ in the sense of the case law [references omitted] by forcing special potential for danger on his pursuer, if he prevents the person provoked by his escape from being able to consider carefully before going into a situation of increased danger. For this very reason he must take into account the possibility of a pursuit even into these special dangers. Any different view would, especially in relation to a jump from a window, as here, (where the fugitive himself can possibly not be aware of the pursuit at all) not take proper account of the fact that he has reprehensibly exposed his pursuer to an increased potential danger. Accordingly, the Senate making the decision has always considered as the only decisive factor the question of whether the fugitive by running away created, in a way that was attributable to and recognisable by him, a situation of increased risk of injury for the pursuer and whether he should have taken pursuit into account [references omitted]. Even if the defendant therefore (on the basis of the description of the facts assumed by the OLG, that he had already distanced himself 10 metres from the building when W jumped after him) was not to know of the pursuit by W, this is not a barrier to liability on his part. The appeal in law challenges the finding of the OLG that the defendant should have taken into account that the police officer would jump after him, simply by reference to the special danger of a jump from a height of 4 metres. But this argument was already considered above not to be effective, when examining whether W ought to have felt himself to be provoked to make the jump. The grounds mentioned there suggested that, for the defendant (who of course exposed himself to the risk of injury from jumping), W, who was responsible for guarding him, would not be any less likely to do the same. The danger that W could be injured in so acting was likewise known to the defendant; it is also described by the appeal in law as clearly recognisable and obvious. The judgment under challenge cannot however stand in relation to the OLG’s reasoning in refusing to divide the loss on the basis of § 254 I of the BGB. The OLG proceeded without legal error on the basis that the accident was partly caused by W’s fault. The fact that the defendant, as has been explained, provoked him in a reprehensible manner to jump after him and therefore in such a way as to oblige him to pay compensation, is not inconsistent with this. The connection in liability law between the psychological pressure to pursue and the injuries to the pursuer which occurred in the pursuit does not only exist when the person pursued is solely responsible for the harm. Allocation of the loss in cases of psychological causation admittedly assumes, as the Senate has stated on a

362  Appendix 2 number of occasions, that the person intervening ought to feel himself to be called on to act not merely in a general sense, but exactly in the way he chose [references omitted]. But this limitation is only to exclude those cases in which the person intervening has taken on a risk which is so excessive that allocating it in law to the person who set the chain of causation in motion would cause the risk of liability to become infinite [references omitted]. For cases of the present kind, it does not follow from the above that, on a jump from a window from up to a certain height, the fugitive should be fully liable for his pursuer’s injuries, and where this height is exceeded he should not be liable at all. Instead there remains room, as the Senate has already stated (where the pursuit should have been foreseen by the fugitive and its potential for harm does not exceed the unacceptability threshold mentioned above) for balancing the special circumstances of its actual execution in accordance with § 254 of the BGB [references omitted]. An ‘all-or-nothing’ principle in such cases would often prevent a just assessment of each individual case, because a differentiated balancing exercise could not take place (reference omitted). The Senate making the decision has therefore already repeatedly approved decisions in which the judge of fact divided the loss on such a basis [references omitted]. In the present case the facts established by the OLG justify its view that W was partly responsible for his injuries. The fact that, as explained above, he had to decide very quickly whether he should jump after the defendant through the window opening, or perhaps like his colleague M take up the pursuit by the stairs, admittedly diminished the requirement for the care to be expected from him within the framework of § 254 of the BGB [references omitted]. But this did not relieve W of every duty of care in respect of his own interests [references omitted]. He could also therefore, despite the required haste, recognise and bear in mind in his decision that the window was a considerable height above the ground and that a jump from the first storey of the building gave rise to a risk of not inconsiderable injuries, even though the defendant, and earlier the co-suspect Ü, survived their jumps apparently without serious injury. Therefore, as the OLG explains, on careful consideration there were reasons for W not taking the risk of injury associated with the jump. Admittedly no protracted consideration was needed for the protection of his own interests which was required of him within the framework of § 254 of the BGB. But even with the need for a rapid decision, W could have considered and avoided the potential for danger which would come to mind with a jump from a height of 4 metres. The fact that W did not take account of this justifies the accusation of contributory fault. The partial responsibility which W bears cannot, however, on the basis of the considerations on this issue laid down by the OLG, be regarded as so insignificant that it could be left entirely out of consideration within the framework of the balancing exercise under § 254 of the BGB for the allocation of loss. In taking the view that the defendant was solely liable, because he had provoked W and thereby created the quite decisive cause of his injury, the OLG did not consider all the circumstances of the present case which were relevant in this respect, and this issue is subject to re-examination in the appeal in law [references omitted]. As the Senate has explained in its judgment of 12 July 1988 which has just been mentioned, in relation to division of liability under § 254 of the BGB it should be taken into account as a decisive factor whether the behaviour of the one or other party made the onset of the harm probable to a significantly higher degree. Here this requires balancing the extent to which the defendant and W could recognise and avoid of the risk of injury, according to an

Appendix 2  363 attribution appraisal, and this has not so far been undertaken by the OLG. It also requires an explanation evaluating the grounds for saying whether and to what extent the defendant’s provocation to take increased risks (as against W’s exposing himself to a position of danger) made the onset of harm more probable. The judgment of the OLG relieving W from any participation in the harm must therefore be quashed and the matter referred back to the OLG. The Senate making the decision cannot make a conclusive decision itself under § 565 III no 1 of the Civil Procedure Code. For one thing the balancing of the responsibilities under § 254 of the BGB is for the judge of fact to assess and this information is only available to the court dealing with the appeal in law to a limited degree (reference omitted). For another thing, the OLG has left open so far whether the defendant pulled W down with him when he jumped. As this could lead to full liability on the defendant’s part, the OLG will also have to make the necessary findings on this point, insofar as this should in its opinion now be material. Notes to Cases 24–27 1. The cases reproduced above deal with various aspects of causation. More cases are found in the previous edition of this work (cases 79–94). Case 26 contains oft-quoted definitions of the adequate cause theory. 2. The literature may be extensive and some of the problems intellectually fascinating, but causation must be approached with the following warning in mind: The problem [of causation] is a difficult one, but the length of the treatment in this casebook and the amount of time allocated it in most courses may perhaps give an exaggerated impression of its importance. In the great majority of negligence cases, the problem does not arise at all; it comes up only in the fraction of negligence actions that involve unusual fact situations. (Prosser, Wade and Schwartz, Torts. Cases and Materials (10th edn, 2000) 349.) This down-to-earth remark applies equally to German and American law. Prosser et al also state in their casebook that ‘The principle task of the court is to do justice as between these parties in their present situation. For this purpose, a weighing evaluative process is required, rather than a clear-cut rule of law’ (349–50). This is not so different from the point the BGH made in its famous judgment of 23 October 1951 (case 26) where, after reviewing the many variants of the adequate cause theory, it concluded that the answer must, in the end, be found in common sense and a reasonable choice between competing policy factors. Once again Americans and Germans are thus not so far apart. For in both these countries academics have not managed to conceal their fascination with the subject which, in the end, they are forced to admit is of relatively small practical value and should be approached in a common-sense way (Hart and Honoré, Causation in the Law (2nd edn, 1985) ch 2). 3. The differences between adequate causation and foreseeability have been discussed above (chapter two, section V.B). ‘But foreseeability’, to quote Prosser et al again (ibid, 350), ‘is an accordion concept, depending upon the detail and precision with which foresight is required’. In modern times it has thus been stretched, so that it is legitimate to enquire whether it has lost much of its usefulness as a device controlling liability. Was not that one of the reasons why the Re Polemis [1921] 3 KB 560 rule was abandoned in England by the Wagon Mound (no 1) [1961] AC 388? In Germany, von Caemmerer has reached the same

364  Appendix 2 conclusion about the effectiveness of the adequate cause theory (‘Das Problem des Kausalzusammenhangs’ Gesammelte Schriften I, 395, 402, 408); and the BGH is not tuning down its doubts about the concept of adequacy in general (eg, see BGHZ 79, 259). Not unnaturally, the search for more normative theories of causation can thus be found in both systems. Such theories, as we have seen, can help keep liability under control; but they can also lead to irreconcilable decisions. 4. Case 27 deals with a different question: under what conditions can liability be imposed if the victim brings the injury upon himself. The aspect of the question we wish to consider has arisen in cases where law enforcement officers are injured while pursuing the perpetrators of crime. Two points must be considered. In such cases, the first step is to establish in what circumstances the tortfeasor owes a duty of care to his pursuer. The German BGH suggested that it was not the flight, as such, that created liability but the manner in which it was executed. We have already noted in the context of the nervous shock cases (see notes to cases 1–3) that although there is no duty of care to abstain from injuring oneself, the situation might be different where selfharming also causes injuries to another person. Conversely the suspect – assuming the position of the BGH is correct – has no duty to help the police to arrest him. But if he seeks to escape the pursuit, he is under an obligation to do this in a manner that will not endanger the health of the pursuing officers. Since, as is clear to him, it is their duty to enforce the law and to arrest him, the suspect owes them a duty of care not to provoke a dangerous pursuit. The problem has been identified above (chapter two, section V.A) as one of causation while the BGH prefers the language of ‘objective attribution’, objektive Zurechnung. (The older case law assumed that the chain of causation was interrupted, see Emmerich JuS 1996, 846) This may be more a matter of terminology than substance. Nonetheless, it is remarkable to note how much effort the court expended in trying to define the circumstances under which a duty of care would arise. Equally interesting is the fact that it did not openly analyse the problem as one of causation even though the theory of ‘the protective scope of the rule’ can be framed as a problem of legal cause. This indicates yet again how interchangeable the different approaches really are (scope of the duty owed, duty of care, and causation). One obvious advantage of approaching the case on the basis of § 254 BGB (mitigation) is that it allows a partial reduction of damages (as was actually held in the present case). A causative analysis on the other hand could entail an all or nothing result. (See for a similar approach in English cases, Hart and Honoré, Causation in the Law (2nd edn, 1985) 141.) The second issue raised by the case is how to weigh the interests involved. It is not necessary to repeat the reasoning of the court, which repays careful reading. Suffice it to say that the BGH requires that the police’s decision to pursue is not wholly unreasonable (which is determined by a comprehensive balancing of interests). Additionally, it must be shown that the loss was caused because of the increased danger situation inherent in the pursuit and was not part of the general risks of life (allgemeines Lebensrisiko). (For details see Teichmann’s note in JZ 1996, 1181.) The notions are interesting; indeed, they make much sense. But, as always, the devil lies in the detail.

Appendix 2  365 CASES TO CHAPTER 3 1. CASES TO § 823 II BGB Case 28 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 8 JUNE 1976 BGHZ 66, 388 = NJW 1976, 1740 = VersR 1976, 1043 Facts On 23 November 1973, in the course of excavations on private land, the defendant damaged the cable of an electricity company. In consequence, the claimant’s finishing business was at a standstill for 27 minutes. The claimant sought compensation for its loss of production to the value of DM 1,157. It saw in the events an interference with its established business and a breach of a protective norm within § 823 II BGB in combination with § 18 III of the Baden-Württemberg Building Regulation which provided that Public traffic surfaces, maintenance, drainage and communications infrastructure, as well as ground water observation points, survey points and boundary marks shall be protected during the course of the building works and, so far as required, shall be kept accessible through necessary security precautions. The claim was rejected by the court at first instance. The appeal to the LG Stuttgart by the claimant also failed. Reasons I. This Senate follows the LG Stuttgart in concluding that the claimant cannot rely on § 18 III LBauO as a protective norm within the meaning of § 823 II BGB … II. 1. The Senate deciding the case agrees with the appellate court in holding that the claimant cannot invoke § 18 III 1 of the Baden-Württemberg Building Regulation as a protective enactment for the purposes of § 823 II BGB. In so far as this runs counter to the principles of the aforementioned decision of the BGH of 12 March 1968 (VersR 1968, 593), the Court rejects them. The decision of 12 March 1968 is not followed … (a) [The Court discussed lower court decisions made in the light of the 1968 decision and which had not followed it.] (b) There are convincing reasons for approving the appellate decision. In its decision of 20 April 1971 (VI ZR 232/69, VersR 1971, 741, 742f), this Senate left open the question whether the victim could rely on the provisions of a Land Building Regulation. That certain provisions of a Building Regulation, especially those for the protection of neighbours, can be treated as protective enactments for the purposes of § 823 II BGB does not stand in the way. For no such purpose can be detected in favour of electricity users [reference omitted]. (aa) The provision of the LBauO here in question is not a protective enactment in favour of the claimant. To be sure, in any human social order, state needs are not identified as valuable in themselves, but the so-called need of the community is always justified through the direct or indirect needs of the affected citizen, and the interests of the individual and the purpose of the rule cannot be allowed to go beyond the sum of individual needs. Thus no public law norm is conceivable which does not, at the very least in some general sense, affect or protect

366  Appendix 2 an individual. But it follows that, in so far as it corresponds to the intention of the legislator, the general protective function does not say anything about when a protective norm in the sense of § 823 II BGB arises and which interests it protects … (bb) … It is of no use to consider legislative purpose in the abstract: nor has this been done so far by the BGH, despite some ambiguous formulations. In the last resort the question must be attacked directly, whether the creation of an individual claim for compensation appears meaningful, sensible, and tolerable in the light of the whole system of liability. Only by doing so can a development, rightly feared by the appellate court, be avoided, namely that the increasing tendency to base claims on § 823 II BGB might undermine Parliament’s ruling against a general liability for purely economic loss. In this connection it may be useful to ask whether in such cases an individual claim for an injunction would be sensible and tolerable. (c) There is no need to go further into these aspects of the decision; for it appears from what has been said that the appellate court properly decided that the provisions of § 18 LBauO afforded no individual protection to users of electricity against possible economic damage. (aa) According to the basic principle of liability laid down by Federal law (Article 72 I and 74 I GG), there is, as a rule, no liability for indirect damage (economic damage that a third party suffers by mere ricochet through injury to another’s property); and this includes damage to an electricity user resulting from damage to a cable owned by an electricity supplier. That the failure to provide compensation is not felt to be intolerable is shown, inter alia, by the fact that the responsibility of electricity suppliers even for vital failures is excluded by regular nationwide conditions of supply. It is not absolutely impossible excluded that this principle may be set aside by protective Land legislation. Nevertheless, such legislation should be interpreted to extend protection only if the need for it arises from a state of affairs in the law of the Land which could not have been anticipated on a federal level. Since that is obviously not the case here, the constitutional distribution of powers makes it unlikely that the Land legislator intended for no reason to extent protection by action repugnant to the federal rule. (bb) But even apart from this constitutional aspect, based on the concept of constitutional demarcation of authority, the appellate decision must be approved. There is nothing to be said for the view that the LBauO, when regulating building, intended to afford to electricity users an abnormal individual protection when a cable is damaged. The appellate court rightly points to the lack of any corresponding provision in § 1 II LBauO, where danger to cables is especially to be anticipated, that is to say, where works are conducted in places open to public traffic. In other fields also electricity users have no individual protection, for instance where cables are endangered in traffic, mining, or agricultural accidents. The possibility that a building regulation intends to afford a protection so much out of line in this particular field is very remote. The official statement of motives leading to the Regulations here in question lends no assistance. Moreover, it is noticeable that the basic duty of care already existed in the general law and was not originally created by the LBauO as part of Land law. Its inclusion in § 18 III LBauO only serves to sum up precautions required to be taken in works regulated by statute, and to form a basis for prosecution. There is nothing to show that an arbitrary individual protection was aimed at, alien to federal law and as part of a generally inappropriate set of regulations.

Appendix 2  367 2. The appellate court also appropriately rejects any liability to compensate for an interference with the claimant’s business (§ 823 I BGB). It finds itself in agreement with the Senate decision [of 1959 BGHZ 29, 65] which dealt with a case on all fours with this one. The Senate, on reconsideration, holds fast in principle to its decision in spite of some loudly expressed academic criticism. The need to relate to a trade, as established by the [1959] judgment, which is denied in cases such as the present one, is essential if the protection provided by case law in the event of a breach of the right of an established and active business is not to be enlarged into a general delictual rule for the protection of traders. The highest court has always taken this point into account although the boundaries of this ‘residual right’ affording special protection to traders have never been fully defined and much could be said in favour of a restrictive application of this delictual rule. In any event, matters cannot be otherwise in the case of a power cut of this nature which affects everyone and which is liable to cause widespread financial loss to persons who do not exercise any trade and to whom the general law of delict affords no claim for damages. The above cannot be countered with the argument that where damage is caused by an electricity failure a distinction between physical and economic damage makes little sense [references omitted]. In fact the Senate has so far awarded damages for physical damage in business according to § 823 I BGB. This, it must be admitted, somewhat surprising limitation – von Caemmerer calls it ‘crude’ – rests on a binding general decision of the delictual law in force (von Caemmerer ZHR 127, 248 = ZBern. JV 1964, 341, 347). It is impossible to recognise any reason for departing from it in favour of businesses. In any event, might not the danger of less foreseeable and perhaps much greater physical damage involved in such accidents justify a partial exemption of the tortfeasor from a risk that the electricity supplier frees himself from with state approval? But the present case affords no occasion for such an examination, since physical damage is neither manifest nor even doubtful. Notes to Case 28 1. The provision of the Baden-Württemberg Building Regulation which was breached in this case concerned the construction process: how various utilities on construction sites were to be protected. But the purpose of that provision was not to protect the users of utilities, but to protect the general public in case water, etc was required for public purposes. The interpretation refers to statutes on similar subject-matter to make a context for interpreting this law. Hence, it was not classified as a ‘Schutzgesetz’ under § 823 II BGB. So the claim in the case went beyond what was the purpose of the provision in question. The interpretative method is not dissimilar from that in the common law. 2. In Atkinson v Newcastle Waterworks (1877) LR 2 Ex 441, a statute imposed a new obligation to maintain a pressure of water in their water pipes in order to put out fires. The statute provided that there was to be a £10 penalty for breach of this duty. In an action brought by a householder claiming that his premises had been destroyed because the water pressure was insufficient for use by the firemen, the court held that there was no right to damages in addition to the criminal penalty imposed by the statute. 3. In passing, one notes the way in which the BGH did not have any difficulty in departing from a previous decision of 1968, which it (and many lower courts) thought was wrong.

368  Appendix 2 Case 29 BUNDESGERICHTSHOF (THIRD CIVIL DIVISION) 27 MAY 1963 BGHZ 39, 358 = NJW 1963, 1821 = JZ 1963, 707 (with a critical note by Rupp = VersR 1963, 973) Facts The claimant site-owner claimed damages from a local authority which had issued a building permit without adequately checking the architect’s calculations regarding the load-bearing capacity of the foundations, as marked on the plan. Because of this error, the building collapsed while in process of construction, and both the builder and the architect were insolvent. The claimant’s claim was dismissed by the LG Kiel and his leapfrog appeal to the BGH was also dismissed for the following. Reasons 1. The trial court was correct to hold that in checking and authorising the plans for the building, the supervisory authorities are exercising a governmental function. In consequence, as the LG agrees, the claimant’s claim against the defendant can only be based on the rules relating to the liability of officials (§ 839 BGB in combination with Article 34); it must be shown that one of the defendant local authority’s officials in the exercise of the public function attributed to him was in breach of an official duty which he owed to the claimant … 2. In approaching the question whether, in giving building permission when it should not have done so, the local authority was in breach of official duties owed to the claimant, the trial court correctly started by considering the purpose served by the official duty [reference omitted]. In the first instance, official duties are imposed in the interest of the State and the public. If the sole function of an official duty is to promote public order, the general interest of the commonwealth in orderly and proper government, the satisfaction of exigencies within the service, or the maintenance of a properly organised and functioning administration, then there is no question of any liability to third parties for its breach, even if its exercise has adversely affected them or their interest. Liability exists only where the official duty which was broken was owed by the official to the third parties themselves. Whether this is so and how wide the range of protected persons may be are questions which must be determined in accordance with the purpose served by the official duty. This purpose is to be inferred from the provisions on which the official duty is based and by which it is delimited, as well as from the particular nature of the official function in question. If, in addition to satisfying the general interest and public purposes, the official duty has the further purpose of safeguarding the interests of individuals, this is sufficient, even if the affected party had no legal claim that the official act in question be undertaken (BGHZ 35, 44, 46–47; BGH VersR 1961, 944). Before a building permit is issued, the plans must be checked for conformity with all building regulations of public law (§ 2 II Provincial Building Ordinance). Such an investigation must encompass the structural safety of the building (§ 15 I e, § 61 Provincial Building Ordinance); as the lower court was right to emphasise, with reference to ­Pfundtner/Neubert [reference omitted], concern for safety is one of its most important aims, since unsafe

Appendix 2  369 ­ uildings pose a direct threat to life and health, the value of physical property and safe b conduct of business. The supervision of buildings thus permits the avoidance of dangers (BGHZ 8, 97, 104 [further reference omitted]). The provisions requiring the verification of the calculations concerning the load-bearing capacity of buildings are directed to the dangers which threaten the public from the collapse of unsafe constructions. While these provisions and the official duties which they impose serve the protection of the public – the ‘public interest’ [reference omitted] – they also protect every individual member of the public who might be threatened by its unsafe condition, that is, every person who comes into contact with the building as inhabitant, user, visitor (RG Recht 1929 no 757, SeuffArch 83 no 134; JW 1936, 803, BGHZ 8, 97, 104), neighbour (BGH VersR 1956, 447), passer-by (LM to BGB § 839 Fe no 1), or workman, and who relies on its being safe. The owner or developer may also be a beneficiary of this protective function if he suffers damage to his body, health, or property as a result of a collapse while he is visiting the building or inhabiting it, but only if the harm is a consequence of the danger from which it is the function of the official verification of the technical specifications to protect the public and hence the individual endangered. That is not the case here. It is true that the claimant has suffered damage as a result of the collapse of the building, but he is not a victim of the danger from which, as a member of the public, he was entitled to be protected by the official duties and the provisions which created them, since it was only the building itself and no other property of his which was damaged. Notes to Case 29 This case raises the problem of the liability of public authorities for exercising their regulatory functions. As will be seen in chapter five, such liability is difficult to establish. Liability for the actions of public officials under § 839 BGB in combination with Art. 34 GG is difficult to establish and so the claimants here sought to establish a direct liability. The approach of the court is to establish the purpose of the regulatory process – is it there to protect individuals and in relation to which interests. The conclusion is that the regulations relate to the safety of persons if the buildings have not been properly constructed. But the loss of the claimant in this case did not suffer physical injury, but the collapse of the building. As site owner, the claimant would have had contractual relationships with the builders and architects, but they were now insolvent. There was no reason why the public authority should have to make up for their deficiencies. Case 30 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 12 NOVEMBER 1957 BGHZ 26, 42 Facts The defendant was the owner of a business running buses. On 6 February 1950 he was granted a licence by the competent authority permitting him to operate two buses to be employed for hire or on excursions. The licence stated expressly that the employment of the buses on regular service between specified places was prohibited. The claimants, the German Federal Railways, alleged that the defendant had regularly conveyed persons between G and L with his buses. They argued that, since most of these persons would otherwise have used the Federal Railways, they had suffered damage as a

370  Appendix 2 result of this unlicensed regular traffic. The claimants asked for an account of the number of journeys and passengers and claimed a sum representing part of their damage. The defendant denied that he carried on regular services and contended that the Act on the Carriage of Persons is not a law serving to protect the German Federal Railways. Moreover it breached the Basic Law by restricting the commercial activities of transport undertakings. The LG rejected the claim, the OLG Hamm allowed it. The appeal to the BGH was unsuccessful for the following. Reasons 1. The OLG was correct in regarding as a protective law in the meaning of § 823 II BGB in favour of the claimants the provisions of the Act concerning the Transport of Persons on Land which require a licence by the administrative authorities for the operation of regular traffic with land-based vehicles and provide penalties for such operations without a licence. The crucial question is whether the legislature, in providing regulations for public traffic, also wished to protect the special interest of the Federal Railways [reference omitted]. This question must be answered in the affirmative without hesitation. The special position of the German Federal Railways within the legal framework of public passenger transport is shown by the fact that § 14 of the Act on Passenger Transport exempts them from licensing and that § 27 II of the Act on Passenger Transport only requires them to give notice of the intended establishment of a regular route. According to § 5 of the Decree for the Execution of the Act on Passenger Transport, the Federal Railways must be consulted if a dispute arises as to whether a traffic undertaking is subject to the provisions of the Act on Passenger Transport or to which type of traffic the traffic undertaking belongs. § 9 I 2 of the Decree requires the competent regional directorate of the Federal Railways to be heard if an application is submitted for a licence to operate a regular cross-country route. According to § 11 II of the Decree a licence for a regular service is not to be granted if a new enterprise constitutes inequitable competition for an existing traffic undertaking. Together these provisions show clearly that in the proceedings of consultation the Federal Railways are granted a right to intervene as the guardian of the public interests concerning traffic but that they may also plead any adverse effects upon their own interests. This is the reason why the Federal Railways are accorded the right to start proceedings in the administrative courts if their objections have been overruled [references omitted]. The fact that according to §§ 17 and 24 of the Act on Passenger Transport the administrative authorities also control the price and the conditions of travel is a safeguard against a ruinous competition by undercutting at the expense of the Federal Railways. The importance of the Act on Passenger Transport consists precisely in the fact that it restricts competition between the various transport undertakings because the legislature allots to each branch of transport those tasks which it can fulfil best within the framework of traffic as a whole and of the economy. In so doing, the legislature has attached special significance to the interest of the Federal Railways on the assumption that the maintenance of their efficiency must be assured in the public interest. 2. The appellant is wrong in asserting that the provisions of the Act on Passenger Transport which pursue this goal contravene Article 12 GG. Article 12 I GG guarantees the right to choose an occupation freely but reserves the exercise of an occupation or trade for regulation or statute. It is generally recognised that the legislature is not prohibited in principle from regulating, in particular, the conditions for carrying on a profession

Appendix 2  371 or exercising a trade and from requiring a licence by the administrative authorities for commercial activities. It is equally recognised that in establishing the conditions for exercising a profession the legislature is not completely unfettered and that the essence of the fundamental right to carry on a trade must not be affected [reference omitted]. Opinions are divided as to how the limits set for the legislature are to be drawn in detail and as to when, in particular, the essence of the right to carry on an occupation is being fettered. In this controversy the view of the BVerwG which grants the legislature a considerable measure of discretion is to be contrasted with the very restrictive view of the First Civil Senate of the BGH expressed in its references to the BVerfG, but these do not bind this Senate [references omitted]. The first opinion stresses that all fundamental rights contain their own intrinsic limits and is less concerned with the compelling reasons for these restrictions than with the problem of what remains of the fundamental right, once these restrictions have been recognised. The restrictive opinion allows fundamental rights to be limited for reasons of urgent necessity only and requires the encroachment to be as small as possible in the light of the circumstances, guided by the desire to leave the fundamental right an extensive scope. Nevertheless, the First Senate [references omitted] acknowledges that the legislature may also enact laws in the interest of individual groups if this should be necessary in the public interest and does not arbitrarily detract from the interest deserving protection of other parties. In its decision the First Senate also recognises that the legislature enjoys a measure of discretion in the sphere of Article 12 I GG and points out that the judicial control of the legislature is limited correspondingly. It is unnecessary here to discuss in detail the many attempts to determine and to circumscribe the extent of the prohibition expressed by Article 19 II GG. Even if a statutory restriction of occupational activities is only regarded as constitutional within narrow limits, it cannot be said that the Law on Passenger Transport has infringed illegally the essence of the fundamental right enshrined in Article 12 I GG by having made the commercial operation of a regular traffic route of land-based vehicles subject to a licence for the reason, inter alia, in order to save the Federal Railways from inequitable competition by motorised traffic undertakings. In this connection it is important that despite an increase in motorised traffic the Federal Railways deal with the major portion of public transport. The pre-eminent interest of the community in the efficiency of the Federal Railways is expressed in the organisation of the Federal Railways by the Act of 13 December 1951 concerning the Federal Railways. The act treats the discharge of the functions of the Federal Railways as a public service and requires that in the administration of the Federal Railways the interests of the German economy are safeguarded [references omitted]. For this reason, the operation of the Federal Railways is subject to a number of restrictions which could not be justified from a purely commercial point of view. They cannot in their discretion discontinue routes which are unprofitable and, in particular, they are not free to determine the fares. (Fares must be established, must be equal, serve social needs, and must offer free passes.) Moreover the Federal Railways are burdened with extensive maintenance obligations towards their present and past employees which private traffic operators do not have to carry. The Federal Railways would no longer be able to fulfil their function in the service of the community if private commercial motor transport operators were allowed to exploit the economically profitable routes, which alone are of interest to them, with the result that the Federal Railways would be relegated increasingly to carrying out less profitable transport services. For this reason

372  Appendix 2 alone, the legislature must be interested in the maintenance of the efficient operation of traffic by rail, since the service of mass traffic by the railways is indispensable in present conditions and since any interruption in the ability of the railways to function would lead to a crisis. In this connection it is relevant that any shift of public passenger traffic from the railways to motor vehicle traffic is restricted if for no other reason than because the capacity of the German road system is strictly limited. The special character of public transport makes it appear unlikely that the regulating effect alone of offer and demand can achieve a satisfactory solution to the far-reaching problems of public transport which satisfies the needs of the community. This explains why § 99 of the Act against Restrictions of Competition of 27 July 1957 [reference omitted] does not apply to the Federal Railways and other public traffic institutions. The BVerwG has pointed out rightly that the safeguarding of orderly operations of public traffic is one of the protected legal interests essential for the existence of the community [reference omitted]. It is a primary task of the legislature which is concerned with maintaining and extending an efficient transport system to regulate and to plan public transport by a process of adjustment and balancing [references omitted]. This Senate cannot discern in the discharge of this task by the legislature, which must necessarily include the regulation of the competition between rail and road traffic, an act of unconstitutional interference in the freedom of commerce, all the more since public transport had already been regulated by statute at the time when the Basic Law was being enacted. Moreover, it does not appear that in enacting the Basic Law the intention was to question the validity of this regulation on the ground that freedom of occupation was being restricted or to restrict the legislature and the administration to measures for controlling safety and the proper conduct of trade [references omitted]. If the public interest in an efficient system of passenger transport must be the principal object of the legislation measure for regulating traffic, the legislature was justified for this reason in regarding the protection of the Federal Railways as especially important where route transport is concerned and in fashioning its traffic regulations accordingly [reference omitted]. The enactment of the Act on Passenger Transport does not prevent the activity of private transport enterprises but the control of their commercial activity dictated by the overriding interests of the community. This control does not interfere with the essence of the fundamental right enshrined in Article 12 I GG; on the contrary, in the opinion of this Senate the statutory provisions fall within the framework of the task set for the legislature by ­Article 12 II GG inasmuch as, by requiring the consent of the administration, the legislature wishes to ensure that the Federal Railways are protected against inappropriate competition and that every traffic institution is allotted that task which it can best perform in the interest of the common good. … even if the refusal of a transport licence on the sole ground of insufficient need is regarded as illegal, the need for a licence remains justified in the opinion of this Senate inasmuch as, apart from other reasons, the just interest of the Federal Railways in averting inequitable competition must be taken into consideration. Consequently there are no objections from the point of view of Article 12 of the Basic Law against regarding the penal provision of § 40 I of the Act on Passenger Transport as a valid protective law in the meaning of § 823 II BGB in favour of the Federal Railways by penalising unlicensed route transport (as the dominant practice holds [references omitted]). The view taken by this Senate is in keeping with its decision of 27 March 1956 [reference omitted] where the comparable

Appendix 2  373 provision of the Act concerning Milk and Fats regulating that market were found to protect by an action in tort dairies, the economic activities of which had been interfered with in the absence of a licence [reference omitted]. Finally, the First Civil Senate in its judgment [reference omitted] allowed a claim under § 823 II BGB by chemists against drug stores which had contravened the Act on Medicaments … Case 31 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 16 DECEMBER 1958 BGHZ 29, 100 Facts The defendant and B, a merchant, were the sole shareholders and directors of a … private company [GmbH]. On 17 July 1954, on the application of the company, bankruptcy proceedings were started against it. The claimant, who had supplied raw materials to the company over many years, claimed DM 26,604 as a non-privileged creditor. According to the report of the trustees in bankruptcy, the assets only sufficed to satisfy in part the claims of the privileged creditors. Claiming only part of the sum registered in the bankruptcy proceedings, the claimant sued the defendant personally on the ground that he had neglected in several respects his duties as a director of the company and that the claimant had suffered considerable damage as a result. In particular he had failed, in contravention of § 64 of the Act relating to Private Companies [henceforth cited as GmbHG] to initiate bankruptcy proceedings in time, although the company had been insolvent and overburdened with debts for some time. The LG rejected the claim; the OLG Hamburg allowed it. Upon a further appeal the judgment of the OLG was quashed and the case referred back for the following. Reasons I. The managers of a private company are obliged under § 64 I GmbHG to apply for the start of bankruptcy proceedings as soon as the company becomes insolvent or if the annual or an interim balance sheet shows that the debts exceed the assets … The OLG regarded this provision as a law for the protection (§ 823 II BGB) of the creditors of a private company and held that the defendant had culpably breached his duty to initiate bankruptcy proceedings … II. The appellant denies that § 64 I GmbHG is a protective law in the meaning of § 823 II BGB in favour of the creditors of a private company. He contends that this conclusion was ruled out by § 64 II GmbHG which hardly made any sense if § 64 I GmbHG bore a protective character. This view cannot be accepted. § 64 II GmbHG only establishes the consequence as between the directors and the company if bankruptcy proceedings are begun too late. It provides that the directors must compensate the company in respect of payments made after the company became insolvent or overburdened with debts if these payments cannot be reconciled with the case of a merchant. It does not follow therefore that this provision determines exhaustively the responsibility of the directors for their dereliction of duty and that the creditors of the company are denied protection in their own right. The Act relating to Private Companies does not state whether the directors are liable to the creditors, and this question must therefore be determined in accordance with the general principles of private law [references omitted].

374  Appendix 2 The claimant may claim damages based on a breach of § 64 I GmbHG in conjunction with § 823 II BGB if this provision of the Act relating to Private Companies is also intended to protect the creditors of a private company and to afford them the type of protection which the claimant claims for himself [references omitted]. Whether this is so must be determined in the light of the substance and the purpose of § 64 GmbHG. 1. § 64 I GmbHG provides that the directors must initiate bankruptcy proceedings as soon as the private company becomes insolvent or if the balance sheet discloses that the debts exceed the assets. If the directors fail to initiate these proceedings in time they are liable to imprisonment or a fine in accordance with § 84 I GmbHG. Clearly these provisions are intended to protect the creditors of the company as well. They, in particular, always suffer damage if bankruptcy proceedings are not begun or are not begun in time. It is obvious that the duty to apply to the court laid down by § 64 I GmbHG is also to protect them. This protection of the creditors is all the more called for as the partner shareholders of a private company are not liable personally for the debts of the company. The RG, too, has held in a constant practice that § 64 GmbHG is a law for the protection of the creditors of the company. It has held that, while this provision does not protect everyone, particularly not those persons who are extraneous to the company, it is intended to protect not only the interests of the company but also the creditors [references omitted]. 2. The appellant argues further that even if § 64 GmbHG bore the character of the protective law, it could only protect the creditors existing at the time when bankruptcy proceedings should have been begun. If, as the OLG has held, the defendant should have started bankruptcy proceedings in January 1954 at the latest, the claimant could not, as regards claims arising after this date, be placed in a better position than other subsequent creditors for the reason that other claims of his were of an earlier date. At best he could claim damages in respect of the loss resulting from the fact that the dividend in respect of his claims outstanding in 1954 was smaller owing to the delay in starting bankruptcy proceedings than it would have been otherwise. However, the claimant had not incurred such a loss for he had admitted himself that his claims arising during the period up to January 1954 had been satisfied. As regards goods supplied between 31 January and 15 July 1954, which were alone in issue, the claimant could not claim any damages against the defendant on the basis of § 823 II BGB, § 64 GmbHG. The appellant is wrong in believing that § 64 GmbHG only protects those persons who were already creditors of the company when the conditions for the operation of § 64 I GmbHG materialised [reference omitted]. The duty of the directors to start bankruptcy proceedings continues even after this date, as long as the company’s debts exceed the assets or the company is insolvent. No reason exists for restricting this continuous duty to apply to the court to the claims of old creditors, that is to say, creditors whose claims already existed at the time in which the delay occurred in making the application. The duty of a director to initiate bankruptcy proceedings exists also towards a creditor who after this date supplies goods to the company on credit or who becomes its creditor otherwise. As a present creditor of the private company he is protected against subsequent infringements of § 64 I GmbHG in the same way as are old creditors. Therefore, contrary to the appellant, the protection accorded to the claimant extends also to claims against the private company which arose after 31 January 1954.

Appendix 2  375 3. The question remains as to how far the protection extends which the claimant enjoys for this period by virtue of § 64 I GmbHG. The claimant seeks as damages the full price of the goods which he supplied after 31 January 1954, ie, after the date when, in the claimant’s opinion, the defendant should have started bankruptcy proceedings at the latest. The claimant can claim compensation for this damage on the strength of § 823 II BGB only if the entire damage falls within the range of dangers to protect against which § 64 GmbHG was enacted [reference omitted]. If a statute serves to protect certain persons they can only claim compensation for such damage which occurred within the range of the interests protected by the statute. Therefore, before it is possible to apply § 249 BGB on which the claimant relies, it is necessary first to examine the range of protection afforded by § 64 I GmbHG and to determine, first of all, whether this provision is intended to provide that protection which the claimant claims in his favour. In examining the question of the meaning and the purpose of this provision it appears, first of all, that the purpose of the legislature is to secure a prompt initiation of bankruptcy proceedings in the case where the debts are no longer covered by the assets. Therefore, the legislature in requiring the directors to start bankruptcy proceedings as soon as the annual balance sheet or an interim balance sheet discloses an excess of debts over the assets, clearly aims primarily at preventing that the company assets necessary for satisfying the creditors are not available for this purpose. The intention is to preserve the company assets for the benefit of the creditors so as to allow them to receive payment and to protect them against excessive losses as a result of the bankruptcy. This protection alone, which is clearly the primary purpose of the Act, cannot assist the claimant, however, for the claimant’s claim for damages is not based primarily on the ground that owing to the delay in initiating bankruptcy proceedings the assets available to the creditors have been diminished and that therefore his claim lost totally or partially. Instead the claimant holds the defendant liable in the first place for the fact that the claimant still gave a credit to the private company, the debts of which exceeded the assets. According to § 823 II BGB the defendant is only liable to pay damages for loss occasioned thereby if § 64 I GmbHG protects the interests of the creditors also in this respect, ie, if it seeks to protect them quite generally against the dangers resulting from the continuing operation of a company the debts of which exceed its assets. It is true that the community is in fact protected in this respect as well as by the existence of § 64 GmbHG. This fact alone cannot suffice, however, to attribute to § 64 GmbHG the character of a protective act having such an extensive range. For this purpose not the effect of the law but its substance and aim must be considered, more particularly whether the legislature intended to provide such a far-reaching protection or at least accepted it [references omitted]. This cannot be assumed, however. Confidence in the solvency and the creditworthiness of another does not enjoy special protection in trade and commerce. He who makes a mistake and suffers a loss must normally prove that § 826 BGB or § 823 II BGB in conjunction with § 263 of the Criminal Code applies, unless he can rely on contractual claims. The Act does not indicate that a different rule is to apply in relations with private companies and that those dealing with private companies are to be given more extensive protection. Gadow and Weipert [reference omitted] and Bergenroth [reference omitted] justify the need for special protection of the public on the ground that public and private companies are legal entities whose shareholders are not liable for the debts of the company with their entire assets. It must be admitted that a need exists for this reason to protect the creditors. The legislative history of the Act concerning Private Companies [GmbHG]

376  Appendix 2 shows that the fact that only the assets of a private company are liable for its debts led to the provision that bankruptcy proceedings are to be begun against the company not only if the company is insolvent, but also if its debts exceed its assets [references omitted]. No indications exist that in enacting § 64 I GmbHG the legislature also intended, in addition to the protection mentioned above, to protect the creditors against giving credit to a private company which is overburdened with debts or from entering into business relations with it at all. If they suffer damage in this way such creditors, like creditors of an individual or of a partnership, are therefore restricted to the protection offered by § 826 BGB and by other provisions such as § 823 II BGB in conjunction with § 263 of the Criminal Code, leaving aside any contractual claims. It follows that the claimant can only claim damages against the defendant on the basis of § 823 II BGB in conjunction with § 64 I GmbHG if, and to the extent that, at the time when his claim for the payment of goods sold arose he would have participated in the distribution of the assets. It is not clear whether and to what extent this was the case. Certainly the claimant cannot, on this interpretation of the law, contrary to the view of the OLG, receive the full price of the goods sold, which he claims as damages. Therefore, the judgment appealed against cannot be maintained, having regard to the reasons given by the OLG … Case 32 BUNDESGERICHTSHOF (ELEVENTH CIVIL SENATE) 19 FEBRUARY 2008 NJW 2008, 1734 Facts The claimant seeks damages for negligent investment advice from the defendant. In 2004, the claimant was advised by the A GmbH (hereafter A) as to a capital investment. The consultation was conducted by the defendant, the then chief executive of the A. On 17 May 2004, the claimant signed a form in which he set out his future investment strategy as well as the investment objective as follows: ‘Moderate willingness to take risks: expected returns well above capital market interest rates, returns consisting of profits, hidden assets and capital gains, moderate price fluctuations, investment in balanced assortment of products from the groups … to’. This means first-class Euro-bonds through to securities and over-the-counter business outside the stock exchange. Upon the recommendation of the defendant, the claimant then signed, among other things, a purchase order for securities for 8183 shares of the privately held V-AG at a total price plus premium of €51,552.90. For the purpose of paying the securities, the claimant cancelled his two life insurance policies serving as old-age provision and had their cash-in value of €50,000 transferred directly to the A’s account. In early 2004, the insolvency proceedings were opened in respect of the V-AG’s assets; their shares are worthless. In January 2005, the A also filed for insolvency. The claimant asserts negligent advice because the recommendation of the defendant allegedly did not correspond to his investment objectives. Moreover, he claims he was misled by the defendant as to the safe investment of the capital in a willful and unethical manner.

Appendix 2  377 The LG held the defendant liable to repay the purchase price of €51,552.90 plus €272.60 of fees paid by the claimant conditional on the transfer of the acquired shares. The OLG Frankfurt rejected the defendant’s appeal. The appeal to the BGH was successful and lead to the contested judgment being set aside and to the case being remitted to the OLG. Reasons [8] I. The OLG (BeckRS 2007, 01586) states for the reasoning of its decision that in essence: [9] The claimant has a claim for damages against the defendant for the awarded amount according to § 823 II BGB in conjunction with § 32 II no 1 Wertpapierhandelsgesetz (WpHG: Securities Trading Act) … The defendant breached § 32 II no 1 WpHG when he recommended the acquisition of V-shares. According to § 32 II no 1 WpHG chief executives of securities services companies are prohibited from recommending the purchase of financial instruments to the company’s clients, if and when the recommendation does not coincide with the client’s interests. § 32 II no 1 WpHG is allegedly a protective law within the meaning of § 823 II BGB. The regulation does not only serve as protection for the community but also, and especially, as protection for the client against an infringement of his right to investor-friendly and appropriate advice. [10] As the defendant’s liability already arises from § 32 II no 1 WpHG in conjunction with § 823 II BGB, it can be left open whether the claimant is also entitled to a claim against the defendant under the aspect of wilful unethical infliction of damage for the repayment of the amount claimed. [11] II. The appeal against this is successful. The OLG has wrongfully allowed a claim for damages by the claimant against the defendant under § 823 II BGB in conjunction with § 32 II no 1 WpHG. It already erred in law at the starting point when it explained that § 32 II no 1 WpHG is a protective enactment within the meaning of § 823 II BGB. [12] 1. The issue is whether the provisions of §§ 31, 32 WpHG are protective enactments within the meaning of § 823 II BGB. [13] (a) The majority view approves of the protective enactment character of §§ 31, 32 WpHG either generally or for individual duties – such as the one under § 32 II no 1 WpHG [references omitted]. [14] This Senate has so far left this question open in its generality and only answered it in the negative with respect to organisational duties (Senate, BGHZ 142, 345 [356] = NJW 2000, 359). The §§ 31 ff WpHG can only have the attribute of a protective enactment insofar as they are not of a merely supervisory nature but are also assigned functions protecting investors. If this is the case, they may be important for the content and the scope of (pre-) contractual duties to inform and advise. Their protective scope in private law does not however go beyond these (pre-) contractual duties. It follows that they are not assigned a distinct importance in legal damages claims beyond the informational and advice duties in private law (BGHZ 170, 226 [232] = NJW 2007, 1876 no 18 with references). [15] (b) The application of these principles to § 32 II no 1 WpHG leads to the conclusion that its character as a protective enactment must be denied.

378  Appendix 2 [16] According to general private law principles the individual responsibility of the representative is limited to exceptional cases within the scope of the special contractual relationship and tied to very high requirements. § 311 III BGB and § 826 BGB exemplify this. The strict limitation of the representative’s personal liability in civil law would be subverted if every negligent breach of an advice duty would, under § 823 II BGB, lead to the liability of the organ itself or the employee of the securities services company. The conditions for liability of the representative and the contractual partner, the representee, would be identical, unlike other breaches of all other advice duties outside the scope of the WpHG. Even a securities services company’s employee acting only slightly carelessly would always and automatically be jointly and severally liable alongside the company in the case of a breach of duty under § 32 II no 1 WpHG. Thus a distinct basis for a claim for damages would be created, going beyond the existing cases of liabilities in private law. Nothing suggests that the legislator wanted this at the expense of simple employees. In line with this, in its judgment from 19 December 2006, this Senate already explained that no independent importance in legal damages claims is attached to the WpHG’s primarily supervisory rules (BGHZ 170, 226 [232] = NJW 2007, 1876 no 18 with references). [17] (c) It cannot be countered, by reference to the text of § 32 II no 1 WpHG, that § 31 WpHG and following also have functions of protecting investors. The latter may be true (Senate, BGHZ 142, 345 [356] = NJW 2000, 359) but it does not prove that § 32 II no 1 WpHG is a protective enactment within the meaning of § 823 II BGB. [18] (aa) A further requirement for the presumption of a protective enactment is, according to the case law of the BGH, that the generation of a personal claim for compensation be meaningful and appear tenable in the light of the overall system of liability (BGHZ 66, 388 [390] = NJW 1976, 1740). To do so one must consider, with a thorough evaluation of the overall legislative context into which the norm is put, whether it could have been in the intention of the legislator to tie the delictual initial duty of the offender with all related measures advantaging the injured party’s burden of proof (BGHZ 84, 312 [314] = NJW 1982, 2780; BGH NJW 2005, 2923 [2924], and NJW 2006, 2110 [2112] no 17 with references). [19] (bb) Here, as stated above already, it must firstly be considered that private law does not, in principle, accept the liability of a representative for the breach of the representee’s contractual duties. Neither is there a general piercing of the corporate veil against its organs due to contractual claims against the legal entity [reference omitted]. [20] Additionally, the legislator has decided against general delictual liability for primary economic loss. The protection of economic assets is, in the delictual liability system, principally only ensured through § 826 BGB. This basic decision by the legislator must not be subverted by the recognition of protective enactments getting out of hand and the diversion of the protection which § 823 I BGB grants for certain legally protected interests. The preconditions for protection must rather, in the case of the hypothetical acceptance of a claim under § 823 II BGB, be comparable to those of § 823 I BGB or § 826 BGB…. Without this consideration, the special behavioural requirements in contractual relationships would be reclassified as general duties [reference omitted]. [21] The behavioural duties of § 32 II no 1 WpHG do not contemplate any of the protected interests specified in § 823 I BGB but rather protect only the client’s pure economic interests.

Appendix 2  379 The infringement of such interests only triggers a claim for compensation under § 826 BGB in the case of unconscionable conduct and wilful infliction of injury. Judged by this, only those norms of the WpHG can in principle be qualified as protective enactments, which can either only be breached deliberately or those which sanction unconscionable conduct in the case of careless commission [reference omitted]. There can be no question of this in the case of a merely (slightly) careless breach of the duty to not recommend a financial instrument which does not correspond to the client’s interests. Such a breach of duty must therefore not lead to a duty to compensate under § 823 II BGB. [22] (cc) Moreover, the claim against the representative instead of the contractual partner only makes economic sense in the case of the securities services company’s inability to pay or insolvency. The investor’s (economic) interest alone cannot, however, be the basis for the creation of a new delictual basis for a claim which could justify allowing the organ or the employee of the contractual partner to stand in as a substitute debtor in the case of a merely slightly careless breach of the client’s economic interests. Nothing indicates that organs and employees of securities services companies are, in this respect, to be put in a worse position than organs and employees of enterprises who do not recommend securities or other financial instruments … [25] 2. The appealed judgment cannot therefore be upheld with the above reasoning. Case 33 BUNDESGERICHTSHOF (SECOND CIVIL SENATE) 13 APRIL 1994 NJW 1994, 1801 Facts The defendant was the shareholder and sole managing director of the asset management M-GmbH. Of the share capital of DM 50,000, the defendant held DM 10,000 and her husband M DM 40,000. With the appointment of the defendant as the managing director it was intended that her husband could, in the case of a legal dispute involving the GmbH, could appear as a witness in court. In reality, the defendant did not act for the company; business was conducted by the husband who had been granted power of procuration with sole signature rights but who could only represent the company together with a managing director. On 6 April 1989, the claimant concluded an asset management contract with the GmbH in which she instructed and authorised the GmbH to conduct investment business with the funds placed at its disposal. The claimant paid in a total of DM 453,000 in the time leading up to 6 December 1989. After having terminated the contractual relationship partially at first and altogether on 31 July 1990, she was refunded DM 132,500. On 7 August 1990 the defendant’s husband was arrested. At the request of the defendant, made on behalf of the company on 17 August 1990, bankruptcy proceedings were instituted over the GmbH’s assets. The claimant brings claims against the defendant on various legal counts concerning her residual claim of DM 320,410. The lower courts have denied the claim. With the appeal [against the decision of the OLG Köln], the claimant pursues her cause of action further. The appeal was without success.

380  Appendix 2 Reasons I. The OLG has denied the personal liability of the defendant as shareholder of the M-GmbH for the latter’s liability to the claimant under the heading of piercing the corporate veil because it had not been proved that she received direct benefits from the GmbH’s assets, nor that, insofar as she participated as a wife in her husband’s illicit withdrawals, she did not assume that they were his honestly acquired income. Ultimately, this assessment is unobjectionable on legal grounds … 2. Neither did the OLG consider the case established on the basis of § 823 II BGB in conjunction with § 130 of the Gesetz über Ordnungswidrigkeiten (OWiG: Administrative Offence Act). In this respect too, the appealed judgment is unobjectionable on legal grounds. (a) According to § 130 OWiG it constitutes an administrative offence if the proprietor of a business (Betrieb) or an enterprise (Unternehmen) neglects the supervisory measures, which are required to prevent infringements of duties within the business or enterprise where these duties affect the proprietor as such and their breach is subject to a penalty or fine; The prerequisite for the pursuit as an administrative offence is that such an infringement which could have been prevented through proper supervision is actually committed. According to § 130 II no 1 OWiG the members of a juristic person’s representative body are equivalent to the proprietor. (aa) The OLG held first that § 130 OWiG is not applicable to the relationship of a GmbH’s managing director and its majority shareholder because the former does not have any decision-making power over the latter and the shareholder can remove the managing director from office at any time; the defendant had no means of influencing her husband’s operations. This legal assessment is, as the appeal rightly criticises, incorrect. The defendant was, as managing director, not only entitled but also obligated to ask her husband acting as an authorised officer within the company, to conduct business lawfully and, if necessary, to withdraw his authority of representation. A contrary instruction to her, issued by her husband as the majority shareholder, would have been unlawful; the defendant would not have been bound by it [reference omitted]. Whether she would first have had to challenge the shareholder resolution contained in such an instruction is not to be discussed here. As a last resort, the defendant was left with the option to vacate the post of managing director. In any case, the business owner’s public law duty – to be discharged by the managing director – to ensure lawful conditions within the enterprise, cannot be overridden by the majority situation in the company. Otherwise, a new external managing director could, in many cases, not exercise his duties under § 130 OWiG from the start. (bb) As for the rest, the circumstances for § 130 I OWiG were present according to the facts of the case put forward by the claimant. According to her assertion, the defendant’s husband moved monies of a substantial amount which investors had entrusted to the GmbH for management, into his private assets. This satisfied the elements of the offence under § 266 StGB or even – in the case that these action were planned from the outset – those of § 263 StGB. This does not only concern general offences insufficient for the application of § 130 OWiG but also breaches of company-related duties; because when taking on asset management, the duty not to embezzle the assets to be managed and not to defraud the clients of their assets, is part of the duties ‘affecting the proprietor as such’ [reference omitted].

Appendix 2  381 The prima facie evidence indicates that the defendant’s breach of duty, namely the failure to impose any supervisory measures whatsoever was the cause of the occurrence of the damage … b) The OLG has however rightly found that the claimant’s infringed economic interests are not covered by the protective purpose of § 130 OWiG. A legally protected interest under this provision is primarily the interest of the general public in the establishment and maintenance of an organisational structure within the enterprise to face risks emanating from an enterprise which is the sum of people and means of production. This not only concerns the risk of damage to goods but also the risk of criminal conduct by the people working in the company; the individual becomes a risk factor under the conditions of a structure based on the division of labour within the company [references omitted]. Meanwhile, it may hardly be doubted that the purpose of the provision which rests on a general notion of organisation, includes the safeguarding of individual’s protected interests, infringement of which is supposed to be forestalled by the specific provisions of the criminal law and the law governing administrative offences as addressed by § 130 I OWiG. Neither should this assessment depend on the question whether the behaviour sanctioned by § 130 OWiG is a case of concrete (according to Rogall, ZStW 98 (1986) 573 (599)) or, as the arguably dominant view assumes abstract endangerment (cf Cramer in Karlsruher Kommentar. zum. Gesetz über Ordnungswidrigkeiten, 1989, § 130 no 17 with references). With the assumption of the protection of individuals which was, in any case, also intended, one basic requirement for the recognition of the provision as a protective enactment may be satisfied. However, alone, this does not suffice. It must rather follow from the overall context of the set of norms that the creation of a – possibly additional – claim for damages is actually sought by the law, in other words that such a special claim for damages is reasonable and tenable in the light of the overall system of liability (BGHZ 66, 388 (390) = NJW 1976, 1740). In this context it may also matter whether the aggrieved party is otherwise provided for in an adequate way (BGH NJW 1980, 1792). Finally, regard should be had to whether a claim for damages created through a protective law would contradict general principles of law and it should be asked whether this contradiction is deliberate … The main purpose of § 130 OWiG is to fill the gap resulting from the fact that companyrelated duties are often, as a result of delegation and the division of labour, to be discharged by persons for whom the proprietor of the company is not automatically responsible even though he is the real addressee of the provision and the one who receives the benefits resulting from the expansion of the scope of opportunities made possible by the allocation of human resources based on the division of labour; § 130 OWiG closes this liability gap, by allowing the piercing of the corporate veil to get to the enterprise and therefore the business owner [references omitted]. Insofar as the latter is a juristic person or an association of individuals, this is legally achieved by § 130 II OWiG considering the independent directors or lawful representatives acting for it as equivalent to the owner. As a result, a fine can be imposed on the juristic person or the association of individuals itself under § 130 OWiG. According to this, the purpose of § 130 OWiG is the extension of the possibility to sanction business owners. In examining the question whether this also leads to corresponding claims in private law – including against independent directors in the case of juristic persons – the liabilities existing independently of such claims are to be considered. Here, it becomes

382  Appendix 2 evident that what § 130 OWiG is supposed to accomplish in the field of the law governing administrative offences is already achieved in the civil law of delict through § 831 BGB and – insofar as it concern the legally appointed representative who does not belong to the representative body – § 31 BGB. The resulting transfer of liability to the principal does not, provided that it concerns a juristic person, extend to the members of the representative organ acting for it. The position within the organ does not allow their liability under § 831 I BGB; § 831 II BGB does not apply to them (BGHZ 109, 297 (304) = NJW 1980, 976). The fact that the managing director – as a board member – is not the addressee of the transfer of liability provision under § 831 BGB, is related to the organisational duties within the company which are, in principle, only owed to the company and not in relation to third parties (and the shareholders). Therefore, as this Senate has decided that neither § 93 I of the Aktiengesetz nor, accordingly, § 43 I Gesetz betreffend die Gesellschaften mit beschränkter Haftung is a protective enactment within the meaning of § 823 II BGB (this Senate, NJW 1979, 1829). Following the case law of the BGH’s Sixth Civil Senate, a managing director’s organisational duty within the company may certainly constitute a duty of conduct within the meaning of § 823 I insofar as it involves the protection of the protected interests mentioned by it (BGHZ 109, 297 (302 ff) = NJW 1990, 976). The view that a GmbH’s managing director must, in the case of the breach of a duty to take precautions which transcends the internal organisation of the enterprise – both in the area of organisational safety and product liability, stand liable for the damage caused thereby, may lead to similar results (Münchener Kommentar/Mertens (2nd edn) § 831 no 39; Grunewald ZHR 157 (1993) 451 (456 f); contrary to this Lutter ZHR 157 (1993) 464 (478): only as an accomplice). No further comment on this is to be made here. If the breach of supervisory duties to be performed by managing directors and board members were generally and in all cases result in any outsider who indirectly suffers damage being able to assert compensation claims against the board members personally, then the aforementioned principle according to which the board members’ organisational duties are only owed to the company would, in practice, be subverted [references omitted]. The evidence is insufficient to conclude that this was intended by the creation of the above provision of the law governing administrative offences. For this reason, the view that § 130 OWiG is a protective enactment insofar as the neglect of supervisory measures leads to the breach of duties which, for their part, are of a protective nature (Münchener Kommentar/Mertens (2nd edn) § 823 no 165 footnote. 258 and § 831 no 41; a similar tendency in Lutter ZHR 157 (1993) 464 (478)), cannot be supported at this level of generality. Such business-related breaches of protective enactments committed by a member of staff, and in which the managing director as such plays no part, but which he could have prevented with proper supervision, do not, simply for that reason, make him liable personally to compensate a general injury to the aggrieved party’s assets. In principle, there is no need for this anyway insofar as, according to § 831 BGB or § 31 BGB, the company is liable for the damage; insofar as this is not the case there is no reason to extend the liability to the board members with regard to their supervisory duty by means of § 130 OWiG. The injured party only has a commendable interest to be recognised subject to certain preconditions, in drawing on the managing directors/or even the shareholders, alongside the company – and the actual tortfeasor – as persons liable to pay damages, if the company has become insolvent. This is the reason why the managing director is personally

Appendix 2  383 liable in the case of a breach of the duty to petition for bankruptcy. It is not impossible that in such circumstances the managing partner’s liability can also arise under § 130 OWiG in conjunction with § 823 II BGB if protective enactments concerning the insolvency risk of company creditors are breached within the company. In the present case, however, the claimant was, according to her submissions, injured through the acts of embezzlement and deceit of the defendant’s husband’s. For this, the defendant’s liability cannot be established on the basis of § 130 OWiG as a protective enactment. Notes to Cases 30–33 1. As we have already noted, German judges are spared the need of discussing whether the legislator intended to allow a civil remedy when a particular statute has been breached – § 823 II BGB providing, subject to what we said above, a clear positive answer. But the court still has to discover the purpose of the statute: Was the mischief that occurred the one the statute wished to avoid? Was the claimant the person the statute wished to protect? (For an illustration see BGHZ 108, 134.) Cases 65–67 give some idea of how the German courts tackle these problems; but other decisions, reproduced elsewhere, have also discussed this problem. (See, eg, case 6.) 2. The search for the purpose of the statute only thinly disguises the value judgements that have to be made in each case by the court. Policy thus strongly determines the result, though it is done under the guise of statutory construction. Thus, where more valuable interests are at stake (eg, life and not just the protection of property) the courts tend to construe the statute in a way that is favourable to the claimant (cf Close v Steel Co of Wales [1962] AC 367 (injury to workers) with Gorris v Scott (1874) LR 9 Exch 125 (injury to animals)). And where certain types of claimants are involved (eg, children, workmen etc) the courts will, again, have their interests very much at heart when ‘construing’ the relevant enactments. 3. Case 30 provides an illustration of the difficulty of reconciling the purpose of one enactment with other principles of the legal system and producing a conclusion about the place of civil liability. Here there is a general constitutional principle (dating from 1949) which favours freedom of commerce and thus the freedom to set up a business in competition with others. There was, however, a specific statutory framework on public transport whose framework was held to prevail. 4. Case 32 shows a similar difficulty in reconciling statutory duties on brokers with the more limited pre-contractual duties in the law of contract and in § 826 BGB. The creation of liability for providing unsuitable financial advice would go well beyond the protections offered by those other branches of the law (see paras [16] and [22] of that case). 5. Case 33 is similar in that it identifies the function of this statute as not extending the protection of the consumer of financial products, but rather ensuring that the organisation within firms is appropriate by sanctioning the firm for the erroneous advice of its agents. It should be recalled here that in Germany there is no criminal liability of legal persons. Hence, only individuals are subject to criminal sanctions, but legal persons can be subject to regulatory penalties, which is the case under the OWiG. Given this character of the penalty, it is not surprising that any civil sanction would be imposed not on the company, but on the broker who mis-sold the investment. Such mis-selling is governed by financial services legislation. Much of the compensation for mis-selling of investments to individuals comes

384  Appendix 2 through the Financial Services Ombudsman under the Financial Services and Markets Act 2000. 6. Case 31 provides an example of where statutory duties in relation to insolvent companies were held to protect those who had already traded, but not future traders. The mere fact of the company’s existence (in breach of the duties of directors) was not sufficient to justify the traders giving it credit. In English law, there is no criminal offence of trading whilst insolvent. But § 214 Insolvency Act 1986 empowers the liquidator to seek a contribution from a director who ‘knew or ought to have concluded that there was no reasonable prospect that the company would avoid going into insolvent liquidation’ but continued to allow it to trade. This is a remedy from which all creditors benefit within the structure of the insolvency. The claim in case 31 would have privileged one creditor over the mass of creditors of the company. 2. CASE TO § 826 BGB Case 34 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 15 OCTOBER 2013 NJW 2014, 1380 Facts The claimants, two closed-end real estate funds, bring a claim against the defendant bank for repayment of monies which are purportedly the fund’s and which were, by the fund’s former managing director, the G-GmbH (GmbH = a German limited company), invested at the defendant’s bank in the GmbH’s own name and in February/March 2006 were pledged to the defendants to secure loans for purposes other than the fund’s. The purpose of the GmbH’s (hereinafter GHL) business activity is to keep business shares and other assets of all kinds, the management of closed-end real estate funds and the holding and maintenance of proprietary assets of all sorts insofar as no special licences are required. In 2005 and 2006, the GHL whose managing director was SL, was the claimant’s managing director. The GHL kept two accounts with the names ‘Sonderkonto Umlage HAT 51’ and ‘Sonderkonto Umlage HAT 58’ (special account allocations HAT 51 and 58) in their own name at the M-Bank. On 8 September 2005, SL opened an account for the GHL with the defendant. At the account opening, he stated that the GHL was acting on its own behalf. Between 14 and 19 December 2005, sums in the total amount of €450.000 were transferred from the GHL’s accounts at the Munich-Bank to the GHL’s account with the defendant. The GHL was marked as the originator of the transfer. The reference read ‘fixed term deposit transfer’. In January 2006, the GHL set up – in its own name and stating it was acting on its own behalf – an investment portfolio with the defendant and purchased shares worth €398,231.43 in money market funds. At the time between January and March 2006, both the GHL and the P-GmbH whose managing director was SL’s son, took out loans worth €200,000 each from the defendant. As security for the repayment of the loan, SL pledged the GHL’s bonds. On this occasion he declared that the GHL was acting on its own behalf. After default on the loans in August 2008, the defendant realised the securities. The claimants make a claim for damages against the defendant based on the allegation – insofar as it is of interests to the appellate jurisdiction – that the GHL’s accounts with the

Appendix 2  385 Munich-Bank were escrow accounts in which the claimants’ funds had been placed and that the defendants knew this. The LG München I dismissed the case. On appeal by the claimants the OLG München reversed the LG judgment and held the defendants liable to pay €150,000 to the first claimants and €250,000 to the second claimants. The defendant’s appeal was successful in the interim; it led to the case being reversed and remanded. Reasons [6] II. 1. As the appeal criticises with success, the OLG’s findings already are not based on the assumption that the defendant’s employee, K, caused damage to the claimant in an objectively immoral manner. [7] (a) Whether K’s conduct ascertained by the OLG, is to be considered as immoral, is a question of law which is subject to review by this final appellate court … [8] (b) Conduct is immoral if its overall character – which is to be determined by a comprehensive appraisal of its content, reason, and purpose – is contrary to the sense of propriety of all good and right-thinking members of society [references omitted]. Generally, it does not suffice that the person infringes contractual duties or the law or causes economic damage to another. Rather, in addition, there must be something particularly reprehensible about the conduct which can arise from the pursued objective, the means used, the attitude displayed or the arising consequences [references omitted]. Thus, a third party’s involvement in a party’s breach of contract does not in itself constitute the actus reus of the breach of moral principles; moreover additional circumstances which qualify his conduct as an immoral infliction of damage have to be present. The third party’s intrusion into the contractual relationship must display a lack of consideration of an exceptional degree with respect to the injured party. This is the case, for example, if the third party induces one contractual party to breach the contract, colludes with that party or consciously supports the breach of contractual duties of good faith, eg, in company law [references omitted]. The third party’s positive knowledge of the existence of the contractual relationship is necessary; the unknowing involvement in a breach of contract does not justify the judgment of a breach of good morals [references omitted]. Consequently, the creation of a pledge over account balances held on trust can be conduct violating good morals within the meaning of § 826 BGB by the bank, if the bank knew of the fiduciary responsibility and disregarded it to promote its own interests [references omitted]. [9] (c) According to these principles, the conduct of the defendant’s employee, K, cannot, on the basis of the findings made so far, be qualified as contrary to good morals. K’s actions are morally neutral. Neither the opening of the account and the investment portfolio, nor the conclusion of the loan agreement, nor the creation of a pledge over the shares in the money market funds and their use is in itself reprehensible. Special circumstances which could constitute the actus reus of a breach of good morals cannot be inferred from the OLG’s findings. The OLG notably did not find that K colluded with SL or had knowledge of the fiduciary responsibility concerning the funds invested to the GHL’s benefit. The fact that K has, according to the findings of the OLG, avoided the suspicious facts pointing to a breach of

386  Appendix 2 fiduciary duties by SL and omitted to seek clarity through systematic inquiries even though he should have become alert, cannot constitute the necessary particular reprehensibility of his conduct. Because the mere contribution to a breach of contractual duties of good faith of which the third party has – albeit due to his gross negligence – no knowledge does not justify a judgement of conduct violating good morals [references omitted]. [10] 2. Furthermore, the OLG has neglected that the defendant’s liability under § 831, 826 BGB requires, in addition to the objective and subjective requirements of a breach of good morals, an intention to cause harm and that the breach of good morals and that intention are to be ascertained separately (cf Senate, NJW-RR 2009, 1207 = VersR 2009, 942 no 24). As the appeal criticises with good reason, the findings of the OLG do not justify the assessment that the defendant’s employee, K, caused the damage to the claimant with intent. [11] (a) Admittedly, the employed agent’s culpability is not normally of great importance in this context; instead it usually suffices if the employed agent has satisfied the actus reus of a civil wrong and the latter is unlawful. Something else applies, however, insofar as, eg, under § 826 BGB – in addition to the general culpability, subjective elements are prerequisites for the civil wrong. In such a case these prerequisites must also be present in the person of the vicarious agent (compare Senate, NZG 2010, 587 = VersR 2010, 910 no 38 with further references). [12] (b) Intention comprises a knowledge element and a will element. The person must have known or foreseen the circumstances to which the intention must relate and incorporated them into his will. The assumption of the only form of intention which can be considered here, ie, conditional intent, requires that the person at least considered the circumstances to be possible and was willing to accept them. Contrary to the OLG’s reading, it does, however, suffice if the factual circumstances were merely objectively ascertainable and would have had to impose themselves on the actor. In such a situation, only an accusation of negligence would be justified (compare Senate, NJW-RR 2009, 1207 = VersR 2009, 942 no 24; NJW-RR 2012, 404 = VersR 2012, 454 no 10; NJW-RR 2013, 550 = VersR 2013, 200 no 32; BGH NJW 2013, 2182 = VersR 2013, 916 no 13). [13] (c) Findings that K at least willingly accepted the damage to the claimant are not to be found in the appeal judgment. The OLG merely criticises K for having omitted to pursue the reasonable suspicions of criminal activity despite the fact that he had reason to inquire and must have become alert. That the defendant’s employee did, in fact, become alert and incorporated the damage to the client into his will as required and accepted it, can however not be inferred from the judgment. Notes to Case 34 1. Para 8 of case 34 sets out the test commonly cited of immorality – that it shocks the conscience of all fair-minded and right-thinking persons. Weir (Economic Torts (1997) 49) cited Wills J in Allen v Flood [1898] AC 1, 51 who articulated a similar standard: ‘whether the defendant had in pursuing his own interests done so by such means and with such disregard of his neighbor as no honest and fair-minded man ought to resort to’. This was not the approach of the House of Lords in Allen which rejected any general principle of abuse of rights or liability for immoral conduct. There are, of course, many views of right conduct in a pluralist society, not least among those who engage in business. As Weir asked, ‘Is the

Appendix 2  387 judge simply to consult his conscience, the inner forum? Does he go in for sociological investigation or speculation and ask what other people would think immoral? But the other people cannot be the general, for the general know nothing about the caviar business, for example. But if one looked only to caviar traders to see what they thought moral, one might be endorsing a self-serving practice’ (op cit, 53–54). The BGH here does not offer a benchmark for its views on whether the conduct of the Bank was immoral or not. Instead, it states that the bank would be liable ‘if the bank knew of the fiduciary responsibility [of GHL and P] and disregarded it to promote its own interests’. An English court would not solve this problem in tort, but in trusts. A third party (here the Bank) is liable to the beneficiary if it dishonestly assists in the breach of a trust or fiduciary duty by the trustee (see Hanbury & Martin, Modern Equity (20th edn, 2015) § 25-017). ‘Dishonesty’ in such cases is as difficult to define as in tort. There is an element of subjective knowledge about the circumstances and objective standard of what is proper according the views of ordinary people. Closing one’s eyes or deliberately not asking questions can suffice to constitute dishonesty (op cit, §§ 25-020–25-023). It is that kind of dishonest wilful ignorance that was being alleged in this case. 2. Para 12 of case 34 makes it clear that § 826 BGB is a delict of intention. It does not suffice that there is mere negligence. Hazel Carty (An Analysis of Economic Torts (2nd edn, 2010) 302–04) suggests that intention in the general economic torts is confined to situations where the defendant ‘targets’ the claimant and this would exclude liability for disappointing a person’s expectations of economic gain or merely profiting at the expense of another. A person who establishes a coffee shop next to an existing food takeaway business will know she is likely to reduce the existing business’s expectations of profits and will draw its existing customers away. But such activity is not actionable and may well be lauded in terms of competition. In this case, the Bank and its employee K were not targeting the claimants, but merely interested in obtaining security for its legitimate loans to SL (see para 9 of case 34). By contrast, the solution might have been different if the BGH had adopted the view of Lord Nicholls in OBG v Allan [2008] AC 1 [167] that intention is proved where ‘a defendant seeks to advance his own business by pursuing a course of conduct which he knows will, in the very nature of things, necessarily be injurious to the claimant’. This is a view that Carty (303–04) considers to be too wide, and so do the German courts. (See also C Banfi, ‘Defining the Competition Torts as Intentional Wrongs’ [2011] CLJ 83.) CASES TO CHAPTER 4 Economic Loss Cases (‘Cable Cases’) Case 35 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 9 DECEMBER 1958 BGHZ 29, 65 = NJW 1959, 479 (with an approving note by Lehman in NJW 1959, 670) Facts The claimant was the owner of a factory. In September 1955 an employee of the defendant, a civil engineer, operating an excavator on the premises of M, an enterprise engaged

388  Appendix 2 in graphic work, damaged a subterranean power cable belonging to the electricity works in E, which led from M’s works to the claimant’s factory. At approximately 9.40 am on 18 June 1956, another employee of the defendant excavating a pit intended for an oil-tank cut the cable once again at a distance of about 60 metres behind the previous break. As a result production in the claimant’s factory was interrupted until 6.30 am on 19 June 1956. The claimant contended that the power cable, which from the place of the break onwards served only the graphic enterprise and his factory, was part of his enterprise from an economic point of view. The defendant, in cutting the cable had interfered illegally and culpably with his enterprise and was liable for the damages caused by the interruption of production. Alternatively, he contended that the defendant had failed to observe the necessary care for the safety of others. The defendant argued that the claimant’s enterprise had only been indirectly affected by the cutting of the cable and that only direct interference would have rendered him liable. He also contended that he had exercised the necessary care in selecting and supervising his employees. The LG Bielefeld and the OLG Hannover allowed the claim. Upon a further appeal the claim was dismissed for the following. Reasons 1. The courts below both held the defendant liable in damages on the ground that by cutting the power cable leading to the claimant’s factory with the result that the supply of power was interrupted, the defendant had illegally and culpably interfered with the claimant’s established and active commercial or industrial enterprise. The OLG held the defendant liable on the basis of § 823 I BGB in conjunction with § 831 BGB in as much as the defendant had failed to produce sufficient evidence to exculpate himself. It also held him liable on the basis of § 823 I BGB alone for having failed to observe the required care for the safety of others (Verkehrssicherungspflicht). The appellant objects against the treatment of the cutting of the power cable as an interference with an established and active commercial or industrial enterprise. The appeal must be successful in the result (a) The RG has acknowledged in the constant practice that the right in an existing commercial or industrial enterprise is ‘another right’ in the meaning of § 823 I BGB. As early as its decision RGZ 58, 29 it has regarded the right in an established and active commercial or industrial enterprise as an individual right which can be violated directly; any direct disturbance or interference with the commercial or industrial enterprise is, therefore, a violation of a right protected by § 823 I BGB. During the ensuing period the RG at first accorded the protection of § 823 I BGB to an established and active commercial or industrial enterprise only if interference involved the existence of the commercial or industrial enterprise; that is to say if an enterprise was in fact obstructed, if it was alleged to be illegal, or if its restriction or closure was demanded; sometimes the RG has expressed it in the terms that the bases of the commercial or industrial enterprise must be directly affected [references omitted]. According to this practice, which was developed in dealing with problems of competition and boycott, acts which damaged the commercial or industrial enterprise indirectly only were not regarded as illegal acts in the meaning of § 823 I BGB. Examples are: if the person carrying on a commercial or industrial enterprise is only deprived of economic profit [references omitted], or if the relationship with suppliers is affected detrimentally [reference omitted] or that with the range of customers [reference omitted],

Appendix 2  389 or, finally, if only the prospect of gain is diminished or endangered [references omitted]. The protection of § 823 I BGB was granted in those cases especially where the termination of the commercial or industrial activity of another was demanded on the ground that the activity violated an industrial or commercial right protected by law of the person seeking the termination (design, patents), and it appeared later on that no such right existed, the allegation to this effect having been made falsely due to the objector’s negligence at least [references omitted]; further, eg, if in the course of a boycott, clients had been prevented from entering an eating-house by picketing and by force [references omitted]. The strict requirements for protecting the right in an established and active commercial or industrial enterprise were relaxed by the subsequent practice of the Second Civil Senate of the RG, the final indication appeared already in the decision of 7 June 1929 [reference omitted] where an order of the local Sickness Insurance Office that no payments would be made for certain branded medicines was treated as an act endangering deliberately the commercial or industrial enterprise engaged in the production of the branded medicines, seeing that the full effect of the order of the local Sickness Insurance Office was to force the producer to curtail production. In its decision of 9 October 1934 [reference omitted] the Second Senate abandoned clearly the principle that only the existence of the enterprise was being protected and expressed the view that it sufficed to render § 823 I BGB applicable in making the law concerning trademarks and competition if a claim for damages was based on a culpable interference with the commercial or industrial activity of another. This was confirmed by the same division in its decision of 19 December 1938 [references omitted]; the court stated there that in so holding it took into consideration that every owner of an enterprise could demand to be protected against illegal disturbances which prevented his enterprise from devoting its full potential based on the totality of its components and means employed, even if the disturbance did not threaten the existence of the enterprise as such [references omitted]. The Second Senate considered further [references omitted] whether the same principle did not apply also outside the sphere of the law of competition and designs. In its decision of 3 October 1936 [reference omitted] the First Senate of the RG expressly approved the view of the Second Senate that for the purpose of applying § 823 I BGB a direct attack on the existence of the enterprise was not required where the commercial or industrial activity of another had been interfered with culpably [other reference omitted]). According to the practice of the BGH, the protection of § 823 I BGB is granted in respect of any interference with the right of an established and active commercial or industrial enterprise, if it constitutes a direct interference with the commercial or industrial activity, even if it does not involve competition and industrial property rights [references omitted]. In the decision cited here [reference] it is stated that the right in an existing commercial or industrial enterprise – like ownership – must be protected by § 823 I BGB against direct interference not only in its substantive existence but also in its various manifestations, which include the entire sphere of commercial and industrial activity. This practice must be followed. (b) In consequence of the practice of the court to range the right in an existing or commercial industrial enterprise among the number of ‘other rights’ mentioned in § 823 I BGB this right is placed on an equal footing for the purpose of protection with the other protected legal interest and rights enumerated there, ie, life, health, liberty, and property. Therefore it must also be examined in the case of a violation of a right in an existing commercial or industrial enterprise whether its consequences, for which damages are claimed, are covered

390  Appendix 2 by the protection of the law (the decision of this division [references omitted]). Admittedly in so far as the protection of an established and active commercial or industrial enterprise is concerned, the question is not unlike the above-mentioned fundamental judgment of this division regarding the limits of liability, as to whether damage complained of resulted from the violation of a protected interest, the safeguarding of which is the purpose of the law. The reason is that when § 823 I BGB was formulated, the legislature had not yet envisaged the protection of established and active commercial or industrial enterprises. In the present case, the question as to the limits of liability is therefore to be considered and decided mainly from the angle as to what is the object of protection accorded by the practice of this court to established and active commercial or industrial enterprises. The notion of a commercial or industrial enterprise includes everything which in its totality enables the enterprise to develop and to operate in the economy. Thus it includes not only the premises and the land used by it, machinery and tools, furniture and stock but also business connections, the circle of clients, and debtors. The protection accorded and gradually extended by the practice of the courts to established and active commercial or industrial enterprises is intended to safeguard the enterprise against legal interference with its economic activity and functioning. Even if the BGH in a previous decision [reference omitted] regarded the individual situation in which the commercial or industrial activity is carried out as determining the extent of the area of commercial or industrial activity, nevertheless all the cases in which the BGH had held that a right in an established and active commercial or industrial enterprise had been violated involved the protection of those characteristics of a commercial or industrial enterprise which are specifically its own. The objects of protection are the substance and the emanations of the commercial or industrial enterprise to the extent that they constitute its natural and characteristic features of economic and technical activities. (c) Then as now, as the OLG has observed correctly, the interference with the sphere of the commercial or industrial enterprise must be direct if § 823 I BGB is to apply [references omitted]. The claimant is wrong when he refers to the decision of the RG [references omitted] in support of a view to the contrary; it was held there only that to restrict the right in an established and active commercial or industrial enterprise to the protection of its substance was too narrow and that every culpable interference with the commercial or industrial activity of another was sufficient to render § 823 I BGB applicable; the requirement that the interference must be direct was not affected thereby. It is true, of course, as the OLG has stated, that the notion of ‘direct interference’ has not been defined by the practice of the courts. Baumbach and Hefermehl [references omitted] point out correctly that the difficulties in drawing the line between direct and indirect interference are particularly great in the case of such a complex legal term as enterprise. Contrary to the view of the appellant the purely linguistic distinction between ‘indirect’ and ‘direct’ cannot yield the criteria for the necessary delimitation of these notions. The question as to when interference with the right in an established and active commercial or industrial enterprise is direct cannot be answered either by reference to the doctrine of causality alone, and the absence of so-called intermediate causes is also not decisive, as the OLG has pointed out in agreement with the practice of the BGH [references omitted; contra RGZ 163, 21, 32 where the court relied on directness of the causal nexus; similarly the OLG München, 21 March 1956, NJW 1956, 1769]. The suggestion of Larenz [reference omitted] in his note to the aforementioned decision of the OLG München – upon which both parties rely in support of their legal

Appendix 2  391 position – does not lead to a sufficiently clear limitation of direct and indirect interference. Larenz argues that whether an interference is direct must be determined teleologically, ie, in the sense that the act of interference must have the purpose of restricting the commercial or industrial activity, and that, consequently, the purpose must disclose the direction towards inflicting damage upon the commercial or industrial enterprise. Inasmuch as Larenz wishes to treat as ‘direct’ every interference with a commercial or industrial enterprise the purpose of which is, or at least could have been, to reduce or to affect detrimentally the difficulties become obvious immediately when the interference was due to negligence. Nevertheless it is not possible to agree with Baumbach and Hefermehl [references omitted] that in view of the existing difficulties of delimitation the requirement that the interference must be direct should be abandoned and that instead the effect of the interference upon the sphere of activity should be decisive in favour of the retention of the requirement of directness [references omitted]. The OLG, relying on the decision of this Senate dated 14 April 1954 [reference omitted] is of the opinion that the notion of directness was characterised by its objective. From this it concluded that a workable delimitation could be established in the case of intentional acts; if they were committed negligently it was sufficient if in the circumstances the act might have been intended to affect the commercial or industrial enterprise adversely and the person so acting had been aware of this consequence of his act, but had hoped that the consequence would not materialise. The OLG held that in the present case a negligent interference causing liability to pay damages had in fact taken place. This Senate in the decision cited above has held that an act to constitute a violation of the right in a commercial or industrial enterprise must somehow be directed against the enterprise as such. For this reason this Senate did not regard as illegal interference in a commercial or industrial enterprise the fact alone that one unfounded claim for the restitution of a parcel of land attached to the enterprise had been raised by a claimant seeking restitution under the Military Government no 52, resulting in the administration of the land by trustees. The reason was that the attack was directed against the owner of the enterprise, but not against the enterprise itself, even if thereby it may have caused damages to the commercial or industrial enterprise indirectly. Similarly it is not an interference with commercial or industrial activities if as a result of injuries to persons an enterprise is deprived of the personnel which is indispensable for its operation [reference omitted]. These decisions which require that in order to be covered by § 823 I BGB an attack must be directed against the industrial or commercial enterprise itself indicate the general approach of the predominant practice. It is to avoid an excessive extension of the right in an established and active commercial or industrial enterprise which would run counter to the casuistic enumeration in the German legal system of situations constituting torts. Voices have been raised by courts and in legal literature which advocate a return to the older practice of the RG according to which only an interference with an industrial or commercial enterprise which affects its substance is to be regarded as an attack against an absolute right [references omitted]. These opinions are clearly inspired by the view that, in the words of Lehman [reference omitted], the recognition of an excessively broad general protection of commercial or industrial enterprise might easily lead to a surreptitious creation of rules. Certainly the protection which was originally accorded only to the existence of a commercial or industrial enterprise was extended when subsequently the RG and then the BGH in a constant practice have held that every illegal direct interference with commercial or

392  Appendix 2 industrial activity constitutes a violation of an established and active commercial or industrial enterprise which is protected by § 823 I BGB even if the attack is directed not against its existence but against any one of its emanations. This does not mean that by the circuitous route of protecting commercial or industrial enterprises protection is being granted to contractual rights which, in contrast to absolute rights, only bind certain persons and are therefore not ‘other rights’ in the meaning of § 823 I BGB [references omitted] or that economic aspects as a whole are being protected, although these are only given protection by the law of tort in special circumstances, eg, by § 826 BGB; to protect either of these would be alien to the present legal system. In addition the need to enquire carefully in connection with the question of illegality whether, having regard to the principle of balancing the respective interests and duties, the defendant can perhaps rely on special grounds of justification [reference] has a restrictive effect. In fact the extent and the limits within which the right in an established and active commercial or industrial enterprise is to be protected must be determined precisely by an appropriate amplification of the notion that the interference must be ‘direct’. Direct interference with the right in an existing commercial or industrial enterprise against which § 823 I BGB provides a remedy is only that which is somehow directed against the enterprise as such, ie, which is aimed at the enterprise and does not affect rights or legal interests which can be detached from the enterprise without difficulty. All the cases in which the BGH acknowledged that a right in an established and active commercial or industrial enterprise had been violated involved interferences of this kind which were aimed at the enterprise. Just as an injury to an employer or the destruction of or damage to a lorry belonging to an enterprise is not specifically connected with the enterprise, the cutting of the cable by the defendant or his employee operating the tractor is not so connected either; the defendant’s enterprise operating the excavator had damaged a power cable which apart from supplying power to the graphic working of M, almost by chance serves in addition the claimant’s enterprise only, although it could equally well have been intended to supply electric current to other customers. Furthermore the supply of electric current by a cable and the right to receive it does not constitute a natural characteristic of an established and active commercial or industrial enterprise, but represents a relationship based on the duty to supply current incumbent upon the public supply undertaking, identical with that which connects, eg, household and members of the professions with the electricity works. Consequently the fact that a cable has been damaged on land not belonging to the enterprise concerned resulting in a cut in the electricity supply cannot, in the absence of special circumstances which do not exist here, be regarded as an interference aimed at the area of operation of the enterprise concerned. It is true that when the defendant’s excavator cut the power cable leading to the claimant’s factory, the material and technical bases were already affected whereby the claimant could and did receive electric power from the electricity works in accordance with the contract existing between them. However this does not constitute interference with an established and active commercial or individual enterprise; to do so would exceed the range of protection accorded to commercial or industrial enterprises by the practice of the courts; instead the issue involves a violation of property in the cable belonging to the electricity works and of the right of the claimant against the electricity works for the supply of electric power, limited by the latter’s general conditions of trade. If, therefore, the claimant’s claim cannot be based on a violation of his right to an established and active commercial or individual enterprise, it cannot be supported either, contrary to

Appendix 2  393 the view of the OLG, on the ground that the defendant had violated the required care of the safety of others [Verkehrssicherungspflicht]. Case 36 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 12 JULY 1977 NJW 1977, 2208 = JZ 1977, 721 = VersR 1977, 1006 Facts The defendant was carrying out earth removal operations required in the construction of an aqueduct and reservoir for the city B and the local water authority. In the course of the works a mechanical digger operated by one of the defendant’s men damaged an electric cable which supplied several concerns. As a result current to the claimant’s business was interrupted for 32 minutes, and the work of its 1385 employees brought to a halt. The LG and the OLG Stuttgart dismissed the claim for damages. The claimant’s appeal was also dismissed. Reasons I. 1. The OLG held that the claimant had no tort claim under § 823 I BGB, since no legal interest protected by this rule had been invaded: in having to pay wages when no work could be done owing to the lack of current the claimant suffered a purely economic loss. The court also held that there had been no invasion of an established and operative business. Furthermore, no claim arose under § 823 II BGB, for although there was a provincial regulation regarding the safeguarding of electric cables during building operations (§ 18 III Provincial Building Ordinance of Baden-Württemberg – BadWürttBauO), it did not have the character of a protective law (Schutzgesetz) in favour of customers supplied from the national electricity grid. 2. This is perfectly in line with the decision of this court. (a) This court has frequently stated the preconditions which must be met before damages are payable for affecting a business (BGHZ 29, 65 [case 35]; 41, 123; 66, 388, 393). Those principles involve the conclusion that the damage done by the defendant’s mechanical digger to the electric cable was not an invasion of the claimant’s business as such, since there is lacking the requirement of intimate connection with the business (Betriebsbezogenheit). In a similar case (BGHZ 29, 65, 74) the court said that the breaking of an electric cable supplying a factory is no more intimately connected with the business than injury to its employees or damage to its vehicles: it is not an essential characteristic feature of an established and operative business that it have an uninterrupted supply of electricity, especially as all the other customers connected to the same cable have the same legal relationship with the utility that supplies the current. We need not dwell on this point since even the appellant does not contest it. (b) Although it had previously held otherwise (see, eg, NJW 1968, 1279), this court in its decision of 8 June 1976 (BGHZ 66, 388) stated that § 18 III BadWürttBauO (and the similar provisions of the building ordinances of other Länder) are not protective laws in favour of subscribers who suffer economic loss through a lack of current due to damage to a cable. Accordingly there are no legal objections to the view of the OLG, which evidently was unaware of that decision. Nor, indeed, does the appellant himself contest this part of the judgment.

394  Appendix 2 II. The claimant also puts forward a contractual claim both in his own right and by assignment. The OLG rejected this. The underlying facts are that representatives of the parties had a meeting on site with representatives of the water authority and the city, that the claimant’s business manager and the city representative drew attention to the presence of the main electric cable where the earthworks were about to begin and stressed how vital it was for the claimant’s business, and that the defendant’s clerk of works was then told that any digging in the neighbourhood of the cable must be done by hand rather than by machine. The OLG analysed these facts correctly, and its holding that the claimant was not drawn into the protective ambit of the contract of services between the water authority and the defendant cannot be faulted. 1. Case law recognises that persons not immediately involved in a contract may yet be drawn within its protective ambit, with the result that although they cannot bring a claim for performance, as would be the case if it were a true contract for the benefit of third parties under § 328 I BGB, they may nevertheless have a contractual claim for damages if they suffer harm owing to faulty conduct by the debtor in breach of contract (on this see BGHZ 49, 350; NJW 1975, 344; NJW 1954, 874; BGH VersR 1955, 750; NJW 1956, 1193; NJW 1959, 1676; BGHZ 51, 91, 96). The cases agree that whether third parties are to be included in the protective area of a contract when they were not involved in its formation and have not been expressly covered by the parties, depends on the meaning and purpose of the contract and its construction in accordance with the principle of good faith (§ 157 BGB) (see BGHZ 56, 269, 273); in the long run what is critical is not so much the relationship between the contractors themselves as the special relationship between the creditor and the third party whose inclusion is in question (see especially BGHZ 51, 91, 96). In order to avoid an intolerable extension of contractual duties of care beyond what the principle of good faith can demand of the debtor of the contractual performance, the court has frequently observed that the duties of care and protection can only be extended beyond the actual parties to the contract if the principal creditor (here the water authority) has some responsibility for the wellbeing of the third party, as owing him protection and care (see especially BGHZ 51, 91, 96 [case 48]). This requirement, which is needed so as to avoid blurring the line between contractual and tortious liability in an insupportable manner and contrary to the will of the legislature, is normally present only when there is a legal relationship of a personal nature between the contractual creditor and the third party, such as commonly arises in family relationships, in employment, and in landlord and tenant cases (see BGHZ 51, 91, 96). 2. Contrary to the appellant’s contention, the OLG acted consistently with these principles in holding that the requirements for including the claimant in the protective area of the contract for work between the defendant and the water authority were not satisfied in this case. (a) In particular the water authority here was in no way responsible for the wellbeing of the claimant. For the contractual creditor, the claimant was only one of a large number of subscribers that might be affected by damage to the cable. As this court said in its judgment of 3 November 1961 (VersR 1962, 86, 88), contractual duties must not be extended in cases where faulty work or failure to take security measures could cause harm to people of all kinds – houseowners, tenants, entrepreneurs, and so on – for then the class of people protected by the contract would be unlimited and unenforceable. The mere fact that the claimant’s business was apt to suffer a considerable economic loss through interruption of

Appendix 2  395 the electricity supply does not justify holding that the water authority which could itself suffer if the claimant was damaged, must look out for its wellbeing. Even if it be true that the contractual creditor had a certain interest in the safety of the cable, this interest was only a general one, and not one solely or predominantly related to the needs of the claimant for which the claimant could claim protection from the creditor. (b) Nor can it be said that the meeting on site modified the contract of works between the defendant and the water authority. The water authority was bound to give such instructions before the work started in order to enable the defendant to take the necessary steps to protect the utility cables (including telephone cables – § 317 StGB), and the special reference to the harm the claimant might suffer if the current were interrupted was insufficient to bring it within the protective area of the contract contrary to the principles already stated. It is important that at the time he concludes the contract, the contractual debtor should be able to see what risk he is undertaking, and this would be impossible if the creditor could later determine what third parties were to be included in its protective area by making a unilateral declaration to the debtor or to some unauthorised employee. 3. The OLG was also right to hold that the claimant had no assigned claim for damages from the water authority. The requirements of Drittschadensliquidation are not met (case 48, BGHZ 51, 91, 93 ff). There is no special legal relationship between the claimant and the water authority, the defendant’s contractual creditor, such as would justify holding that in law it was not the creditor but the claimant who suffered the harm. Only if, at the time of the wrong, the creditor’s interest is vested in, or has passed to, the third party, does the party liable have to make good to the creditor what is lost by reason of the creditor’s legal and economic relations with the third party. Apart from a few exceptional cases (eg, BGHZ 40, 91, 100) this only applies when the creditor has contracted on the third party’s account (eg, BGHZ 25, 250, 258) or when the object which the debtor was to safeguard belonged not to the creditor but to the third party (as in BGHZ 15, 224). No such fact situation is present here (see also NJW 1959, 479). We need not now enquire what the case would be if the defendant contractor had undertaken by contract a specific duty of care towards the third party since, as has been stated, no such agreement is shown to have been made. Notes to Cases 35–36 1. These cases represent one facet of the wider problem of compensability of purely economic loss which remains, both in German and Anglo-American law, a central topic of the law of torts: (i) because it impinges (as cases 41 and 47 also show) on the uneasy relationship between contract and tort and (ii) because the decisions on this topic show how judicial fashions change vis-a-vis the concepts used to limit liability for negligence. We shall return to these more general points later; here suffice it to make a few general remarks about these ‘cable cases’. 2. The factual situation is, typically, the following: A damages B’s property and as a result C, (and, perhaps, others) suffer economic loss. Cases 28, 35 and 36 fall into this pattern and find an excellent English equivalent in Spartan Steel v Martin and Co [1973] 1 QB 27 and an American parallel in Beck v FMC Corporation, 385 NYS 2d 956; aff ’d, 369 NE 2d 10 (1977). A factual variant, raising analogous problems, is the following: A, a water company usually under a contractual obligation with a local authority B to provide water and maintain proper water pressures, fails to do so. As a result of this, firemen are unable to extinguish a fire that breaks out and consumes C’s house. In all but four American jurisdictions C’s claims against

396  Appendix 2 A are turned down, HR Moch Co v Rensselaer Water Co, 247 NY 160, 159 NE 896 (1928) being, perhaps, the locus classicus. These negative results of Anglo-American and German law call for a comment, not least because they are in stark contrast with the attitude taken by other systems (eg, the French). 3. It is interesting to compare case 35 with Spartan Steel [1973] 1 QB 27, and discover the true reasons that lie behind these judgments. Which of these judgments do you find most convincing? How many of the reasons given by Lord Denning MR can also be found in the German decision? Zweigert and Kötz, § 5, maintain that ‘style’ is one of the most important distinguishing features between common law and modern civil law (though they do not specifically discuss judicial styles). How different do you find the style of common law and German judgments? 4. A policy factor which gets short shrift in these judgments is the insurance factor. The American water cases display an amazing ingenuity in utilising every legal concept under the sun to turn down these claims while at the same time avoiding talking openly about insurance considerations. In these cases two types of insurance can be envisaged: loss insurance (which would justify the status quo, where the victim bears the loss in law) and liability insurance (which would argue in favour of a change in the law by making the contractor liable for the harm to third parties). Which of the two is cheaper and more efficient and why? A good discussion of the insurance factor can be found in the decision of the Canadian Supreme Court in Norsk Pacific Steamship Co Ltd v Canadian National Railway Co [1992] 1 SCR 1021. The insurance aspect of the case is also increasingly considered by the German legal literature which seems divided as to whether a change in the law is ­desirable. For further details see Hager, ‘Haftung bei Störung der Energiezufuhr’ JZ 1979, 53 and Bürge, ‘Die Kabelbruchfälle’ Juristische Blätter 1981 57. The two most thorough monographs on the subject are by Hermann, Zum Nachteil des Vermögens (1979) and Taupitz, Haftung für Energieleiterstörungen durch Dritte (1981). 6. If distinctions are to be made what about the following situations? (a) A damages B’s cable which has been installed to service only C’s factory. Can C recover? The point does not appear to have been decided in either England or Germany but an Australian case has given an affirmative answer. Caltex Oil (Australia) pty v The Dredge ‘Willemstad’ (1976) 11 ALR 227. Here the floodgates argument cannot be invoked. Could this case be solved by applying Lord Goff ’s theory of ‘transferred loss’ or the Germanic equivalent of Drittschadensliquidation? (See discussion in chapter four, section I.E.) In the Caltex case the Australian High Court distanced itself from the broad exclusionary rule so favoured by England courts. But the rich variety of views found in the multi-judgment decision makes it difficult to extract a common ratio decidendi and for this reason its precedential value in subsequent ‘leading’ cases seems to have been limited. (b) If A damages B’s cable and C’s molten material solidifies during the power cut and has to be thrown away, C has suffered material damage and can therefore recover damages for it (and for consequential loss of profits). But what if the solidified material can be re-melted and used after the restoration of the power? A German court of appeal (OLG Hamm, NJW 1973, 760) held that this was not interference with property since there was no permanent interference with its substance. The reasoning appears too abstract and conceptual, and perhaps it would be more convincing to accept that there is material damage. That the damage was only temporary should thus only influence the quantum of damages rather than the characterisation of the loss as material or economic. On these points see Möschel,

Appendix 2  397 ‘Der Schutzbereich des Eigentums nach § 823 I BGB’ (JuS 1977 1, 5; Isenbeck, note on OLG Hamm in NJW 1973, 1755. 7. Case 28 also considers whether a claim can be based on § 823 II BGB (see discussion in text, chapter 3). In the late 1960s the BGH held that it could: BGH NJW 1968, 1279. The Oberlandesgerichte refused, however, to follow suit (see, eg, BayObLG NJW 1972, 1085; OLG Hamm NJW 1973, 760; OLG Saarbrücken VersR 1976, 176) and in the end forced the BGH to recant. The question turns on the purpose attributed to the building regulations. Are they designed for the public benefit alone or for the benefit of individuals such as the claimant. The answer, however, once again depends on how the legislation and its policy is understood. How else can one explain the fact that identically phrased statutory provisions have received different characterisations in Germany, Austria and Switzerland? On this see the exhaustive treatment of Bürge in Juristische Blätter 1981, 57. 8. Case 36 offers an example of how the idea of a contract for the benefit of third parties can be a technique to find liability for economic loss. But the case also identifies the limits of this technique. In particular, the person liable needs to know the potential risk – the number and character of the third parties to whom he may be liable. As the judgment states ‘the contractual debtor should be able to see what risk he is undertaking, and this would be impossible if the creditor could later determine what third parties were to be included in its protective area by making a unilateral declaration to the debtor or to some unauthorised employee’. Merely pointing out the potential risk to the customers of the water company is not enough. There needs to be some special responsibility of the water company for the wellbeing of the protected third parties or some form of specific engagement of the debtor towards them. These were lacking here. Furthermore, the concept of Drittschadensliquidation does not apply because the loss of the third-party victim (payment of wages) is different from the loss of the water company (the damage to the infrastructure it owned). It is not the case that the property damaged was that of the third party or that the water company contracted on behalf of the third party. The identification of the risk (which would then be reflected in the price for the contract) would similarly be the reason why the English Contracts (Rights of Third Parties) Act 1999 provisions would not apply to this case. Under section 1(1) of the Act, a third party has to be expressly identified and the contract must purport to confer a benefit on her or him. Neither condition would have applied to case 41. Economic Loss (Loss of Use) Case 37 BUNDESGERICHTSHOF (SECOND CIVIL SENATE) 21 DECEMBER 1970 BGHZ 55, 153 = NJW 1971, 886 = VersR 1971, 418 Facts The defendant Federal Republic of Germany was the owner of a navigable channel which connected a mill with the port of B. During the night of 21 October 1965 part of the wall forming the bank collapsed bringing down part of the external wall of a dwelling house based on it. In order to prevent a further collapse of the house, its owner, acting in accordance with an order of the competent authority, the City of B inserted beams as support. Two of these were inserted between the two banks of the channel immediately upon its surface. Thus the channel was effectively closed until the bank of the channel was

398  Appendix 2 ­ rovisionally restored during the middle of 1966. As a result, the claimant’s motor vessel p Christel was immobilised at the mill; nor could the claimant approach the mill with his other vessels, as he was contractually bound to do, in order to carry goods to and from the mill. He claimed damages amounting to DM 31,061 for loss of earnings. The LG Stade and the OLG Celle allowed the claim. Upon a second appeal, the claim was rejected in part for the following. Reasons I. … II. … 1. The OLG is correct in holding that the case of a culpable violation of the duty incumbent upon the defendant by its constitutionally appointed organs to maintain the channel, § 823 I, §§ 89, 31 BGB must be considered as forming the basis of the claim, and not, as the appellant contends § 839 BGB in conjunction with Article 34 of the Basic Law … Prior to and at the time of the collapse of the wall forming the bank the duty to maintain it was vested (by State) in a particular authority. The culpable violation of this duty gives rise to claims under § 823 I BGB [references omitted] … 2. … it follows from the existing duties of the defendant [references omitted] to keep the channel open to navigation that it is also obliged to prevent the threatening collapse of the wall of the channel by suitable safety measures which the owner must tolerate … In the special circumstances the duty of the defendant to secure the navigability of the channel included not only the duty to restore it when obstructed or rendered impassable, but also the duty to remedy by suitable measures any immediate danger which endangered the navigability of the channel owing to the state of the walls or the banks. 3. As the OLG has held with justification, the authority constitutionally appointed by the defendant has culpably violated this duty … The appellant is wrong in contending that the culpable violation of this duty was the adequate causation for the closure of the channel and therefore for the losses of the claimant resulting therefrom. It is true that the immediate cause for closure of the channel was the order of the city of B of 22 October 1965 and the propping-up of the house, street no 10 in the execution of this order. Both were only the adequate consequence of the preceding violation of the duty incumbent upon the authority constitutionally appointed by the defendant. For it is not outside common experience that the failure to secure a defective wall of a bank which supports an external wall of a building, can lead to consequences of this kind. 4. The OLG denies that the provisions concerning the duty to maintain a waterway constitute a protective law in the meaning of § 823 II BGB. This is correct in law [references omitted]. Nevertheless it holds the defendant liable in damages for the loss incurred by the claimant through the closure of the channel because the conduct of its constitutionally appointed organ in violation of its duty is to be regarded as an inadmissible interference with an established and active commercial or industrial enterprise. This reasoning, and partly also the result, are open to legal doubts. (a) Liability based on interference with the right to an established and active commercial or industrial enterprise is subsidiary in character and is incurred only if no other remedy exists, and if the rules in force governing a certain topic viewed as a whole disclose the existence of a gap, which must be closed with the help of § 823 I BGB [reference omitted]. An examination of the case from this angle leads to the following conclusions.

Appendix 2  399 As regards the claimant’s motor vessel Christel, any claim for damages on the ground of interference with a right to an established and active commercial or industrial enterprise is ruled out to the extent that damage to property has occurred which leads to loss. For property is damaged not only if the substance of an object is adversely affected but also by any other actual interference with the right of an owner [references omitted]. In the present case property of the claimant in the motor vessel Christel has been damaged inasmuch as the vessel was forced to remain at the loading stage of the mill because the channel was closed. It was consequently unable to move beyond that area of the channel between the loading-stage and the beams which formed a bar. It was therefore practically eliminated as a means of transport and was incapable of normal use. The ‘imprisonment’ of the vessel therefore constituted a factual interference with this vessel which affected the rights of the claimant as an owner. In denying an interference with property in a similar case the RG [reference omitted], contrary to the present Senate, clearly proceeded from the assumption that an interference with property in the meaning of § 823 I BGB can exist only in an interference with the substance of an object, but not in any other kind of interference [reference omitted]. Such a narrow interpretation of § 823 I BGB does not, however, accord with the purpose of this provision. This is to protect the rights enumerated therein against any culpable illegal violation. The defendant, who is responsible for the conduct of its constitutionally appointed representative (§§ 89, 31 BGB), who, in violating its duty caused damage, is therefore liable to pay compensation to the claimant for the damage arising from the ‘imprisonment’ of the motor vessel Christel: § 823 I BGB. To this extent any liability of the defendant is excluded on the ground of illegal culpable interference with the rights of the claimant in an established and active commercial or industrial enterprise. Moreover it must remain undecided as to whether any such interference has taken place at all. As regards the claim for damages in respect of the river boats which could not use the channel the answer must be different. To this extent the defendant has not interfered with the property of the claimant for the reason that the river-boats were not affected in their capacity of means of transport by the closure of the channel and were thus not diverted from their natural use. This conclusion is not altered by the fact that the claimant was unable to dispatch the river-boats to the loading-stage of the mill while the channel was closed. This cannot be regarded as an interference with property, but is a restriction of the claimant in the enjoyment of the common use of the channel together with all others who engage in shipping. Such common use is not, however, ‘another right’ in the meaning of § 823 I BGB [reference omitted]. (b) Therefore the question as to whether the violation of their duty by the constitutionally appointed authority is to be regarded as an inadmissible interference with an established and active commercial or industrial enterprise is only relevant in respect of the claimant’s claim for damages arising out of the closure of the channel. This court disagrees with the OLG which answered the question in the affirmative. The appellant is, however, wrong in arguing that in the present no right of the claimant in an established and active commercial or industrial enterprise has been violated if only for the reason that such a violation cannot be committed by an omission. The rights and legal interest which are protected by § 823 I BGB can also be violated through an omission [reference omitted]. The appellant is right, however, in contending that the observations of the OLG as to whether in the present case the defendant has directly interfered with the claimant’s established and active commercial

400  Appendix 2 or industrial enterprise is not open to legal objections, at least in so far as they concern the amount of damages in issue. It is recognised by the practice of the courts that not every illegal and culpable interference with the business activity of another gives rise to claims for damages in accordance with § 823 I BGB. Instead, this is only the case if the interference touches directly the sphere of the commercial or industrial enterprise, therefore centred on the enterprise and does not affect rights or protected interests which can be separated without difficulty from the commercial or industrial enterprise [references omitted]. In the present case no such interference aimed at the claimant’s enterprise has taken place. The navigability of a waterway does not fall within the ambit of the commercial enterprise of a person engaged in shipping. A temporary closure of a waterway which also concerns others engaged in shipping does not therefore interfere with the claimant’s commercial enterprise. The OLG wishes to come to a different conclusion in the present case on the ground that the claimant’s vessels had used the channel, before its closure, more than others engaged in shipping – at times almost exclusively – and that the closure has temporarily prevented the claimant from complying with his contractual obligations towards the mill; but this reasoning cannot be accepted. The existence of such obligations does not mean that the navigability of a waterway, which a person engaged in shipping has to use within the framework of his contractual obligations, is to be regarded as falling within the sphere of that person’s commercial enterprises. The contrary opinion of the OLG cannot be supported either by the consideration that at the time when the river-wall collapsed the journeys of the claimant’s vessel on behalf of the mill represented an important part of the claimant’s commercial activities. The question as to what falls within the commercial enterprise of a person engaged in shipping cannot be determined by the fact that one or several of his vessels are principally employed on certain river routes, seeing that this depends on the offers to load them made by third parties. The OLG is therefore wrong in holding that in the present case the defendant is liable to pay damages for having interfered with the claimant’s established and operating business also in so far as he could not for a time use the channel for his vessels. If this opinion were accepted it would mean that common users would be protected under the heading of ‘any other rights’ of § 823 I BGB, if only by the circuitous route of a right in an established and operating commercial or industrial business. It follows that the judgment appealed against is only to be upheld to the extent that it declares the claimant’s claim arising out of the ‘imprisonment’ of the motor vessel Christel to be justified (DM 24,086). The additional claim (DM 6,965) must be dismissed. Case 38 BUNDESGERICHTSHOF (SECOND CIVIL SENATE) 9 APRIL 1984 NJW 1984, 2569 = VersR 1984, 584 Facts In the summer of 1980 the claimant started to construct an inner harbour wall about 230 metres long out of steel shuttering. The employer and owner of the harbour was the city. On 16 March 1981 while building operations were still in train, the barge TS on entering the harbour collided with and damaged the part of the wall, which had been constructed. The claimant repaired the wall and sued the defendant as owner of the barge for its expense in so doing, claiming both in its own right and as assignee of the city.

Appendix 2  401 The Rhine Navigation Court held the claim admissible, but the Rhine Navigation Court of Appeal dismissed it. The BGH reversed and remanded. Reasons 1. The owner of a ship is answerable for damage done to a third party by the fault of any of the crew in the execution of his functions (§ 3 I Binnenschifffahrsgesetz, hereafter BinnSchG). Not only must causative fault on the part of a crew member be shown but that person must actually be liable to the third party [references omitted]. The relevant basis of liability here is § 823 I BGB. 2. The Court of Appeal did not decide whether any of the crew were at fault in the collision with the coffer-dam, nor whether the navigational signs at the harbour entrance had been correctly positioned by the city, as the claimant alleged. For the purposes of this appeal both assumptions must be made in favour of the claimant. 3. According to the Court of Appeal the claimant cannot complain of damage to property because the claimant did not own the part of the wall which was damaged: it belonged to the city. The piles driven into the harbour bed were firmly attached to it and formed an essential component of the harbour itself, which was vested in the city. The piles were not there as a merely temporary measure: they were to remain there for the duration of the works. It is irrelevant that at the time of the accident the city had not yet accepted the half-built wall. Important as acceptance is for the contractual relations between the claimant and the city (see §§ 640 ff BGB) it is irrelevant to the question of the ownership of the constructed part of the wall. That falls to be determined by §§ 94, 946 BGB, as the court below correctly stated. This turns on objective factors (permanent fixture to the soil) and not on the attitudes of the contractor and owner of the land. To the extent that these have a role to play under § 95 BGB, the appellant is bound by the finding that the piles were driven into the ground for the duration and not for subsequent removal, so that there can be no question of this being ‘a purely temporary measure’ [references omitted]. 4. The Court of Appeal further held that the claimant could not base a claim on interference with possession. It held: At the time of the accident the claimant was certainly still in possession of the standing portion of the wall; for the purpose of executing its building operations, it had direct physical control of the building site, the piles already installed, and the wall, on which they were still working. But possession is protected by § 823 I BGB only in so far as it confers a right to possession, use, or enjoyment. The claim under § 823 I BGB is geared in principle to the replacement of the injury to possession, not to injury to the thing itself; but the claimant’s claim is addressed to injury to the thing itself so that it does not lie under the heading of interference with possession. Contrary to the view of the Court of Appeal the claimant’s possession of the coffer-dam is a sufficient basis for its claim, on the factual assumptions made for the purposes of this appeal (2. above). The claimant was still bound to complete the work after it had been damaged (see §§ 631, 644 BGB). Until the city accepted it, the claimant bore the risk of having to repair at its own expense any damage to the wall caused by third parties, and until that was done the city was bound neither to accept the work nor pay the agreed fee. Thus the claimant’s possession of the wall was associated with responsibility for its condition. This is enough to support a claim for the cost of the repairs. The case is akin to those where a tenant or lessee

402  Appendix 2 is contractually liable to the landlord or lessor for damage done to the thing by a third party. The tenant and lessee have been granted a claim for damages against the third party based on their possession [references omitted]. Those are admittedly cases of ‘liability-harm’ [reference omitted], whereas here it is by reason of his duty of performance vis-a-vis the site owner that the possessor suffers. Nevertheless, this is equally a consequential loss attributable to invasion of a legally protected interest, and it is irrelevant that it is purely economic in nature [reference omitted]. The Court of Appeal was in error to suppose that in NJW 1970, 38 ff the Sixth Civil Senate had held that a building contractor had no claim based on possession against another contractor for damaging work done by the first contractor and not yet accepted. On the contrary, the judgment expressly left this question open, the first contractor in that case being no longer in possession of the work … Case 39 BUNDESGERICHTSHOF (SEVENTH CIVIL SENATE) 23 APRIL 1981 NJW 1981, 1779 = WM 1981, 773 Facts In 1973 as the general building contractor for the District of M the claimant built a centre for the disabled. The claimant delegated to the defendant the tiling operation of the proposed structure. For this purpose they agreed that the standard contract VOB/B (1952) should apply, but they made special provision concerning delivery and conditions and warranties in respect of legal or physical defects. According to the list of work to be done, the surrounds of the swimming pool of the Special School were to be covered with tiles made of artificial stone which were to be ‘non-slip as a cover of the bottom’. The architect K, who was appointed by the District of M, selected the tiles from samples submitted by the defendant. When the swimming pool was opened, it appeared that the tiles submitted by the defendant did not prevent slipping. At first the District asked the claimant to remedy the defect free of cost. The claimant refused and referred the District to its remedy against the architect. Thereupon the District instructed the claimant by an additional contract and against further payment to replace the unsuitable tiles by others which prevented slipping. The claimant once again employed the defendant for the fixed price of DM 7,992 and received in return DM 9,000 from the District. To the latter extent the District claimed damages from the architect on the ground that he made a mistake in selecting the tiles. The latter’s Insurance Company paid this sum in full and in subsequent proceedings sued the claimant for the payment of two-thirds of this amount. The LG Essen, by a decision of 5 November 1976 condemned the claimant to pay one half of the amount (ie, DM 4,500). The claimant accepted this and, in turn, claimed compensation from the defendant. The LG rejected the claim. The OLG Düsseldorf gave judgment in favour of the claimant for DM 1,500. Upon leave to lodge a second appeal the judgment of the LG was restored. Reasons The OLG allowed the claimant’s claim to the extent of one half of the sum paid to the Insurance Company of the architect on the ground that the defendant’s performance was fundamentally defective in the meaning of § 13 nos 1 and 7 of the standard contract. It held that in selecting the tiles both the defendant as well as the clerk of the works had failed, in violation of their duty according to § 4 no 3 of the standard contract, to make an examination and to give advice; as a result the work had been defective.

Appendix 2  403 The liability of the defendant in respect of defects was not ruled out by the fact that the claimant had not asked the defendant to remedy the defect. It was true that, had the owner of the building sued the claimant as the principal contractor for damages in respect of defects, the claimant would have been obliged to give the defendant in his capacity of subcontractor the opportunity to make good the defect. However, instead of asking for the defects to be remedied the District M had instructed the claimant to replace the defective tiles by non-slip tiles and had demanded with justification that the architect should pay for the expenses in remedying the defects. In the opinion of the OLG the claimant had been under an obligation to compensate in part the architect’s insurance company and had been unable to rely in relation to the latter, upon its right to ask for the defect to be removed – even if the claims of limitations or if liability had been restricted by agreement. As between the principal building contractor and the sub-contractor it would be inequitable if the latter, who was the real cause of the damage, could effectively plead that he had not been asked to remedy the defect, while the principal contractor was precluded from relying on this defence. If the latter was liable to pay, he should also be entitled to hold the sub-contractor liable for the consequence of the defect. The conclusions of the OLG cannot be accepted. They are contrary to the particular legal nature of sub-contracting. 1. Since no question arises as to claims sounding in tort, the claimant’s claims against the defendant can only result from the instructions given on 4 April 1973. The contract of the general or principal building contractor with the sub-contractor is an independent contract to perform building operations; it creates mutual rights and duties which are independent of those which may exist between the owner of the building or others connected with the building operation and the principal building contractor and of the extent to which they rely on them [references omitted]. The liability of the principal building contractor does not as such have any repercussions upon his contractual relationship with the sub-contractor. Neither the letter appointing the sub-contractor nor the documents accompanying the contract provide, in addition to liability for defects, for liability of the sub-contractor by way of recourse in the sense that he must assume liability for pecuniary obligations of the principal contractor, if the sub-contractor is liable in the last resort for the basis of this obligation. Such a right of recourse cannot be derived either from a general liability for a breach of contract by a positive act. If the breach of contractual duties to examine and to advise does not result in more than a defective performance, any liability of the sub-contractor – as the OLG does not fail to recognise – can only be based on the responsibility for defective performance (see §§ 4 no 3 and 13 no 3 of the standard contract); it cannot be based in addition on the failure to observe the general duty to protect the other party to the contract against loss [references omitted]. 2. Since the defendant fitted tiles on the surround of the swimming pool which were not anti-slip and thus were contrary to the contract and unsuitable, without having drawn the attention of the claimant that the tiles selected by the architect in the presence of the clerk of the works were unsuitable, the claimant has a claim to have the tiles replaced or – if the defendant should refuse to do so – for damages in remedying the defect. However, the claimant has forfeited this claim not only because he failed to invite the defendant to remedy the defect, as required by § 13 no 7 of the standard contract [reference omitted], but also because he gave additional instructions, accompanied by the promise of payment, to exchange the tiles for others [reference omitted]. Thereby any claim for damages according to § 13 no 7 of the standard contract was lost [reference omitted].

404  Appendix 2 3. It is true that the principal contractor is liable for the culpable acts of the sub-contractor as his aid in performing the contract; however they are not co-debtors of the owner of the building and of others connected therewith as regards their liability for defects. The subcontractor owes his duty to the main contractor, not to the owner of the building, and thus § 421 BGB does not apply. A claim by the architect of the building owner against the main contractor for partial compensation cannot therefore be brought against the sub-contractor at the same time. The claimant, too, did not acquire a claim for partial compensation against the defendant by repaying to the architect and his insurance company half of the expenses in remedying the defects. 4. The claimant cannot either base his claim on considerations of equity. (a) It is true that according to § 242 BGB reasons of equity may result in the reduction or even in the rejection of claims. On the other hand, reasons of equity cannot create claims which do not exist in law or in contract [reference omitted]. (b) The rejection of the claim by the LG is also not inequitable. When the claimant received, on 20 June 1974, the additional order, he was not prevented from requesting the defendant to replace the tiles on the ground of liability for defects, seeing that they were clearly defective [references omitted]. If the claimant should have regarded this as inequitable, having regard to the additional order received from the owner of the building, he could at least have reserved his right of recourse, in case the architect who was involved in the wrong selection should be sued by the owner of the building in respect of the defects in the building which were partly caused by the architect, but by the architect, who would ask for partial compensation, if sued by the owner of the building. A main or general contractor can provide adequately for such a risk in his contracts with the subcontractors. If he fails to do so, he cannot shift the legal consequences to the sub-contractor on the ground that they are inequitable. The claimant as the main contractor has received a higher remuneration than the subcontractor in respect of the same performance. The fact that as the main contractor he received a higher remuneration is justified, in particular, by the higher risk run by the main contractor as a co-debtor side by side with the architect and other specialists. Case 40 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 4 NOVEMBER 1997 BGHZ 137, 89 = NJW 1998, 377 Facts In this case a commune in Saxony is claiming damages in respect of the harm caused by unlawful interference with development on its land. Shortly after the reunification of Germany the claimant decided, against the wishes of a number of citizens, to construct an industrial park. It entered into a development contract with H., an architect, who entrusted the work to two named building contractors. The plans having been approved by Ministry for Economy and Employment in Saxony and the appropriate government committee, work was due to start on the morning of 22 April 1991. On that day, however – and, according to the claimant, the following day as well – demonstrators from the civic movement made it impossible for any work to be done. The claimant charges the defendants with taking part in the demonstration and collaborating in a plan to disrupt the work, thereby causing damage to the contractors which they put at DM 62,909.66. This sum the claimant paid to them and

Appendix 2  405 now, having prudently taken an assignment of the contractors’ claim, seeks to recover it from the defendants. Reasons I. The court below [OLG Dresden] was of opinion that the first, second, third and fifth defendants were liable to the claimant either in tort or in unjustified enrichment, regardless of whether the claimant had actually paid the sum in issue to the contractors: if it had paid, it could bring a condictio against the defendants under § 267 I BGB as a third party who has paid off a debt due from the defendants; if they had not, they could sue in tort on the basis of the contractors’ claim for damages duly assigned to it. The court held that the defendants were at fault and had unlawfully infringed an interest of the contractors which was protected under § 823 I BGB, namely their lawful possession of the construction machinery, interference with its use being a relevant infringement. The members of the civic movement who foregathered on the morning of 24 April 1991 did so with the intention of disrupting the construction work. The disruption continued until the afternoon of the following day and only came to an end when, pursuant to a conversation with the mayor’s office, the citizens were shown the documents authorising the works. During those two days the demonstrators positioned themselves so close to the machines that the work could not proceed in safety: they were effectively blockaded. This blockade was unlawful, and not protected as the exercise of fundamental rights under Articles 5 I and 8 GG. The defendants were liable as collaborators and assistants for the harm resulting from this infringement of the contractors’ protected interests, for they had all been present at least for part of the demonstration and had endorsed and helped in the blockade: the third defendant had acted as spokesperson for the demonstrators, the first defendant had furthered its purposes in an administrative capacity by making telephone calls to the authorities and so on, and the second defendant had posed in the shovel of a mechanical digger for a spectacular press photograph. Further details were required of the loss of use of machinery and vehicles suffered by the contractors, but the claim for VAT on their losses could be dismissed right away. There was no question of contributory fault on the part of the contractors or of the present claimant. Some of the appellants’ criticisms of the decision below are justified: the judgment is not fully supported by findings of fact, some of which are procedurally flawed. [1, 2. Procedural points; 3. Discussion of the claim in unjust enrichment, and the validity of the assignment.] The court below was right to start out from the position that the two-day blockade of the machines allocated to the construction work was an unlawful infringement, by persons at fault, of one of the contractor’s protected interests. This in principle gave the contractors a claim under § 823 I BGB even under the conditions prevailing in the newly incorporated provinces so shortly after reunification. (a) We may leave aside the question where and under what circumstances conduct such as is here alleged constitutes an unlawful infringement of an established and operative business (on which see BGHZ 59, 30, 34 = NJW 1972, 1366). For the court below did not err when it held that the contractors’ lawful possession of the machinery was a legally protected interest which the blockade infringed. (aa) It is established by case law that if an owner is prevented from using his property as intended, this may constitute an infringement of his ownership (BGHZ 55, 153, 159 = NJW 1971, 886).

406  Appendix 2 (bb) The same must be true of the right of lawful possession: if the thing possessed is to be used in a particular way and such use is unlawfully inhibited, this is an infringement of a legally protected interest under § 823 I BGB. The equipment which the contractors brought on to the proposed industrial park on the morning of 22 April 1991 was to be used for the work of construction they had undertaken. Conduct of the kind found by the court below which resulted in a total blockade of the machines so that they could not be used for two full working days – no negligible or fleeting disturbance (NJW 1977, 2264, 2265) – can amount to a tortious infringement of the contractors’ lawful possession. In the circumstances we need not ask if the contractors actually owned the machines, since the appellants do not deny that the machines were in the contractors’ lawful possession. (b) On the basis that it was right to charge the defendants with the two-day blockade and consequently with an infringement, objectively speaking, of the contractors’ possession under § 823 I BGB, the court below cannot be criticised, contrary to the view of the appellants, for holding that it was unlawful. (aa) The appellants are right, however, to argue that the blockade cannot count as the ‘violence’ required by § 240 I of the Criminal Code for the crime of oppressive coercion (Nötigung). For demonstrators to place themselves in the immediate vicinity of vehicles, machinery and so on and thereby stymie the operations by bringing moral rather than physical pressure on the contractors’ personnel does not amount to the violence required by that provision (for details see BVerfGE 92, 1 = NJW 1995, 1141). But this does not mean that such conduct cannot count as an unlawful infringement of a protected interest under the private law of tort. (bb) But even conduct which objectively infringes an interest protected by § 823 I BGB is not unlawful if it is legitimated as the exercise of a constitutionally protected right. The relevant right here is the right of assembly under Article 8 GG, but it does not cover a blockade of the kind and extent found by the court below. A defendant who deliberately uses direct pressure against a particular protected interest of another cannot normally invoke the constitutional right of assembly (BGHZ 59, 30, 35 f = NJW 1972, 1366), for this right, like that of freedom of expression of opinion, is designed to safeguard the right of a group to publicise their views by intelligible means when there is a conflict of opinions such as is inherent in a democratic society (BGHZ 59, 30, 36 = NJW 1972, 1366). (cc) Even if contained within constitutional limits, the exercise of the basic right under ­Article 8 GG may well infringe the rights of others. If so, this must just be accepted. This may be the case when demonstrations have results which, though inevitable, are unintended (such as interference with traffic movements or access to the streets, squares and other places where the demonstration is being held), or when the intentional interferences are inconsiderable and of very short duration, as when, in this case, demonstrators climbed on to the machines for a media photo-call. But when, instead of exchanging views, presenting the other side of a dispute or making a protest as such, one actively puts pressure on third parties to prevent them from exercising their rights, one leaves the area protected by the freedom of assembly. The right of assembly protects attempts to convert opponents to one’s own opinion, not measures designed to force others to submit against their will. The latter is the case here if, as the court below held, the demonstrators positioned themselves right beside the construction machinery and thereby, as intended, prevented the execution of the work for two full days.

Appendix 2  407 (dd) Although these events took place in one of the newly incorporated provinces only a few months after reunification this does not, contrary to the view of the appellants, affect the decision that this conduct was unlawful. The special conditions facing the citizens in the new provinces at this period of abrupt change on all fronts may indeed be taken into account in the balancing and weighting of the parties’ interests which is necessary in every case. Nevertheless the appellants cannot usefully invoke the ‘confrontational culture’ which existed in the German Democratic Republic when, in order to bring about changes in the one-party regime, citizens made frequent and intensive use of the right of demonstration. At the time of the events now in question the rule of law was already established in the new provinces, and it would be inconsistent with it to make the lawfulness of conduct depend on standards appropriate to conflict with the previous regime. Under the constitution, which was fully in force there at the time, the lawfulness of the exercise of a fundamental right and the unlawfulness of an infringement of the legally protected interests of third parties cannot be affected by considerations of what would have been licit or desirable during the events which triggered change in the German Democratic Republic. (c) There is no evidence that the defendants’ experiences with the previous regime in the German Democratic Republic actually led them to think that their actions were lawful, but in any case this would be relevant only to the question of whether they were at fault (see BGHZ 59, 30, 39 f = NJW 1972, 1366). The judgment below hints that the failure of the police to intervene may have led the demonstrators to think that their actions were justified, but, as the court held, only if such a mistake of law were unavoidable could failure to realise the unlawfulness of their actions in the given circumstances prevent a finding of fault (BGHZ 118, 201, 208 = NJW 1992, 2014). If the defendants here supposed, without making any inquiries, that the conduct charged against them was lawful, they are guilty of negligence at least. 5. The appellants are right, however, to criticise the findings of the court below as to the extent and effect of the conduct of the several defendants against whom it entered judgment. The court based its holding that the contractors had a good claim for tortious infringement of their lawful possession on the view that the assemblies which hindered the construction works lasted for the whole of 22 and 23 April 1991 and that, as was intended, the use of the machines for their proper purpose was wholly prevented during that period. The findings underlying this conclusion are procedurally flawed. (a) We cannot on review uphold the appellants’ objection to the finding that, as the demonstrators intended, the blockade of the machines lasted for the whole of 22 April 1991. This finding was open to the judge of fact, though it was based on very slender evidence. Nor, contrary to the view of the appellants, was it a fault of procedure that the judges whose decision was based on the evidence of M did not actually hear him give that evidence: that would be relevant only if it had had important aspects which did not figure in the written report. (b) By contrast the finding that the demonstrators blockaded the construction machinery for the whole of the following day is flawed. 6. The court below held that the defendants’ participation in the blockading measures rendered them liable in tort. The appellants are right to object to this: the findings of fact do not satisfy the requirements of § 830 I 1 and II BGB as to the liability of joint tortfeasors and accessories.

408  Appendix 2 (a) The court below started out correctly by noting that the question whether a person who participates in conduct involving delictual liability falls within these provisions as a joint tortfeasor or accessory depends on principles developed in criminal law (BGHZ 63, 124, 126 = NJW 1975, 49; BGHZ 89, 383, 389 = NJW 1984, 1226). The participation must therefore be with knowledge of the facts and at least some degree of intention on the part of the individual to commit the act in conjunction with others or to facilitate the act of another; objectively there must in addition be some actual participation in the execution of the act which in some way advances its commission and is material to it. Thus a person who participates in a demonstration will be liable if he knows it is intended to create a blockade which infringes rights and causes harm (BGHZ 59, 30, 42 = NJW 1972, 1366). There is no need to distinguish between co-authors and accessories since in tort law both are treated alike under § 830 II BGB. The assistance lent by an accessory need not be ­physical in nature – moral support may be sufficient (BGHZ 63, 124, 130 = NJW 1975, 49) – but it must be established, consistently with the requirements of the criminal law relevant to § 830 I 1 and II BGB, that each individual was guilty of conduct which supported the unlawful infringement of the rights of another and was associated with knowledge of the facts and the intention to commit such an infringement. (b) In the light of these principles the third defendant is the only one for whose liability for participating in the blockade the court below has laid a proper foundation. The third defendant acted as spokesperson for the demonstrators so the court could rightly hold that she not only had a significant influence on the actual course of the demonstration but also, subjectively, intended that the harmful conduct should take place. To this extent the role and functions adopted by her in the demonstration may elucidate her inner intentions (BGHZ 63, 124, 128 = NJW 1975, 49); the court below could well base its judgment on the third defendant’s leading role in the way the demonstration developed. (c) However, the liability of the other defendants is not supported by the findings made thus far. (aa) This is clearest in the case of the fifth defendant. On the wholly conclusory evidence of S, the court held that the fifth defendant participated in the demonstration on 22 April 1991 but it made no finding as to the nature, extent or duration of such participation. But temporary presence at the place of the demonstration and unspecified participation in the assembly are not enough in themselves to imply co-authorship or accessoryship as regards the infringements of rights here in issue. Mere ‘participation in an assembly’ may be a permissible way of evincing in public one’s opinion on the matter in issue, and thus be constitutionally protected by Articles 5 I and 8 I GG (see BGHZ 89, 383, 395 = NJW 1984, 1226). This is true not only of presence at mass demonstrations but also of participation in smaller and less unwieldy gatherings, provided that such participation does not go beyond what is permitted by the exercise of the rights mentioned, that the individual has no part in a project to invade rights, does not subjectively endorse the harmful conduct of the others and does not join the demonstration in knowledge of its intention to create a blockade (see BGHZ 63, 124, 128 = NJW 1975, 49). At present there is no sufficient finding that the fifth defendant in fact contributed even morally to the infringement of the contractors’ rights in any legally relevant manner, much less any findings about his mental attitude. (bb) Nor has any sufficient foundation been laid for the liability of the first defendant.

Appendix 2  409 The court below relied essentially on the evidence of S, who testified that ‘he had spoken with her in the street and that she had said she was one of the demonstrators’; it was error in law for the court to hold that this was evidence of intentional support for the blockade and of sufficient practical assistance. The finding actually amounts to no more than that the first defendant attended the demonstration for a short time (indeed not even on the construction site but ‘in the street’, very close to where she lived), and it is not explained how such conduct, in so far as it might exceed what is permitted in the exercise of fundamental rights under Articles 5 I and 8 I GG, could be construed as intentional support for the unlawful measures of the blockade. Nor is it enough that the first defendant spoke on the telephone to senior members of the commune and province, for the court did not enquire whether these calls were made in aid of the blockade or in an attempt to broker a ‘peaceful’ solution. In view of the first defendant’s constitutional rights it was wrong to conclude without more that she was guilty of tortious interference with the rights of others. (cc) Finally the facts found are insufficient to render the second defendant liable for relevant participation in the infringement of the contractors’ rights. The court below founded particularly on R’s evidence that at 16.30 hours on 22 April 1991 he saw the second defendant taking part in the demonstration. Here again there is no legal justification for inferring from his brief presence at the demonstration in the late afternoon that he approved of, adopted and furthered the unlawful blockading. Nor does it follow from the fact that he briefly climbed into the shovel of a digger in response to a photo-call; such conduct, as has already been stated above, may well be covered by Article 8 I GG and need not constitute a relevant unlawful infringement of the rights of the contractors. 7. Finally the court has not found with the clarity required of a final judgment what harm, if any, was suffered by the contractors. III. The decision below must therefore be vacated and the matter remanded, with leave to the defendants to raise again by way of appeal their objections to the prior findings of that court. Notes to Cases 37–40 and also Case 7 1. Case 37 and the earlier presented case 7 deal with the situation where no property is damaged as such, but its owner is deprived of its use. Technically the loss could be considered as purely financial but the decisions reproduced above rightly adopted a more subtle approach. 2. The canal case, like the cable cases, explores various ways of allowing the claim. One is the judge-made right of an established and operating business (see above, chapter two, section II.E.iii), but its subsidiary nature prevents it from being invoked if there is another applicable rule. The claimant’s argument that he was entitled to expect the proper maintenance of the canal did not fare better, the court refusing to hold that the statutory obligation to maintain the canal was a protective norm and therefore actionable under § 823 II BGB (see above, chapter three, section I.B). This is a debatable interpretation; and in Germany it has not pleased everyone. The crux of the decision lies clearly in its teleological interpretation of § 823 I BGB. Interference with property, reasoned the court, must be taken to

410  Appendix 2 include not only interference with its substance but also with the rights and the authority of the owner. This is sensible enough, but demarcation lines must also be drawn. For the BGH the dividing line was between the vessel trapped for an indefinite time and the vessel which, though unable to perform its contract, has retained its freedom of movement. The crucial factor here being the duration of the interference. The judgments raise as many problems as they solve and that, perhaps, explains why they have not been treated by German lawyers as leading cases setting out legal principle. One could imagine alternative fact situations. Must the interference be complete or prolonged, or both, before it is actionable? What if the vessel could return to its starting point but by means of a circuitous and very expensive route? Why is an obstruction of someone else’s waterway that hinders the use of my vessel actionable, while the interference with someone else’s cable that stops me from using my machinery is not? Casuistry appears to have kept alive for so long the rule prohibiting the compensation of purely economic loss. It also explains why there are so many exceptions to the rule and why the law has become so difficult to present in a simple way. (See also, BGH JZ 1983, 857; BGH, NJW 1983, 812, and Deutsch ‘Die neuere Entwicklung der Rechtsprechung zum Haftungsrecht’ JZ 1984, 308–09.) Finally, the reader must be reminded of a point made earlier. Perhaps these cases – which turn on a wide interpretation of ownership (Eigentum) – are really reactions to the categorical exclusion of pure economic loss from the list of protected interests of § 823 I BGB. The acceptance of this explanation would ensure that little effort was spent on the kind of theoretical debates which one finds in the German literature and which – to foreign eyes – border on the abstract and legalistic for ignoring the realities of the situation. (Thus, in Germany one can distinguish between a ‘locked in’ (Einsperrung) and ‘locked-out’ (Aussperrung) vessel (in the context of the ‘trapped ship’ case and the search for the purpose of protection and the damage (Schutzzweckzusammenhang) leading to distinctions between an interference with the substance of the property (Substanzschaden) and the ability to use it (Gebrauchsschaden)). This is made clear in case 7 in paras 17 and 18. See also Münchener Kommentar/Wagner § 823 BGB at nos 228–32. Modern examples would be a ‘flashmob’ which blocks up a supermarket with, each member of the mob buying a very cheap article (ibid, no 228). 3. Case 38 raises similarly intricate points. The property inflicted was vested in the harbour authority. The construction firm had lawful possession of the wall. However, the infliction caused damage to the substance of the wall; the loss did not result out of loss of use of the wall. Therefore, one might object that the harbour authority as owner and not the actual claimant (possessor) was entitled to claim damages for the damage to the wall. The construction firm sued because in the end the loss fell on it: it could not charge the employer, the harbour authority, with the increased cost of building the wall under the risk provision of § 644 BGB. But then was this not a case of Drittschadensliquidation, of ‘transferred loss’, allowing the owner to sue on behalf of the construction firm? Yet, the court did not consider this route. 4. It has been impossible to find an exact factual equivalent in English and American law. English law has, in some instances, used the tort of public nuisance. In Rose v Miles (1815) 4 M and S 101, 103; 105 ER 773, a barge owner navigating a creek obstructed by the defendant’s barges was allowed to claim his extra costs for unloading the cargo from his barges and transporting it by land to its ultimate destination, since in Lord Ellenborough’s view

Appendix 2  411 he had suffered greater damage than other members of the public who might have been contemplating using the creek. The decision, incidentally, has impeccable origins that can be traced back to Iveson v Moore (1699) 1 Ld Raym 486 (another case allowing recovery for purely economic loss resulting from highway obstructions). The fact that these cases were not resolved in negligence is significant. English law may lack general principles on the recovery of pure economic loss, but it has identified a number of specific instances in which recovery is possible, usually with the addition of a feature beyond fault and economic harm. The following casuistry may support this statement. (i) Deliberate interference with existing contracts with resulting economic loss had long been actionable (Lumley v Wagner), but not negligent interference. (ii) Even in the absence of contract the parties may negligently be deprived of a prospective economic benefit. Their plight has not been dealt with consistently by the courts. Frustrated beneficiaries who lose their legacies due to the negligence of a lawyer advising the testator can usually recover (see case 47 and its notes); but in other cases the courts have not been so generous. In Weller and Co v Foot and Mouth Disease Research Institute [1966] 1 QB 569, a live virus escaped from the defendant’s laboratory due to their admitted negligence and caused a cattle disease. As a result, cattle auctions were prohibited for a period of time and the claimants, cattle auctioneers, tried to claim their lost profits from the defendants. Their action failed. (iii) Loss of a chattel is not treated as economic loss. A bailee, for example, who has negligently lost the bailed chattel will be responsible to the bailor for its value. Bailment, however, is very ‘close’ to contract so the theoretical difficulties concerning compensation are in this case minimised. (iv) Where the tort of negligence fails the claimant, the older tort of nuisance may come to his aid. Obstructions on the highway – including access to the highway – may thus be actionable in nuisance, and here recovery of purely economic loss has traditionally been allowed. This could provide a remedy in the kind of factual situation envisaged in case 28; though the duration of the obstruction would again be crucial. Rose v Miles (1815) 4 M and S 101 is also interesting. There the claimant’s barges were prevented from navigating on a public navigable creek. The court allowed him to claim the extra cost he incurred by having to convey his goods overland. 4. Only in exceptional cases does German tort law provide compensation for negligently caused pure economic harm. One way, as was noted in chapter two, is to recharacterise the harm as ‘interference with the right of an established and operative business’. Case 40 illustrates the difficulties that must be surmounted by the court before compensation can be awarded and is yet another example of the constitutionalisation of private law. In this case construction equipment was immobilised for a short period. Normally damages can be claimed in tort only if a particular right or legal interest, listed exhaustively in § 823 I BGB, has been infringed. This rule has, however, proved to be unduly restrictive, so the courts ‘discovered’ the ‘right of an established and operative business’ – actually invoked by the claimant in this case (see chapter four, section I.D.i) – and included it as an ‘other right’ under § 823 I BGB, and it was under this heading that blockades had been discussed in the past, see chapter two, section I.E.iii.

412  Appendix 2 Again the courts gave a very wide interpretation to ‘infringement of ownership’ and held that physical damage was not required: prevention of use is now sufficient, as the present case confirms. Finally the courts further enlarged the scope of § 823 I BGB by holding that lawful possession is an ‘other right’: damage to a thing or loss of its use may now be compensated without having to ask whether the claimant was actually owner. This can be seen in the instant case: the Court could deal with the interference with the use of the construction equipment in the possession of the contractors without having to decide whether they owned it or not. It is noteworthy that two days of being unable to use the equipment already sufficed to amount to an interference with the lawful possession of it (contrast case 37 where the vessel was immobilised for as long as eight months). Thus, future litigants might decide to base their claim on possession rather than the right of an established and operating business governed by the somewhat ambiguous ‘directness’ requirement; (the directness requirement is normally fulfilled only if the interference was intentional; with regard to possession as a right, negligence will suffice; see chapter two, section II.E.iii.) Moreover, if the non-usability of the machines for two days constitutes an infringement under § 823 I BGB this decision is extremely difficult to reconcile with the cable cases (11 ff). From this perspective the case should have arguably been solved on the basis of the right of an established and operating business. Once again the difficulties in keeping § 823 I BGB in bounds and at the same time allow for the compensation for loss of use become apparent. Having dealt with this problem the Court then had to surmount another: how to accommodate the protection of the contractors’ interests (ownership or possession or, on a better view, the right of an established and operating business) with the exercise by the defendants of their constitutional right of assembly. The Court drew the line between demonstrations which simply seek to persuade people and influence opinion on a contested matter and those which are designed deliberately to bring pressure on others to prevent them using their rights as they wish. The Court stressed that in the present instance the interference was not a mere side effect of a demonstration but it was the very object of the protest to prevent access to the site. From a dogmatic point of view this required an elaborate balancing of interests before the unlawfulness of the demonstration could be positively established. The third relevant point of the decision concerns the liability of associates and assistants. In general tort liability requires a causal contribution to the infringement and the damage. In the case of group action the requisite contribution may take the form of moral support by the defendant for those whose acts directly cause the harm. But it is often difficult for the victim to establish the causal effect of any such moral support, so § 830 I 1 and II BGB lay down that associates and assistants are fully liable as joint tortfeasors even if the victim cannot establish their actual causal contribution. Such contribution is, however, presumed only of those whose association or assistance was voluntary and who with knowledge of the facts intended to act along with those who directly caused the harm. This may not be at all clear in the case of mass manifestations that get out of control so that infringements occur which some of the participants never intended. This was critical for the defendants here, as some of them were eager to persuade others to their point of view but were not ready to infringe their rights, such as those of the building contractors.

Appendix 2  413 ECONOMIC LOSS (NEGLIGENT STATEMENTS) Case 41 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 12 FEBRUARY 1979 NJW 1979, 1595 Facts The claimant claims damages from the defendants, an international bank, for loss suffered as a result of inaccurate information supplied to her by their German branch (and concerning the creditworthiness of a third party). Towards the end of 1970 the claimant was looking for a profitable way to invest some DM 130,000 and a finance broker, L, recommended the hotel P, built by U and opened to the public a few months earlier. U had financed his hotel by a number of loans including one for DM 2.5 million raised from the defendants and secured by a land charge. U, requiring a further DM 3.5 million, decided to raise this from private individuals with the help of advertisements and brokers offering 12 per cent interest on all loans as well as a land charge for security. More precisely, he registered a land charge for DM 3.5 million in favour of the defendants which was divided into smaller parts each securing sums of DM 10,000 and DM 25,000. The defendants, in consideration for the usual fee, were willing to assign these ‘part land charges’ to lenders and place the funds in a blocked account for U until the completion of all formalities. On 3 February L, the broker, gave the claimant the following information which was written on the defendants’ paper but gave neither date nor address: ‘Hotel P, George U. This is a newly built luxury hotel, with some 440 beds and conforming with international standards, was officially opened in June 1970 in the presence of many dignitaries. So far as we know it has already entered into long-term arrangements with a number of international travel agencies. It is owned by U, whom we know as a client and as a competent business man. U also owns a hotel in Tenerife and two sanatoria run by reputable persons. Owing to a great increase in building costs, U needs a further DM 3.5 million which is to be found on the open market. Any money advanced for this purpose will be credited to a blocked account with our bank, and after the notary has confirmed that the terms of the contract have been complied with, it will be credited to the hotel’s current account. We ourselves have in the past made substantial payments to U against security but, due to an increase in building costs, U’s liquidity is, at present, tight’. On 17 February 1971 the claimant paid DM 130,000 which the defendants immediately credited to U’s account. Three days earlier the defendants had asked U to repay their loans by 23 February 1971 and on 16 March 1971 they extended the repayment date to the end of May 1971. Meanwhile U was getting deeper and deeper into financial difficulties and on 23 December 1971 he applied for a composition with his creditors. Four months later bankruptcy proceedings followed. Both claimant and defendant withdrew from the auction of the hotel and the claimant will receive nothing from the bankrupt’s estate. The claimant brought an action claiming DM 65,000 since legal aid was granted to her only for this amount due to her contributory negligence. She argues that her loss is due to the defendant’s letter which gave information which they knew to be false. The defendants deny that the information was wrong and also deny liability on the grounds that they had not entered into any contract to supply her with information.

414  Appendix 2 The LG awarded the claimant DM 32,500, and ruled that she should bear the rest of the loss herself because of her contributory negligence. The defendants’ appeal (OLG München) was rejected and their further appeal on points of law is also dismissed. Reasons I. The OLG accepted that the defendant is liable according to the law of contract. Their appeal on points of law fails. 1. The OLG found that the defendants knowingly and deliberately composed the notice (quoted above) and put it into circulation with the view to its being shown to potential private lenders to U. (a) The OLG (also) found that the information it contained was both in form and content intended to reach a circle of private potential investors. Stripped to its essential the notice gives information which is intended to appeal to private individuals. This is true both of the description of U and of his other businesses. For instance, the reference to the official opening of the hotel in the presence of local dignitaries could only have aimed at making his business appear reliable in the eyes of private persons. Much of this material would clearly have been written in a different way if the document had been intended to be used solely for internal banking purposes. Its contents make sense only if they are seen as aiming from the outset to attract private prospective investors. And this is corroborated by the statement in the notice that the money lent would be transferred from the blocked account with the defendants to the hotel’s account only after a notary had confirmed that the terms of the contract had been complied with. This method of concluding a contract is less important to a bank than the encumbrances which are not mentioned in the notice. But it is calculated to dispel doubts that may arise in the mind of an individual, inexperienced in money matters, reading the preceding passages which explain why the extra sums are required. The outward appearance of the notice also speaks in favour of this interpretation. Thus, it bears the business name and the description of the defendant but gives no indication of the person addressed, or the date or any other details that usually accompany letter writing. This interpretation is not only possible, but, indeed, necessary, the more so when one realises that the defendants, who were asked to handle the loan, were aware that only private individuals would be considered as lenders. The appeal is thus not able to reveal any error of law committed by the OLG when characterising the sense and purpose of the notice. The argument that the OLG failed to take into account the fact that the defendants gave this kind of information in response to enquiries made by banks is also unsuccessful for if this is taken to imply that the defendants supplied information to banks only, it runs clearly counter to the defendants’ submissions before the lower court. There the defendants maintained that information concerning U was given only to individuals making specific enquiries … On the appellate level, therefore, one must assume that the defendants gave information not only but also to banks. This does not necessarily run counter to the OLG’s interpretation. Since only private individuals would be considered as lenders, the banks must have enquired on their behalf and thus the information so acquired must have been destined only for their clients and not for themselves. (b) Once it is accepted, as it must be, that the information supplied by the defendants was meant for potential investors, one must then also accept the further finding of the OLG, namely that the defendants circulated this information so that it would be presented to a group of prospective investors. The assumption that the defendants intended to give the

Appendix 2  415 information to individual enquirers only, and had not agreed to its being passed on to other interested parties, is inconsistent with the purpose of preparing the information, namely to appeal to a group of individuals who might be interested in becoming lenders. Given that the defendants were themselves substantial creditors of U, and were anxious to relieve him of his financial difficulties, their intention was to bring the information to the notice of as many prospective lenders as possible. The assertion that the defendant supplied information concerning U only to individual enquirers does not rule out the possibility that the bank, in conformity with its purpose, approved of the information being passed on to other lenders. In any event, the defendants have failed to adduce any evidence to show that their notice had been brought to the attention of only a small group of individuals. The OLG was thus free to look at the objective contents of the notice. 2. The OLG was also not in error in finding that the defendants were fully aware that their information would be of great importance to the recipients and would be used as a basis of important investments. Since its prime purpose was to help attract finance for the hotel P, it is obvious that it was intended to help prospective investors to decide whether to lend money to U to the extent of at least DM 10,000 and was designed with that purpose in mind … 3. The OLG considered the information given to have been false in so far as it concealed facts which ought to have been disclosed. Thus, the reference to U’s other properties created the impression that they also were available as additional security even though in actual fact they were already encumbered up to the hilt. The reference to the defendants’ own substantial secured loans to U was also false since they had already called for their repayment at the time when the information (in the notice) reached the claimant … The inaccuracy of the notice is evident from a number of other undisputed facts such as, eg, the concealment of the various charges on the sanatoria properties. To a lender such information is particularly important when making up his mind as to whether to make a loan or not … Contrary to the view advanced in this appeal, it must be said that it is customary to mention all substantial charges when information is given about land by a bank. According to the findings of the OLG, when the information was issued by the defendants, the entire hotel facilities as well as the sanatoria had not been paid for and U was no longer in a position to honour any bills drawn for them. These circumstances, which would normally point towards an extremely delicate economic situation, should have been made clear by the defendants at the time of issuing of their notice since they would have had great bearing on the decision of the lenders. The defendants did not argue that they were unaware of the above, indeed this would have been unlikely for a bank like theirs, whose function it is to grant credit to borrowers. Nor did the defendants fulfil their duties by stating in their notice that U was faced with liquidity problems since this would not normally indicate to a private individual that bills had already been protested. All these findings are sufficient to characterise the information as false. II. All the factual elements necessary to impose contractual liability for negligent advice are thus satisfied. According to the cases where information is supplied by a bank a contractual or quasi-contractual relationship already exists between the bank and the enquiring party whenever the information supplied by the bank is of manifest significance to the inquiring party and it is clear that the latter will be relying on it in making substantial capital allocations (cf decision of the Senate of 6 July 1970, WM 1970, 1021). The situation in this present case is just that. In this case, the bank addresses itself to a quite clearly defined group of

416  Appendix 2 prospective lenders who are interested in advancing money for a specific project. The information is aimed at this group, which the defendants wish to attract, and which they know will use this information to make vital economic decisions. This being clearly the purpose of the information, it can make little difference in law whether the seeker (of the information) directs himself to the bank or the bank to him. Given the purposes to be achieved by the information, the bank must realise that the persons likely to rely on it must understand it in the sense of a legally binding declaration (the distributor of the notice is a mere messenger). That is why in this case good faith causes a contractual relation to arise when a potential addressee has relied on it in making his decision. The appellant’s argument, unsubstantiated by the facts of this case, that the information was only intended for banks, is immaterial since this does not preclude the fact that banks were then allowed to pass it on. The OLG is indeed wrong in treating this as a case of ‘information to whom it may concern’. The BGH has repeatedly insisted that it is, in principle, not possible to assume that a bank when giving information is willing to put itself under an obligation to an indeterminate and incalculable number of persons … However, this is not the case here for, though the information is directed to persons still unknown to the bank, those persons can be determined by virtue of their interest and form part of a calculable group of persons. III. 1. Given that a contract to supply information was thus concluded by the parties, it became incumbent upon the defendants to supply objectively correct information. This the defendants negligently failed to do (§§ 276, and 278 BGB) since as bankers they knew, or ought to have known, that the facts they failed to mention in their notice were important for the lenders in order to reach their decision. 2. The appeal before this court also claims unsuccessfully that the OLG erred on the aspect of causation … Practical experience however shows that the claimant would not have made U a loan if the defendants had given her adverse information by disclosing to her U’s actual financial status. IV. The argument raised in this appeal, that the defendant’s negligence is overshadowed by the claimant’s contributory fault insofar as she accepted the advice of the finance broker L against the advice of her bank and her tax accountant, cannot affect the judgment currently under appeal. For the OLG, in its exercise of its judicial functions, concluded all legal and factual aspects of the case, and the appellants can point to no legal error prejudicial to them. Their argument that these facts should, from a point of view of law, be now differently appraised cannot thus be accepted. Case 42 BUNDESGERICHTSHOF (FOURTH CIVIL SENATE) 28 AUGUST 1982 NJW 1982, 2431 = WM 1982, 762 Facts The claimant, a Danish private bank, claims damages against the defendant because it was induced by an expert valuation made by the defendant and by information supplied by him to the Danish Consul in Munich to grant a credit which could not be recovered later on. The firm of P was the owner of a considerable area of building land. It intended to develop it by building an extensive holiday village. The project had been approved in principle in planning proceedings. No detailed building plans had, however, been drawn up. Only a draft existed which had been prepared by a private architect appointed by the firm of P in

Appendix 2  417 agreement with the local commune. At the request of the firm of P the defendant submitted on 10 August 1974 an expert opinion in which he concluded that the area of building land as a whole had a commercial value of DM 200,000,000. On 19 December 1974 the Danish Consul telephoned the defendant and informed him that the Consulate had received an enquiry as to whether the defendant was in fact an officially appointed and sworn expert. Upon receiving an affirmative reply, the Consul asked whether the expert valuation of the area of the holiday village, which the defendant had supplied, was still valid; in so doing he referred to the growing fall of prices in the market of immovables. The defendant replied that he had not heard anything since in this matter. However, in the meantime the proceedings for the approval of the plans should have been advanced. If so, the increased readiness of building operations was a positive factor which balanced the negative development on the market for immovable property. In particular the fact had to be taken into account that according to the practice of planning consent prevailing now, other projects of this kind would no longer receive approval. At the Consul’s request the defendant wrote a letter to the Danish Consulate in which he stated: ‘In supplementation of my detailed expert opinion of 10 August 1974 I confirm that the value of the object mentioned above has remained unchanged to the present time. The negative effects of the general development on the market of immovable properties are balanced by the fact that the land is ready to be built upon. Moreover, no consent for further comparable projects in the German region of the Alps can be expected either at present or in the future’. On 6 June 1975 the claimant entered into a contract for a loan of DM 15,000,000 with the firm of P. The two managers of the firm and the Danish firm of N became independently liable sureties; the Danish Export Council on its part became a surety for the last mentioned firm. In addition the loan was secured by a charge amounting to DM 18,000,000 on the immovable property of the firm of P. On 14 March (August) 1975 the net loan amounting to DM 14,305,000 was paid over. Subsequently the project of the holiday village was not pursued and the interest which had fallen due was not paid. Consequently the loan agreement was rescinded. Based on its charge over the land the claimant levied execution against it by way of a sale by auction and bought it on offering DM 1,900,000. The claimant contends that the firm of P had sought contacts with sources of money in order to obtain a loan of at least DM 15,000,000 for its planned holiday village. In this connection the firm had entered into negotiations with the Danish firm of N. It had held out the possibility of an order for the delivery of 600 prefabricated houses, if N would assist P in obtaining a credit of DM 15,000,000. In a letter of 28 September 1974 P had not set out its financial situation and the state of the project; in this connection P had referred to the annexed expert valuation by the defendant. N had approached the Danish Ministry of Commerce in order to obtain a guarantee by the State; for this purpose it had submitted the expert valuation by the defendant. The Ministry of Commerce had interposed the claimant as a bank, which was to be secured by way of reinsurance by a guarantee of the Danish State. In order to ascertain whether the conditions existed for granting the loan the Danish Export Credit Council had instructed the Danish Consul in Munich to obtain details from the defendant; it had been agreed between the Export Council and the claimant that the Consul had told the defendant expressly that a Danish enterprise intended to participate in the project by way of a guarantee or by granting a credit. The claimant’s claim was rejected by the courts below. Upon appeal to the BGH the judgment of the OLG München was quashed and the case referred back for the following.

418  Appendix 2 Reasons 1. The OLG holds that the claimant is not entitled to damages in its own right. In making his enquiry the Consul had not made it clear that he acted as the claimant’s agent. The information was not information ‘for those whom it may concern’ which might have the consequence that the defendant was liable in contract ‘to any third party’. From the point of view taken by the OLG, it should also have been examined whether the claimant was included in the protection sphere of the contract. The practice of the courts – and to a great extent also the literature – acknowledges the admissibility of contracts with protective effects for the benefit of third parties [references omitted]. The articles by Ziegler [reference omitted] and Sonnenschein [reference omitted] to which the defendant refers do not cause this Senate to deviate from this well-established legal rule. Since the Consul obviously lacked any personal interest in examining the creditworthiness of the firm of P, it could be assumed, at least if it was denied that the Consul acted in the name of another, that future suppliers of credit were to be included in the protection sphere of the contract. The OLG should have examined the claim from this point of view as well. In this connection the OLG adds: the expert valuation had clearly anticipated and assumed an expected development – namely the award of the necessary consent, division, and sale – although in law the possibility of developing the land had not yet been assured. The estimate of a value which was only expected to materialise could not as such have been of interest to third parties, especially credit institutions. However, on page 2 of the expert valuation, the defendant stated expressly that he had been instructed to ascertain the ‘commercial value at the relevant time’. It is true that in carrying out the instruction to supply an expert valuation the defendant had to take the future development into consideration. According to the customs of trade the (present) commercial value of an immovable is determined not only by the factual circumstances at the time when the valuation is made, but also by the expectation of future events (eg, that it will be capable of development as building land). It is obvious that a credit institution which intends to secure a future loan by a mortgage of charge will be interested in the commercial value of the land to be encumbered. As the OLG has found, the Consul made it clear to the defendant that the information given by him was required for the purpose of deciding whether the loan was to be granted. The Consul was not content with the information given over the telephone, but asked for a written confirmation; thereby he demonstrated to the defendant that his expert opinion was to serve as the basis of a far-reaching decision. The question as to whether the defendant made it sufficiently clear in his expert opinion that the planning permits necessary for the development of the area in issue may be important in assessing the blameworthiness of the defendant and any possible contributory negligence on the part of the claimant, but it is irrelevant for determining whether the claimant can make any claims at all because the contract for the supply of information has been violated. 2. The OLG regards it as possible that in concluding the contract for the supply of information the Consul asked as a representative of the Danish State. If this point of view is adopted the question arises as to whether the Danish State can claim damages from the defendant because the contract to supply information has been violated. According to the claimant’s pleadings, the Danish Export Council – apparently as representing the Danish State – became a surety for the credit to be granted. The claimant contends that the Export Credit Council had assigned to the claimant any possible claims for damages by the Danish

Appendix 2  419 State against the defendant; by way of a subsidiary argument the claimant relies also on this claim for damages. By the reference back the claimant is enabled to amplify its pleadings in this respect and especially to set out to what extent the Danish State has suffered damage. It will be useful if in this connection the claimant provides some information concerning the legal position of the Export Credit Council, and in particular whether it is an organ of the State which became a surety in the name of the Danish State and also whether on the latter’s behalf it has assigned the claim to the claimant. Case 43 BUNDESGERICHTSHOF (THIRD CIVIL SENATE) 10 NOVEMBER 1994 BGHZ 127, 378 = NJW 1995, 392 Facts The case concerns the question of the protective scope of a report prepared by an architect/ building expert submitted to the owner of the building pursuant to a contract concluded between the expert’s employer and the owner of the building. The report concerned the value and state of repair of the said building. It was used as the basis for a purchase contract concluded between the claimant/purchaser and the owner of the building. After the transaction was completed, grave defects were detected in the building. Since the vendor had excluded his liability for visible or hidden defects, the purchaser sued the expert for damages. The OLG Köln dismissed the claim but the BGH quashed the judgment below and referred the case back for the following. Reasons 1. The OLG failed to discuss whether the claimants had a claim for damages as a result of a direct contractual relationship in the form of a tacitly concluded contract to supply information (Auskunftsvertrag) [references omitted]. This cannot be challenged for legal reasons since prior to the conclusion of the purchase contract the parties had no direct contacts. 2. The OLG interprets the contract to provide an expert report to the effect (§§ 133, 157 BGB) that, out of that contract with the owner, protective duties arose that the expert owed towards the claimants. For the court, the crucial point came when the son of the owner, who concluded the contract on his behalf, stated that the property valuation report was needed for the purposes of selling the property. The inclusion of the claimants within the protective scope of the contract for a report on the state and value of the property is legally sound. (a) In particular, and in this instance, the existence of a contract with protective effect for third persons cannot be denied with reference to the fact that the interests of the claimants and the person who commissioned the report were contradictory. Where an expert report is requested from a person possessed of particular knowledge – which is certified or attested by official documents – for the purpose of using the report in contractual negotiations with a third person, the person commissioning the report normally has an interest in it as means of evidence. This can only be guaranteed if the report was prepared objectively, conscientiously, and in full knowledge of all facts and where its author accepts responsibility for its contents as towards third persons. Accordingly, the BGH has previously decided that in such a case the juxtaposition of interests of the person commissioning the report and the third person does not rule out the latter’s inclusion in the protective scope of the

420  Appendix 2 contract ­authorising the preparation of the report [references omitted]. It is irrelevant that the defendant, when compiling his report, was unaware that his assessment was to be submitted to that particular claimant. Acknowledging his duty of care does not presuppose that the person so duty-bound knows the number or names of the persons to be protected. It suffices that the defendant knew that his valuation was intended for a (potential) buyer [references omitted]. [There follow passages dealing with the particular personal qualifications of the defendant, whose professional standing, duties in respect of the expert report submitted, and the inclusion of the claimant in the protective scope of the contract to provide the report, were likened to those of a publicly appointed expert.] (b) Contrary to the doubts raised in the defendant’s reply to the further appeal, the existence of a contract with protective effects for third persons can arise even where, during inspections of the premises, the owner’s representative deliberately concealed the defects of the property. This fact may be an indication that he was not interested in an objectively correct expert opinion on the value of the property that would take into account the interests of the buyer. But this hidden and unrevealed reservation has no bearing on the question as to what was objectively declared when an order was made for a valuation, ie, in respect of the purpose of the report and a possible inclusion of third persons in the protective scope of the contract. 3. [There follow statements as to the specific duties to inspect fully the object to be valued, possible breaches of these duties by the expert, and their effects. The court also deals with the vicarious liability of the architect’s/builder’s employer.] On the basis of the undisputed facts it must be assumed that the defendant, who under § 278 BGB is responsible for the acts of the expert, has performed his contractual duties badly and that this breach led to the submission of a report whose contents were incorrect. The OLG was convinced that an accurate expert opinion would have discouraged the buyer from concluding the purchase contract, ie, that the defendant’s wrongful act caused the damage. 4. The OLG held that – as towards the claimant – the defendant is not liable for damages according to the principles of ‘positive breach of contract’ (positive Forderungsverletzung). [The positive Forderungsverletzung or positive Vertragsverletzung was previously pure judgemade law and was only codified after the Schuldrechtsreform of 2002 in §§ 241, 280 BGB.] [The lower court’s reasoning follows.] The reasoning of the lower court is legally unsound. (a) The OLG rightly assumed that a person commissioning a report, who deliberately intends it to reflect wrongly the actual state of repair of the object of the report, has no claim for damages against the author of the report. Contracts for the provision of expert reports, like the one before the court, must be qualified as contracts for the production of work (§ 631 BGB). This means that in cases of an intentionally wrong assessment of real property, the person commissioning the report has either a claim for damages under § 635 BGB or a claim for positive breach of contract if the damage arose as a consequence of the first defect (Mangelfolgeschaden): in this case the original faulty report [reference omitted]. Such a claim for damages would not be affected by the knowledge of the commissioning person that the expert’s report is flawed, since it is only in respect of claims listed in §§ 633, 634 BGB that § 640 II BGB requires the commissioning person, at the point of acceptance, to reserve his rights. This provision does not apply to claims for damages [reference omitted]. But the person who commissions the report and

Appendix 2  421 who deliberately brings about a misleading expert report, exposes himself to the defence of abuse of right if he later bases his claims for damages on this defect [references omitted]. This defence of malice will be upheld even where the charge of ‘contradictory behaviour’ (venire contra factum proprium) is based on the actions of a representative (§ 166 I BGB) [reference omitted]. (b) The starting point of the OLG’s reasoning is also in line with the BGH’s case law according to which the protected third person, who derives his rights from the contractual relationship between the initial contractual partners, has basically no wider rights than the tortfeasor’s direct contractual partner. The courts deduced from this fact that the third person, deliberately damaged by the person liable to protect him will, under § 254 BGB, face the tortfeasor’s defence that the contractual partner was co-responsible for the damage, unless this partner was a legal representative of the third person or employed by him to fulfil his own obligations (§ 278 BGB) [references omitted]. The same result applies for a contractually agreed exemption from liability [reference omitted]. This limitation of the third person’s protection is based on the legal maxim expressed in § 334 BGB and the principle of good faith (§ 242 BGB). Both arguments show that we are dealing here with merely a legal rule (reference) and not with an unshakeable principle. As far as the maxim of good faith is concerned, this fact is self-evident. Nothing different can be derived from the legal argument behind § 334 BGB or – as the OLG held – from an analogous application of § 334 BGB. The provisions of § 334 BGB which deal with the true contract for the benefit of a third person are of an optional nature. According to those provisions, the promisor can use contractual defences even against the third person. Their application can, even tacitly, be excluded as can be seen, in particular, from the nature of the covering (or underlying) relationship (Deckungsverhältnis) [reference omitted]. There is no apparent reason for applying more stringent rules in cases like the present where, when interpreting the contract in order to establish how and to what extent a third person was protected, these legal provisions are to be applied either directly or according to their underlying maxim. The lower court misjudged this point. When interpreting the expert report, the OLG should have considered that the ‘nature of this particular contract’ resulted in an exception to the rule according to which the liability of a person who owes protection to a third person does not exceed his liability towards his direct contractual partner. The defendant knew that the expert valuation had been commissioned for sales purposes. Accordingly, not only could he expect that his report would be submitted to interested buyers. He should further assume that, given the special trust which prospective buyers normally place in the reliability and expertise of an approved expert, the statements made in his report would probably be given a greater weight than the information provided by the seller. The maker of report should have thus assumed that his report was apt to disperse possible doubts of prospective buyers in the veracity of the seller’s information. Herein lies the obvious and particular value that the report has for the vendor, ie, its ability to promote the chances of a sale. Above all, it matches the obvious interests of a prospective buyer in legal protection for his trust in the veracity of the report, especially in cases where the seller dishonestly tries to conceal the true condition of the sales object. Where, therefore, a contract for the production of an expert report must be taken to include prospective buyers within its protective ambit, it must be assumed that the third person’s trust in the expert’s

422  Appendix 2 statements must be protected even where the incorrectness [of the report] was (also) instigated by the principal. This result does not depend on the effects which this inducement has on the liability of the supplier as against the principal [reference omitted]. Such contractual interpretation will not burden the expert with an unreasonable risk of liability. More precisely, it will, certainly, render him liable for the dishonesty of the person who commissioned the report from him. True, when providing his report, the expert can use information provided by his principal – and he will often be forced to do so – wherever he cannot himself verify the facts. But he must then make this clear in his report [reference omitted]. Normally, he will thereby indicate that he excludes his liability for the truth of these statements. 5. The reasoning of the OLG, in denying the defendant’s liability as towards the third person included in the protective scope of the contract, is thus legally flawed and its decision must, therefore, be quashed. [There follow instructions as to the reinterpretation of the contract and the court’s opinion that the claimants cannot be held to have been co-responsible for the damage merely because they have not personally found any defects when inspecting the premises.] Case 44 BUNDESGERICHTSHOF (THIRD CIVIL SENATE) 2 APRIL 1998 BGHZ 138, 257 = NJW 1998, 1948 = JZ 1998, 1013 Facts The claimant is the receiver of the assets of the G AG. Its predecessor (G GmbH & Co) acquired from H, the sole member of the S GmbH (hereafter called STN) all the shares in the business by a notarised contract dated the 12 October 1992. This was immediately after H had brought in to this company the real property company which owned the business premises and the buildings on them which were let to STN in accordance with § 20 of the Conversion Tax Act. The purchase price was DM 2.5 million, payable immediately. The claimant demands from the defendant auditors compensation for incorrect information. The defendants had been commissioned by H to carry out a compulsory audit in accordance with §§ 316 ff Commercial Code (hereafter HGB). They had been occupied since July 1992 with the audit of the annual accounts of STN for the year 1991, drawn up by the accountant R. Their complaints led to the annual accounts being altered by R and showing a balance of DM 21,891,249.03 and an annual surplus of DM 2,666,467.37 higher than that in the earlier accounts. The defendants by a letter of 8 October 1992 to STN for the attention of H (and a further telefax letter of 9 October 1992 to the B GmbH for the attention of the accountant St who had been consulted by the G GmbH & Co) stated that the now current annual accounts would not be changed by them and could be confirmed by them. Later irregularities in STN’s accounting came to light. H had at the end of 1991 incorrectly credited nine sums for a total of almost DM 25 million. The final annual accounts, for which the defendants issued a limited note of confirmation on 30 March 1993 in accordance with § 322 HGB, showed a deficit of DM 11,049,361.15 instead of a surplus of DM 2,666,467.37. The claim was in the end for DM 2.5 million. In it the claimant alleged that the G GmbH & Co would not have acquired the shares in the business in the knowledge of the actual

Appendix 2  423 ­ usiness yield in 1991 (or would only have done so at a symbolic purchase price of DM 1). b It was unsuccessful in the OLG Hamm. The claimant lodges an appeal in law against this decision. Reasons The appeal in law leads to a quashing of the appeal judgment and a reference of the matter back to the OLG. I. 1. The OLG, whose judgment is printed in [reference omitted], accepts that liability on the part of the defendants would come into consideration, because the subsequent insolvent has been included in the protected area of the audit contract between STN and the defendants. The appeal in law accepts this assessment as favourable to it. On the other hand, the reply to the appeal in law considers that the instructions for the compulsory audit, the communication about the status of the audit and the foreseeable outcome of it could not result in any protective effect in favour of third parties. (a) According to § 323 I 1 HGB the auditor of the accounts is under a duty to carry out a conscientious and unbiased examination and a duty of secrecy. If he breaches his duties intentionally or negligently, he is under a duty to compensate the company (and, if a connected undertaking has been harmed, this as well) for the harm arising from this (§ 323 I 3 HGB). In the academic literature, it is deduced from this that according to § 323 I 3 HGB ie for the area of the compulsory audit, where there is a violation of the duties of the auditor third parties are not entitled to any claims against him [references omitted]. Insofar as the duty to compensate for harm is extended to connected undertakings, this would rest – as a correlative – on this undertaking’s duty of presentation and provision of information to the auditor of the accounts for the group in accordance with § 320 II 2 HGB [references omitted]; the connected undertaking’s entitlement to compensation presupposes that the auditor is violating a duty incumbent on him and owed to the connected undertaking [references omitted]. An extension of the duty to compensate to further third parties for harm by way of interpretation or analogy would therefore be forbidden [references omitted]. Besides this, an extension of the liability to shareholders/members or creditors of the company would run counter to the goal of – in cases of negligent breach of duty – limiting the risk of liability of the auditor (§ 323 II HGB). It would give rise to concern that the company would have to share its claims, which are in any case limited, with third parties [reference omitted]. (b) The Senate endorses this in principle. Liability of the defendants to the purchaser, who does not belong to the group of persons mentioned in § 323 HGB as entitled to compensation, does not therefore come into consideration from this point of view. The breach of duty of which the defendants are accused certainly belongs technically to the area which is covered by the regime of § 323 HGB. It is therefore here a matter of the more extensive question of whether and under what conditions an auditor who is entrusted with a compulsory audit can also be made liable for appraisals, certificates or other statements which are connected with the object of audit, to persons who are not contractual parties to the audit contract and are also not included in the associated undertakings addressed in § 323 HGB. (aa) The OLG takes into consideration (correctly here) the principles according to which protective duties can arise from a contract for the benefit of a third party, who himself has

424  Appendix 2 no claim to the main obligation under the contract. The case law has in particular accepted such protective effects for contracts by which the client commissions a report or an expert’s opinion from a person who has at his disposal a particular specialist knowledge recognised by the state (eg publicly appointed expert, auditor, tax adviser) in order to make use of it as against a third party [references omitted]. As the purpose of the report is to induce trust in and possess evidential value for the third party, a conflict of the interests of the client and the third party is not an obstacle to the latter’s incorporation into the protective area of the contract [reference omitted]. There are no difficulties about also applying these principles in cases in which an auditor of accounts is entrusted with the compulsory audit of a company provided that it appears sufficiently clear to him that on this audit a particular work product is wanted from him which is to be used as against a third party who trusts in his expert knowledge. If § 323 I 3 3 HGB (only) regulates a statutory liability to the company and the associated undertaking, this does not mean that contractual liability of the auditor to third parties according to the principles developed by the case law on the third-party liability of experts would thereby be excluded from the outset. Such exclusion of the possibility of creating conditions of liability (which are justified by the interests involved and take account of the principle of private autonomy) cannot be inferred from this provision in this sort of generality. A third-party liability which is essentially based on the fact that it is for the contracting parties to determine against whom a duty of protection is to be established [reference omitted] is not affected by the area of direct application of § 323 I HGB. It also does not signify, as Ebke/Scheel [reference omitted] think, a disregard of a basic decision of the legislator in favour of a limited liability of auditors expressed in this provision. This provision, according to paragraph 4 of which the duty to compensate may neither be excluded nor limited, does not pursue such an extensive purpose. (bb) Nor does § 323 HGB create a material exclusionary effect against liability of the auditor in the run up to the issue of the certificate. The provision does not for instance connect the liability to the issue of the certificate as such; it presupposes instead a fault-based breach of duty in the carrying out of the audit in accordance with para 1 sentences 1 and 2. Whether – in the relationship of the auditor to the company – mistakes in the context of the notification of a certificate are included as well, can be left undecided. There is in any case no ground for leaving the trust (which is worthy of protection) of a third party, who has been included within the protected area of the audit contract, that such a publication is correct simply without any sanction in liability law. (cc) Certainly, the legislative intention which is expressed in § 323 HGB to limit appropriately the risk of the auditor’s liability needs to be considered within the framework of the auditor’s contractual liability to third parties. Incorporating an unknown number of creditors, members or acquirers of shares within the protective area of the audit task would militate against this. It cannot be assumed as a rule that the auditor will be ready to take on such an extensive risk of liability. It is different however if the parties to the contract on the commissioning of the work (or possibly even at a later point in time) proceed on the agreed basis that audit is to be carried out in the interest of a certain third party as well and the outcome is to assist this third party as the basis for a decision. In any case, in such cases the undertaking of the task includes a conclusive declaration of the auditor that he intends to carry out the audit conscientiously and without bias in the interest of the third party as well. There is no ground in a case of

Appendix 2  425 this kind for denying to a third party claims against an auditor who breaches his duty in the audit [references omitted]. (c) The appeal court infers from the way the letter of the 9 October 1992 was addressed that it was recognisably intended for the use of a third party; it also considers that the defendants could have reckoned on their information being of importance for decisions by recipients with a business background. These findings are accepted by the appeal in law as favourable to it. They are unsuccessfully disputed by the reply to the appeal in law which claims on the contrary that the defendants did not have to reckon with a third party basing a purchase decision on a communication regarding the expected outcome of an audit, because in the legal world if need be an intermediate status report could be a basis for a decision of that kind. The significance to be attributed to the letter of the 9 October 1992 is a question of interpretation which the judge of fact has to undertake, taking into consideration all the decisive circumstances, which can include the discussions preceding the letter. The appeal court will in the further proceedings have an opportunity to look at the objection raised by the reply to the appeal in law insofar as the letter of the 9 October 1992 contains no certificate corresponding to § 322 HGB and therefore also cannot form a basis for trust which is worthy of protection. (d) The defendants also have an opportunity in the further proceedings to give a more precise basis to their objections, raised in the appeal in law, to the assumption by the appeal court that they had breached their audit duties and given an incorrect confirmation just because they had failed to obtain confirmation of the balances. 2. (a) The appeal court denies that the defendants are liable even though it bases its decision on a breach of duty. This was because the claimant has not proved that the insolvent would not have acquired the shares in the business of STN if the deficit for the year 1991 had been known to it. The appeal in law objects (correctly here) that its case was to the effect that the shares in the business would not have been acquired on the conditions of the contract of the 12 October 1992 if the deficit for the year 1991 had been known. Besides this the appeal court considers the statements of the witnesses called by the defendants, in particular in relation to the calculation of the purchase price in the purchase contract, to be contrary to logic and experience and does not consider the claimant’s argument on this issue. The circumstance that no special point of reference was established for the value of STN in the calculation of the purchase price and the piece of land included was the decisive valuation factor for the calculation of the purchase price does not justify the conclusion expressed by the appeal court that it was a matter of indifference to the purchaser whether STN had a value at all. Even if the managing director of the subsequent insolvent should have declared in the purchase contract negotiations that the firm was no longer worth anything anyway and he did not want to pay anything for it, it does not follow from this that the purchaser would have been prepared to put its money into an undertaking which was heavily in debt by more than DM 10 million a good nine months previously. In this connection it may remain open in proceedings in the appeal in law exactly how the purchase price clause in § 4b of the purchase contract is to be understood. The decisive factor is that the annual account for the year 1991 addressed by the defendants in the letter of the 9 October 1992 revealed an annual surplus of about DM 2.6 million whilst the annual account which was later provided with a note of confirmation by the defendants documented a deficit of more than DM 11 million.

426  Appendix 2 It cannot be inferred from the statements of the witnesses who have been examined that such a difference did not influence the calculation of the purchase price. In § 10 of the purchase contract the seller warrants that the principles of proper accounting had been observed and to his knowledge no liabilities of the business existed which were not evident from the accounts. The appeal in law correctly points out that this provision argues against the appeal court’s assumption that the operative value of STN was without any significance for the purchase price. In the face of this provision and the fact that STN’s inadequate financial cover existing at the end of 1991 could only be balanced by the bringing in of the business premises, it cannot be denied that the breach of duty by the defendants (which was accepted by the appeal court) caused the purchase decision on the basis which it gave. In fact, there is a prima facie case in favour of it. (b) Also, if the appeal court had doubts about whether the breach of duty caused the purchase decision, it should not have disregarded the evidence of the witness Dr B who was called on this issue. Even if the negotiations about the purchase of the shares in the business were concluded on the 8 October 1992, the parties to the purchase contract were only finally bound by the documentation of the 12 October 1992. Therefore events between these two points in time could still be of importance. This applies for instance to the bringing in of the real property company by the seller on the day of the documentation of the purchase contract. Further, the appeal court itself – in spite of the conclusion of the negotiations on the 8 October 1992 – proceeds decisively on the basis that the defendants’ letter of the 9 October 1992 was a ground of liability. But then prima facie evidence which refers to the causality of this letter is also important. The prima facie evidence ought not to be left out of consideration, as the reply to the appeal in law thinks it should be, just because the claimant has not explained why the witness should have had such an insight into the events relating to the decision. This is because there was a letter of the 7 October 1992 written by this witness, who represented the purchaser, which the appeal court mentioned in its version of the facts of the case and from which important circumstances for the calculation of the purchase price arise. 3. The appeal in law also correctly objects to the fact that the appeal court has denied damage. The deliberations of the appeal court are based in this respect on the legally incorrect idea that the shares in the business of STN were, insofar as they concerned the operative value of the company, without significance for the calculation of the purchase price, and it was only a matter of the value of the business premises which had been included. Whether damage has resulted to the purchaser, which has asserted that if it had been correctly informed about the circumstances of STN at the end of 1991 it would not have acquired the shares in the business or would only have acquired them for a symbolic purchase price of DM 1, can only be established by inclusion of the value of the undertaking as a whole. It cannot be ascertained solely by the purchase price which has been paid – as the claim of the claimant seems to suggest – nor solely by the value of the business premises which has been brought in. II. The Senate cannot make a decision in the case itself, because further findings by the judge of fact are necessary on the questions addressed under I. The appeal court will also have to investigate the argument of the defendants that the purchaser had been informed about the business circumstances of STN and it was in any case attributable to it as contributory fault that it had had no intermediate status report prepared. It will further have the opportunity within the framework of its new assessment to go into the question again of whether a claim

Appendix 2  427 by the claimant can be based on an information contract or on tort. Where liability which is merely based on the protective effect of the audit contract is being considered, the limitation of liability in § 323 II HGB is to be taken into account. This is because the provisions of § 323 HGB – in this respect also – take precedence as a special regime over the contract law provisions of civil law [references omitted]. Case 45 BUNDESGERICHTSHOF (FIRST CIVIL DIVISION) 10 MAY 1984 NJW 1985, 2411 = WM 1984, 1233 Facts The first claimant had a continuous business relationship with the defendant, a forwarding agent, since November 1976. In accordance with an agreement from 26 January 1978 the first claimant stored goods in one of the defendant’s storehouses. The second claimant owned the goods. The first claimant is the parent company of the second claimant. On 19 December 1979 the first claimant discovered that some of the goods had been stolen. The claimants seek to obtain declaratory judgments to the effect that the defendant is liable in damages for the loss of the goods … The LG and the OLG Köln have rejected the claim. The appeal against these decisions was allowed. Reasons II. 2. The OLG denied the first claimant’s entitlement to a contractual action on the following ground. The second claimant had direct rights of action founded on a contract for the benefit of a third party and on delict. In the view of the OLG it followed that the promisee could not recover damages in respect of the third party’s loss (Drittschadensliquidation). The reasoning of the OLG is flawed. (a) Only the contracting party to that contract, ie, the first claimant as promisee, can enforce the contractual right of action derived from the agreement from 26 January 1978. The fact that the second claimant suffered the loss and not the first claimant is not a bar to that right of action. In cases like the present, where a bailor enters into a contract with a bailee whereunder the bailee undertakes to store and guard the goods the promisee or bailor is entitled to recover damages in respect of the loss suffered by the third-party owner of the goods [references omitted]. (b) The second claimant could have enforced the rights under the agreement from 26 ­January 1978 instead of the first claimant only if the first claimant had assigned his contractual rights against the defendant to the second claimant or if the contract between the first claimant and the defendant from 26 January 1978 had been one for the benefit of the second claimant or at least with protective effects towards the second claimant. However, this is not the case here … (c) Therefore the second claimant’s claim is exclusively founded on the law of delict. This direct right of action of the second claimant does not prevent the first claimant from pursuing his contractual claim founded on Drittschadensliquidation against the defendant. The first claimant may sue in addition to the action brought by the second claimant. The fact that the first claimant’s claim flows from the same acts or omissions of the defendant as that of the second claimant does not indicate otherwise. The claims pursued by the claimants in contract and tort respectively are independent from each other in that each right of action

428  Appendix 2 follows its own rules, they are also equally valuable each in its own right [reference omitted]. It follows that the contractual claims can be brought in addition to and independently from an action in delict. The fact that the claimant is exposed to both claims does not amount to a double recovery prohibited for reasons of the law of civil procedure … To allow the first claimant to sue on the basis of third-party loss compensation does not prejudice the defendant debtor in any interest that needs protection. The promisor does not lose the right to invoke limitations of liability, contributory negligence, limitation periods or other defences. This is true also for an extinction of the obligation by performance. If the promisor fulfils his obligations towards one of the creditors his obligations towards the other creditor cease to exist as well (see § 428 BGB; RGZ 170, 246, 250). Case 46 BUNDESGERICHTSHOF (SEVENTH CIVIL DIVISION) 25 NOVEMBER 1971 VersR 1972, 274 = MDR 1972, 316 Facts The claimant is the owner of a castle X. where he runs a hostel for the needy. The building has a mineral oil heating system. The oil is stored in two tanks. A mixer tap connects the two tanks. In May 1965 a company B. employed the first defendant, a mineral oil wholesale firm, to supply and install two devices the function of which is to detect leaks in the tanks. It is disputed whether the first defendant also undertook to remove the mixer tap. The claimant is economically linked with the company B. B contracted in its own name but on the account of the claimant. The first defendant employed the sub-contractor R who in turn instructed the second defendant to actually carry out the construction works. Oil leaked from one of the tanks into the estate’s soil and subsequently into the estate’s lake by the end of August 1965. The leakage was caused by a defective weld. An employee of the second defendant had welded the respective airing pipe. However, the oil in the tank would not have spilled over had the mixer taps not been wrongly adjusted. In the action before the Court the claimant seeks compensation from the defendants as joint and several liable debtors for the loss caused by the leaked oil. The loss has been provisionally estimated to amount to DM 171,589.88. The LG Köln and the OLG Köln allowed the claim. The appeal is rejected. Reasons I. 1. The OLG held that the claimant is entitled to a contractual remedy against the first defendant in respect of the loss although he is not a privy to the contract between the company B. and the first defendant. The company B. contracted in its own name but on the account of the claimant. Therefore, B. acted as indirect agent on behalf of the claimant. In view of these findings, the OLG applied the concept of recovery of damages in respect of a third party’s loss (Schadensliquidation im Drittinteresse). According to this principle the promisee may authorise the third party to sue the defendant in its own name and claim compensation for the loss that falls on the third party. This line of the reasoning of the OLG is supported by a series of decisions substantially to the same effect (BGHZ 51, 91, 93 = [case 48]; BGHZ 40, 91, 100 = VersR 63, 1172, 1173; BGHZ 25, 250, 258 = VersR 57, 705, 706 with further references). This part of the judgment is not put into question by the defendant’s submissions .. 4. According to the OLG the first defendant’s breach of contract

Appendix 2  429 (positive Vertragsverletzung) for which he is liable lies in the fact that the airing pipe was not properly welded. [The positive Forderungsverletzung or positive Vertragsverletzung was previously pure judge-made law and got only codified after the Schuldrechtsreform of 2002 in §§ 241, 280 BGB.] The first defendant is legally answerable for this defect; the defect is at least a contributory cause for the loss. The fact that the mixer tap was not adjusted properly is contrary to the opinion of the defendant irrelevant because the leakage would have been avoided if the airing pipe had been sealed off properly. In that case the leakage would have been noticed on time. This suffices to meet the requirement of causality. 5. The OLG further assumes correctly that the first defendant is responsible for the fault of the employees of the second defendant according to § 278 BGB and that these employees have acted negligently; they have not taken sufficient care when welding the airing pipe. The first defendant could not convince this Court of the contrary. II. 1. In the view of the OLG the liability of the second defendant is founded exclusively on the law of delict (§ 831 BGB) … 2. A pre-condition for § 831 BGB is physical damage to property, just as it is for § 823 I BGB. However, the second defendant’s contention that the OLG did not positively establish that he has caused physical damage to property is not correct. Such physical damage was caused by the second defendant … 3. In the view of the OLG the second defendant did not successfully proof that he had carefully selected and supervised his employees; according to § 831 BGB he bears the burden of proof. This finding is not questioned by the second defendant and the reasoning of the Court appears to be correct. III. The OLG found that the claimant was not contributory negligent … Notes to Cases 41–46 1. Cases 41–44 deal with economic loss caused by negligent statements – typically taking the form of some certification. The law on this subject is complicated for two reasons. First because the potential liability flows from words and it is generally believed that people utter words with less care than they usually put in their actions. Words also ‘travel’ far and thus, it is said, can cause more widespread harm. Neither argument is entirely convincing. In these days of worldwide class actions, disputes about asbestos, silicon breast implants, Dalcon Shield or defective heart valves have put paid to this assertion. Nor is the distinction between words and actions always as easy or as obvious as those who advocate them believe. Thus, are negligent certifications words or documents based on negligent investigations, ie acts or omissions? More likely, therefore, that the real problem here is, once again, the systems’ dislike for pure economic loss, aggravated on occasion by the abovementioned characteristics assigned to words. The law appears complex because there are influences not only from other national laws, but EU law, as well as tensions within domestic law on the one hand to compensate victims and on the other not to give protection to economic loss outside contract. For a legal rule that can claim its existence to a multiplicity of sources invariably courts interpretative difficulties. Although the Code as enacted in 1900 was not favourable to creating liability for economic loss, subsequent judicial decisions have softened this approach. For the academic lawyer in general, the comparatist in particular, this may well be one of the most striking features of the German position. For, as a common lawyer with unique insights into German law once observed, it underscores ‘the German willingness, indeed eagerness, to extend tort

430  Appendix 2 protection … [despite] the Civil Code’s categorical exclusion of tort damages for pure economic loss and the great weight reputedly given by German law to theoretical orthodoxy over pragmatism’. (Fleming (1989) 105 LQR 508.) In this trend (rather than in the details of German law) may also lie the greatest lesson for the common lawyer who, additionally, would not have to go to the same pains to justify similar results if (or when) he decided to adopt a more flexible attitude towards pure economic loss. Finally, many of the ideas, notions, and trends discussed in this section are also evident in two other areas of economic loss. The first is concerned with the consequences of mistakes made by lawyers (and is discussed in the next section); the other deals with damage caused to products (and is considered by cases 54 and 55 and the notes that accompany them). 2. In the light of these introductory remarks, it is self-evident that an account such as the one that follows is bound to be somewhat crass – certainly to the extent that it attempts to summarise such an enormous volume of decisional law. Here more than elsewhere the reader should thus look at what follows more in search for signposts for further study of the law than as a source of detailed answers. If the material assembled here and the notes that accompany it also succeed to make the reader ‘think’ that can only be regarded as a welcome bonus. 3. At first sight, German law is cautious and conservative. § 675 II BGB provides that ‘A person who gives advice or a recommendation to another is not bound to compensate for any damage arising from following the advice or recommendation, without prejudice to his responsibility arising from contract or delict’. Since the main tort provision (§ 823 I BGB) excludes, as we have seen, pure economic loss from its list of protected interests, liability in tort can only be based on § 824 BGB, § 826 BGB or § 823 II BGB. The first (§ 824 BGB) has minimal importance, while the second (§ 826 BGB) also has a limited application. This is despite the fact that in recent times the courts have widened the meaning of intention (in § 826 BGB) to include not only dolus directus but also dolus eventualis (a notion somewhat akin to our concept of reckless behaviour). Thus, in one decision (BGH, NJW 1987, 1758–9) the court eased the fault requirement stating that (for the purposes of liability under § 826 BGB) it would suffice to show that the auditor expected his report to be used in connection with credit negotiations and that (if it were incorrect) it would cause harm to the relying creditor. 3. Because of the above strictures of the tort provisions of the Code the courts have had recourse to the notion of contract with protective effects of third parties (Vertrag mit Schutzwirkung zugunsten Dritter) with the result that the liability of auditors has been taken significantly further than the wording of § 826 BGB could ever possibly justify. The absence in the German law of tort of any liability for negligently inflicted pure economic loss has resulted in a number of substitute legal constructions. One such device is the contract with protective effects for third parties, a judicially created variant of the betterknown notion of contract in favour of third parties (see chapter four, section E and now after the Schuldrechtsreform § 311 III BGB). This construction makes it possible to treat pure economic losses of third persons, resulting from a faulty performance of contractual (or non-contractual) duties, as actionable harm resulting from a breach of a contractual duty. This contractually-based liability towards third parties for their pure economic loss, though now well acknowledged in principle, remains controversial; and the controversy rages as much over detail as it does over the dogmatic basis of the solution.

Appendix 2  431 In German law (and often but not invariably in the common law), liability, essentially, depends upon reliance on the report; and whether this was reasonable or not depends on the contract (commissioning the audit report) as well as all other relevant circumstances. Thus, third parties may be able to sue for damages under contracts to which they are not signatories (BGH, JZ 1986, 1111); or where their protection under the contract commissioning the report arises not from its wording but from necessary implication (BGH, NJW 1987, 1758–59). In order to adapt and apply the concept of a contract with protective effects towards third parties to the negligent misstatement situation – the so-called ‘expert liability’ category of cases (Expertenhaftung) – the BGH has held that for the protective effects to arise, it is no longer necessary for the requirement of ‘Wohl und Wehe’ (for better or for worse) to be fulfilled. Until roughly 1984, this requirement had served as one of the main control factors of the concept since it limited its scope to situations where the promisee was responsible for the ‘wellbeing’ of the third party. This, for instance, was easily satisfied in the context of family relationships but also in employment settings where the employer’s duties of care towards his employees were involved. But it was not adequate to cover relationships of commercial nature, so it was dropped. (See BGH, BGHZ 69, 82, 86; BGH, NJW 1984, 355, 356; BGH, NJW 1998, 1059.) A further bold step towards increasing the range of persons included under the ‘protective umbrella’ of the contract was taken when the BGH abandoned the view that third-party protection should be denied when there was a real or potential conflict of interests between the commissioning principal of the report and the third party. (BGH, NJW 1987, 1758–59). This trend is continued in case 44. The decision deals with the problem whether and to what extent the co-responsibility of the contractual partner of the surveyor should be taken into account in an action by the third party/ purchaser of the land. In this instance the site owner, who intended to sell the property, commissioned a report from a surveyor to estimate the value of the house. The surveyor over-valued the house. This was because he negligently relied on the misleading ­information given to him by the site owner. The third party/purchaser relied on the surveyor’s report and bought the house at an unrealistic price. The court allowed the action of the third party. The actual result of the decision surely appears reasonable (in that sense, Medicus JZ 1995, 309). In the final analysis, however, the BGH took another step in the direction of an extracontractual/tortious liability for certain cases of economic loss. But the court was not willing to adopt the language of a tortious ‘duty of care’ towards certain third persons. Instead, it sought to derive this result from the intention of the parties to the contract of employment of the surveyor which was given protective effect towards the third party/purchaser. The BGH resorted to two fictions to achieve the ‘desired’ result on the basis of contract. The first was that the site-owner had a real interest in including the buyer in the protective scope of the contract. In fact, he had not, since he and the purchaser were on opposite sides of the bargain and, as a result, the survey gave rise to a conflict of interests. (While the siteowner is clearly interested in a favourable valuation, the purchaser/claimant is interested in a valuation at the lower end of the scale). It is, therefore, difficult to argue that the site-owner wished to benefit the third party/claimant. Such an intention could only be ‘discovered’ if one could show that had the parties openly discussed the issue they would have agreed that good faith required that the site-owner also contract for the benefit of the purchaser. Such a construction, however, is so unconvincing that, in reality, it shows that it is the law that is imposing upon the surveyor such a duty towards the purchaser and not the will of the parties.

432  Appendix 2 The second fiction is even more striking. It is inherent in the derivative nature of the third party’s cause of action that the promisor/surveyor can avail himself towards the third party of any defences available to him against the promisee (§ 334 BGB, which corresponds to Contracts (Rights of Third Parties, Act 1999 section 3(2)). In an action by the site owner the surveyor could have objected that the site owner who commissioned the report, had acted contrary to good faith in concealing a crucial defect of the property. The BGH held that the promisor could not avail himself of this defence as against the third party/purchaser. The court relied on a device – which is not always available – to solve this problem, namely implied term reasoning. Thus, it assumed that in the contract that created the ‘duty of care’ towards certain third parties, the surveyor tacitly waived his right to avail himself of any defence against the claimant/potential purchaser which he, the contractual debtor, had against his contractual partner (the person commissioning the report). This waiver, the BGH stated, was justified by the fact that the expert knew that his performance was intended to form the basis of the financial calculations of the purchaser of the land (who, one might add will – reasonably – rely on the report). It goes without saying that these considerations might  also justify imposing liability under the Hedley Byrne principle of reasonable reliance and assumption of responsibility. However, it is more difficult to see how this result, imposing liability, can be derived from applying the concept of a contract in favour of the third party. For not only is this result incompatible with the traditional model of a contract in favour of third parties; it is also doubtful that the surveyor would have accepted such a waiver had it been discussed before entering into the contract. Once again, such analysis indicates that the duty is imposed by law and does not flow from the will of the contracting parties. It also casts new doubt on the whole construction of a contract with protective effects towards the purchaser. (See Ebke ‘Abschlussprüfer, Bestätigungsvermerk und Drittschutz’ JZ 1998, 991, 993 ff who suggests that ‘implied term’ reasoning is in such cases used to make up for the exclusion of pure economic loss from the list of protected interests in § 823 I BGB). In the light of the above, it comes as no surprise to discover that some academic commentators had originally argued in favour of abandoning the contract with protective effects as theoretical basis of the decisions of the court – at least in cases such as the present one. But the BGH remained to be convinced and had never given any signs that it was about to change its stance (see chapter four, section I.E). The Schuldrechtsreform confirmed the BGH’s position and identified the liability of the ‘expert’ for negligent misstatements in German law as pre-contractual (see § 311 II BGB and § 311 III 2 BGB which refers to reliance). 4. Cases 42–45 also highlight one of the main structural differences between German tort law and English law. German law has not developed a general exception permitting the recovery of pure economic loss outside the framework of §§ 823 II, 824, 826 BGB and apart from the ‘creation’ of the protected interest under § 823 I BGB of an established and operating business. As a result, it has, once again, been forced into contractual thinking. As the cases reproduced above show, German contract law has proved flexible enough to accommodate the desire to hold liable those who give advice (or perform other services such as auditing or surveying) even if in a strict sense there is no privity of contract between the parties (see again now § 311 BGB). This, for instance, could happen when third parties rely on statements by professionals given in the course of their employment by a different person. To see whether there are real differences between the legal systems, we need to adopt a functional approach. Zweigert and Kötz, 44 remarked that:

Appendix 2  433 when the process of comparison begins, each of the solutions must be freed from the context of its own system’. And they continued: ‘Here, too, we must follow the principle of functionality: the solutions we find in the different jurisdictions must be cut loose from their contextual context and stripped of their national doctrinal overtones so that they may be seen purely in the light of their function, as an attempt to satisfy a particular need’. The problem of negligent misstatements has caused major conceptual difficulties in both systems. The preferred option of English courts is, as we have seen, to extend liability in negligence to cover pure economic loss – a type of harm traditionally belonging to the realm of contract law. By contrast, the German predilection for contract appears at first sight to have an axiomatic advantage. On closer re-examination, however, it raises serious doubts whether liability really flows from the intention of the parties (essential if one is to remain faithful to contract theory) or whether it is more accurately imposed by the law. (For instance the contract route encounters difficulties if the contract is void; the issue has not been decided but the better view seems to be that liability to third parties should not cease in such a case.) The realisation that the theoretical basis might not, after all, lie in the intention of the parties has finally come to full light, especially in cases such as case 43. We must conclude therefore that in this area, if any, a functional approach is capable of providing insights of general interest. As Professor Schlechtriem remarked, it is not so much the theoretical basis that counts. What really matters is that the specific criteria for imposing liability receive attention and are developed rationally on a case by case basis. (See his ‘Schutzpflichten und geschützte Personen’ in Beuthien et al (eds), Festschrift für Dieter Medicus (1999) 529.) More specifically his view is that the main emphasis should be laid upon the scope and purpose of the duty owed in the individual case. In his opinion, the relevant test is to be found in Lord Hoffmann’s speech in South Australian Asset Management Corp v York Montague Ltd [1997] AC 191, 211 where the learned Law Lord argued that the claimant has to show ‘that the duty was owed to him and that it was a duty in respect of the kind of loss which he has suffered’. Against this background, the comparative study of each other’s systems can provide useful insights to both of them and make the lawyer – student or practitioner – understand better what he is trying to achieve. Another and perhaps more important lesson that can be drawn from comparing liability for negligent misstatements is that in this field of ‘professional negligence’ the traditional compartmentalisation of obligations into contractual and tortious lacks explanatory power. (cf Cartwright (1997) 13 Construction Law Journal 157). These observations will be best understood if read in conjunction with the text in chapter four, section I.D.v), above, and the notes to cases 35–37, above. 5. The (German) case law regime just described is, as indicated at the beginning of this section, modified wherever the statutory regime takes precedence. This is the situation in the Caparo type of case where the result reached by the House of Lords is acceptable also to German law. (cf von Bar’s comprehensive review of the Caparo case from a comparative perspective ‘Liability for Information and Opinions Causing Pure Economic Loss to Third Parties’ in Markesinis (ed), The Growing Convergence (1994) 98, 125). Contrast now case 45 on statutory audit under § 323 of the Commercial Code (HGB). Caparo, it will be recalled, dealt with a ‘statutory’ audit, prepared for the company but relied upon (to their detriment) by (a) existing and (b) potential shareholders of the said company. The Court of Appeal allowed the first (but not the second) to recover their losses, but the House of Lords overturned the decision denying both categories of claimant all redress against the

434  Appendix 2 negligent accountants. The same solution as in Caparo would still follow in German law if the result were to be determined solely by the wording of § 323 HGB which specifically regulates the legal position of auditors in the case of ‘mandatory audits’ (­Pflichtprüfungen viz, the formation audit, the annual audits, and ‘special’ reports) and which limits the auditor’s liability for negligent breach of his duties to the company only. Shareholders and potential shareholders are, thus, excluded for the purview of this paragraph. (This has been confirmed in case 45.) They are also denied an action under § 823 II BGB because § 323 HGB is not regarded as a protective norm (Schutzgesetz). As already indicated, § 323 I HGB provides that if the auditor negligently fails to comply with his duties he is liable only to the company in question (and if an associated company sustains loss also to this company). Until the seminal judgment in case 44 was published, this paragraph of the HGB was understood as implying that any other third party was prevented from suing the auditor. It thus came as a surprise that the BGH, in case 44, did not endorse fully this widely held view. While the court there acknowledged that the ‘legislative intention’ which was expressed in this provision was ‘to limit appropriately the risk of the auditor’s liability’, it also stressed that this provision did not have an ‘exclusionary’ effect. The consequence of such an approach is that the auditor could in principle owe a duty also to persons not expressly mentioned in § 323 HGB. This was the case where the auditor (contractually) undertook to perform his service without prejudicing the interests of a third party, in the instant case a purchaser of the company. It is not entirely clear whether this requires that the auditor issues a statement in addition to the actual audit before his liability widens to include third parties. In the somewhat unusual facts of the case in question, the auditor had confirmed to a second auditor employed by the purchaser that he would stand by the views expressed in the annual report. (The better view would seem to be that this extended liability is engaged only if such an additional statement is made. On this, see Canaris ‘Die Reichweite der Expertenhaftung gegenüber Dritten’ ZHR 163 (1999) 206, 208.) A consequence of this restrictive reading would be that in respect of the statutory audit, itself, no liability would arise in relation to third parties. But that does not affect the striking feature of the decision which is that such an undertaking was said to flow from the intentions of the parties and that it had been conclusively declared. Once again, therefore, one must express serious doubts as to whether the auditor was actually willing to accept liability beyond that which normally flows from § 323 HGB, especially in the light of the pre-existing and restrictive understanding of that provision. (See Ebke, ‘Abschlußprüfer, Bestätigungsvermerk und Drittschutz’ JZ 1998, 991, 993.) The inescapable impression thus is that the duty is imposed by law with consequences which may not have yet been fully fathomed by the (German) courts. For, as Professor Ebke remarked: ‘If the intention of the parties as expressed in the contract no longer determines the existence and extent of liability and this is allowed to turn on “objective interests” and the third party’s reliance, then the choice of the [contracting] parties and their right to determine the extent of their obligations will take second place. A result-orientated risk allocation that does not flow from the will of the parties will then become predominant’. This in turn is difficult to reconcile with those decisions in which it was held that § 323 HGB was not a provision which acquires protective effects towards third parties within the framework of § 823 II BGB already referred to, not to mention traditional contract dogma. Under § 323 II HGB, liability of the auditor is restricted to €1m per audit or €4m for the audit of a public limited company (Aktiengesellschaft).

Appendix 2  435 6. In this context, of particular interest is a decision of the BGH in 1985 where one reason given for the enlargement of the auditor’s liability was the existence of mandatory liability insurance according to § 54 of the Accountants’ Regulations (Wirtschaftsprüferordnung, WPO). (See, BGH WM 1985, 450, nos 6 and 8). In line with Directive 2014/56 EU, § 54a of those Regulations permits the liability of auditors to be limited by contract. Thus, if third parties are entitled to sue auditors, now subject however to the uncertain implications of the decision in case 44 above, they can be opposed by all the defences that may be available to auditors as a result of their contracts with the commissioning company, including contractually permissible limitations of liability. The contractual nature of this action makes this point obvious, whereas it would be more problematic if the action were tortious in nature. 7. As a postscript one might add that inadequate consideration has been given to a point raised by Bingham LJ in the Caparo case ([1989] QB 653, 689) namely that the finding of a duty situation in such cases will by no means always lead to liability. For most claims would very likely fail (or would be settled at a very early state in the proceedings) on the grounds that no negligence can be proved or that the causation link between negligent misstatement and the loss has not been established. 8. In relation to case 45, the solution favoured by Lord Goff in The Aliakmon is not far removed from the German approach, as the learned Lord was ready to admit. For he pointed out that the rights of a building employer under §§ 633–39 BGB were vested in the customer and that there was no indication that the situation was different if a third party owned the property on which the work was done. Certainly the right to have the defect remedied by the builder, restitution in lieu of termination, price reduction are not dependent upon the building employer having sustained a financial loss as a result of a defective performance. (The position is more difficult to ascertain in relation to the right to recover damages.) Thus far then we can indeed observe that the solutions of the two systems coincide. There is only a conceptual difference in that the employer’s right is according to Lord Goff framed in terms of a right to substantial damages measured by the cost of cure while the rights mentioned above are not rights which entitle the promisee to recover damages, especially the right to have the defect cured is a variant of specific performance. The rationale behind this approach has been best described by Professor Treitel in the International Encyclopedia of Comparative Law Vol VII ch 16 (1976) 6 as the concept of ‘enforced performance’. From this point of view Lord Goff ’s approach constitutes a remarkable step towards protecting the right to the performance of a contract and a departure from a mere loss focused theory of contractual remedies. In respect of the right to recover damages for defective performance the position of German law is more difficult to ascertain. 9. It should be noted however that German courts also allow recovery of damages in respect of a third party’s loss (the site owner) in contract. Cases 45 and 46 illustrate this point. Case 45 first of all shows that such claims by a promisee on behalf of a third party are meant to enable the promisee to enforce the contract and therefore are not excluded by a direct right in tort. One might add for the sake of completeness that in carriage of goods (by land) situations German law combines the contract for the benefit of a third party with third-party loss recovery and as a consequence allows recovery of damages on behalf of a third party even if the third party has a direct action in contract (see § 421 I 2, 3 HGB; Herber ‘Die Neuregelung des deutschen Transportrechts’ NJW 1999, 3297, 3302; Helm, Haftung für Schäden an Frachtgütern (1966) 164). Case 47 suggests that even though German law follows the ­principle accurately described as enforced performance, it is ­sometimes

436  Appendix 2 nevertheless ­necessary to allow recovery of damages in respect of a third party’s loss, for instance in the case at hand as far as consequential loss is concerned. We can note that overall German law is characterised by a great degree of flexibility with regard to the rights of a promisee to enforce the contract but also regarding recovery of third-party loss. ECONOMIC LOSS (NEGLIGENT PERFORMANCE OF PROFESSIONAL SERVICES) Case 47 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 19 JANUARY 1977 NJW 1977, 2073 = VersR 1977, 638 Facts The defendant is an attorney who represented the claimant’s father in divorce proceedings. In January 1972 the claimant’s father and mother met in the defendant’s office, where they signed a divorce agreement drawn up by the defendant. It contained the following clause: § 6. As to the house, the parties agree that the half belonging to Mrs M is to be transferred to the three children in equal parts. Mr M hereby agrees not to sell his half but to transfer it to his present legitimate children. An appropriate notarial contract to this effect is to be concluded immediately after the divorce is final. Mr M further promises that once the divorce is final he will indemnify Mrs M against any liabilities arising from the house or its construction … A divorce decree was granted in February 1972, and the defendant, in the name of the claimant’s father, thereupon waived any rights of appeal, as did the mother’s attorney. The claimant’s mother now refuses to transfer her interest in the property to the claimant and his siblings. The claimant claims damages for breach of the defendant’s duty as attorney. The LG rejected the claim but the OLG Bamberg allowed it. The defendant was permitted to appeal, but his appeal was dismissed. Reasons I. [the reasoning of the OLG]. II. Despite the appellant’s contentions, this reasoning is sound in law. 1. [The defendant was in breach of his duty as attorney]. 2. Nor is there anything wrong in law with the OLG’s holding that although there was no contract between the claimant and the defendant, the claimant could sue the defendant for damages for his faulty breach of contract. (a) The OLG found that there was here a contract with protective effect for third parties and that the claimant’s claim arose therefrom. We do not have to decide whether this is so. (aa) Certainly an important factor pointing in that direction is that the claimant was the son of the attorney’s client and was entitled to care and protection from him (compare BGHZ 61, 227, 233). The usual problem in cases of contracts with protective effects for third parties is whether the victim was someone the debtor could expect to be harmed by a breach of the contract. That is not the problem here. The very words of § 6 of the divorce agreement drawn up by the defendant show that the children were its sole beneficiaries, the only people apt to suffer if the agreement proved invalid. The only question here is how far the protective effect of this contract works in favour of the children, in particular whether they have any claim for damages for breach of contract in

Appendix 2  437 their own right. Now the contract between client and attorney is such, given its nature and structure, that it can only be very seldom, whether one interprets the contract extensively or invokes § 242 BGB (see BGHZ 56, 269, 273; NJW 1975, 977), that the duties it generates can be sued on by third parties, for the fiduciary relationship between client and attorney makes it strongly bilateral and self-contained [references omitted]. Thus the fact that third parties have an interest in what an attorney does will not normally lead to any extension of his liability, even if those persons are named or known to him. However, an exception must be made where a contract drafted by the attorney is designed to vest rights in third parties specified therein, especially third parties who, as in the present case, are represented by the client. It is true that most of the cases where the courts have granted third parties a claim for damages arising out of a contract to which they were not parties have involved personal injury or property damage and its consequences (BGHZ 49, 350, 355; NJW 1955, 257; [other references omitted]), but it is not impossible for a third party to have a personal claim for economic loss caused by breach of subsidiary contractual duties (NJW 1968, 1929; BGH NJW 1975, 344). In drawing the line here, one must certainly apply an especially stringent test: the circle of persons to whom the protective effect of a contract extends is to be narrowly drawn, so as to avoid blurring the line between contractual and tortious liability in an unacceptable manner (BGHZ 66, 51, 57; NJW 1974, 1189). It must always be borne in mind, in claims for purely economic loss, that the debtor is not to be made liable for the mere ricochet effect of his conduct on third parties. (bb) Despite this, we cannot, on the special facts of the present case, fault the OLG’s holding that the claimant was drawn into the protective ambit of the attorney’s contract. The respondent invokes a decision of this court of 6 July 1965 (NJW 1965, 1955), but this is not quite in point. The court there did allow the daughter of a client to sue the attorney although she was not herself a party to the contract, but the court was reluctant to categorise the contract as one with protective effect for third parties [references omitted]. Contracts with protective effect for third parties are concerned with breach of subsidiary duties by the contractor (see BGH NJW 1975, 344), whereas in that case the question was really whether the attorney could be made liable towards the client’s daughter, the third party, for a breach of specific duties of performance [reference omitted]. Our case is clearly distinguishable. (b) The claimant might also base his claim here on the concept of Drittschadensliquidation, a doctrine which borders on, if it does not actually overlap, the area of application of the doctrine of contracts with protective effect for third parties (see BGHZ 49, 350, 355). It would have been quite proper for the defendant’s client to indemnify his son, the claimant, for the harm he had suffered, and one could then infer from the fact that he brought suit as his son’s statutory representative that he was making an assignment of his own claim which the claimant, on the threshold of majority, could implicitly accept. But we need not pursue the matter here. (c) In whatever legal or doctrinal category one puts the present litigated facts, the result must be that the claimant has a direct claim against the defendant attorney for compensation for the harm which he suffered as a result of the defendant’s failure to tell his father of the need to implement the agreement in § 6 of the divorce document. Any other conclusion would be inconsistent with the meaning and purpose of the attorney’s contract here and of the father–son relationship between the client and the claimant of which the defendant was well aware.

438  Appendix 2 Notes to Case 47 Lawyers can through their negligence harm the interests of: (i) their clients and (ii) third parties. Increased litigation under the first heading, spurned no doubt by liability insurance becoming compulsory (as it is in Germany or France) or widespread (as it is in England and the US), has led to a flourishing of professional liability. England came into line in respect of the immunity of advocates in court in Arthur JS Hall & Co v Simons [2002] 1 AC 615. Lord Steyn’s speech in particular contains some insights, which are especially interesting from a comparative perspective. Their Lordships acknowledged that in the light of changes in the law of negligence, the functioning of the legal profession, the administration of justice, and public perceptions towards lawyers, the time had come to reconsider the immunity of advocates from suit. It is worth noting perhaps that English barristers, unlike their colleagues on the Continent, do not enter into contracts with their clients (or solicitors); and they may not sue for their fees. Therefore, the principle established in Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 provides the only route of recovery available against barristers. At the time of this decision, the common law systems took different positions. For the High Court of Australia in Gianarelli v Wraith (1988) 165 CLR 543, and the Court of Appeal of New Zealand in Rees v Sinclair [1974] 1 NZLR 180, had come to the conclusion that public policy considerations justified the immunity. Canada on the other hand ‘had got on perfectly well without an immunity for over a hundred years’, as was pointed out by Lord Hoffmann, at 567. So the decision not only brings English law closer to continental European practice than it was before; it also confirms the current trend of disunity in the common law. But, notwithstanding the above result in practice, the attempt to draw on the experience of continental Europe did not meet with wide approval. The main objection against drawing on the experience of civil law systems was derived from the difference in legal culture. The most sceptical of their Lordships was the Scottish judge, Lord Hope of Craighead, who although in the end also argued against the immunity rule, stressed that ‘the much wider scope which is accorded to the judicial function under the continental systems makes it very difficult to draw any useful comparisons’ (593). At the other end of the spectrum was Lord Steyn who, as has already been noted, is a keen student of comparative law. The learned Law Lord was thus prepared to downplay the cultural differences between common and modern civil law because he could see that the absence of an immunity has not caused any practical difficulties in other countries in the European Union. 2. Lord Steyn accepted that the duty of an advocate in a civilian system was less extensive than in England. For instance, in Germany there is no duty to refer the court to adverse authorities. However, the advocate in Germany assumes a position which (in theory at least) goes beyond that of a mere ‘service provider’ to his client. § 1 Bundes­ rechtsanwaltsordnung (BRAO) thus states that the Rechtsanwalt is an ‘independent agent in the development of the legal order’ (Organ der Rechtspflege). The advocate thus has to exercise his profession in the light of the trust that is placed upon him in his capacity as advocate (§ 43 BRAO). The law imposes a number of restrictions on freedom of contract in this area; for instance it prohibits contingency fees (§ 49b II BRAO) or fees that are below the level prescribed by statute (§ 49b I BRAO). The breach of some of the advocate’s duties also entails criminal sanctions in addition to possible civil liability towards his own client. For an advocate may not act, even indirectly, for both parties

Appendix 2  439 at the same time, § 356 StGB; and he must not knowingly make false statements to the court. This brief survey demonstrates that German advocates do owe duties not only to their clients but also to the public at large, even though in some respects they may be less pronounced than the duties that an English barrister may owe to the court. Finally, it is ironic to note that while the German advocate does not owe the court a duty to refer it to authorities that go against the interests of his client – because the court is supposed to know the law – he breaches his duty towards the client if he ignores such authorities and as a result does not accurately advise him as to the outcome of the litigation. 3. Case 47 deals with a different problem: can a lawyer owe a duty to third persons who are not his clients? The German decision invites comparison with such cases as Biakanja v Irving 49 Cal 2d 647, 320 P 2d 16 (1958) (pleaded in tort); Lucas v Hamm, above (pleaded in contract and tort) and Heyer v Flaig 74 Cal Rptr 225; 449 P 2d 161 (1969)) decided in tort in the United States; and Ross v Caunters [1980] Ch 297 and White v Jones (pleaded in tort only) in England. Similarities and differences must again be stressed. (i) The first point to note is, again, the tendency of German law to base its solution on contract. That contract cannot easily explain all such cases is obvious not only by the court’s own review of the precedents but also by a certain unease it experiences in utilising the notion of contract with protective effects vis-a-vis third parties or the theory of ‘transferred loss’ (Drittschadensliquidation), both briefly explained above (chapter 4, section I.E). The first German decision on the subject – BGH, NJW 1965, 1955; JZ 1966, 141 note Lorenz – relied on the notion of contract with protective effects vis-a-vis third parties and found for the claimant, though one is inclined to believe that the theory of transferred loss might have been an even more appropriate device. (This case is discussed in English by Lorenz in ‘Some Thoughts about Contract and Tort’ in Essays in Memory of Professor FH Lawson (1986) 86 ff). Incidentally, the granting of an action against the attorney (for a sum equal to the void legacy) can in practice result in a ‘double-legacy’ – a point that has troubled some commentators. (See Kegel, ‘Die ‘lachenden Doppelerben’: Erbfolge beim Versagen von Urkundspersonen’ in Festschrift für Flume (1978) I, 545. This argument, however, has been rejected both in England (White v Jones, above) and in Germany (see: BGH; Zeitschrift für das Gesamte ­Familienrecht 1980, 133 and Lorenz and Markesinis (1993) 56 MLR 558 ff). CASES ON PRODUCT LIABILITY Case 48 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 26 NOVEMBER 1968 BGHZ 51, 91 = NJW 1969, 269 (with approving notes by Diederichsen = JZ 1969, 387 and Deutsch = VersR 1969, 155), Fowl Pest Facts On 19 November 1963 the claimant, who ran a chicken farm, had her chickens inoculated against fowl pest by the vet, Dr H. A few days later fowl pest broke out. More than 4,000 chickens died and over 100 had to be slaughtered. The claimant claimed compensation for the damage from the defendants, vaccine manufacturers, whose vaccine XY had been used by the vet. This he (the vet) acquired from the defendants in 500 cm bottles at the beginning of November 1963. The bottles came from batch ALD 210, which the defendant company had had inspected on 18 October 1963 at

440  Appendix 2 the public Paul-Ehrlich Institute in Frankfurt-am-Main; and the batch had been released by them for public use. The defendant had subsequently and in the course of its business poured the contents into receptacles normally used in commerce. As regards receptacles with lower than 500 cm capacity that is done by airtight closure under negative pressure; larger bottles were filled by the defendants ‘openly’ but in a closed room under ultraviolet radiation. When a few days later, on 22 November 1963, Dr H inoculated the chickens at R’s farm, fowl pest broke out there. At about this time fowl pest also broke out in three other poultry farms in Württemberg which had had their chickens inoculated with the defendant ­company’s vaccine from batch ALD 210. When the Stuttgart Veterinary Inspection Officer had several bottles of that batch inspected by the Federal Research Institute for virus diseases in animals, there were found in some bottles bacterial impurities and still active ND (Newcastle Disease) viruses, which had not been sufficiently immunised. Moreover, the Paul-Ehrlich Institute established that some of the bottles sent to it for inspection were not sterile and ND virus could be detected in them. The defendant company disputed the claim that the outbreak of fowl pest was to be traced to the use of its vaccine; and in any case the defective sterility of the bottles was not the cause. For this it invoked the opinion supplied to it by Dr E of the Federal Research Institute for Virus Diseases. It put forward evidence exonerating it from liability for its workers in and the director of its virus section. The LG and the OLG Düsseldorf declared the claim well founded. The defendant company’s appeal was unsuccessful for the following. Reasons The OLG started by finding that the vaccine supplied to Dr H was contaminated by bacteria, and that the outbreak of fowl pest was to be traced to it. Even the defendant company’s expert, Professor Dr E, could not exclude the possibility that the contamination had arisen through carelessness on the part of persons employed by the defendant company in the bottling. For their fault the defendant company must be liable under § 278 BGB to the vet, the buyer of the vaccine. He, however, was entitled to be compensated for the damage done to the claimant. Since he had assigned his claim for compensation to the claimant, the action was well founded. I. The principles governing the claims for damage suffered by a third person (Drittschadensliquidation) cannot be applied to the present case. 1. In principle, the only person who can claim compensation for damage under a contract is the one to whom the damage occurred in fact and who, in law, has to bear it. If the damage occurs to a third party, the doer of it is liable to him – apart from certain exceptions – only in delict. This distinction between the more favourable liability in contract and the more restricted liability for delict is imbedded in the existing system of liability law and is not a mere theoretical dogma. Only in special cases have the courts admitted exceptions, namely where special legal relations between the creditor under the contract and the beneficiary of the protected interest cause the interest to be ‘shifted’ on to the third party, so that as a matter of law the damage is done to him, and not to the creditor. From it the doer can derive no benefit to the third party’s detriment: he must make good to the creditor the damage to the third party. That applies – apart from the rare cases of responsibility for risks (BGHZ 40, 91, 100) – where the creditor has contracted for the third party’s account (BGHZ 25, 250, 258), or where the thing that the debtor promised to take care of belonged not to the creditor but to the third party (BGHZ 15, 224).

Appendix 2  441 (a) This is no such exceptional case. No ‘union of interests’ between the vet (who made the contract) and the third party (ie, the claimant) is created by indirect agency. Dr H had not bought the vaccine to the order or for the benefit of the claimant. When he ordered and obtained it from the defendant company he did not yet know for which farmer he would use it. A vet invariably buys his medicines for himself like a contractor in respect of his materials and not for his patients or employers, even if he requires them to perform an order already given to him. Moreover, this is not one of the cases where the thing placed in the debtor’s care belonged not to the creditor but to a third party. Of course Dr H may have had imposed on him a ‘duty of care’ (Obhutspflicht) concerning the claimant’s chickens. But it is a condition for claiming for damage suffered by a third party (Drittschadensliquidation) that the duty of care exists between creditor and debtor (BGHZ 40, 101). That was not the case here. (b) The OLG also acts on these principles. It is also aware that in principle the manufacturer and supplier of a thing which has been sold again to a third party does not need, merely on the basis of the contract of sale, to make good damage occurring to a third party (BGHZ 40, 104, 105). All the same it believed that in the present case it could permit the claim in respect of the damage suffered by the third party. Here the faultless condition of the vaccine was of special interest to the claimant, on whose chickens it was to be used. The vet could not check the condition of the vaccine, but had to rely on careful manufacture by the defendant company. The latter must therefore have proceeded on the assumption that a duty of faultless delivery rested on it in favour not merely of the vet but also of whomever happened to keep chickens. (c) These considerations do not justify treating this as a case for claiming damage as suffered by a third party (Drittschadensliquidation). Already in its judgment (BGHZ 40, 90) the BGH has emphasised that a contract of sale cannot be interpreted in accordance with the requirement of good faith so as to afford a basis for compensation to a third party injured through defects in the thing bought. In that decision it departed from the judgment of the RG in RGZ 170, 246. The OLG has also established no concrete basis for holding that the defendant company had been ready and willing to afford to the other party to the contract (namely the vet) claims to compensation more extensive than under the statutory law of sale. Moreover, it is a condition of claiming for damage suffered by a third party that only one damage shall have taken place, which would have been suffered by the creditor unless the protected legal interest was that of a third party. There can be no question here of ‘shifting’ the damage. It occurred here to the claimant in fact as well as in law, whereas in a genuine ‘shifting’ of damage it occurs to the creditor in fact, though not in law. It could not occur either to the vet or to the chicken farmer, but only the latter, and not – which is the decisive point – to him instead of the vet. The cases of claims for damage suffered by a third party (Drittschadensliquidation), so far admitted by the courts, cannot be extended to cover a case like the present. Otherwise the manufacturer and supplier of necessaries and luxuries, of toiletries and medicines, etc would have to make good damage to the ultimate user not only in delict but also on the contract of sale. For he also knows, like this buyer, the wholesaler, intermediate, and retail dealers, that any damage would show itself in the hands not of the dealer, but of the ultimate recipient. This does not lead to the conclusion, however, that the producer is liable in contract to the ultimate recipient. The question how these interests are to be protected cannot, therefore, be solved by allowing a claim for damage suffered by a third party. 2. The OLG also based its opinion on the principle that a duty of care on the part of the manufacturer towards the third party arises from the meaning and purpose of the contract. This might be interpreted in the sense that the OLG is willing to allow the claimant a claim

442  Appendix 2 to compensation on a contract with protective effects for third parties. That consequence also cannot be approved. (a) The BGH has, indeed, allowed claims to compensation on this legal theory and under specified circumstances to a third person not a party to a contract (BGHZ 33, 247, 249 and 49, 350, 351 with references). Those principles, however, cannot be called in aid here. In no way can everyone who has suffered damage through a failure of care on the part of a debtor derive his own claim to compensation from the contract between creditor and debtor (Senate judgment of 30 April 1968 – VI ZR 29/67 NJW 1968, 1323). The Senate in its judgment of 18 June 1968 (VI ZR 120/67 NJW 1968, 1929) indicated afresh that the law distinguishes between persons suffering direct and indirect damage and that liability under a contract is, on principle, bound up with the bond that binds debtor to creditor (cf also BGH judgment of 9 October 1968 – VIII ZR 173/66). Otherwise there is a danger that the debtor can no longer calculate the risk that he undertakes in making a contract. Hence it would no longer accord with the principle of good faith, out of which the contract with protective effect for third parties has been developed, for the debtor to be liable for such extensive consequences of his breach of contract. That can be admitted only if the creditor shares, so to say, in the responsibility for the welfare of the third party, because damage to the latter affects him also, since he is under a duty to afford him care and protection. It is this internal relation between creditor and the third party, ordinarily marked by legal relations of a personal character, and not the relation between the parties to the contract, that is the reason for the protection of the third party. Such a relation does not, as a rule, exist in a contract of sale or a contract for doing a job. (b) Moreover, in the present case there are no such close relations between the creditor (the vet) and his clients. II. If therefore the judgment under attack cannot be supported by the foregoing reasoning, we must enquire whether it can be upheld on other grounds. The claimant not only based her action on claims derived from the contract made by Dr H with the defendant company, but also invoked §§ 823 ff BGB. In addition, she prayed in aid the question exhaustively argued in recent times, above all at the Deutscher Juristentag of 1968, concerning the direct liability of the manufacturer of goods to the ultimate user (‘product liability’). 1. Even the advocates of an extensive liability of the producer start as a rule from the proposition that it can be based neither on a claim for damage suffered by a third party (Drittschadensliquidation) nor on a contract with protective effects for third parties. They prefer to provide the user with his own claim for damages, not one dependent on the contract between the manufacturer and buyer, and not brought against the manufacturer as an ‘action directe’ – like the claim for damages based on §§ 823 ff BGB. But they consider this claim in delict no longer satisfactory or appropriate, because it does not, as a rule, cover purely economic damage and, above all, because it leaves open to the producer the possibility of exonerating himself, especially where there is a mere slip in the productive process. The case to be considered here affords no occasion for examining the question whether we should adhere to the rule developed by the courts that the producer can invoke § 831 BGB when there are defects in the actual production … and that such defects raise no presumption of fault against the manufacturer (Senate judgment of 21 April 1956 – VI ZR 36/55). For it is not established here that it was because the defendant company’s staff had made a mistake that the vaccine contained reactivated viruses. That may also be due to causes that are inherent in the company’s methods of production, and in particular in the method of bottling. In the present case there is no need to adopt a comprehensive attitude to the problems of products liability. Here, only the following considerations apply.

Appendix 2  443 (a) The claim in the action could be granted without further discussion if the view of Diederichsen in his Die Haftung des Warenherstellers (1967) could be followed, that the manufacturer must be liable for every kind of defects in the product without reference to fault, as in the liability for risks or results (‘strict liability’). He believes that this can be derived from the existing law by ‘considerations of legal sociology or legal theory’. It is however doubtful whether his standpoint can be supported on grounds of legal policy and, at any rate, liability without fault is incompatible with the present law of (civil) liability. To extend the liability for risks regulated in particular enactments – mostly subject to different ceilings – to products liability is forbidden to judges. It is rather for the legislator to decide whether or how far a stronger objective liability should be imposed on the manufacturer. (b) Nor is it legally possible – apart from special cases – to afford to the ultimate recipient a direct claim for damages on the assumption that contract of warranty was concluded directly, albeit tacitly, between him and the producer. The fact that the producer allows his goods to be distributed as his invention, that is to say with his label, in original packaging, with his trade name or trademark, and so on, cannot, as a rule, be considered as a declaration that he intends to make himself responsible to users for careful manufacture (cf RGZ 81, 1). Normally, even the advertisement of branded goods which are advertised with particular emphasis on the ultimate user, contains no indication of any willingness to be liable for any defects in the goods (BGHZ 48, 118, 122–23). Moreover, that cannot be assumed even when the appreciably wider question is asked whether the manufacturer is willing to be directly liable to the ultimate user of his product. (c) There is also no question of a claim for damages being accorded for a breach of alleged duties of protection consequent on a ‘social contract’. No business relations exist between manufacturer and recipient nor are they intended to be started and, eventually, to be concluded. The relations which certainly exist on the sociological plane have not enough legal weight for claims for liability to be made from a special legal relation. That applies also to Weimer’s attempt to derive a producer’s liability from the general rule in § 242 BGB. 2. Special consideration is merited by the idea that recognition should be given to a special quasi-contractual relation between manufacturer and user, resting on statute and developed from the notion of confidence. In fact the relations that have come into existence between the buyer of a dangerous product and its manufacturer, before the occurrence of the damage, would seem to be closer than those that bring the latter into relations with ‘everyman’ when – and not before – he is actually injured. As regards the claims for compensation of a buyer, on the other hand, it should be considered whether they also arise from contract law if he bought the goods not directly from the manufacturer but through a dealer. (a) Starting from the special legal relationship between manufacturer and acquirer of goods, Lorenz at the Karlsruher Forum 1963 was the first to state the opinion that the manufacturer must be liable under § 122 BGB to answer for the confidence in his product, strengthened by advertising, that he has awakened in its users. Those ideas were mentioned by the Eighth Civil Senate of the BGH at the close of its judgment of 13 July 1963 (BGHZ 40, 91, 108), but without committing itself to any position. In its judgment BGHZ 48, 118, it declined to accept advertisement as a possible source of liability. In the struggles for the all-important customer (König Kunde), advertisements have become more and more extensive and more and more significant from a business point of view. This, however, does not yet mean that they have acquired the meaning of a promise of legal liability. Moreover, no reasonable user understands it to be so: and Lorenz has not followed up his idea.

444  Appendix 2 (b) Lorenz’s basic idea provided the foundation for the attempts to derive the manufacturer’s liability from a duty to satisfy the confidence placed by the user and made the basis for a claim corresponding to the legal principles developed for culpa in contrahendo. [The culpa in contrahendo was previously pure judge-made law and was only codified after the Schuldrechtsreform of 2002 in §§ 241, 311 II, III BGB.] It is however doubtful whether these considerations can hold water, so as to afford the user a claim for damages which, like the claim in delict, cannot be excluded automatically, but on the other hand would not be threatened by exoneration under § 831 BGB. The Senate has already, in its judgment of 21 March 1967 (VI ZR 164/65) reacted against the attempts to base the liability of a third person, not a party to a supposed contract, on the fact that his confidence was sought; and it emphasised that they would break, with dire consequences, through the boundary drawn between liability based on a contractual obligation and that arising from delict. Whether the doubt there expressed against an extension of liability for ‘positive breach of contract’ (‘positive Vertragsverletzung’) tells also against a subjection of the producer to a liability on the analogy of contractual liability need not be finally decided in this case. [The positive Forderungsverletzung or positive Vertragsverletzung was previously pure judge-made law and got only codified after the Schuldrechtsreform of 2002 in §§ 241, 280 BGB.] Nor need the question be gone into of how such a quasi-contractual claim should be afforded to a person injured by the product if he did not buy it but damage occurred through its use by himself or another person. In the case now to be decided there is no question of a number of legally successive sale contracts in which the seller, in fact, is often the mere ‘distributor’ of the manufacturer in which case a breaking of the veil suggests itself. Here between the claimant and the defendant company stood a vet, who had alone to decide which vaccine to use. The claimant had placed confidence in him and not in any advertisement. She was not, herself, in a position to buy the vaccine directly or in the market: the defendant company could deliver it only to the vet and only he might use it … That, of itself, excludes the idea that a quasi-contractual relation existed between the parties. The claimant was not a ‘consumer’ of the vaccine, nor even a ‘user’ of it, but, from a legal point of view, ‘only’ a sufferer of damage. As such she is limited to her claim in delict. III. According to the OLG’s finding of fact the conditions of liability under § 823 BGB are fulfilled. The vaccine supplied by the defendant company was defective and the cause of the disease to the chickens. Even if, as explained above, the rules of contract law are not applicable, nevertheless the starting point must be that the defendant company has committed a fault. If anyone when using an industrial product for its declared purpose suffers injury in one of the legal interests protected by § 823 I BGB, through the defective manufacture of the product, it is for the manufacturer to explain the antecedents that caused the defect and thereby to show that he was not to blame for it. 1. It is not in question that even in ‘product liability’ the injured party must prove that the damage was caused by a defect in the product. The claimant had therefore to show that the fowl pest broke out among her chickens because the vaccine originated with the defendant company and contained active viruses when delivered. That proof was considered by the OLG to have been furnished. [An explanation followed.] 2. The OLG, having to ascertain why the vaccine contained live viruses, started from the fact that both the Paul-Ehrlich Institute and the Federal Research Institute found bacteria in the bottles examined by them. It based its conclusions in essence on

Appendix 2  445 Professor Dr E’s opinion. He declared it highly probable that the bacteria had found their way into the bottles at the manual pouring of the vaccine from the large containers into the bottles. It has been observed on various occasions that viruses which – as here – have been killed by the addition of formaldehyde can, under certain conditions, become reactivated. It was therefore possible that the bacteria here had reactivated the virus. On the basis of these explanations of the expert, the OLG believed it could find that the contamination of the bottles by bacteria was the cause of reactivation. It pointed out also that no damage arose from the part of the batch that was not contaminated by bacteria, whereas that was the case with the bottles used by Dr H and in the district of Heilbronn, and in which the bacteria were found. Even Dr E held it possible that the contamination of the vaccine was caused by ‘human error’ on the part of one of the persons employed by the defendant company in bottling the vaccine. 3. The appellant attacked this conclusion of the OLG, but without success. It is indeed correct that the OLG considered no fault of the defendant company itself as proved. It accepted that it was probably only an employee that was to blame for the damage. A liability of the defendant company, cannot, as we have seen, be established by applying the law of contract, as set out in § 278 BGB. That does not, however, necessitate sending the dispute back to the judge of fact. For it would still be for the defendant company to exonerate itself even if the claimant can rely on § 823 BGB. (aa) This results from the fact that the claimant’s claim for compensation is also based on § 823 II BGB. For the defendant company, by delivering the dangerous bottles of vaccine infringed a protective enactment. This vaccine, a medicine in the sense of the Medicines Act of 16 May 1961 (§ 3 III AMG), was capable of producing in the chickens injurious, even fatal, effects. § 6 AMG prohibits the putting of such vaccines into circulation. That provision – like § 3 Lebensmittelgesetz (cf RGZ 170, 155, 156 on § 4 LebMG) which applies to foods dangerous to health – constitutes an enactment for the protection of endangered human beings or animals. If, however, an infringement of a protective enactment is proved, it is presumed to be the result of fault. The infringer therefore must produce facts sufficient to disprove his fault (Senate judgment of 12 March 1968 – VI ZR 178/66). The owner of the business did not produce that proof so long as a possible cause, falling within the scope of his responsibility and which might point to fault remained unelucidated (Senate judgments of 3 January 1961 – VI ZR 67/60 and 4 April 1967 – VI ZR 98/65). (bb) This rule governing the burden of proof would, however, also apply if the claimant could here base a claim for damages only on § 823 I BGB. In that case also it would be for the defendant to exonerate itself. It is true that the injured party who relies on § 823 I BGB will have to allege and if necessary prove not only the causal connection between his damage and the conduct of the doer, but also his fault (BGHZ 24, 21, 29). However, the possibility of proving the subjective conditions depends appreciably on how far the injured party can elucidate the detailed course of events. That is however especially difficult when it relates to antecedents which played a part in the business of manufacturing the products. The courts for a long time came to the help of the injured party by contenting themselves with proof of a chain of causation, which, according to human experience, indicates an organisational fault in the manufacturer. All the same, one cannot stop at this point in considering claims for damages for ‘product liability’. All too often, the owner of a business can show that the defect in the product might have been caused in a way that

446  Appendix 2 does not point to his fault – evidence which generally relies on activities in his business and which is difficult for the injured party to disprove. In consequence, when damage has arisen within the range of the manufacturer’s business risks, he cannot be regarded as exonerated merely because he points out that the defect in the product might have arisen without any organisational fault of his. This is required in the area of ‘product liability’ in order to protect the interests of the injured party – whether ultimate acquirer, user, or third party; on the other hand, the interests of the producer allow him to demand that he may prove his lack of fault. This rule of evidence indeed only operates as soon as the injured party has proved that his damage falls within the scope of the manufacturer’s organisation and risks, and indeed is satisfied by the existence of an objective defect, or of unbusiness-like conduct. This proof is required of the injured party even when he sues the doer of damage for breach of protective and subsidiary duties arising from a contract or the negotiations for one (Senate judgments of 16 September 1961 – VI ZR 92/61 and 18 January 1966 – VI ZR 184/64). It is the same if he claims against the producer for breach of his duty of care. However, once he has provided this evidence, the producer is better able to explain the facts or to bear the consequences of being unable to offer an explanation. He surveys the field of production, determines and organises the manufacturing process and the control of delivering the finished products. The size of the business, its complicated, departmentalised organisation, its involved technical, chemical, or biological processes and the like make it practically impossible for the injured party to ascertain the cause of the defect. He is therefore unable to lay the facts before the judge in such a way that he can decide with certainty whether the management is to be blamed for neglect or whether it is a case of a mistake in manufacture for which a workman is at fault, or a single breakdown that may happen at any time, or defect in development that was unforeseeable in the existing state of technology or science. But if the unknown cause lies within the scope of the producer, it is also within the scope of his risks. In that case it is appropriate and expected of him that the risk of not being able to prove his innocence should lie with him. Such rules of evidence have always been applied to contractual or quasi-contractual relations of a special legal character between injured party (creditor) and doer of damage (debtor) (BGHZ 48, 310, 313). No obvious reason can be given why they should not also apply to delict, if the reasons for them apply. In certain connections § 831 BGB already imposes on the employer the proof of exoneration – the same applies to liability cases under §§ 832, 833, 834 BGB, and above all to §§ 836 ff BGB. Here, indeed, the law requires a person damaged through the collapse of a building to prove that the damage was ‘the consequence of defective erection or defective maintenance’, but lays on the possessor etc the burden of proving that he had done everything to avoid the dangers that could attach to his building. The reversal of the burden of allegation and proof ordered in these provisions does not always proceed from a presumption of fault in the doer of damage. It rests in the main on the thought that the doer is in a better position than the injured party to throw light on the events relevant to the charge of negligence, so that it is just to impose on him the risk of being unable to do so. The Senate has already in its judgment of 1 April 1953 (VI ZR 77/52) indicated that the claimant cannot be required to prove – as a rule an almost impossible task – that the thing that caused the damage came into circulation through the fault of the owner of the business or his agents. Above all, the Senate has already in its judgment of 17 October 1967 (VI ZR 70/66) declared that it is for the

Appendix 2  447 producer to exonerate himself, if the injured party can give no detailed information about the management’s blameable breaches of duty. The modern development of production, which is distributed among persons or machines that are hard to identify at a subsequent stage and rests on finishing processes capable of being inspected and controlled only by specialists, demands a development of the law of evidence in the direction already indicated in § 836 BGB … In any case – as with the recognised shifting of the burden of proof for ‘positive breach of contract’ – it always depends on the interests at stake in the groups of cases from time to time under consideration. The question whether the assumption of the risk of proof can be imputed in the case of the owner of a small business, where the manufacturing processes can be easily surveyed and examined (family and one-man businesses, agricultural producers, and the like), need not be considered here. In cases of the present kind it is in any case for the manufacturer to exonerate himself. 4. The defendant company has not furnished that proof of exoneration. (a) According to Professor Dr E’s opinion submitted by the defendant company, it is possible that carelessness on the part of someone concerned with the bottling led to the contamination of the bottles. He considered the process of filling containers over 500 ccm by manual pouring and not, as happens with the smaller containers, by means of an apparatus as an ‘older method’ which was indeed ‘tolerable’, but needing improvement. For this manual pouring there must at least be constructed a correspondingly superior ‘clean work bench’ with UV radiation. In addition the ‘modest apparatus outfit’ of the business must be increased by installing dry sterilisers, so that the larger containers could be better sterilised, above all without long interruption. He also pointed out that in the process of autoclave without a temperature and pressure gauge no control could be exercised over whether the high temperature needed for the sterilisation under pressure was really attained. Moreover, he recommended the use of tubes showing changes of colour. He also advised that the filling-room be examined for its germ content from time to time by exposing dishes of agar or blood. The expert then was of opinion that in spite of these suggestions for improvement, the manufacturing methods of the defendant company were ‘not unsatisfactory’ and fulfilled the ‘normal requirements’. Moreover, the method of bottling guaranteed a sufficient degree of security, even though it needed to be improved. Finally, he was of opinion that the defendant company had not carelessly neglected any of the necessary precautions. The bacterial contamination could indeed have been caused by defective observance of the required precautions, but could have occurred even if they had been observed. (b) The expert’s view of the required degree of care cannot be approved. Even he starts by saying that in the manufacture of vaccines in which the effect of living viruses must be immunised ‘the highest possible security’ must be required. For that very reason vaccine works are subjected to strict public supervision (§ 10 AMG together with the provisions of Land law still operative under § 5). The defects mentioned by him in the equipment of the defendant company’s business, above all as regards manual bottling, are in conflict with a finding that the management were not guilty of careless conduct. The improvements recommended by him were not at all far-fetched and imposed on the company requirements that were neither technically nor financially excessive. The possibility cannot be excluded that those additional precautions would have averted the bottling of dangerous vaccine.

448  Appendix 2 Case 49 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 7 JUNE 1988 BGHZ 104, 323 = NJW 1988, 2611 = JZ 1988, 966 Facts The defendants manufacture carbonated soft drinks which they bottle in reusable bottles manufactured by DB and Co. and which they market, inter alia, under the trade mark ‘Fri’. The parents of the claimant, who, at the time of the accident was three years old, purchased a crate of lemonade produced by the defendants on 5 September 1981 from the drinks retailer F. Two days later, on 7 September 1981, when the claimant took one of the bottles out of the crate in the basement of his parents’ house, it exploded. The claimant lost his right eye and part of the sight in his left eye as a result of injuries received from glass splinters. The remains of the glass were not preserved after the accident. The claimant claimed damages for part of his pain and suffering from the defendants in the amount of DM 6,000. In support of his case he claimed that as manufacturers, the defendants are responsible for an injury to his health which occurred when one of their products was being used for the purposes for which it was intended. He could not be expected to prove that the defect in the bottle occurred after it had been marketed by the defendants, since this would be impossible for him in practice. The numerous other comparable cases in which bottles containing products manufactured by the defendants or other producers of mineral water products had exploded showed that this accident did not merely involve a ‘stray incident’. Rather, they demonstrated that technical precautions which could have been taken in the bottling process were not in fact taken, even though the dangers must have been known. The defendants contested the claimant’s description of the accident. In their view the bottle of lemonade did not explode, but rather it either fell out of the claimant’s hands or was banged against another object when it was lifted out of the crate. The bottle of lemonade was free from defects when it left the defendants’ business. This was guaranteed by the technical installations and organisation of the defendants’ business. The fact that the cause of the accident could not be clarified since the remains of the bottle were not preserved, was a matter for which the claimant must take responsibility. The LG gave judgment for the claimant. The OLG Frankfurt rejected the claim, and allowed the defendants’ appeal on the basis that the claimant had no claims against the defendants arising from the accident. The claimant’s application to the BGH was successful and led to the quashing of the judgment and the remittance of the case to the lower court for decision. Reasons I. The OLG considers that it is not proven that the lemonade bottle was already defective when it was marketed by the defendants. In the view of the OLG, the lack of proof falls as a burden upon the claimant. The essential findings of that court are as follows: the reversal of the burden of proof developed by the case law for product liability did not extend either to the defective nature of the product or to the proof of a causal link between the defect and the damage which gives rise to liability, but concerns merely the question of fault. There is also no possibility of a lessening of the burden of proof using the rules governing prima facie proof. It is true that there is no question of inappropriate handling of the product by

Appendix 2  449 the claimant. According to the evidence given by the expert witness Dr Sch, what caused the accident was excessive pressure within the bottle as a result of it being insufficiently filled, or an existing crack in the glass which led to the bursting of the bottle as a result of a small increase in pressure caused by the movement of the contents as it was removed from the crate. However, it could not be excluded that the damage to the bottle such as might here be considered to be the causal factor for the explosion of the bottle could have been caused only after the bottle had been marketed by the defendant. Consequently, the claimant must incur the typical difficulties regarding proof which are faced by a consumer who is injured by a product which has been passed along a rather lengthy chain of manufacture and distribution. A lessening of the burden of proof can be of no assistance to the victim as regards evidence of the causal connection. That would lead to a form of strict liability for the manufacturer which is not recognised under the present law, since it would be practically impossible for the defendant to provide the necessary proof. II. The arguments put forward by the OLG are not, as a matter of law, in all respects convincing. 1. The OLG clearly regards the liability of the defendants as being feasible where it could be said that both possible causes which the expert witness said might explain the explosion of the lemonade bottle – namely excessive pressure inside the bottle as a result of it being insufficiently filled or a crack in the glass – were already present at the time when the bottle was marketed by the defendant. In reaching that conclusion, the OLG placed limits which were too restrictive upon recovery. At the present time, it cannot be excluded that the defendants as the manufacturers might still be responsible for the explosion of the lemonade bottle, including an explosion of the violence which caused the severe injuries suffered by the claimant in this case, even where the direct cause of the accident was a hairline crack which only appeared in the glass after the bottle had been put into the marketing chain leading to the claimant by the defendant. In this case there would be no question of considering the issue which the OLG took to be central, namely the burden of proving whether the defect in question was present or absent at the time when the bottle left the defendant’s business. (a) As the manufacturers of carbonated lemonade, the defendants are subject to a duty under the principles of the law of tort to ensure, within the limits of what is technically possible and economically reasonable, that consumers do not suffer any impairment of their health as a consequence of their products. This duty covers not just the concern that the drink which they manufactured should be fit for consumption; it also makes the defendants responsible for ensuring that the containers in which their lemonade is marketed do not cause injuries, whether to the consumer or to other persons concerned with the transport of the product [references omitted]. This applies also to the danger of the bursting of the glass bottle chosen by the defendants for their product as a consequence of a defect in the material or of excessive pressure which can lead – as the present case shows – to very serious injuries. Those types of accidents may be rare, even when measured against the high turnover in drinks and the common usage of that type of lemonade bottle – even in reusable containers. Still, as the experience of the court and the evidence of the expert witness demonstrate, they do occur and have long been known to the drinks industry as a specific risk inherent in such products. It was the task of the defendants to deal with this risk within the limits of what was technically possible and financially reasonable. The responsibility of the defendants is not undermined by the fact that in addition to used bottles which it prepared for refilling, it

450  Appendix 2 also used brand new reusable glass bottles manufactured by DB and Co for its lemonade. Even with regard to these new bottles, they assumed responsibility for the product when they made use of them; consequently it was for the defendants to ensure that when the bottles were delivered they would withstand the demands of being transported and of being used in the normal way by the purchaser. The defendants were also not solely a bottling concern in respect of which the responsibility for the use of the bottles might have been differently evaluated [reference omitted]. The defendants decided how the drink would be put together, specifying in particular the level of carbonation which in turn determined the degree of pressure in the interior of the bottle; they also specified the type, get up, and usage of the chosen packaging material. Consequently, the defendants are not simply responsible for ensuring that this material and the level of internal pressure to which the bottles were subject once filled were appropriate, but also for ensuring that the composition of the bottles was satisfactory bearing in mind the demands which could be expected to be placed upon them in the context of distribution and consumption. The types of defects which in the view of the expert witness were likely to be responsible for the eye injuries suffered by the claimant are among those which it is for the defendant, if possible, to eliminate using appropriate methods of production and control. (b) In this context the defendants must take into account that even if the bottles were not damaged when they left the manufacturer’s sphere of control, they may [subsequently] be damaged and left in a state in which they might explode on the way to the consumer. For the product must not only be capable of withstanding impacts arising in the context of normal and intended usage such as knocks, pressures, heat, cold, etc; such bottles must also be capable of standing up to all types of foreseeable and normal usage (see OLG Frankfurt VersR 1985, 890; Borer, Produkthaftung: Der Fehlerbegriff nach deutschem, amerikanischem und europäischem Recht (1986) 26). Of course, it cannot be expected that the manufacturer should take precautions against all types of instances in which its bottles of drink are handled carelessly. The limits of the type of care which the manufacturer would be expected to demonstrate are exceeded in circumstances where the inappropriate handling of the bottle deviates from what is normally foreseeable. However, the defendants must take into account not only the distance which the bottle must travel before it reaches the consumer and the length of time between production and consumption, all of which means that there are uncertainties as to how the bottles will be handled, but also the [possibility of a] great variety of different consumers coming into contact with the bottles. The defendants may not rely upon the fact that the bottles will be sensibly and gently handled during transport and storage. (c) Of course, the defendants cannot be reproached for having used reusable glass bottles in the first place for bottling their lemonade, even though there remains a residual risk of injury from such bottles, in particular where they are not handled carefully by distributors or consumers. In principle, the defendants are entitled to expect the users, themselves, to take care to avoid injury from glass breakages, because these are inherent risks in the material itself. The same cannot be said of the risks of an explosive breakage of the bottle such as occurred in this case. The average consumer does not anticipate such a risk; even an appropriate warning on the bottle would not change the expectations of consumers in this respect in any lasting way. The consumer cannot in general protect himself against the bottle through acting more carefully where it has already been damaged or where it is subject to excessive internal pressure. The serious injuries which are in particular likely

Appendix 2  451 to occur if there is an explosive breakage of the glass are completely disproportionate to the obligations in respect of the product which the consumer can be expected to assume when handling it as an aspect of the general risks of life. It is true that there is much to be said, in the light of the information put forward so far in this case, for the fact that, having regard to the great number of reusable bottles with the same features used by manufacturers of carbonated drinks, there are extremely few accidents caused by exploding bottles which have suffered prior damage. Consequently, there are no grounds for raising legal doubts about the admissibility of using such bottles on the grounds of any general level of risk. On the other hand, the specific risks of an explosive breakage cannot for these reasons simply be ignored by the manufacturer; the consequences of such an accident are too serious for this to be the case. On the contrary, the manufacturer of drinks must be regarded as subject to an obligation within the realms of what is economically reasonable and technically possible to eliminate such specific risks leading to serious injuries in so far as is possible. The type of measures which can be expected of the manufacturer include introducing a significant reduction in the level of carbonation, as was suggested by the expert witness in this case, using a type of bottle which is not as dangerous when it breaks, making use of caps which automatically release excessive pressure, and other appropriate measures. (d) In this case, it can be concluded from the above that the OLG must first examine the question of whether and to what extent the defendants could be reasonably expected, at the relevant time when the bottle was put on the market, to take these types of precautions against their bottles exploding where the glass was damaged, even if only when it was being transported to the consumer. In judging what it is economically reasonable to expect of the manufacturer it is necessary to take into account, inter alia, the customs of consumers and sales potential for a product altered to take into account these matters. However, it must [also] be taken into account that it is the basic safety needs of consumers which are being counterpoised to these economic factors. The burden of going forward with the evidence and of proving that a method of production which eliminates the risk of lemonade bottles exploding is possible and reasonable and of demonstrating that there is a breach of duty on the part of the defendants falls upon the claimant, who is not protected by any easing of the burden in this respect. Should the OLG come to the conclusion that the defendants could have eliminated those types of risks of exploding bottles even at the time of the accident, and that the defendants had negligently closed their minds to this possibility in spite of the risk which had long been known in this branch of industry, then it is clear that the defendants are responsible for the injuries to the claimant even where the bottle exploded not because of excessive pressure because it had not been filled up, but because the glass had been damaged, even during transport to the consumer. 2. It is only where it can be said that the defendants are not subject to a duty to take such precautions with a view to eliminating the risk discussed above at the time when the bottle was put into circulation that it would be relevant, for the purposes of determining whether the defendants are liable, to consider the question which the OLG placed at the centre of its analysis. This [question] was whether, alongside the possibility that it was excessive pressure caused by the bottle having been insufficiently filled (which would certainly be a defect in manufacture on the part of the defendants) the other possible cause of the damage (namely a crack in the glass) should also be regarded as occurring in the defendants’ sphere of production. To put it differently, did the bottle, when it was put on the market, already have the

452  Appendix 2 defect which actually triggered the explosion? However, even in this context the arguments of the OLG are not sustainable. (a) The OLG cannot, without erring in law, exclude the possibility that the lemonade bottle in question was free from defects when it was marketed by the defendants. (aa) The applicants’ submissions to this court seek to rely, without avail, upon the rules of prima facie proof in order to demonstrate that the defect which led to the breakage of the bottle was already present when the product was marketed. The claimant argues that it is possible to see that the occurrence of the loss is typical – a feature which it must display if there is to be an easing of the burden of proof and which is in principle necessary for the purposes of demonstrating a defect in the product [references omitted] – from the fact that there have been repeated similar accidents in the past involving lemonade bottles marketed by the defendants, as well as lemonade and mineral water bottles manufactured by others, but despite this the defendants had not taken any care to ensure that adequate controls were placed upon the bottles which it put on the market. Additionally, the claimant argues that it has satisfied the conditions of prima facie proof because the defendants have neither identified nor proven a serious possibility of the lemonade bottle suffering damage after it left their business premises. As this court has repeatedly stated [references omitted], the rules on prima facie proof are of no assistance where it cannot be excluded that the condition which caused the danger only arose after the product left the manufacturer’s business premises. There is nothing to counter the arguments put forward by the OLG that it could not be excluded that the damage was caused to the bottle after it had been finally marketed by the defendants. There remains the possibility that a third party for whom the manufacturer is not ­responsible – such as a distributor or a retailer – damaged the lemonade bottle by handling it incorrectly. (bb) Even the arguments led by the claimant in his appeal whereby the damaging occurrence resulted in the product destroying itself so that the reasons for the difficulties in proving the case were the responsibility of the defendants do not justify allowing the modifications in the burden of proof sought by the claimant. It cannot be said that the defendants are frustrating the claimant’s attempts to prove his case because it cannot be excluded that it was not the defendants but a third party who was responsible for the bursting of the bottle and consequent destruction of the means of proof. (cc) The claimant likewise derives no assistance from the reversal of the burden of proof developed in case law of the BGH in particular for cases of medical malpractice involving gross negligence in the treatment process. This case law is based on the proposition that the difficulties experienced by the claimant in clarifying exactly what happened during the treatment process which result from the error in treatment can be traced back to the fact that the range of possible causes for the claimant’s misfortune is either widened or displaced because of the particular likelihood that the error in question would cause loss and to the fact that the failure of the treatment is especially likely as a consequence of the serious medical error [references omitted]. The situation here is not comparable to such a serious error in treatment. The re-use of used lemonade bottles without adequate controls against prior damage to the glass does not in itself represent an elementary error which on these grounds alone would justify an easing of evidentiary difficulties including potentially a shifting of the burden of proof. For it was established by the OLG that the defendants screened the bottles by putting them under an initial pressure of 6.0 bar.

Appendix 2  453 (b) It is crucial to determine in this case which party is burdened with the consequences of the fact that the exact cause of the defect and the point at which it arose remain unclarified, and in this context it is correct to adopt the starting point of the OLG, namely that it is in principle the task of the claimant not only to prove the defect in the product and the causal link between the defect and the injury to the claimant, but also to prove that the defect in question arose within the manufacturer’s sphere of control for which the defendants are responsible. The courts have so far always refused to extend the principles of the reversal of the burden of proof regarding the issue of fault to the issue of objective attribution of the injury to the action (‘objektiver Zurechnungszusammenhang’) of loss [references omitted]. A generalised form of reversal of proof would turn the manufacturer’s tortious liability into a form of strict liability (‘Erfolgseinstandshaftung’) for all consequences for which it would be necessary to find some specific legitimation in the substantive law. However, it does not follow from the above – as the OLG assumes – that modifications of the evidentiary burdens (amounting to a reversal of the burden of proof regarding the attribution of a harmful defect in the product to the manufacturer’s sphere of control) are always excluded. The objections to a presumption of a causal link working against the manufacturer will exceptionally become weaker, inter alia, where the defect in the product which has been established is typically one which arises within the manufacturer’s sphere of control. In such cases, and precisely for this reason, the manufacturer (who is required wherever possible to eliminate such risks in order to avoid the infliction of serious loss) is under an obligation, for the sake of the consumer, to assure himself before the product is put on the market that it is free of such defects. This is so where the victim has demonstrated that the manufacturer’s attempts to ensure the ‘safety status’ of the product have been inadequate. In such a case there is no significant hardening of the substantive duties imposed upon the manufacturer if he is required to demonstrate – as it were, in order to ensure the performance of the duty to ensure the ‘safety status’ of the product which he has not so far fulfilled – that the defect occurred only after he had put the product on the market. The manufacturer would be acting in bad faith if, in the context of litigation and in order to exonerate himself, he were able to rely upon the absence of data regarding the state of the products when they were put on the market which should precisely be available by law in order to ensure the substantive protection of the consumer. (aa) By opening up such a possibility of reversing the burden of proof regarding the existence of a causal link in the field of product liability, this court is building on principles which it has already developed regarding the easing of the evidentiary burden within the law of tort. In this context it is not accepted that every breach of duty which leads to the occurrence of damage remaining unexplained will necessarily lead to the imposition of a burden upon the tortfeasor. There is no general rule that the risk of non-clarification will fall upon the party which has caused it as a consequence of a breach of duty [references omitted]. If it were the case that a failure on the part of the defendants to institute adequate controls upon the re-use of bottles in order to ensure that they will not burst merely represented a breach of their general duty of care to manufacture products which can be used without harming the consumer’s health, then there would be no reason to relieve the claimant, as the victim, of the burden of proving that the non-existent controls were responsible for the accident, simply because of this breach on the part of the defendants of a duty of care to which they were subject [reference omitted].

454  Appendix 2 (bb) However, the position is different where the duty on the part of the manufacturer to eliminate the risk is precisely focused on the clarification of an ambiguous state of affairs or an unclarified feature of the product and is a duty which is imposed upon the manufacturer for the protection of the consumer precisely in order to ensure, through a timely and exact investigation and control of the status of the product, that it is free of risks typically found in such products and which can no longer be discovered once the product has been put on the market by the manufacturer. If the manufacturer is in this way required to produce and preserve data on the inquiries made into the safety of the product, because he is not permitted to burden the consumer with the unclarified status of the product and the risks inherent in that status, then this in no way changes the material duties imposed upon the manufacturers, but rather confirms them. This is so where the manufacturer has breached this duty and so carries the burden of proving that the proper provision of data at the time of the inspection of the product would have ensured that it was guaranteed free of defects. To this extent, there is a conflict of interests which is comparable to that arising in those cases in which the doctor is required, for the purposes of protecting his patient, to provide written reports in order to ensure that there is prompt clarification of the patient’s state of health. This clarification serves to avoid dangerous developments and cannot be drawn up belatedly. In these cases, too, this court has imposed upon the doctor who wrongfully fails to ensure that there is such a report the burden of proof in respect of what actually occurred where as a consequence of the breach of duty the clarification of what is in any case a probable causal connection between the negligence of the doctor and the injury to the claimant is made more difficult or impossible and the provision of a report is required precisely because of the increased risk of the procedure undertaken in that particular case [reference omitted]. The general essence of the principle of law underlying these decisions can also be applied exceptionally in respect of the constellations of fact described above concerning product liability in order to ease the burden of proof upon the consumer in respect of the causal connection and can go so far as to shift the burden of proof upon the manufacturer. (cc) The preconditions for the application of the principles regarding the reversal of the burden of proof are fulfilled, having regard to the facts as they are to be understood for the purposes of this appeal hearing. By selling the returnable bottles, the defendants put on the market a product which, because of its particular features (glass containers which are used several times and which are subject to considerable internal gas pressure) reveals an enhanced tendency to cause damage. In respect of such bottles, which may have been used many times over a period of many years, and which may therefore have already been damaged and are therefore likely to explode, the defendants, as the manufacturers, are subject to a duty of examination and report preservation in that they must inspect the state of the glass of every bottle before it is put on the market with a view to ensuring that it is not likely to burst and to ensure that only undamaged bottles leave the manufacturers’ place of business. For if the manufacturer of soft drinks uses not only new bottles but also, as here, re-used bottles, then if there is no report preservation there will be no basis for judging the state of the glass and whether and to what extent it is capable of withstanding not only the high internal gas pressure to which it will be subjected but also the considerable demands which will be placed upon it during its journey to the consumer; these are risks which the manufacturer must take into account. It is precisely because serious injuries to the health of a victim can occur where there has been a prior impairment of the glass leading to a risk of explosion and because the risk of such impairments is greater where the previously used

Appendix 2  455 bottles are re-used, that the manufacturer is subject to a duty to investigate the condition of the bottles which is so far unknown to him, and thereby to provide for himself and for the consumer information regarding the resistance to explosion of the glass. It has been established by the OLG that there was no comprehensive method of identifying the already damaged bottles within the defendant’s firm; in particular, subjecting the bottles for a short period of time to pressure of 6.0 bar was not a sufficient form of control. Consequently, there appears to have been a breach by the defendants of their duty of report preservation with the resulting possibility of a reversal of the burden of proof. It is a precondition for this duty to ensure the ‘safety status’ of the bottles that some form of reliable means of identifying already damaged bottles is both technically possible and economically reasonable for the defendants; while this can be assumed for the purposes of this appeal, it has so far not been adequately clarified. If there was such a duty of examination and report preservation, then if it was a hairline crack in the glass which caused the explosion of the bottle, it is to be assumed until the defendants have proved the contrary that the damage to the bottle existed already before it was put on the market by the defendants and could have been discovered through a proper inspection [reference omitted]. III. The judgment of the OLG must therefore be quashed and the issue returned to the OLG for a further hearing and decision. It is for the OLG to clarify – where necessary after having heard the parties once again and having taken the advice of an expert witness – whether the defendants could have prevented the explosion of the bottles in the hands of the consumer where the glass had been damaged, by taking reasonable measures in the context of the manufacture of the products (the lemonade) or, if this was neither possible nor reasonable, whether it could have ensured through appropriate and reasonable controls and report preservation that damaged bottles were not once more put on the market. In such a case the defendants, as the manufacturers, are required to prove that the absence of such controls and some means of securing the safety status of the products was irrelevant to the loss which occurred. If, however, at that time it could not be demanded of the defendants that they provide such a ‘safety status’, then the burden resulting from the unexplained cause of the damage will fall upon the claimant. Case 50 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 19 NOVEMBER 1991 BGHZ 116, 104 = NJW 1992, 1039 = JZ 1993, 671 Facts After the wedding breakfast held at the second defendant’s restaurant on 29 July 1989, the claimant and some of the 54 guests suffered from salmonella poisoning. Germs of salmonella enteritis were later found not only in the vanilla ice-cream but also in the pudding and custard prepared the previous evening by the first defendant and her daughter, who were found to be carriers of salmonella. The claimant claimed back the DM 3,000 she had paid the second defendant for the wedding feast; from both defendants she claimed damages for pain and suffering in the amount of DM 1,500 and a further DM 800 because the start of the honeymoon was delayed for four days by reason of the illness. The LG held both defendants jointly and severally liable for DM 1,500 as damages for pain and suffering, but rejected the rest of the claim. All parties appealed to the OLG Bamberg, which ordered the second defendant to repay the DM 3,000 paid for the wedding feast,

456  Appendix 2 but rejected the rest of the claim. On the claimant’s appeal the decision rejecting the claim for damages for pain and suffering against the second defendant was vacated. The second defendant’s ancillary appeal was rejected. Reasons A. [Procedural.] B. The court below dismissed the claim for damages for pain and suffering against both defendants. It held that the first defendant was not liable under §§ 823 I, II BGB in conjunction with § 230 Criminal Code and/or § 8 of the Food Act [Lebensmittel- und Bedarfsgegenständegesetz, after 2005 replaced by the Lebensmittel- und Futtermittelgesetzbuch] for serving meals contaminated with salmonella, because the claimant could adduce no proof that the first defendant was at fault. According to the experts’ reports, there were three ways the salmonella could have got into the pudding: from the hands of the salmonella-carriers, from the equipment used in making the pudding or from the ingredients used, especially the eggs. It could be neither proved nor disproved that the salmonella got into the pudding from the hands of the first defendant or her daughter. The rules regarding the burden of proof in cases of product liability did not affect the first defendant since she was not the owner of the restaurant. Nor did they affect the second defendant, since they are inapplicable to the owners of small family businesses, where proof of the subjective elements of delict is not particularly difficult: it is relatively simple to make a pudding and to understand how it is made. Furthermore, the claimant could sue the second defendant on the basis of the contract between them. The second defendant could not be made liable under § 831 BGB, for he had shown that he was free from fault as regards the conduct of his wife and daughter. As against this, the claim that the second defendant return the money paid for the wedding feast was allowed on the basis of § 635 BGB. The second defendant had failed to prove that neither he nor any of those who helped him perform the contract were responsible for the salmonella, for it was possible that his wife or daughter had been salmonella carriers before they started to prepare the pudding, and should therefore have washed their hands more carefully. Although there was nothing wrong with the rest of the meal and only a few of the guests were rendered ill, the entire sum paid could be reclaimed since the feast was to be regarded as a single event. The court below rejected the claim for damages in respect of the lost honeymoon as not representing an economic loss. II. The claimant’s appeal. 1. The claimant’s appeal from the dismissal of his claim for damages for pain and suffering against the second defendant is justified (a), but the court below was right to reject the similar claim against the first defendant (b). (a) The second defendant’s liability. The reasons given by the court below for denying the second defendant’s liability for the immaterial harm suffered by the claimant are not good in law. (aa) In providing food infected with salmonella, the second defendant as owner of the restaurant contributed to the injury to the claimant’s health. Liability under §§ 823 I, 847 BGB [after 2002 the content § 847 BGB can be found in § 253 II BGB] must therefore be considered, as it was by the court below. It is a precondition of liability under these provisions that the defendant be chargeable with some fault. The burden of proof of fault normally

Appendix 2  457 lies on the victim, but in the area of product liability the BGH has developed the ­exceptional principle that if a product is defective when he puts it into circulation the producer must establish and prove by evidence that he was not at fault as regards the defect in the product which harmed the consumer (BGHZ 51, 91 [103 ff] = NJW 1969, 269; BGHZ 80, 186 [196 ff] = NJW 1981, 1603). For the purposes of product liability, the second defendant was unquestionably the producer of the meals prepared in his restaurant, so the application of this principle falls for consideration. This is not a case, to use Brüggemeier’s words (VersR 1983, 116 ff) of ‘transferring the rules of product liability to the providers of services’, for the wedding feast involved much more than the mere provision of services: services were indeed involved, but the main thing was the supply of the meals. When the burden of proof in the area of product liability was first reversed in the so-called ‘Fowl Pest’ case ([case 48] BGHZ 51, 91 = NJW 1969, 269), the BGH took into account the evidentiary difficulty which a claimant normally faces in a suit against a manufacturer. The court based its reversal of the burden of proof on the fact that since the producer oversees the sphere of production and organises the production process and quality control, he is in much the better position (‘näher dran’) to explain what actually happened and to bear the consequences of lack of proof. If the cause of the lack of explanation falls within the producer’s area of responsibility, it seems appropriate and fair under these decisions that he bear the risk of being unable to prove that he was not at fault (BGHZ 51, 91 [105] = NJW 1969, 269; for comparable conflicts of interests, see BGHZ 67, 383 [387] = NJW 1977, 501, etc). (bb) In the ‘Fowl Pest’ case, which certainly involved industrial production, the court deliberately left open the question whether the risk of inability to disprove fault should also be imposed on the owner of a small business – a family operation or one-man concern – where the methods of production are uncomplicated and simple to understand. In its judgment of 30 April 1991 (BGHZ 114, 284 = NJW 1991, 1948 – Aids) the court again declined to decide whether the principle as to proof applies only to industrial mass production, but it did hold it applicable in a case where an infusion solution for use in a hospital became un-sterile either during or after the preparation (BGH NJW 1982, 699), and the Eighteenth Civil Senate of the OLG Frankfurt has applied it in a case, rather like the present, of a gypsy salad infected with salmonella in a restaurant (19 February 1979, VersR 1982, 151). Writers are divided on the question, but by far the majority opinion is that in cases like the present, the burden of proof should be reversed [references omitted]. This court is of the view that there is no compelling reason to exempt small businesses such as personally-run restaurants and cafés from the evidential burden. The underlying idea which gave rise to this reversal of proof in cases of product liability, namely the consumer’s ignorance of how the producer manufactures his products or organises his business, is of general application, whether the business is big or small, the method of production industrial or personal. It is quite true that what happens in a family-run café is more easily understood than what goes on in a factory geared to mass production. It is also true, as the court below noted, that making a pudding is quite a simple operation calling for no specialist knowledge, comprehensible even by the injured customer. But that does not alter the fact that production takes place in the owner’s area of control, and that the restaurateur can monitor the process more easily than the customer. He is in the better position to discover and investigate sources of error. The consumer is an outsider who is normally in no position to know how individual dishes are prepared, what ingredients the patron uses or where he obtains them, nor can he tell what steps are taken to maintain hygiene in the

458  Appendix 2 kitchen. Given these considerations, it seems right and fair to put on the second defendant the burden of disproving fault. This court is well aware that it may seem harsh to place the burden of proof on small businesses which cannot be expected to have the same facilities for control as a big industrial concern, but this difference is largely offset by the fact that it is much easier for the owner of a small business than for the manager of a large industrial concern to oversee its organisation, to discover any faults in the system of production and to adduce the necessary proof. Another consideration is that there are no really satisfactory criteria for distinguishing sensibly between large and small and middle-sized businesses. To go by the number of employees would lead to capricious results, especially as there is often little relation between the size of the workforce and the structure of the enterprise. Indeed, in family and one-man businesses it is often immaterial whether any person outside the family is employed or not. The Product Liability Act from 1 January 1990, based on principles applicable throughout the EC, does not draw any distinction between large and small businesses or make liability turn on whether the production is industrial or personal [references omitted]. To draw such a distinction in claims for immaterial harm which are not covered by the Act and still fall under § 823 BGB would not be right. (cc) The court below gave a further reason for not reversing the burden of proof in this case, namely that the claimant had a contractual claim against the ‘producer’. This is an error. The BGH decided in the ‘Schwimmerschalter’ case ([case 53] BGHZ 67, 359 [362 f] = NJW 1977, 379) that the reversal of the burden of proof is not excluded by the mere fact that consumer and producer were in contractual relations; to hold otherwise would lead to unacceptably capricious results, as it is often a matter of mere chance whether there is any contract between the victim and the producer, whether any contractual claim has prescribed (§§ 477, 638 BGB) [reference outdated after the Schuldrechtsreform of 2002] or whether a contractual claim would be barred by an exclusion clause. Cases in the BGH have consistently held that claims in contract and tort coexist, each following its own rules (BGHZ 67, 359 [362] = NJW 1977, 379; BGHZ 86, 256 [258] = NJW 1983, 810). In the present case, the reversal of the burden of proof in tort cannot depend on whether the claimant or other wedding guests have contractual claims for damages against the second defendant. The court below was therefore wrong to hold that the claimant had the burden of proving that the second defendant failed to show the care required by the circumstances. It should rather have inquired whether the second defendant had managed to exculpate himself. (dd) The mere fact that the food provided for the wedding guests was infected with salmonella does not of itself demonstrate any fault on the part of the second defendant. As has been said, the court below was unable to determine how the salmonella got into the pudding and custard, in which it was undoubtedly present, whether from the eggs or some other source. In particular, it is not known whether or not the first defendant and her daughter were already carriers of salmonella when they prepared the pudding. Infection from the kitchen equipment, according to the court below, ‘could be ruled out’, but there is the possibility that the salmonella got into the pudding from ingredients bought in by the second defendant. In such a case, what matters is what steps the second defendant took to ensure a properly hygienic method of preparation. On this point the court below found, in connection with another matter, that the second defendant had exculpated himself, and the appellant does not question this. But the court below did not advert to the precautions taken by the second defendant to minimise the use of tainted ingredients, or ask what checks the patron of a

Appendix 2  459 restaurant should make on the products he buys in. The duties imposed on the producer and retailer of food products are onerous (constant holding, see BGHSt 2, 384 etc), but only within the limits of what is possible for the defendant. A small business cannot be treated just like a large one [references omitted]. This does not relieve the small café proprietor of responsibility towards his guests: if with the means at his disposal he cannot ensure that the food he serves is wholesome, then he may have to stop serving it. In general, however, if he obtains his supplies from a reliable source, he need go in for quality control only when on the particular facts a test is called for. This matter requires further elucidation on remand. (b) Liability of the first defendant. The claimant’s appeal from the dismissal of his claim for damages for pain and suffering against the first defendant must fail. (aa) The first defendant cannot be made liable under § 823 I BGB because the claimant cannot prove that she was at all at fault in preparing the infected pudding. The mere fact that it was infected does not establish fault. Nor is the burden of proof reversed against the first defendant since she did not own the restaurant and therefore was not the ‘producer’ of the noxious sweet. Only the owner is affected by such reversal: it does not apply to subordinate employees, nor even to all managers, but only to those whose role and position in the firm is such that they can be seen as its representative [references omitted], especially those with a capital stake in the business, such as partners (see BGH NJW 1975, 1827). (bb) Nor can the first defendant be made liable under § 823 II BGB in relation to § 21, 8 no 1 of the Food Act. Not only is it doubtful whether she can be said to have ‘produced’ the pudding, but there was no proof of fault, as the court below was right to find. The appellant blames the defendant for not using a recipe which would have heated the pudding to over 75 degrees and thus have killed all the germs. This does not establish fault. Like the court below, we can leave aside the question whether the risk of salmonella poisoning makes it obligatory for cafés to heat puddings above 75 degrees, for in view of the possibility that the dishes in which the pudding was placed were infected by the hands of the defendant or her daughter, it was not shown that cooking the pudding as recommended by experts would have prevented the spread of the salmonella. Contrary to the view of the appellant, the fact that there was a breach of § 8 Food Act does not imply any negligence on the part of the second defendant. The decisions do hold that where a protective law has been infringed, it is usually for the defendant to assert and prove facts which repel an inference of ­negligence (BGHZ 51, 91 [103 ff] = NJW 1969, 269; BGH VersR 1967, 685; BGH NJW 1985, 1774 = VersR 1985, 452, 453), but this only applies when the protective law is so detailed in its prescriptions that one can properly infer that there must have been negligence (BGH VersR 1984, 270 [271]). If the protective law merely prohibits a stated injurious result, the mere fact that such a result occurs is no indication of negligence. That is the situation here. § 8 Food Act simply forbids the preparation and circulation of noxious food products. It contains no detailed prescriptions of conduct whose neglect might indicate fault, so one cannot infer any fault on the part of the second defendant from the mere fact of the infraction. It follows that the claimant must adduce full proof of the intentional or negligent failure by the first defendant to take the precautions required by the circumstances. 2. The appellant must also fail in her appeal against the rejection of her claim for damages for the delay to the honeymoon. The court below was right to deny that this constituted economic harm. As this court held in BGHZ 86, 212 = NJW 1983, 1107, the pleasure of a holiday foregone owing to personal injury is not to be commercialised, though it may be taken into account as an element of damages for pain and suffering …

460  Appendix 2 Case 51 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 9 MAY 1995 BGHZ 129, 353 = NJW 1995, 2162 = JZ 1995, 1060 Facts The defendant bottled and distributed carbonated mineral water in returnable glass bottles, either ‘standard spring-water bottles’ or bottles of thicker glass and different shape. On 27 June 1990 the claimant, then nine years old, was fetching two bottles of the latter type from the cellar of her parents’ house. She had placed them on the floor outside the cellar in order to close the door and was about to pick them up when one of the bottles exploded. Splinters of glass entered her left eye and caused serious injuries which despite an operation reduced her sight to 60 per cent and left her with astigmatism. When bottles were to be refilled in the defendant’s factory the following process took place. Cases of empties were put on rollers and carried to a conveyor belt, where the bottles, still in the cases, were visually inspected by two of the defendant’s operatives, whose job it was to discard any intrusive or damaged bottles. Then a grab armed with rubber bulbs picked up the bottles, three at a time, and transported them to the washing point, where they were repeatedly sprayed with water. On leaving the washing point, still on the conveyor belt, they were inspected again visually by another employee. They then passed through the bottleinspection unit, an electronically operated machine which passed a beam of light through the base and mouth of each bottle, and if this disclosed any damage in those parts, the bottle was discarded. There was then a further visual inspection before the conveyor belt carried the bottles to the filling station. Before entering the filling station they were subjected to yet another visual inspection, and then entered the pressure chamber, where they were subjected to a pressure of 5 bar, a pressure one-third greater than would be exerted by the contents of the bottle once filled. On leaving the pressure chamber the bottles were filled, visually checked once again, and then labelled. The conveyor belt then carried them to the packing station where rubber grips lifted them and placed them in cases for consignment. About 15,000 bottles per hour were processed in this manner. The claimant, relying on the report of the national materials laboratory in D which he put in evidence, maintained that there was a fault in the glass at the site of the fracture – a chip about 4 mm. broad, which may well have existed at the time the bottle was delivered. For her pain and suffering the claimant claimed an appropriate capital sum plus monthly instalments of DM 500. She also claimed a declaration that the defendant was bound to make good to her any material loss she might suffer as a result of the accident on 27 May 1990, except in so far as her claims may have vested in third parties. Both lower courts dismissed her claim. Her appeal was now allowed. Reasons The court below (OLG Hamm), whose decision is published in VersR 1995, 103, accepted the evidence that explosions of glass bottles filled with carbonated water are always due to damage to the surface of the bottle, and that spontaneous explosions occur through the spread of a very fine hairline crack. The very slightest physical contact, even, under certain circumstances, that of a warm hand, may be enough to cause the bottle to break. The court below held that in this case the bottle had such a hairline crack in it and that the defendant

Appendix 2  461 should have withdrawn it during the production process, but that it was at fault in failing to do so and letting the bottle get into circulation. Accordingly, the precondition of a claim for damages for pain and suffering, namely that the defendant have been culpably in breach of a duty of care towards the public, was not satisfied. The explosive bottle was one which unavoidably ‘got away’ despite the exercise of all appropriate precautions. Certainly before a manufacturer puts into circulation a product which entails particular risks he must take every care to make sure that it has no defect. But the defendant’s techniques of quality control were, according to the experts, up to the state of the art, and no system of control could absolutely ensure that no bottle with a hairline crack left the factory. According to the experts there was an irreducible residual risk in refilling glass bottles, and this case was an instance of it. The court below was also of the view that the defendant was not liable for the future material loss of the claimant under the Product Liability Act of 15 December 1989 (BGBl. I, 2198), since it followed from the reasons given for dismissing the claim in tort that in the current state of scientific and technical knowledge the defect in the bottle could not have been detected (II no 5). The appellant’s criticisms of the judgment below are justified. 1. The court below was wrong to dismiss the claimant’s claim for damages for her material harm under § 1 of the Product Liability Act. (a) The claimant rightly objects on procedural grounds to the finding that there was a hairline crack in the bottle, which exploded in the claimants’ hand. There was no basis for such a finding. The claimant’s case was that there was a 4 mm. chip off the surface of the bottle, and this was confirmed by the report from the national materials laboratory in D which was put in evidence. The report was to the effect that this fault, which could have arisen shortly before the bottle broke, was the direct cause of the explosion. Furthermore V stated in his expert testimony that the explosion could be assumed to have occurred at the place of the fault. If so, the bottle had at the time of the accident a defect, which caused the bottle to explode. If it was by reason of the chipping that the bottle exploded, then the defendant is liable for the consequent material harm to the claimant under § 1 I 1 of the Product Liability Act. Liability could only be avoided if the defendant could prove (§ 1 IV 2 of the Product Liability Act) that at the time the bottle was put into circulation it did not have the defect, which caused the damage (§ 1 II 2 of the Product Liability Act). No such proof was adduced by the defendant in this case. It asserted only, by reference to the expert opinion of C, its production manager, that if the bottle had been chipped when it was in the factory, it would have exploded in the pressure chamber, an assertion which does not exclude the possibility that the bottle was chipped after being filled but while it was still in the defendant’s sphere of influence and risk. On such facts there would be no room for the defence under § 1 II no 5 of the Product Liability Act: there is no difficulty in detecting such a chip. (b) But even if, as the court below evidently supposed, the bottle broke not in the area of the chip but elsewhere, by reason of a hairline crack, it was still no defence to a claim under §1 I 1 of the Product Liability Act that the current state of science and technology did not permit the defect to be detected. (aa) As the court below rightly held, a product is defective under § 3 I of the Product Liability Act if it does not afford the safety which in all the circumstances can justifiably be expected,

462  Appendix 2 and consumers expect soda water bottles to be free from faults such as hairline splits and microfissures which could make them explode. The consumer’s expectation that the bottle be free from faults would not be diminished even if it were technically impossible to identify and remove such faults. The presence of such a hairline crack constitutes, as the court below rightly held, a manufacturing fault, even if it is one which ‘got away’ (BGHZ 51, 91 [105] = NJW 1969, 269 – the ‘Fowl Pest’ case). (bb) Manufacturing defects which ‘get away’ do not, simply because they cannot be avoided by any proper precautions, constitute defects unascertainable in the current state of scientific or technical knowledge in the sense of Art. 7(e) of the Product Liability Directive or of § 1 II no 5 of the Product Liability Act which transposes the Directive into German law. The purpose of the rule in both instances is merely to exclude liability for what are termed development risks [references omitted]; the term covers only cases where at the time a product was put into circulation none of the means offered by the current state of science and technology rendered it possible to detect its dangerous quality [references omitted]. The strict liability of the producer is to be limited by what is objectively possible in the light of the knowledge of risks available at the time the product is put into circulation [reference omitted]. The only dangers to be treated as development risks are dangers inherent in the design and construction of the product, which in the current state of technology could not be avoided, not those that were inevitable at the stage of production. When the Product Liability Act was being fashioned it was agreed that the defence under Article 7(e) of the Product Liability Directive should apply not to manufacturing defects, but only to defects of design and construction [references omitted], and the only dangers emanating from a product which the German legislator wished to exempt from the scope of the Product Liability Act were dangers, undetectable even with the exercise of all possible care, arising at the stage of design and construction. Liability is to be excluded ‘only if the potential danger of the product was unrecognisable by reason of the fact that at the time of circulation it was not yet possible to recognise it’ [Explanatory Memorandum (Gesetzeserläuterung) of the draft Product Liability Act]. It is no longer a defence to this strict liability that the defective product ‘got away’. The potential danger of returnable glass bottles filled with carbonated liquids has long been recognised and has indeed frequently engaged the courts [references omitted]. As the lower court found, the danger of such glass bottles lies in the fact that even a tiny hairline crack which spreads can cause it to explode. Such a defect may arise at the stage of filling or pre-exist unnoticed, but in neither case is it a fault of design or construction, so liability in respect of it cannot be excluded under § 1 II 5 of the Product Liability Act. In such a case the liability of the producer under § 1 I 1 of the Product Liability Act can only be avoided if it appears that the hairline crack was not in the bottle when it had been refilled and put into circulation. No such proof has been adduced by the defendant. (c) There is no need to refer the matter to the Court of Justice of the European Communities. It is true that the concept of ‘the state of science and technology’ in § 1 II no 5 of the Product Liability Act comes from Article 7(e) of the Product Liability Law and must be interpreted in a similar manner in all member states [reference omitted]. It is also true that if the interpretation of a concept of community law is in issue the court of last resort in a member state must in principle refer the matter to the Court of Justice (Article 177 II EC, now

Appendix 2  463 Article 234 TFEU) [reference outdated after the enactment of the TFEU]. But in the present case there is no occasion to construe the concept of ‘the state of science’. The question is rather whether and how far the German legislator has utilised the freedom allowed by Art. 15 I (b) of the Product Liability Directive to deviate from Article 7(b) of the Product Liability Directive and make the producer liable, and this is a question for the national courts. Indeed, even where a concept in a Directive is in issue, a reference to the Court of Justice is required only if its interpretation is disputed in the literature or the case law [reference omitted] or if the court wishes on a point material to the case to deviate from the holding of the Court of Justice (see BVerfG NJW 1988, 2173). Neither of these is the case here. 2. The appellant is also right to criticise the court below for rejecting her claim in tort for damages for pain and suffering. (a) The court below correctly held that on the question whether a particular defect, such as the chip or hairline crack in this case, arose or even remained undiscovered while it was in the producer’s sphere of responsibility the burden of proof can be reversed if the producer was in breach of his Befundsicherungspflicht, his duty to ascertain the condition of his product and correct it if defective (BGHZ 104, 323 [330]; BGH NJW 1993, 528). [See note, below.] It also rightly held that users of returnable bottles are bound to have a control system which so far as is possible and reasonable in the light of the latest technology checks the condition of every bottle and takes out of circulation any bottles which might be dangerous. (b) The court below concluded that in this case the defendant had fulfilled its Befund­ sicherungspflicht, but there are procedural objections to the way in which it reached its conclusion. (aa) Despite the appellant’s complaint, there was no need for the court below to inquire whether the defendant excluded bottles which had been in prolonged use, since even if such a duty was broken, the breach was not causative of the harm in issue. The evidence of the national materials laboratory in D was that the general condition of the bottle that exploded indicated that it had been used relatively infrequently. So the court below could properly suppose that the defendant was not in breach of its Befundsicherungspflicht for failing to remove from circulation, on the ground of its prior use, the bottle which injured the claimant. (bb) But the court below failed to obtain the further expert opinion demanded by the claimant on the question whether the pressure of only 5 bar in the chamber through which the bottles were passed prior to being refilled was adequate. This was a procedural lapse [references omitted] which the claimant is right to criticise. The particular reason for obtaining such a report in this case is that standard spring-water bottles, which are made of thinner glass than the bottle which injured the claimant, are exposed to a pressure of 5.5 to 6 bar, and even this is inadequate to exclude all bottles which are apt to explode [references omitted]. In principle the extra thickness of the bottle in question may have increased the resistance of the glass [references omitted], as is indeed indicated by the defendant’s assertion that 25 bar was needed to make their bottles explode. The court below should therefore have called for direct evidence on the question whether the pressure chosen by the defendant for its bottles of thicker glass was adequate to produce the desired effect of excluding damaged bottles. It was not bound to raise the pressure so high as to cause all bottles with hairline cracks to explode, for the precautions which a defendant must take in order to avoid a reversal of the

464  Appendix 2 burden of proof need not totally exclude the chance of explosion of bottles when handled by the consumer: it is enough if they would significantly reduce the risk of this happening [references omitted]. (cc) The court below was also wrong to ignore the claimant’s evidence that the production methods used by the defendant and its system of control were inadequate to disclose existing defects such as the possible chipping of the bottle in question. Having found that the defendant’s electronic bottle inspection unit could recognise a blemish only if it was apparent at the base or neck of the bottle, the court should not have been satisfied by the expert opinion of V that it would be impossible to construct a machine which could detect other faults. As this court has already held (NJW 1993, 528) a mineral water company’s Befundsicherungspflicht requires it to provide a control system which reveals the condition of every single bottle and guarantees, within the limits of what is technically feasible, that dubious bottles are not reused. This does not mean that it is enough for the company to use the best possible machinery in its control procedures. If defects in bottles undetectable by machinery could be seen by human beings, the company is under a duty to arrange for a visual inspection of every single bottle. Here the defendant admittedly had the bottles inspected visually several times both before and after they were filled, but it is not clear that every bottle was so inspected, especially as during the first inspection the bottles were still in cases, and the two inspectors had to remove not only damaged bottles but also those of a different sort. Again, seeing that the throughput was 15,000 bottles per hour the subsequent inspectors had to check four bottles every second, and to check them not only for faults but also to see that they were clean, duly filled and properly labelled: it is highly unlikely that they could be expected to discover all possible faults, including a chip only a few millimetres in size. III. This being so, the decision below must be reversed. The claimant’s claim for material harm is ripe for final decision. The evidence shows that the explosion which damaged the claimant was due either to a chip or to a hairline crack, both of which are defects under § 3 of the Product Liability Act so that the defendant is liable under §1 of the Product Liability Act for all material harm and the declaration sought can be made. There is no case for restricting the quantum of damages since the harm suffered by the claimant falls below even the individual limit under § 10 I of the Product Liability Act. The claimant’s claim for damages for pain and suffering must be reheard and decided afresh. In the further proceedings the following must be noted. Should the court accept that the bottle was chipped, as the claimant claims, and the question is whether the chipping occurred during carriage or within the parents’ sphere of control and responsibility, this would be a matter for the defendant to prove if it emerged that it was in breach of its ­Befundsicherungspflicht. If the defendant cannot discharge that burden, it will be liable even if the explosion was not due to the chip but to a hairline crack elsewhere in the bottle: its failure to keep the bottle out of circulation would constitute a cause of the injury, and damage due to its exploding because of a hairline crack would fall within its area of responsibility since the exclusion of bottles with external damage helps protect consumers from injury through explosion. Should it transpire that the bottle was not chipped but that the explosion was due to a tiny hairline crack invisible to the human eye somewhere else on the bottle, then if the defendant has fulfilled its Befundsicherungspflicht by having adequate pressure in the pressure chamber and keeping the bottle exposed to it for long enough, it will not be liable for the claimant’s pain and suffering.

Appendix 2  465 Case 52 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 12 DECEMBER 2000 NJW 2001, 964 = ZIP 2001, 379 = JZ 2001, 711 Facts The claimant, who was born on 31 August 1982, claims compensation on the ground that his milk teeth ‘bite’ was destroyed. This was because a child tea product made by the former first defendant had been supplied to him for the first two years of his life by a plastic feeding bottle which this defendant sold with the tea without the necessary warnings. In 1985 dentists told the claimant’s mother that his tooth damage could be due to the tea. In the autumn of 1993 she was referred to the relevant local health insurance scheme about the possibility of a claim. She then took legal advice. The claim, lodged on 4 January 1996, sought compensation from the former first defendant and from its leading employees sued as the second to the sixth defendants. The claimant considers these latter defendants are jointly responsible (partly as members of the board of directors and partly as authorised signatories, departmental managers etc) for the development, production and sale of the children’s tea and for consequential breach of duties in liability law to consumers. The LG rejected the claim on the basis of a limitation defence. The claimant’s appeal (OLG Frankfurt) was unsuccessful. He withdrew his appeal in law against the first defendant, but is pursuing it against the second to sixth defendants. Reasons I. The OLG considers – in agreement with the LG – that the claims made in the statement of claim are time barred. The three year limitation period in § 852 BGB [reference outdated after the Schuldrechtsreform of 2002, see now § 195 BGB] had begun to run from 1 January 1986 at the latest. The claims had therefore become time barred on 31 December 1988 as no interruption of the limitation period took place within the permitted time. The claimant’s mother – according to the relevant indications given by the dentists giving treatment – had had the necessary knowledge, at any rate by the end of 1985, of the fact that the consumption of children’s tea and the manner of its administration had caused the tooth damage. Since this time, it had also been possible for her to know that the first defendant as manufacturer of the tea and marketer of the feeding bottles fell to be considered as a tortfeasor. But in fact the mother was completely unaware that the claimant, as a person suffering harm, could have looked to the defendants for compensation. However, this circumstance did not prevent the running of the limitation period. This was because the running of the period would not be delayed until the time when the person suffering harm or his legal representative had legal knowledge that he had a claim to compensation. If, on the other hand, he had no knowledge at all of a possible claim to compensation and if this lack of knowledge formed the hindrance to obtaining knowledge of the tortfeasors, the running of the limitation period would begin with the knowledge of the harm … 2. The judgment of the OLG (which is no longer the object of the appeal in law proceedings) that possible claims by the claimant against the first defendant as producer and seller of the children’s tea and the feeding bottle were time barred has no legal effects on the claims which now still remain against the other defendants. The appeal in law correctly alludes to

466  Appendix 2 the fact that the prerequisites for the running of the limitation period and the expiry of the limitation period are to be tested independently for each defendant. (a) The beginning of the running of the limitation period is dependent, according to § 852 I BGB, on the knowledge of the person suffering harm not only of the harm but also of the identity of the person obliged to compensate. If several people are to be considered as tortfeasors, the beginning of the limitation period is to be determined as against each of these persons who are possibly liable according to the point in time when the person suffering harm has obtained knowledge of the identity of the tortfeasor concerned [references omitted]. Accordingly the limitation period can, in relation to several persons obliged to compensate, begin and end at different points in time, even if they are simultaneously responsible for the same harm arising out of the same event. (b) Contrary to the view of the reply to the appeal in law, the position is no different in this respect when the several persons coming under consideration as responsible under a duty to compensate are on the one hand an undertaking (carried on in the form of a legal person) and on the other hand persons who are its organs or (managing) employees, for whom the undertaking has to assume liability under § 31 BGB or § 831 BGB. The employee liable according to § 823 I BGB and the proprietor of the business who is responsible for him according to § 831 BGB are joint debtors to the person suffering the harm (§ 840 BGB) just as much as the legal person liable under § 31 BGB and its directly responsible organ in tort are (reference omitted). Consequently a claim can only become time barred against the joint debtor as to whom each of the prerequisites are established (§ 425 II BGB). The personal responsibility of the person who acts directly tortiously exists not only in the case of § 831 BGB but also in the framework of liability for organs under § 31 BGB as separate and independent liability beside that of the undertaking [references omitted]; here also automatic parallel treatment of the prerequisites for limitation does not come into consideration. 3. The limitation period for possible claims by the claimant against the second to sixth defendants could therefore only begin to run from the point in time from which the claimant (or his mother who was entitled to care for him) had the necessary knowledge in relation to the identity of these persons who were possibly liable to compensate. He or she would therefore have to know their names, addresses and the nature of their work in the business in each case [references omitted]. Even for the organ of a legal person, responsibility in tort law for injury to the legal interests of third parties can in fact depend to a considerable extent on the division of competences and work in the business [references omitted]. The OLG made no findings at all on the question of the date from which the claimant’s mother had the knowledge about the second to sixth defendants which was necessary in this respect. There is nothing evident which indicates that this could have been the case earlier than three years before the filing of the claim. 4. It has to admitted in favour of the reply to the appeal in law that exceptionally – following the legal concept of § 162 BGB – the limitation period can also begin in the sense of § 852 I BGB if the person suffering harm did not positively possess a state of knowledge which would trigger the running of the period, but certainly had the opportunity of obtaining the necessary knowledge in a reasonable way and without significant difficulty [references omitted]. But this only applies when the person suffering harm effectively closes his eyes in the face of unavoidable knowledge and neglects to take advantage of a more or less obvious opportunity for knowledge so that an appeal to lack of knowledge appears to be mere

Appendix 2  467 formalism because any other person in the position of the person who has suffered harm would have had the knowledge under the same concrete circumstances [references omitted]. It is not possible to assume such a case, not even in relation to those defendants who at the point in time of the harm were not only managing employees but members of the board of directors of the former first defendant. No grounds at all can be deduced from the findings which have been made for saying that the claimant’s mother could at any time have discovered the names, addresses and areas of competence of the members of the board of directors coming under consideration for liability in the present context in a manner so simple and obvious to everyone that reliance on the absence of knowledge could appear to be impermissible. This would apply especially in relation to those defendants who – without being members of the board of directors – were engaged in the production and sale of tea products as departmental managers or authorised signatories. 5. It is to be deduced from the judgment on appeal that the OLG did not consider findings about the actual knowledge of the identity of the second to sixth defendants as persons under a duty to compensate to be necessary on legal grounds, because the claimant’s mother simply did not know that the claimant as the person suffering harm could have looked to these defendants for compensation. The appeal court takes the view that the limitation period would begin to run immediately on knowledge of the harm when the person suffering harm had no knowledge at all of a possible claim to compensation and this absence of knowledge constituted the hindrance to obtaining knowledge of the persons causing harm. The appeal in law successfully contests these arguments. The view of the OLG cannot be supported by the decision of the BGH of 17 March 1966 [reference omitted] cited in the appeal judgment on this issue. That judgment takes into account the fact that in the area of § 852 BGB also the legal maxim that absence of knowledge of the law always and in all circumstances causes prejudice does not apply without exception. In particular it does not apply when the absence of knowledge of legal maxims and principles forms the hindrance to knowing the identity of the person obliged to compensate. It would admittedly work to the disadvantage of the person suffering harm if the identity of the person obliged to compensate was actually known and nothing was lacking for the making of the claim to compensation other than the knowledge of the legal norm which permitted proceeding against the tortfeasor. From these principles, it follows for the present case: If the claimant’s mother had actually known the names and addresses of the second to sixth defendants and their business positions, it would not have been relevant to the running of the limitation period that she had refrained from making a claim to compensation through lack of legal knowledge. But so long as she did not know the names, addresses and positions of these defendants (and this has to be assumed here, in the absence of contrary findings for the period up to three years before the lodging of the claim), the situation is still that the limitation period did not begin to run through lack of the required knowledge of the identity of the person causing the harm. In such a state of affairs it has no legal effect whether or not the person suffering the harm had the necessary legal knowledge for the pursuit of possible claims. § 852 I BGB makes the beginning of the limitation period dependent on the required knowledge of the facts; if this is lacking, no hypothetical conclusions can be drawn as to how the person suffering the harm – on whatever grounds – would have behaved if he had had the knowledge.

468  Appendix 2 Notes to Cases 48–52 1. In the area of product liability, the student of German law will be irresistibly tempted to make comparisons with developments in the United States. Many reasons can be adduced to explain this. 2. First, it is a matter of fact that German academics have in the past used American law quite extensively in their writing in this area of tort law. The interest first manifested itself in the early 1930s when the great Ernst Rabel encouraged two of his most brilliant students – Kessler (subsequently Professor at the Yale Law School) and Wahl – to take note of the emerging American doctrines (Die Fahrlässigkeit im nordamerikanischen Deliktsrecht (1932) and Vertragsansprüche Dritter im französischen Recht (1935) published in vols 6 and 9 of the Beiträge zum ausländischen und internationalen Privatrecht). American case law was ahead of Germany in dealing with product liability (see the pioneering judgment of Traynor J in Escola v Coca-Cola Bottling Co of Fresno 150 P 2d 436 (Cal1944)). Drawing on this, the work of Professor Lorenz (in Festschrift Nottarp (1961) 59) led the way, as the belief grew that the richness of American law might be of use to the emerging German law of product liability. (Lorenz’s many articles on the subject clearly show this influence.) The American influence on the contemporary European proposals for law reform, both the Council of Europe’s proposal of 1975 and the EEC’s 1985 Directive, is also noticeable (see Whittaker (ed), The Development of Product Liability, 43–45). 3. A second reason which invites comparison between German and American (but not English) law is the willingness of both systems to experiment with contractual notions and devices in an attempt to satisfy the ever-growing demands of modern consumers. Thus contractual experiments are discussed in chapter four, section III.C and section V). The leading case 48 (Fowl Pest) may – to the approval of most commentators – have turned attention away from contract to tort; but contractual solutions – especially in the form of ‘implied warranties’ can sometimes be used. 4. As Whittaker (The Development of Product Liability, 15–18) explains, systems which do not depend on consideration have often found a way of extending the contractual liability of the seller to the ultimate consumer. Most notable was French law in the 1960s (see Borghetti in The Development of Product Liability, 95–96). 5. In Germany, in product liability cases the victim had to prove that the defect in the product which was the cause of the injury arose in the producer’s organisational area, before the product left the defendant’s factory. Case 51 lowers further the hurdle for the victim. For in that case the BGH alleviated this difficult burden of proof by imposing on the defendant a Befundsicherungspflicht. This means that there is a presumption that the defect arose in the producer’s organisational area unless he can prove that he took all possible and requisite measures of quality control to ensure that the product was free from defects. The term Befundsicherungspflicht has perplexed some commentators. Literally it signifies a duty to keep a record of the results of an investigation, such as a doctor’s note of his diagnosis, a meaning quite appropriate to its function of reversing the burden of proof in cases where the defendant can adduce relevant evidence more easily than the claimant. But the term is here used to mean a duty not just to ascertain the condition of the product but also to correct it if faulty, ie, effectively to operate an extremely good system of quality control. As the BGH said in another case: ‘The producer’s duty to ascertain and assure the result of the investigation is neither a duty to ‘keep a record of the evidence’, nor a (non-existent) duty of documentation.

Appendix 2  469 In this context Befundsicherung applies to all bottles being reused, not in the sense of making a list of the results of checking each bottle, but rather in the sense of establishing and operating a control procedure which permits the ascertainment of the physical condition of each bottle and ensures that, so far as technically possible, all bottles which are in any way faulty are kept out of further use’. (BGH, NJW 1993, 529.) Finally, one should note that the device is necessary only where a claim is based on the §§ 823 ff BGB. If the Product Liability Directive respectively the laws which implement the Directive are applicable (in Germany the Produkthaftungsgesetz), it is clear anyway that it is for the defendant to prove that the established defect was not present in the product when it was put into circulation. 6. Case 52 could be seen as a sequel to the ‘baby bottle’ cases. In these cases the sugary content of the baby bottle caused tooth decay when the bottle was used regularly and for longer periods of time. The BGH (JZ 1995, 902) required that crystal-clear warning notes had to be attached to the product if liability was to be avoided. It also held a company liable which, although being in fact a retailer, could nevertheless be treated as if it were the producer of the product since it was the exclusive retailer (so-called Quasi-Hersteller) of this product (Milupa AG in that case). The decision highlights a different aspect of product liability. As was explained in chapter four, section III.C the codal provisions, unlike the Product Liability Directive, do not adequately reflect that the duties imposed in the context of product liability are primarily addressed to the manufacturer and not to the individual employee or manager. Thus, the process of production has to be organised in such a way as to ensure that dangerous products are not put into circulation. Clearly, it is impossible for an individual employee to comply with these requirements. Against this background the interesting question arises whether employees can, nevertheless, be held liable. For the reason already given, the BGH used to reject such a possibility. (See, eg, BGH, ZIP 1987, 1260.) However, in case 50 the court, arguably, established two new principles. First the rules of product liability (Produzentenhaftung) under § 823 I BGB (namely the reversed burden of proof for a deficient organisation of the production process) apply also to minor companies – in this instance, a catering company. Secondly, and this is important in the present context, it held that an employee could also be liable if the defect occurred in his sphere of responsibility. This was a qualified liability in so far as the burden of proof for fault was not reversed for the employee (the chef of the catering company in that case). In case 52, the court confirmed this line of reasoning in respect of an employee (who had a higher position in the company) and the management without clarifying the exact conditions of their liability. The decision, although highly legalistic in tone, is nevertheless noteworthy for two reasons that are not immediately apparent from its wording. First of all, the external liability of employees of a company is not self-evident. Secondly, one must note the potentially far-reaching implications of this decision. For if one accepts that both management and employees may be liable under the heading of product liability, the limitation period (three years: now contained in §§ 195, 199 I BGB) can in practice be considerably prolonged. In the present case the OLG found that the limitation period of the action against the company had run out on 31 December 1988. But it also held that the action against the managers and the (appropriate) employee had also become time-barred as the claimant knew at an early stage of the injuries caused by the sugary tea in the baby bottle. The BGH quashed this decision and explained that for the limitation period to commence,

470  Appendix 2 it was not sufficient to know that the damage was caused by the company’s product. In addition, it was necessary to show that the victim knew the identity, function in the company, and address of the potential defendant. (The rule that the limitation period may be different for each severally liable debtor is contained in § 425 II BGB.) The claimant does not even have to undertake any special effort to find this out, but can rely on channels of information open to everyone. Given that the defendant/employee may be able to claim an indemnity from his employer, one can thus see how, in effect, the present decision undermines the limitation period of three years that affects the company itself. We are thus confronted here by yet another judicial extension of ­product liability in the interest of the ‘consumer’. 7. The classifications made in German law between defect in construction (case 48, and case 53), defect in design, defect in marketing (warnings etc) (BGH, BGHZ 59, 172), and development risks have exact equivalents in American law. DAMAGE TO THE PRODUCT Case 53 BUNDESGERICHTSHOF (EIGHTH CIVIL SENATE) 24 NOVEMBER 1976 BGHZ 67, 359 = NJW 1977, 379 = JZ 1977, 343 (with critical notes by Lieb and Rengier = VersR 1977, 358) Facts The D firm – insured by the claimant company – were manufacturers among other things of tin covers for transformers. The defendant produces cleansing and degreasing apparatus for industrial products, in which through heating and evaporation perchlorhylene oil is washed out and separated from the parts to be cleansed. A ballcock connected to a switch, which the defendant alleges to have obtained from a foreign supplier, prevents the filaments, normally covered with fluid, from being exposed to the air. After the D firm had, on 29 January 1969, ordered such cleansing apparatus for about DM 20,000, the defendant confirmed the order on 4 February 1969 with the addition: ‘Warranty: according to our enclosed conditions of sale and delivery’. No VIII of those conditions of delivery – in so far as is relevant here – runs as follows: VIII. liability for defective delivery: 1. All those parts are to be made good or replaced without charge at our choice to be exercised fairly, which within twelve months of the delivery are proved unusable or the usefulness of which is seriously affected in consequence of circumstances existing before the passing of the risk – in particular owing to defective design, inferior materials, or defective construction … 9. Further claims of the buyer or the party giving the order, in particular a claim for compensation for damage caused not to the delivered object itself but by the latter indirectly will in no case be accepted by us. After the apparatus had been set up and put into operation at the beginning of June 1969 the used oil in the apparatus ignited because a switch operated by a ballcock had not switched off the filaments in time and they had become overheated. The claimant company, which had paid to the D firm, its insured, a sum of DM 70,971, made a claim for compensation against the defendant on the ground that the switch had failed in consequence of a defect in manufacture or construction; the D firm had had to spend that amount for the repair of the cleansing and electrical apparatus as well as the elimination of corrosion of the metal stocks.

Appendix 2  471 The defendant stated that the fire had happened only through an excessive supply of petroleum, and denied that it was liable for the damage caused by the fire, and in addition points to the formal exclusion of liability for all claims for compensation and in that respect invokes the operation of prescription in that the order for payment was first made on 23 June 1972. Both courts below rejected the claim. Upon the claimant company’s application for review, the judgment of the OLG Stuttgart was quashed and the case referred back to that OLG for the following. Reasons I. … II. … 1. The decision of the OLG must be opposed in the result to the effect that the claimant company’s claims in contract for damages did not exist according to its pleadings, because they were time-barred under § 477 BGB [reference outdated after the Schuldrechtsreform of 2002, see now § 438 BGB]. [Details follow.] 2. On the other hand, the further considerations of the OLG that also from the delictual point of view the claimant’s action is without foundation according to its own pleadings, does not stand up to legal examination. (a) An objective breach of duty by the defendant causing damage resulting from a fire by delivering defective cleansing apparatus has been sufficiently established by the claimant company and proved by experts. [Details follow.] (b) Since to this extent the claimant company claims against the defendant as the producer of the apparatus, it was for the latter, regarded from the point of view of so-called ‘product liability’, to exculpate itself by proving absence of fault, a circumstance that lay entirely within its sphere of influence and of which the claimant who could rely only on conjecture, could not be unaware (BGHZ 51, 91 [case 48]; Senate judgments of 28 September 1970 – VIII ZR 166/68 = WM 1970, 1418, 1420 – LM BGB § 433 no 36 and of 24 November 1971 – ZR 81/70 = WM 1972, 106 = NJW 1972, 251). In this connection, it can be assumed in favour of the defendant that the ballcock switch, the failure of which, according to the claimant’s account, started the fire, was obtained from a third party and only incorporated in the apparatus manufactured by it. If that switch was of itself free from defect, but its performance was too weak or otherwise unsuited for the apparatus, it is a matter of a so-called defect of the construction, characteristic ‘product liability’ (see judgment of 20 September 1970). But even if there was nothing wrong with the construction and only the switch showed a defect, the defendant would be required – without prejudice to the question which additional claims the claimant might perhaps have against the producer of the switch – to exculpate himself from any fault in respect of such defect of production; for after the defendant ordered and incorporated this switch which was necessary for the operational safety of the apparatus to be sold, the responsibility for a defect-free working of the switch – as between the parties – fell exclusively within the ambit of the defendant, who alone could control the workmanship and incorporation of the switch, whereas the D firm was deprived of such a possibility of examining it. (c) The OLG’s view based on that of the LG, that the ‘legal institution of product liability’ had been developed for a disposition of goods involving several stages and could not therefore be applied if – as here – direct contractual relations existed between producer and ultimate consumer, is at variance with the law. A genuine concurrence existed between a claim for damages for breach of contract and that for a tort, with the consequence that each claim follows its own legal rules and the injured party is, as a matter of principle, free to choose

472  Appendix 2 the basis on which to put forward his claim. In particular he is not prevented from falling back on delictual liability, if contractual claims are no longer available either because the period of limitation has run out or because an exemption clause is restricted to contractual liability [reference omitted]. If the injured party bases his claim on a tort of the producer, the mere circumstance that direct contractual relations exist between them or in any case have existed, does not exclude the application of the principles of concurring the reversal of the burden of proof of fault developed for claims against a producer (cf also the judgment of the Senate of 28 September 1970 – VIII ZR 166/68). In so far as in this connection Count von Westphalen in his criticism (BB 1976, 1097) of the judgment of the Senate of 24 May 1976 openly expresses the opinion that the Senate, on facts like the present, has retreated from the principles of evidence governing product liability, overlooks the fact that the subject of the dispute then decided was a typical case of a claim arising out of a chain of dealings against a firm which had neither manufactured the product nor had distributed it as a detached agency of the manufacturing firm, and that for this reason there was no room to introduce the principles of product liability; that was also to be deduced from the unabridged statement of facts in the judgment reported in WM 1976, 839. (d) Contrary to the view of the OLG the claimant has also alleged in sufficient detail the existence of the property of the D firm and damage resulting from it. [Details follow.] (e) The OLG declares as regards the cost of repairing the cleansing apparatus, that in any case there was no interference with property, because, according to the claimant’s statement, the apparatus was originally delivered in a defective condition and therefore the D firm was never the possessor or owner of an object free from defects. This view is based on a mistake of law. It is indeed correct that both the RG (RG JW 1905, 367) and the BGH (BGHZ 39, 366) denied a claim of the owner of a building for damage to property based on the defective erection of a building (§ 823 I BGB) in respect of that particular building, when the materials used in the building were defective and when, with the completion of each phase, each time a further defectively produced portion passed into the landowner’s ownership [reference omitted]. It is essential in these cases that the defect in the object transferred was inherent beforehand to the object as such; it was therefore completely useless to the owner from the start and that the defect was identical with the damage complained of (cf Duns/ Kraus, Haftung für schädliche Ware (1969) 66). In such a case the damage to an object of another is in fact already excluded conceptually; only economic damage exists for which § 823 I BGB does not provide redress (BGHZ, above). That is however not so here. Apart altogether from the fact that the above-mentioned considerations of the OLG concern only the damage to the cleansing apparatus itself, but not the damage caused by the fire to other property of the D firm, the defendant here had transferred to the D firm the ownership of an apparatus which was otherwise free from fault and only contained a regulating device which was defective as regards a limited function – the failure of which caused further damage to the whole apparatus after ownership has passed. In such a case it does not matter that from the formal point of view the purchaser only acquired property which was defective at the outset [references omitted]. Instead, it is decisive that the danger arising from the accompanying delivery of the switch resulted in damage exceeding that represented by the defect only after title had passed and thereby the property of the purchaser, otherwise from defect. [references omitted] In cases of that kind – especially when the injured party has acquired the ownership on the basis of a contract of sale – there is no reason to restrain him from having recourse to claims in

Appendix 2  473 tort. That is true all the more so since, if the injured party wishes to retain the apparatus (perhaps in order to maintain production) and only wants compensation for the cost of repairs, he cannot rely on a contractual claim to compensation because the law of warranties in sale (§§ 459 ff BGB) does not provide for damages beyond the express warranties of quality (§§ 463, 480 II BGB). [references mentioned outdated]. Moreover, claims for breach of contract by a positive act (positive Vertragsverletzung), arising out of the delivery of defective objects, are restricted to compensation for damage caused to other legally protected interests but do not cover damage to the object of the sale itself [reference omitted]; thus, to that extent the buyer would be largely without a remedy if he could not fall back on claims in tort. [The positive Forderungsverletzung or positive Vertragsverletzung was previously pure judge-made law and got only codified after the Schuldrechtsreform of 2002 in §§ 241, 280 BGB.] The Senate does not fail to recognise that in some cases the boundary may be difficult to draw between a defect affecting the transferred object as a whole and a limited defect which later on causes new damage to the object transferred which was otherwise free from defect, as for instance when what was to begin with a limited defect expands like a ‘creeping disease’ and afterwards takes hold of the entire object [references omitted]. In the present case it is not necessary to set down unambiguous criteria for delimiting the two given the small value of the ballcock and the total value of the cleansing apparatus sold for some DM 20,000. (f) Finally, the claim for compensation put forward by the claimant, in so far as it is based on tort, is not excluded on legal grounds. The short period of limitation of § 477 BGB is not applicable to such a claim (see judgment of this Senate of 24 May 1976 – ZR 10/74). The same applies to the disclaimer of liability regulated in section VIII no 9 of the defendant’s general conditions of delivery, which it may be assumed in the defendant’s favour, were incorporated in the contract. Whether such a disclaimer also includes claims in tort, in so far as they are connected with the defective performance, is a question of interpretation in the light of the individual case (cf BGH judgment of 23 April 1970 – VII ZR 150/68 = JZ 1970, 903). Since the OLG – consistently with its point of view – did not attempt an interpretation of the general delivery conditions, this Senate can itself interpret this clause (see Senate judgment of 25 June 1975 – VIII ZR 244/73 = WM 1975, 895 = NJW 1974, 1693). For this purpose it must be taken into account not only that exemption clauses being exceptions from liability provided by dispositive law – must in principle be construed narrowly, but also in the present case that according to the so-called ‘obscurity rule’ any remaining doubts as to the extent of the provisions contained in the general conditions of trade must be interpreted against the party who drafted them and makes use of them. In the present case the exemption clause is found in a section of the general conditions of trade which is headed ‘Liability for defects in delivery’ and which regulated in particular the contractual warranty by the seller, and therefore by modifying §§ 450 ff BGB [references outdated] and §§ 377 ff HGB regulates the contractual claims for a warranty. It need not be decided whether the buyer’s or contracting party’s disclaimer which is mentioned only in no 9 also includes claims for compensation for breach of contract by positive act arising from a defective delivery. In any case there is no sufficiently clear provision that claims for a blameworthy injury to the legal interests protected by § 823 I BGB are to be excluded. If this had been the defendant’s intention, it ought to have been indicated to the D firm by an unambiguously formulated clause that the latter’s legal position was being further restricted to an appreciable degree, for example as regards any claims arising from a negligent bodily injury or a destructive threatening the existence of an entire business.

474  Appendix 2 In so far as this Senate stated in the decision BGHZ 64, 355 that the exclusion of liability contained in section II no 5 of the ‘General Conditions for the supply of Electrical Power from the Low Tension Network (AVB)’, embraces not only contractual but also delictual claims for damage arising from the break in the supply of current, those statements relate to a state of facts and interests which is not comparable with the present case. Quite apart from the fact that the AVB are regarded as a legal enactment (BGHZ 9, 390) and that for this reason the so-called ‘obscurity rule’ cannot be invoked for its interpretation (cf judgment of the Senate of 21 October 1958 – VIII ZR 145/57 = NJW 1959, 38), the exclusion of liability in no II 5 AVB takes account of the circumstance that the energy undertakings can only perform the task allotted to them of providing the public with cheap current, if they are as far as possible exempt from liability; this particular task demands the widest possible exemption from liability with the consequence that – as far as admissible – claims for compensation are included in whatever legal form (judgment of this Senate of 9 June 1959 – VIII ZR 61/58 = NJW 1959, 1423 = LM BGB § 138 [Cc] no 2). On the other hand in the present case, which involves a shift from the seller to the buyer by means of general trade conditions, these considerations do not apply. III. The decision of the dispute depends therefore on whether the claimant succeeds in proving that a defective or unsuitable switch caused the fire. To that extent the dispute requires a further clarification of facts. Case 54 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 14 MAY 1985 NJW 1985, 2420 = VersR 1985, 837 Facts In April 1980 the claimant bought a compressor from the defendant manufacturer. In March 1982 its diesel motor suffered considerable damage, because it had run for a time without lubricant. This was because oil had leaked out owing to the fracture of the oil-conduit at the point where it joined the sump. The claimant maintains that it was a fault in design that the oil-conduit was fixed at only one point, namely where it entered the motor – or compressor – housing, and that it would not have broken under the vibrations set up by the prolonged running of the motor if it had been affixed to the chassis as well. The claimant claimed damages of DM 5730.28 for damage to property (cost of substitute motor, expenses of experts and rental of replacement). Reasons 1. The OLG Nürnberg was of the opinion that, accepting the claimant’s allegations as true, the damage to the compressor’s motor was not damage to the claimant’s interest in the integrity of his property such that the defendant was under a tort duty to take care to avoid it. If, as he alleged, the compressor was unfit for prolonged use as envisaged, he must bring a claim in respect of his interest in the usability and value of a merchantable compressor. II. The judgment of the OLG is unsound in law. 1. The first points made by the OLG are correct enough. (a) The OLG followed decisions of this Senate to the effect that the manufacturer of a product can be liable under § 823 I BGB for harm to a consumer’s property if the damage to or destruction of the property represents damage which it is the duty of the manufacturer to take care to avoid in the interest of the acquirer in the integrity of his property [references omitted].

Appendix 2  475 (b) The OLG correctly distinguished those cases where the damage consisted simply of the fact that the defect in the thing made it less valuable and constituted an infringement of the acquirer’s interest in usability and value for money, since it is not the function of duties imposed by the law of tort to protect a purchaser’s interest in having a thing to use which is free from defects. (c) As to whether or not the damage represented an invasion of the claimant’s interest in the integrity of his property the OLG was right to adopt the test whether the damage was identical with the loss of value of the compressor due to its initial defect, ie, whether it was ‘substantially similar’ to the loss in value quoad usability and value for money represented by the defect. 2. The OLG was nevertheless wrong to infer from the fact that the initial defect in the compressor only manifested itself in the loss of its value the conclusion that in this case there was no invasion of the claimant’s interest in the integrity of his property. (a) The OLG was wrong to suppose that the primary test as to whether the harm which later manifests itself is identical with the loss of value due to an initial defect, that is, whether they are ‘substantially similar’, is whether the thing was fit for prolonged use. What really counts is the comparison between the damage which is in issue and the disvalue of the product at the time of transfer, namely the amount by which the defect renders it less valuable. The diminution in value due to the defect and consequently the harm to the interest in value for money can be tested by the principles applied when abatement of the price is sought for breach of warranty (§ 472 I BGB) [reference outdated]. While it is true that in making this assessment the fact that the defect will reduce the useful life of the product can materially increase the initial shortfall in value, it is only if the entire thing or component for which compensation is sought is affected from the economic point of view by the non-durability that the short life expectancy will be fully expressed in the diminution of value and thus establish complete ‘substantial similarity’ between loss of value and damage to the thing. Where the initial defect which carries the risk of premature breakdown affects only part of the product and is quite curable, and only later destroys the product or damages other parts of it, the undefective part of the product has a value sufficiently distinct from the shortened life due to the defect that there is no complete identity between the damage and the shortfall in value. That was the case here. Taking the material facts as found below, the component parts of the compressor which the claimant bought from the defendant manufacturer were individually faultless and it was initially quite functional. The only trouble was the inadequate anchorage of the oil-pipe which rendered it likely to break under the stress of operation and let the oil escape. This could have been avoided by the simple welding job of making an additional fixing to the chassis. Only the oil-pipe was non-durable, not the compressor as a whole or even the motor. As the defect, viz, the inadequate and easily curable fixing of the oil-pipe, could only damage the motor if its fracture and the consequent loss of oil remained unnoticed, the loss of value due to the defect at the critical moment, namely the transfer of ownership, was limited to the cost of occasional replacement of the pipe during the normal life of the compressor, or alternatively the cost of installing an additional fixing. (b) Contrary to the view of the OLG, the claimant’s claim is not simply for an invasion of his interest in the usability and value for money of a functioning compressor. This case differs from the ‘hydraulic jack’ case, cited below, in which this Senate dismissed a damages claim for damage to property where the jack was not usable (NJW 1983, 812 = VersR 1983, 346). A point sometimes overlooked by critics is that the defendant in that case had restored the jack to its original condition after the collapse of one of the supports, so that the claimant

476  Appendix 2 was in possession of a jack with just the original defect and no more, namely the design or construction fault in its undercarriage. It is true that as this defect was not remedied by the manufacturer the claimant did not use the jack for a long time for fear that a support might again give way under the weight of the vehicle. In such a case the purchaser suffers no harm over and above the original defect in the product, whereas in our case, as explained above, the damage is significantly greater. This demonstrates that the claimant here is not complaining simply of an invasion of his interest in having a functional compressor to use. (c) This case differs in two respects (neither of which affects the outcome) from previous decisions of this Court where it was held that there had been an invasion of the claimant’s interest in the integrity of his property (BGHZ 67, 359 = NJW 1977, 379 (thermostat); BGHZ 86, 256 = NJW 1983, 810 (accelerator pedal); NJW 1978, 2241 = BB 1978, 1491 (rear tyres)). (aa) In the accelerator pedal case ‘a risk of accident arose through a combination of unfortunate circumstances’. As the court below correctly held, that was not the case here. It cannot be a precondition of a damages claim that further special circumstances be required before any damage occurs [reference]. Even in the absence of further special circumstances defect and harm lack ‘substantial identity’ if, as explained above, a curable defect initially affects only a particular part of this product. Furthermore, it must be irrelevant to the question of the congruence of initial defect and subsequent harm whether or not the harm occurs by means of an accident or results from a ‘violent’ occurrence. This Senate in BGHZ 86, 256 (273) = NJW 1983, 810 left it open whether it was only in such circumstances that the manufacturer’s liability arose. But just as tort liability cannot depend on whether the defect in part of a product endangers other interests of the consumer or third party, that is, poses a risk to the environment and not just to the product itself (BGHZ 86, 256 (258) = NJW 1983, 810, criticised by Hager AcP 184, 417), so it cannot be relevant to liability that the harm occurs by means of an ‘accident’ or by ‘violent’ damage to or destruction of other parts of the product. That would introduce into the law of tort a criterion foreign to its general principles. The principle is that the acquirer’s interest in the thing not being damaged or destroyed by reason of a fault of design or manufacture deserves as much protection as his interest that such fault not damage other property acquired elsewhere, and the manufacturer’s liability cannot sensibly depend on whether the defect in manufacture damages other property of the consumer or only the product itself [references omitted]. Likewise, the victim’s interest in the integrity of his property and its protection by the law of tort cannot depend on whether the thing is damaged or destroyed ‘violently’ or gradually over a period of time. After all, the manufacturer’s liability for damage to other property of the consumer does not depend on whether the damage is sudden or gradual; nor does it where the damage is to the product itself. For damage to the product the manufacturer is liable in tort as well as in warranty unless the claimant never had an undamaged product and so cannot complain of any impairment in his interest in the product remaining undamaged, that is, unless the subsequent damage was so inherent in the original undervalue of the product that any damages awarded must be for his failure to acquire an undamaged thing rather than for invasion of his interest in the thing not being damaged. (bb) Finally it is immaterial that in this case the damage to the compressor’s motor occurred through the absence of an additional fixing for the oil-pipe, rather than through the presence of a defective or unsuitable component which threatened the whole. Here the damage was as much an invasion of the claimant’s interest in the integrity of his property, which the manufacturer was under a duty to respect, as in cases where an original defect in a component

Appendix 2  477 affects the whole or other parts of the thing. The case is like those in which a thing is badly constructed because one of its parts is too weak to work or otherwise unsuitable (BGHZ 67, 359 (362) = NJW 1977, 379). This distinction can have no effect on tort liability. Reversed and remanded for further findings of fact. Case 55 BUNDESGERICHTSHOF (SEVENTH CIVIL SENATE) 30 MAY 1963 BGHZ 39, 366 = NJW 1963, 1827 = VersR 1963, 933, 1024 Facts In 1951 the claimant contracted with the defendant builder to have a house built on his land and with the defendant architect to have the construction supervised. Cracks appeared in the ceilings because the concrete used was well below the requisite strength. The claimant claimed damages for the reconstruction of the ceilings which were in danger of collapse. Because he was out of time for a contract claim the claimant based his claim on the delictual provisions § 823 I BGB and § 823 II BGB in connection with § 330 of the Criminal Code (StGB) or § 367 no 15 StGB. Reasons The OLG Frankfurt was right to find that the facts disclosed no tort on which the claimant’s claim for damages could be based. 1. There is no question of a claim for damages under § 823 I BGB on the basis that the claimant’s property (Eigentum) has been damaged by fault. The land owned by the claimant, as compared with what it was, has suffered no harm through the defective method of construction. In so far as the land has been built on, as the OLG rightly stated, the claimant never owned it in an undefective condition. As the building proceeded, the claimant’s ownership attached to each part of the building as it was constructed in the condition in which it was constructed, with all the qualities and defects resulting from the incorporation of the building materials. To make someone the owner of a defective building is not to invade an already existing ownership (compare RG JW 1905, 367; OLG Karlsruhe NJW 1956, 913). The decision of the Senate in LM no 4 to § 830 BGB was a different case; there defective concrete balconies which had been built onto the top storey caused the collapse of the whole building. 2. The OLG was also right to reject the claim for damages based on § 823 II BGB in connection with § 330 StGB. Under this last-named provision a person ‘who in supervising or erecting a building in breach of generally recognised rules of building practice acts in such a way as to cause danger to others’ is guilty of an offence. The trial court found that a danger existed within the meaning of this provision and this finding is not subject to review. But as the OLG stated, § 330 StGB is solely designed to protect the lives and health of ­individuals [references omitted]. It is only to this extent that the provision is a protective statute whose breach can give rise to a claim for damages under § 823 II BGB. Damages can only be claimed under this text if the harm takes the form of the invasion of a legal interest for whose protection the rule of law was enacted (BGHZ 19, 114, 126; 28, 359, 365 f). The claim before us is for compensation for harm to an interest other than the legal interest protected by § 330 StGB. Nor is the claim for those damages justifies by the consideration that the replacement of ceilings which are in danger of collapse is necessary to save the users of the rooms from imminent danger. It still remains the case that the cost of rendering the ceilings represents a

478  Appendix 2 harm which affects only the pecuniary interests of the claimant. This is evident if one imagines that a ceiling collapses and injures an individual; then certainly the harm attributable to the personal injuries must be compensated under § 823 II BGB and § 330 StGB; but there would still remain the material harm requiring the replacement of the ceilings, and this would still affect only the economic interests of the claimant. 3. The claimant finally relies on § 823 II BGB in connection with § 367 I no 15 StGB. This provision provides, inter alia, that it is an offence for a builder or building worker to construct a building in deliberate deviation from the building plan approved by the authority. According to the claimant, an offence was here committed because the approval of the plan was based on specific calculations, incorporated in the submission, relating to the load-bearing capacity of the construction, and these calculations were in turn based on the quality of the concrete to be used. It is not necessary to decide whether the use of concrete inferior to that on which the stress calculations were based constitutes a deliberate deviation from the authorised plan. We agree with the OLG that § 367 I no 15 StGB is not designed to offer protection against harm of the sort for which the claimant claims damages. It is true that in its decision reported in LM no 1 § 823 (Bb) BGB the BGH recognised that § 367 I no 15 StGB was a protective statute; that case, however, involved personal injuries suffered by a worker employed on the building site. In the view of the OLG, § 367 I no 15 StGB is like § 330 StGB in offering protection only to the human person. This view is open to criticism. The final Courts of Appeal have accepted that the cognate provision of § 367 I no 14 StGB exists for the protection of property as well and that a breach of the provision may also give rise to claims for damages in respect of property damage under § 823 II BGB (RGZ 51, 177–8, BGH, LM no 2 to § 823 Bd BGB). Both these decisions were concerned with harm caused to neighbouring buildings adjoining the building site and vested in third parties. Thus it may be taken that the protective purpose of § 367 I no 15 StGB is also to be construed to guard against damage to property as well as damage to persons. In the present case, however, as has already been stated, there is no damage to property but a pecuniary loss attributable to the defective execution of the building work in breach of contract. Notes to Cases 53–55 1. Cases 53–55 deal with damage to the product and not damage caused by the product. The questions here are basically two: (i) is this economic loss or physical damage and (ii) should the answer be left to the law of contract or be found in an extended law of tort? If the answer favours tort, should the tort duty be determined, both in its scope and extent, by the underlying contract?

Case 55, concerned the question whether a defective design could as such lead to damage to property (Eigentum) in the meaning of § 823 I BGB. The court denied this: ‘The land owned by the claimant, as compared with what it was, has suffered no harm through the defective method of construction’. The claimant never owned it in a non-defective condition. This restrictive approach must now however be approached

Appendix 2  479 with caution. For in BGH, NJW 2001, 1361, the BGH held that in principle the criteria developed in earlier cases (reproduced in the previous edition as cases 68–73) in relation to chattels could be applied by analogy to immovables. Yet, in the case at hand it denied liability under § 823 I BGB. The (simplified) facts were these. The claimant bought a site from the defendant and erected buildings on it. The defendant had filled the site with slag that made the site unsuitable for building. Within a couple of years cracks appeared in the buildings. The claimant sought a declaratory judgment that the defendant was liable in tort for the cost of repair of the buildings. The BGH held that the claimant never owned the building in a non-defective condition. It was of central importance that the site was from the outset unsuitable for building. The defect ‘attached’ to the whole property and could not be confined to one of its ‘components’. The mere fact that the buildings were not defective when build (but became so only subsequently) did not indicate otherwise. Thus, where the building is ‘doomed’ from the outset, whether because of a defective design (here the court relied on case 55) or unsound foundations as in the present case, § 823 I BGB cannot be relied on. In the final analysis one wonders, however, whether this new approach will substantially increase the use of tort law in this area. Purchasers of buildings or building employers will have difficulties to show that they ever owned the land in a non-defective condition. Thus, the main remedy for claimants in such situations will lie in the law of contract, which is not without its pitfalls, given the shorter limitation periods which are ‘objective’ in the sense that they do not depend on whether the claimant knew or could have known of the defect. Claimants who have a cause of action against a local authority for negligently granting permission to build on a site unsuitable for building are, at least in theory, in a better starting position. (This is the situation in case 74 of the previous edition, BGHZ 39, 358.) For here, under § 839 BGB in combination with Article 34 GG, the claimant can recover damages also for pure economic loss. This is not say, however, that the claimant will recover easily, as case 74 illustrates. For such liability to arise the claimant must establish that the local authority violated a duty that specifically protected the claimant’s interests. This was denied in case 74. In assessing whether such a duty of care was breached, as will be further explained in chapter eight, section I.A.ii, there is ample room for policy considerations. Foreseeability of loss is not a sufficient condition of liability. The courts have, after much hesitation, allowed claims (also for pure economic loss) where the health of potential occupants of a licensed building was potentially affected (eg, because the building was erected on an abandoned and temporarily forgotten waste damp). The first decision in which the BGH adopted a more generous approach, and in which it awarded damages to a purchaser of a building that was inhabitable because it was erected on polluted soil, was BGHZ 106, 323. Damages were assessed on this basis. The claimant’s investment in the site and the building was frustrated. Accordingly, it could be recovered, minus what the land was actually worth. The case law that followed is rich and not easy to reconcile. A detailed examination of these cases at the borderline between public (building) law and the tort law must be reserved to a specialised treatise. Here, suffice it to make three general observations. First, the factual background of this line of cases was a growing awareness of environmental issues, in particular, of the dangers posed

480  Appendix 2 by old waste damps and the like. Secondly, generally speaking, the courts confined this new head of liability to cases where the planning authority (city or district councils) neglected health risks. This enabled the courts, thirdly, to limit liability for pure economic loss to a clearly identifiable, small group of victims. This is achieved by confining the protective scope of the duty of care to those persons who intend to live in a building that is not inhabitable because of the negligent planning. 5. Where a defective component causes further damage to the product but no other damage to persons or other property (so-called Weiterfressermangel or Weiterfresserschaden). This borderline case has caused its problems; and it is here that tort is increasingly used to invade the province of contract law. This unease is reflected in the German cases reproduced in the previous edition of this book. (Note, eg, case 68 and, incidentally, note how superficially (by English standards) earlier case law is brushed aside. This ‘summary’ way that earlier ‘precedents’ are handled by German courts is a subject worthy of further study.) Thus it is said that if the defect and the damage caused by it are not ‘substantially the same’ then recovery for the latter is possible in tort. And conversely, if there is ‘substantial identity’ (Stoffgleichheit) between defect and subsequent harm, then no tort action will be allowed. So where asbestos tiles attached to the claimant’s house released in rainy weather a substance which silted up his windows, a tortious claim was successful (BGH, NJW 1981, 2250). But in another case (BGH, NJW 1981, 2248) insulation material built into a roof caused it to crack as temperature variations produced expansion and contraction. The defect and the damage it caused were here considered to be ‘substantially the same’ so the tort action failed. 6. Decisions such as those just mentioned provide illustrations; but the criterion of ‘substantial identity’ troubled the German courts. The famous Kompressorfall case (case 54) introduced a new test which requires the court to compare the defect of the product when acquired with the damage done when the defect has spread. This German case law has always proved highly controversial with academics, but their criticisms have left the judges unmoved. After the Schuldrechtsform of 2002 the situation becomes even more complicated as it is not certain anymore whether the courts want to uphold the Weiterfresserschaden-­ jurisprudence at all anymore. One of the reasons for this uncertainty is that the new § 438 I no 3, II BGB has a longer limitation period for (moveable) objects (two years) than before (only six months under the old § 477 BGB). Hence, one might argue that there is less of a reason for the courts now to circumvent the contractual liability (with its very short limitation period) with the Weiterfresserschaden-jurisprudence (the tort limitation period is three years under §§ 195, 199 BGB, but with a later beginning of the limitation period than § 438 I no 3, II BGB (for the latter: delivery)). However, it seems that the courts do not want to abolish the idea of the Weiterfresserschaden. (See more detailed about the situation after the Schuldrechtsreform: Janssen ‘Die Zukunft des weiterfressenden Mangels nach der Schuldrechtsreform’ VuR 2004, 60 ff). 7. The previous edition (621–22) contained unpublished letters from Professor Hein Kötz and Professor John Fleming on cases 53 and 54. These comments provided useful com­parative lessons for common lawyers at the time before the Schuldrechtsreform of 2002.

Appendix 2  481 CASES TO CHAPTER 5: LIABILITY FOR OTHERS 1. § 831 bgb Case 56 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 7 OCTOBER 1975 NJW 1976, 46 = JZ 1975, 733 Facts The claimant, the Gas–Electricity and Waterworks of the City of K, as holders of the right to draw water for their undertaking, claimed damages in respect of expenses incurred or likely to be incurred in the future as a result of the pollution of the water-table by petroleum waste. The claimant alleged that the fourth defendant, a petrochemical enterprise, had engaged the first defendant on the recommendation of the second defendant – an independent expert on damage by mineral oil and de facto manager of the first defendant – to carry and safely to dispose of their oil waste consisting mainly of a mixture of oil and water. In carrying out this assignment, the first defendant had installed ovens and barrels in a gravel-pit filled with refuse situated in an area which had been designated by the government as a protected water-zone for the use of the waterworks. No licence had been obtained, although the first defendant had been given to understand by the competent authorities that it would be forthcoming, if certain conditions were complied with. On being alerted by an outsider that the oil waste had not been disposed of expertly, the claimant caused boreholes to be sunk and excavations to be made which disclosed that the water-table was covered by an extensive body of oil. In the action against the fourth defendant the claimant sought to be reimbursed for the expense of drilling observation wells and of collecting and examining samples of water and soil. The LG, by a separate judgment, rejected the claim against the fourth defendant while allowing the other actions to proceed. On appeal by the claimant, the OLG Köln quashed the judgment of the LG and referred the case back. A second appeal was unsuccessful for the following. Reasons I. The OLG has held that the fourth defendant is liable in tort (§ 823 I BGB), as well as on the ground that the claimant had acted on his behalf in his interests and in accordance with his actual or presumed intention (§§ 683, 677, 670 BGB), to pay the expenses claimed by the claimant if further evidence to be obtained by the LG reveals that the first defendant has contaminated the water-table to the claimant’s detriment by disposing inexpertly of the waste entrusted to him. 1. The claimant’s pleadings do not support any liability of the fourth defendant according to the provision of § 22 of the Water Preservation Act (WHG) which establishes extensive strict liability for such expenses in the instances enumerated there. (a) § 22 I WHG cannot serve as a basis of the claim, if for no other reason, because no act of the fourth defendant was objectively capable of allowing the waste produce to seep into the water-table [references omitted]. The fourth defendant has not even envisaged and accepted the possibility that the oil waste might be disposed of in this manner nor were

482  Appendix 2 the measures taken by him for the destruction of the waste in fact capable of allowing the waste to seep into the water. The circumstance that by handing the waste over to the first defendant he enabled the latter to dispose of it improperly, contrary to a contractual arrangement, does not suffice to attract liability under § 22 I WHG. This provision was not intended to create such an extensive liability for the unauthorised conduct of third parties … (b) The fourth defendant cannot be held liable under § 22 II WHG because the noxious substances infiltrated into the water-table from the first defendant’s installation but not from that of the fourth defendant from which they had already been carried away. 2. Liability for damage caused by the fact that waste materials seeped into the water-table is not, however, confined to the situations enumerated in § 22 WHG. This provision was intended to reinforce the protection against interference with the quality of water by introducing strict liability; in the absence of an express statement to this effect this provision, like any other establishing strict liability, does not preclude claims based on tort or on quasicontract [acting for another without authorisation; references omitted]. The OLG was also correct when considering this ground of liability that the right of the claimant enjoyed by virtue of §§ 46 ff, 200, 203 of the Prussian Water Act was not affected by subsequent legislation [references omitted]. The right to extract water is an absolute right in the meaning of § 823 I BGB to be respected by everybody [reference omitted], capable of being violated by the pollution by noxious substances to the water-table in the area of the intake operated by the claimant’s waterworks [reference omitted]. The OLG was right in holding consequently that the fourth defendant must prevent as far as possible any such interferences with the right to extract water by waste products and that if he fails to act in accordance with the care required in daily life he must, inter alia, pay for the necessary measure to avert the danger to the supply of drinking-water by the water-works as a result of a pollution of the water-table [references omitted]. II. 1. As stated, the producer of such industrial waste which is a source of danger to the environment in the absence of special measures is liable, irrespective of other special rules of conduct and of the legal consequences resulting from their infringement under § 823 I BGB, to take the necessary steps in the execution of the general duty of care to safeguard the public in general [Verkehrssicherungspflicht] derived from § 823 I BGB to avoid that the (potential) danger results in damage to third parties. Just as the producer of goods is subject to this duty in respect of goods introduced into commerce [references omitted] the producer of industrial waste must also seek to avert within the limits of what is practicable any usual dangers emanating from by-products ‘of negative value’. It is irrelevant in this connection that they are not for sale, as is also that their manufacture is allowed. The fact alone determines that the manufacturer has created the source of danger and must render it safe for third parties within the limits of what is possible and can be expected of him. This general principle of the law of tort [reference omitted] has its counterpart, as regards objective imputation, in the maxim which also dominates in public law relating to the environment to the effect that he who causes damage to the environment must also pay for it [references omitted] … 2. The OLG has found, without contravening the law, that the waste containing petroleum constitutes a special danger for the maintenance of the water-table if it is stored or

Appendix 2  483 destroyed inexpertly. Given the danger to the environment, especially having regard to the quantity of petroleum waste products produced by the fourth defendant (about 570 tonnes in approximately two months), strict care was required in storing and disposing of it. The OLG stressed correctly in this connection that a harmless disposal of the waste was technically difficult and therefore demanded a special method and a special installation for destroying it if the danger of inexpert or incomplete destruction was to be avoided; and that at least greater storage capacity and longer storage was necessary with its attendant perils. 3. The Court was right, moreover, in holding that the fourth defendant was not obliged to store, and dispose of, the waste himself, but could delegate this task to an independent enterprise which could not be regarded as its aide in the meaning of § 831 [editor’s note: the judgment refers wrongly to § 832] BGB in the absence of a relationship of dependency. In such circumstances, the fourth defendant was, however, bound to see to it that the necessary safety measures were taken properly in order to prevent damage to third parties by the disposal of the oil waste. (a) Naturally the supervision of a specialised enterprise is limited by the need for a trusting collaboration, and by the independence and the immunity from orders of the agent; it would mean straining excessively the requirements of care in the face of economic and technical reality if the principal were asked to control at every step the manner in which the agent operates. On the other hand, those subject to duties of care to safeguard the public in general are not always released of their responsibility for the sources of danger which they have created if another is equally bound to take safeguarding action by virtue of a contract. Instead they may be obliged, if the circumstances so require – as for instance in an acutely dangerous situation [reference: fireworks] or if serious reasons exist for doubting whether the agent will take sufficient account of the dangers and the need to safeguard against them [reference: Mosel Lock construction] – to control the work by the enterprise entrusted with it or to intervene in case of necessity [reference omitted]. In particular, the duty is not discharged if an enterprise is employed which does not offer a sufficient guarantee that the necessary safety measures will be taken; for in those circumstances the delegation to such an enterprise of the duty to safeguard the public only increases the danger of damages to third parties. In such a case those subject to a duty of care to safeguard the public in general cannot plead that by the interposition of an independent enterprise their power controlling the source of danger has been curtailed. They had the opportunity to select the agent carefully; the more their influence is limited by the independence of the enterprise to which the task is delegated, the more the duty to select the enterprise carefully must be taken seriously. They are liable if the danger materialises, since they themselves brought it about by employing an unreliable enterprise. (b) The appellant argues that petroleum waste is no more dangerous than the petroleum produced by the fourth defendant. Since the fourth defendant cannot be held liable for damage caused by an inappropriate use of the petroleum after it has been delivered to his customers he cannot be liable either if an enterprise engaging in the destruction of waste employed by him disposes of the waste in an improper manner contrary to a contractual arrangement. This argument cannot be accepted – at least in this generalisation. It need not be decided whether and to what extent the manufacturer of goods can also be held liable for damage

484  Appendix 2 to third parties when the product is used contrary to its intended use, if the manufacturer ought in this respect to have had doubts about the reliability of the customer [references omitted]. In determining and delimiting the respective spheres of liability it is decisive that the waste incidental to the manufacture of petroleum and its disposal are, so to say, the ‘negative aspect’ of the manufacture and that, according to the general view, its destruction is and remains a matter for the manufacturer, while the ‘destruction’ of the petroleum is in the hands of the customer according to its purpose. If a manufacturer decides to engage in the production of petroleum, he must provide for safe destruction of waste, the more so since this normally requires special measures; certainly resort may also be had to his liability in private law if somebody is damaged by the waste. If the manufacturer employs a third party for the disposal of the waste, he complies with his own duty to safeguard the public in general through the interposition of the third party … 4. No legal objections exist against the finding of the OLG that in the course of the enquiries, which were necessary and could be expected to be carried out before delegating the task, the fourth defendant should have realised that the enterprise employed by him did not at the time offer a sufficient guarantee that the waste would be disposed of safely and that, if the enterprise should have disposed of it in the way the claimant alleges, dangers did materialise for which the fourth defendant is liable, not having used sufficient care in selecting the enterprise. (a) The OLG is correct in law when it bases its critical appreciation of the first defendant’s action on the primitive conditions in which the installation, established provisionally only, was operated … This method did not comply with the provisions of § 34 II 1 WHG according to which even outside a water-protection zone materials may only be stored or deposited so as not to create the fear that the water-table may become polluted or that its quality may be affected in any other way. The fact that the installation was set up on a foundation of clay which had been spread over the refuse did not exclude with the necessary degree of certainty a pollution of the water-table – by seeping oil – if only as a result of mixing it with oil [reference omitted], the more so since it was uncertain whether the layer was resistant to water and fluids throughout [reference omitted]. For this reason, special measures had to be taken for the protection of the water-table so as to prevent effectively that oil should escape because the containers begin to leak as a result of corrosion, of defective materials or construction, or in consequence of spilling in the course of filling or emptying [references omitted] … At all events the fourth defendant should have realised, when he gave the order, that the installation lacked the simplest safety mechanism for protecting the water-table and that in its actual state the harmless destruction of the waste was not guaranteed, keeping in mind the amount of waste to be destroyed. If so, he should have entertained doubts about the reliability of the management of the enterprise which has so flagrantly disregarded the simplest requirements of safety. In view of such manifest flagrant omissions the fourth defendant could also have foreseen that the first defendant in destroying the oil waste would not seriously consider the protection of the water-table … (b) Having regard to its duty to safeguard the public in general [Verkehrssicherungspflicht], the fourth defendant was obliged to inform himself of the operational conditions of the first defendant before entrusting him with the waste oil. The fact that at the time malpractices

Appendix 2  485 in disposing of industrial waste had not seriously concerned the public and the industries involved, as the appellant contends, does not relieve the fourth defendant; given his experience he must have been aware of the possibility and the resulting danger of an improper destruction of such waste … In agreement with the OLG it must be held that the fourth defendant could not rely on the recommendations of the second defendant, even if he got to know him as a reliable expert on the prevention of damage by oil and that he had been recommended as such by the water authorities and by the department head of the fourth defendant’s insurers. Whether the same considerations would apply also if the second defendant had not been personally connected with the first defendant need not be decided here. At any rate … the fourth defendant knew that the second defendant had founded the enterprise together with his wife, who was only nominally the manager, and that in fact he managed the affairs of the first defendant himself. III. 1. In view of those considerations, the OLG had held correctly that if the fourth defendant had applied the standard of care required of him, he should not have left it to the first defendant to dispose of the waste, at least not without taking special measures for controlling the destruction. Consequently, the fourth defendant is liable, certainly from the angle of damages due according to § 823 BGB, to compensate the claimant for the expenses necessarily incurred in restricting the dangers to the supply of drinking-water, in so far as they are caused by the alleged inexpert operations of the first defendant and would not have occurred if the fourth defendant had properly complied with his duty of care to safeguard the public in general. Case 57 BUNDESGERICHTSHOF (SEVENTH CIVIL SENATE) 30 OCTOBER 1967 BGHZ 49, 19 = NJW 1968, 391 = VersR 1968, 92 Facts The claimant finances hire-purchase agreements of motor-cars by providing loans for the purchasers. The money representing the loans is paid direct to the vendors in discharge of the purchase price. The claimant only grants a loan if title to the motor vehicle is transferred to him by way of security, if the seller becomes a surety, and if a report concerning the purchaser’s creditworthiness is favourable. The defendant carries on the business of an information agency with branches in sixteen cities of the Federal Republic. The branch in Bonn was managed from 1955 onwards by Z, its ‘commercial representative’ (until he died in March 1962). For many years Z provided the motor car dealer F – who has since lost his fortune and was adjudicated bankrupt at his request – with ‘information concerning the financial standing’ of about 1,500 clients of F. This information was supplied on paper with the name of the defendant at the letter-head. In twenty-six cases the information was invented; the persons did not exist; in five other cases the persons existed, but the information was too favourable. In these twenty-six cases Z wrote the letters at short notice without having engaged in any enquiries or examination, relying exclusively on the information supplied by F, and concealed their existence from the defendant. Using these letters, F deceived the claimant into making him pay over the ‘loan’. The LG found, and it is now undisputed, that Z was aware of the danger to the claimant’s assets as a result of his conduct, but that he took the risk.

486  Appendix 2 The claimant claims from the defendant damages in respect of the loss, alleged to be DM 201,145.08, caused by F and Z. The defendant disputes the claim both as to its basis and its extent. He also pleads contributory negligence … The LG and the OLG Frankfurt rejected the claim. Upon a second appeal the claim was admitted in principle and the case referred back to ascertain the amount for the following. Reasons The claimant argues that the defendant is liable under § 31 BGB for the torts committed by Z to the detriment of the claimant. The OLG denies this. 1. It holds that Z is not the defendant’s representative appointed in accordance with the statutes in the meaning of § 31 BGB. He lacked the necessary independence in his dealings with third parties and a sphere of administration of his own within functions of management of the defendant. These arguments are not free from error in law. The facts as found by the OLG compel the conclusion that Z was the representative of the defendant in the meaning of § 31 BGB. (a) According to this provision, a legal entity is responsible for the damage to a third party by its representative, appointed in accordance with the statutes, as a result of an act ‘in the execution of the duties allotted to him’ which engages liability to pay damages. The legal concept of ‘representative appointed in accordance with the statutes’ has been extended increasingly in practice and in the literature. The OLG has overlooked this. Representatives appointed in accordance with the statutes are not only those persons whose activities are envisaged by the statutes of a legal entity, nor need they possess the right to represent the entity in legal transactions. It is not necessary either that the range of tasks falls within the managerial administration of the legal entity. It suffices if the representative is entrusted with handling important and essential functions of the legal entity by the general system and functioning of the enterprise [references omitted]. In such circumstances it would be inequitable to permit the legal entity to exonerate itself in reliance on § 831 BGB. (b) These conditions were fulfilled in the present case as regards Z. (aa) It is undisputed that he managed the office of the defendant in Bonn as a ‘one-man business’ in complete independence. With the permission of the defendant he described the office as a ‘branch’ of the latter. In agreement with the defendant he used the latter’s business stationery and reference forms and a stamp to the same effect. Thus, in his dealings with third parties he clearly did not act as an ‘independent commercial agent’ on behalf of the defendant; the OLG was wrong in holding that in fact he managed the defendant’s office in Bonn as an independent agency of information. (bb) In view of the agreed conduct in dealings with third parties, it is irrelevant that, as between Z and the defendant, their legal relationship was governed by the ‘contract of agency’ of 11 August 1955 in accordance with the law relating to commercial agents. This does not rule out the conclusion that in his relations with third parties Z was the representative of the defendant in accordance with § 31 BGB. (cc) By providing references on paper bearing the letter-head of the defendant, Z made the statements contained therein in the name of the defendant. Nothing in these letters indicates that these are not statements of the defendant, but only of Z. Obviously, the value of these references for the recipient consisted in the fact that they emanated from the reputable

Appendix 2  487 defendant, a big information agency known throughout the world. It is not disputed that the defendant knew of this general practice of Z, although the particular thirty-one ‘references’ which form the basis of the present claim were concealed from him. (dd) The OLG has found that the defendant himself engages in the business of an information agency, that he has set up and maintains a network of information offices, that it provides these offices with the sources from which to draw their information and permits these offices to use its business name. In so doing it has, to a wide extent, delegated to the managers of its ‘offices’ the independent discharge of its characteristic functions (to provide information). Thus, the defendant has also delegated to Z the task of supplying references independently in the area of Bonn. It need not be stressed that the provision of references on creditworthiness by an information agency is a very responsible activity; if carried out carelessly much damage can be caused, as the present case shows clearly. 2. By way of a subsidiary argument the OLG denies that the defendant is responsible for Z under § 31 BGB on the ground that his torts had not been committed ‘in the execution of the functions allotted to him’, but only on their ‘occasion’. This conclusion, too, is wrong having regard to the facts as found by the OLG. (a) An act is done in the execution of the duties entrusted to a person if it remains within the range of measures which constitute the execution of the functions entrusted to him. The act must be in close objective connection with those measures. The liability is not excluded if the order is exceeded or the power is abused. A deliberate tortious act may well be committed in close objective connection with the allotted functions; this is the case, in particular, if the tortious act violates the allotted specific duties [references omitted]. (b) The defendant refers to the decision [references omitted]. However, that case must be distinguished. A credit agent who had been entrusted with a single sale of a motor vehicle had falsely represented to a third party that the order had been carried out, in order to get hold of the moneys involved. In so doing, the agent had severed himself from his allotted range of functions objectively as well. As is pointed out in that decision, the conclusion would have been different if he had sold the vehicle intentionally on his own account and had embezzled the purchase price; this act would still have been sufficiently connected with the functions allotted to him. This is not the case here. It is true that Z gave false references, but they were references and thus he operated exactly within his real sphere of functions. The close objective connection is not destroyed by the fact that he exceeded his powers arbitrarily and intentionally illegally. 3. The OLG relies on an additional subsidiary argument to the effect that the claimant’s contrib­utory negligence excludes altogether a possible obligation of the defendant to pay damages … The judgment of the OLG does not show clearly whether this statement refers only to liability under § 831 BGB or whether the OLG also wishes thereby to rule out any claim under § 31 BGB which, as was shown here, is alone in issue. If the latter should be the case, the decision of the OLG cannot be approved. Faced with intentional acts of representatives appointed in accordance with the statutes in accordance with § 31 BGB, contributory negligence on the part of the injured party can never be regarded as so serious as to preclude a claim for damages altogether.

488  Appendix 2 Case 58 BUNDESGERICHTSHOF (THIRD CIVIL SENATE) 14 JANUARY 1954 BGHZ 12, 94 = NJW 1954, 913 Facts The claimant, who was insured by M, while riding his motorcycle at night collided with one of four telegraph poles which were lying across the road and suffered a severe fracture of his skull. The LG allowed his claim for damages, but the OLG Frankfurt rejected it. Upon a second appeal the judgment below was quashed and the case referred back for the following. Reasons I. The defendant, the Federal Post, is only liable for the consequences of the accident if the case falls within the ambit of a particular statutory provision. The law in force at present does not provide for liability ‘according to general principles’; in particular it does not contain a principle that everybody is liable to make good any damage caused by his property unless he can prove that he is not to be blamed for the fact that the location of the property imperilled others. Absolute strict liability of the defendant in respect of the telephone lines maintained by it deserves even less consideration. II. The claimant complains that the defendant did not maintain its installations in a safe condition for traffic and that its employees did not take measures for removing the recent obstacle to traffic. None of these considerations is sufficient to hold the defendant liable under § 839 BGB and Article 131 of the Constitution of Weimar; even in the case of public operations both the duty to maintain an installation adequately for traffic purposes as well as the duty to remove sudden obstacles to traffic are obligations which do not arise out of a special relationship of protection between the public authority and a third party who happens to have been affected accidentally; the real reason is that objectively a dangerous situation has been created. Where such obligations to take safeguarding measures are concerned public corporations are not to be treated differently from private persons, even if the activity in question may bear the character of an act jure imperii. The liability of the public corporation is therefore governed by §§ 823, 831 BGB. Following the practice of the RG, this Senate in its decision [reference omitted] has given detailed reasons for so holding; the observations made there as to the duty to safeguard the public in respect of a public path apply here as well. The appellant is wrong in relying in this connection on the argument that according to the practice of the courts the activity of the Federal Post has been regarded increasingly as being exercised jure imperii. The appellant is also wrong in referring to the decision of the RG [reference omitted]; it is there stated expressly that the principle set out here applies also to damage caused by the laying of telephone cables; as regards ‘third-party outsiders’ no liability arises under § 839 BGB; liability in the exercise of official functions to protect a third party against damage exists only in favour of those who are obliged, by virtue of the Law concerning Telegraph Lines to suffer interference with their property. However, this is not the case. III. The OLG has held correctly that the defendant is not liable for having failed to remove the fallen telegraph poles from the highway in time.

Appendix 2  489 1. The objection of the appellant to the conclusion of the OLG that the defendant is not liable under § 831 BGB is unfounded. (a) According to a constant practice no liability arises under § 831 BGB, even in the absence of separate evidence in exoneration, if the employee has acted in such a manner as any carefully selected person would have done [reference omitted]. (b) The technical supervisor acted, however, as any other employee, including he who acts with the necessary care, would have acted. It may be that the night in question was stormy and that this could also be observed at the Post Office in L. It cannot be said, however, that in these circumstances an employee of the Post Office, acting with the necessary care, on noticing a partial disruption of the telephone lines would have dispatched immediately a repair column during the night. Since only seven out of thirty lines failed to function, it could not be assumed that poles had fallen and that the lines had collapsed. The defendant has stated, and the claimant has not disputed it, that such interruption had also occurred previously due to the fact that damp had penetrated the cables and because ‘lead fatigue’ had affected the strength of the cables. The parties agree that during the night when the accident happened the weather was wet. It is understandable, therefore, that the technical supervisor also attributed this disruption of the lines to the causes which had been observed previously. It must be conceded to the defendants that little purpose would have been served in attempting to remedy this disruption if a repair column had been sent on a search errand during the night. The Act on Telegraph Lines, too, assumes, as § 12 III shows, that disruptions are normally dealt with during daytime only. 2. In these circumstances, the appellant is wrong in contending that the telephone business had been supervised inadequately by the defendant and that it was therefore liable for the damage – directly in accordance with § 823 BGB – thus ruling out the need to prove that one of its organs had been at fault. Such liability has been held by the practice to exist, eg, if a public corporation has failed to take any measures at all which serve to control its installations in order to ensure the safety of traffic [references omitted]. During the night from 15 to 16 February 1948, too, an employee of the Post Office had been charged with supervising the functioning of the telephone lines. It need not be decided whether the technical supervisor could be regarded as an ‘organ’ of the defendant in the meaning of §§ 89, 30, 31 BGB; the OLG has rightly denied that he acted negligently. The observations made above in respect of the question whether a carefully chosen employee would have acted in the same way have shown that he did not act culpably. It has not been demonstrated either that during the night when the accident occurred another employee of the defendant or one of his organs negligently omitted to attend to the telephone lines. No claims arise therefore on the ground that the obstacle to traffic had not been discovered and removed in time. IV. The claimant also bases his claim on the ground that the defendant had not maintained its telephone poles properly; the accident had occurred because the storm had felled a rotten pole which by means of the telephone cable had in turn pulled down the other poles which had been secured inadequately. This allegation has not been considered entirely satisfactorily by the court below. 1. The OLG does not consider this allegation as forming a basis of the claim because in its opinion the fact has not been proved and is incapable of being proved that the accident

490  Appendix 2 actually occurred in the way alleged by the claimant; the possibility should not be ruled out that an American lorry had collided with a pole and had thus caused the collapse of the telephone lines. In so far as the appellant argues that the OLG had misunderstood the burden of proof, seeing that faced with an actual situation in violation of the traffic rules the defendant bore the burden of proof ‘that it is not responsible for the dangerous condition of its installation’, his contention cannot be accepted. It is for the claimant to prove that the damage was caused by faulty maintenance of the installation not only where the claim is based on § 823 BGB but also in the case of § 836 BGB [reference omitted]. This follows from the principle that a claimant must prove that the factual conditions exist for the creation of a right. 2. The OLG overlooks, however, that the defendant may be liable even if an American lorry had collided with the pole, thus leading to the collapse of the telephone lines. The OLG is of the opinion that the possibility of the lorry by colliding with it made a strong impact on one of the poles is to be ruled out. In the absence of any traces on one of the collapsed poles, experience shows that, if at all, the collision would only have had a weak impact on the pole. If, however, even a slight impact with the pole could have resulted in a complete collapse of a part of the installation, the possibility would exist that inadequate maintenance of the installation was in fact a contributory cause of the accident. It must be considered whether the rotten condition of one of the poles, conceded by the defendant itself, was so considerable and, apart from this the other poles had been secured insufficiently so as to render them no longer safe for traffic. It need not be decided whether the storm or the lorry broke the pole. Neither does a natural event create liability nor does the act of a third party exclude liability in all cases. This principle applies also in respect of § 836 BGB. In dealing with the question of causality, the determining factor is whether the structure was so inadequately maintained or secured that even a minor impact, to be taken into consideration as normal, could lead to its collapse. The ‘last’ cause may perhaps never be ascertained, and yet liability may not be excluded for this reason. If upon further examination it should appear that the telephone poles were deficient in the sense indicated here, the defendant would be liable under § 823 BGB in conjunction with §§ 89, 31, 30, unless it proves that none of the organs is to blame; the fact alone that another dangerous situation was allowed to persist is a sufficient indication that the care was lacking which is required for safeguarding traffic … In view of the special features of this case, liability under § 823 BGB would exist if it should be established that the telephone lines were inadequately maintained, unless the defendant can exonerate himself. In these circumstances it is unnecessary to discuss the question raised by the appellant as to whether liability under § 836 BGB can arise even if the damage has not been caused by the ‘mobile force’ of the collapsing structure but by the fact that the collapsed structure is allowed to lie on a road which carried public traffic. § 836 BGB does not involve a different type of case but only a reversal of the burden of proof [reference omitted]. Thus § 836 BGB can be disregarded if within the framework of § 823 BGB the debtor is called upon exceptionally to prove that he is not to blame.

Appendix 2  491 Case 59 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 10 JULY 1954 NJW 1956, 1106 Facts The claimant was a patient in the neurological clinic of the Municipal Hospital in B between 25 May 1951 and 9 February 1952. He suffered from introspective-endogenous depressions. On 24 May 1951 he received electro-shock treatment and on 28 May 1951 he underwent a lumbar puncture. On 6 and 7 June 1952 the electro-shock treatment was repeated. In the course of it he suffered a fracture of the twelfth vertebra from which he recovered after having lain in plaster for six-and-a-half months. Since then his right leg is paralysed and he suffers from intestinal and heart trouble. The medical expert of the Social Insurance Office of the Land regards him as incapable of work. The OLG Bremen allowed the claimant’s claim for damages against the hospital of the defendant. A second appeal was unsuccessful for the following. Reasons The OLG has found that the claimant entered the clinic of the defendant as a patient supported by social security. It has held correctly that in these cases the legal relationship between the municipal hospital or clinic and the patient is of a private law nature. According to a constant practice of the RG, followed by the BGH [references omitted], the reception of a patient supported by social security creates a contract with the hospital in favour of the patient with the result that the patient acquires a right of his own to be treated expertly. If a doctor, who has been charged with the treatment of such a patient supported by social security commits a mistake culpably, the defendant as owner of the clinic is liable according to § 278 BGB for the mistake of the doctor appointed by him to perform the duties of the latter. On the other hand, as the OLG has pointed out, a claim for pain and suffering against a doctor in charge on the ground of assault causing bodily harm cannot be based on § 278 BGB, but only on § 831 BGB, unless direct liability under § 823 BGB is in issue. II. 1. The appellant is wrong in alleging that the claimant had validly consented to the electro-shock treatment and that this consent could only have been annulled in accordance with §§ 161 ff BGB. This view would only be correct if (a) the claimant had been aware of the typical dangers of electro-shock treatment and, in particular, of a fracture of the spine and if with knowledge of these dangers his consent had included these factors, or (b) the doctor in charge could so understand and interpret the general conduct of the claimant in the particular circumstances of the case and having regard to the views current in human relations between reasonable people that the claimant was aware in outline of the dangers connected with shock treatment and that he had accepted the risk. As to (a): It is a constant practice in cases where a passenger in a motor vehicle is injured that an exemption from liability based on the assumption of a risk can only be presumed if the victim went on the journey conscious of the possibility of danger and thus consented expressly or tacitly to a possible danger arising out of the driver’s conduct, whether culpable

492  Appendix 2 or not. Such a consent does not include dangers which the victim merely ought to have noticed [references omitted]. Similarly, the RG has pointed out [reference omitted] that physical treatment by a doctor involving the corporeal inviolability of a patient is only covered by the contract and not illegal in so far as the consent of the patient extends to it. According to the RG, [reference omitted] before applying any physical treatment the doctor must make certain of the patient’s consent, which must be done based upon correct ideas concerning the nature and consequences of the treatment, even if naturally it does not cover all details. In [reference omitted] the RG upheld this view. The BGH has affirmed this view [reference omitted], even if in the case before it the existence and the extent of the consent was not in issue, but whether it was void on the ground of illegality or contrary to bonos mores. These principles must be applied here. The OLG agrees [reference omitted] … by requiring that a valid consent presupposes that the person who gives it knew the significance and the extent of the physical treatment by the doctor, at least in outline. No objections can therefore be raised against its legal conclusions. As to (b): As the RG [reference omitted] and the BGH [references omitted] have stated, the declared and not the subjective intention of the claimant counts. The OLG has found that the doctors administering the treatment assumed that the claimant had consented. However, according to the OLG they should have realised that real consent was lacking. They had therefore assumed negligently that consent had been given. This conclusion cannot be faulted in law. The court has thereby correctly made it clear that all the claimant’s declarations, oral, tacit, or to be presumed, could not and should not have been regarded by the doctors treating him, having regard to the attendant circumstances and according to good faith, as constituting a valid consent which included the possible dangers connected with the physical treatment … 2. The appellant denies that, as the OLG held, he was obliged to inform the claimant of the possible consequences of the electro-shock treatment. The OLG, in examining whether the doctor was under a duty to give information, rightly relied on the practice of the RG according to which the substance and the extent of the duty to inform a patient is influenced by the degree of danger which the physical treatment affecting corporeal inviolability involves. The duty to respect the freedom to allow physical treatment affecting corporeal inviolability cannot be denied on the ground that the relationship between patient and doctor requires the use of a special standard. It is the ethical task of a doctor to listen to the patient and to inform him in detail about undesirable side effects of the therapy to be used. If the right of personality is properly appreciated, it cannot be said that this appreciation discloses a tendency, flowing from a mistaken notion of freedom, to enmesh in a network of legal provisions the special relationship between doctor and patient. On the contrary, this duty to give information concerning the possible injurious consequences of the therapy is part of a doctor’s calling which must not fail to pay regard to personality and corporeal inviolability. It is no answer to point out that in certain cases it may perhaps be advisable not to enlighten the patient. It is unnecessary here to determine the extent of the duty to provide information as regards diagnosis and therapy and what the doctor can and must say, for in the present case no information was given at all. The OLG has also rightly referred to the decision of the RG [reference omitted] where it is stated that as a matter of principle the individual must remain free to determine the fate of his body even in relation to his doctor

Appendix 2  493 [reference omitted]. Naturally the doctor would attempt to spare the patient injurious fear and not to remind him unnecessarily of the possible serious consequences of his illness. However, this consideration had to give precedence to the necessity for the doctor to ensure before any physical treatment is begun that the patient has given clear consent, based upon accurate ideas concerning the kind and the consequences of the corporeal treatment. In so far as the information provided in order to obtain the patient’s consent led to a lowering of his mood or even of his health in general, it was an inevitable disadvantage which had to be accepted. It is unnecessary here to discuss the cases decided by the courts concerning physical treatment without consent where danger lies in delay, for this situation does not arise here. Every doctor knows that physical interference with the inviolability of the patient against his will is not permitted. A doctor may not disregard this even if he disagrees from his professional point of view [reference omitted]. The consent of a patient who is capable of giving it is required and, in principle, is to be obtained by the doctor, but does not, however, extend necessarily to treatment which, according to medical experience, especially in its after effects, cannot be regarded as relatively harmless. The OLG has found that electro-shock treatment gives rise to such dangers so as to rule out the possibility of calling them atypical and not worth mentioning … If, therefore, the OLG speaks in these circumstances of a danger which cannot be regarded as atypical, it has done so without committing an error of law. If, for this reason, it held that the doctor was obliged to inform the claimant of the therapy and its consequences, no criticism can arise against this either. Since during the period in question electro-shock treatment could not be regarded as harmless according to the details given in the literature, and particularly in the light of the contradictory conclusions about its results, the OLG has rightly held that the doctors engaged in the treatment were under a duty to inform the patient … The treatment in the absence of the consent required in this case, based on adequate information, is therefore illegal. The duty to inform the claimant remained, despite his tendency to depressions. It is another question how the patient is to be informed of the consequences, having regard to his personality and what details are to be intimated. III. It is true that the extent of the duty to inform is disputed. The medical profession points out, in particular, that the relationship of trust between doctor and patient is an important factor. Nevertheless, a doctor cannot take the view, without incurring the charge of negligence, that he need not inform his patient at all about a therapy which is not without danger. Since this is a legal problem, a doctor cannot without further consideration follow the view which is occasionally expressed by medical circles, but is rejected by a constant practice of the courts [reference omitted]. The fact that the claimant suffers from a psychotic illness could not induce the doctors to believe that they were entitled to interfere to a considerable extent with his physical inviolability without informing him [reference omitted]. It is irrelevant in this connection whether … fractures normally heal without further complications … The OLG has recognised that the information need not always be complete in every detail. However, it holds the doctors responsible for having omitted to give any indications. It has not been suggested that at the time of the electro-shock treatment the clinic had gained special experience of its own which could have justified the opinion that this treatment was entirely free from danger … The OLG was therefore right in holding that the doctors treating the claimant had been negligent.

494  Appendix 2 The finding of a causal nexus cannot be faulted either. It need not be decided whether any finding of fact would have been relevant to the effect that the claimant would have given his consent, had he been properly consulted, seeing that in the present case an illegal interference with his corporeal inviolability did in fact take place. Since the OLG was unable to make such a finding, having regard to all the circumstances, it has held correctly that the defendant is liable to the claimant for the consequences of the corporeal treatment in accordance with §§ 611, 275, and 278 BGB [provisions have partly different content after the Schuldrechtsreform of 2002]. IV. The OLG was correct in law when it regarded the doctors administering the treatment as persons allotted the execution of a function in the meaning of § 831 BGB. The OLG credits the defendant with having selected with care the doctors administering the treatment. The OLG had held, however, with justification that the directors of such a clinic owe a duty of guidance and control, for the violation of which those setting up the clinic are liable. Naturally, purely medical questions of therapy cannot be subject to guidance by the administration in individual cases. The duty to provide information incumbent upon the doctors in respect of therapy … is not, however, a purely medical matter, exempt from the duty to give guidance, even if it need not be decided here whether the doctors in its employ must be given guidance as to the extent itself of the information. The OLG has rightly criticised the absence of all instructions and control in respect of the information to be given to patients. In the present case it has not been established whether a doctor was among the directors. If so, the defendant would be liable for the medical director’s failure to give the necessary instructions [references omitted]. However, even if the directors of the clinic did not include a medical expert and only one doctor, in his capacity as chief medical officer, had been entrusted with the control and determination of all questions concerning medical matters, in the absence of any provision in the statutes, the defendant would be liable for the absence of control and for having culpably omitted to provide instructions. This would be all the more the case if neither the directors of the defendant had given the necessary instructions since they were not experts nor had any expert individual been charged with this task. Irrespective of the reason why the necessary control in this case or the instruction concerning the duty to provide information was lacking, the OLG was correct in also holding the defendant liable to pay damages for pain and suffering. Case 60 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 20 APRIL 1971 NJW 1971, 1313 = VersR 1971, 741 Facts On 8 July 1964 the first defendant’s excavator, used to dig a ditch (for the purpose of moving a new electric-light cable), hit the pipe across the street which connected the house of the claimant with the main gas pipeline. Gas escaping into the cellar of the house caused an explosion which damaged the house so severely that it had to be pulled down. The claimant sued the defendants as joint and several debtors for compensation in respect of the damage to the house and to his business. The claim against the first defendant was based on his own culpable act (§§ 31, 823 I BGB) as well as on the culpable acts of the second and third defendants (§ 831 BGB). The OLG Koblenz rejected the claim. A second appeal was successful for the following.

Appendix 2  495 Reasons The OLG denies that the first defendant as a legal entity is liable under §§ 31, 823 I BGB and holds that it had discharged the burden of proof required to exonerate it from liability under § 831 BGB for the second defendant, the local construction manager, and the third defendant, the chief supervisor of excavations, having regard to what it treats as undisputed pleadings. 1. The OLG is of the opinion that the second defendant, having been in charge of the local construction works, is liable for the occurrence at the place of construction. As a graduate civil engineer with considerable experience in road building he had the necessary qualifications to carry out tasks on his own in accordance with the relevant technical guidelines and restrictions as well as those provided by his firm. He had been in charge of big construction works, showing great circumspection, and was familiar with all construction operations and safety measures connected therewith. He had executed conscientiously many construction works of the first defendant on his own and had never given cause for complaint. The managers and building specialists of the customer of the first defendant regarded him as a particularly reliable and conscientious specialist. The third defendant, too, who had been in the employ of the first defendant for 27 years, had much experience in civil engineering and had excelled in training younger leading construction workers. 2. These statements do not suffice, however, to show that the first defendant has discharged the burden of proof incumbent upon him for exonerating himself. Instead, the undisputed pleadings themselves disclose that the first defendant’s organisation is to blame. (a) According to the practice of the highest courts and to the dominant view in the literature, civil engineers undertaking construction work on public roads of cities must take into account the existence of subterranean service ducts and must exercise the utmost caution in the knowledge of the exceedingly great danger which can be caused if electricity, gas, water, or telephone lines are damaged. The life and health of human beings is imperilled if such works are carried out inexpertly, especially through contact with power cables or the escape of gas. Moreover, the failure of the supply lines often causes considerable damage to industrial and commercial enterprises, to hospitals and others. Consequently, civil engineers whose work brings them into contact with supply lines, especially by the use of excavators and similar heavy gear, are under a particularly heavy duty to make enquiries and to take safety measures concerning any existing supply lines; a civil engineer is obliged to obtain the information within the limits of general technical experience which is necessary for the safe execution of the operations to be carried out [reference omitted]. In this connection a civil engineer is bound, in particular, to acquaint himself adequately with the lay-out of the gas pipes as well as the other supply lines by inquiring at the place where the relevant reliable details are available. Since supply lines are normally laid down and maintained without the collaboration of the communal building authority, it is not sufficient to make enquiries with the latter; instead, information must normally be obtained from the competent supplier of the services. In a number of cases evidence of this can be found, as is shown by the cable information leaflet of the electricity works of Koblenz … These instructions do not have the character of legal rules. They show, however, the extent of the duty to safeguard the public in general

496  Appendix 2 (§ 823 I BGB) incumbent upon civil engineers using excavators. If the necessary i­nformation cannot be obtained by inspecting the documents in the possession of the supplier of the service, the position of the supply lines must be ascertained by other means before the excavators begin their work … In general, an inspection of these maps will provide the civil engineering enterprise with a sufficient amount of information concerning the position of the subterranean lines and individual connections with houses … It must not be decided either whether their duty to obtain information, which the first defendant had assumed, additionally by contract [reference omitted] is always incumbent upon the management itself of the civil engineering enterprise [references omitted]. In the case of enterprises which are as big as the first defendant, this may be difficult, even if the manager of the branch in K should be regarded as its statutory representative. In any event, if the gathering of information is delegated to employees, the civil engineering enterprise must give clear, emphatic instructions to the local construction manager and to the supervising foreman when and how they must ascertain the position and extension of the supply lines, including the individual connections of houses on the basis of reliable documentation by the supply undertakings in question. In view of the particularly grave danger if gas, water, and power installations are damaged, the instructions must point out imperatively not to be satisfied with oral information of a general kind not containing specific figures – especially as to the depth at which the ducts are located – which is clearly not based on maps. Such a duty to ascertain the location of the existing supply lines must be said to exist where the excavations involve the creation of a ditch to a depth of 0.60 metres, especially if it is to run under the pavement and thus in the neighbourhood of connections with houses; experience shows that the latter run at a lesser depth than the main ducts. The duty to make enquiries existed even if information was supplied by … on the occasion of a previous examination. When as a result of the extension of the order for excavations – as it was in the present case – the danger is increased, the additional operation requires further information if on the previous occasion only oral information of a general kind was provided without precise details and also clearly without the assistance of maps or other papers. Moreover, the first defendant should have given general instructions to the two other defendants concerning the need for a renewed investigation if an additional order of this kind is received. The defendant failed to give instructions dealing with the various aspects as was required here. The first defendant would not be exonerated if, as he contends, the connection of the gas pipe with the house was located at a depth of 45 centimetres. It is not true that if a ditch is dug by an excavator to a depth of 60 centimetres, the possibility of hitting a gas pipe could be disregarded altogether … [references omitted]. The first defendant should therefore have considered the possibility that gas pipes, particularly connections with houses, may be located at a depth much less than one metre. (b) The failure to give the necessary instructions to the second and third defendants also constituted the cause of the damage which occurred …

Appendix 2  497 Case 61 BUNDESGERICHTSHOF (SEVENTH CIVIL SENATE) 30 JUNE 1966 BGHZ 45, 311 = NJW 1966, 1807 = JZ 1966, 645 = VersR 1966, 959 Facts Defendants G and T are partners in civil law (Gesellschafter einer Gesellschaft des bürgerlichen Rechts) in a motor vehicle garage. The claimant had an accident as a result of defects in repairs to his automobile that had been made at the garage. He brought a claim for damages against the defendants. The OLG Hamm adjudged G and T liable to pay for only half the damages in view of the contributory fault of the claimant. On the revision brought by the defendants, the liability of defendant G for damages was denied. Reasons The court holds that defendant T, who actually repaired the vehicle, is liable under § 823 BGB for defects in the repairs which caused the brake fluid to leak out and the brakes to fail at the time of the accident. The court also holds that defendant G is not liable under § 823 BGB since he did not repair the vehicle, and that he cannot be held liable under § 31 BGB since that section does not apply to his partnership. Accordingly, [with respect to G] only liability under § 831 BGB comes into consideration. The OLG held that such liability existed. Nevertheless, the factual basis for imposing it is absent. One assigned a task within the meaning of § 831 BGB is simply one who is dependent on the instructions of the person assigning it. The right to give instructions need not extend to details. It is sufficient that the worker’s activity may be limited at any time or withdrawn or circumscribed as to time and circumstances. These requirements are not met with regard to the work which defendant T did on the claimant’s automobile. Dependence in the sense just described cannot be deduced from the fact that both defendants bound themselves to a partnership contract in which each had the obligation to conduct repairs pursuant to the purpose of the partnership. In such cases, as a rule, two prerequisites for imposing liability under § 831 BGB are absent, namely the possibilities of limiting the task by use of an authority to give instructions and of ordering that the task not be performed [references omitted]. Case 62 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 18 FEBRUARY 1969 VersR 1969, 518 Facts A bus owned by the defendant pulled up to a bus-stop without coming close enough to the kerb to enable passengers to step directly from the kerb into the bus. Claimant, a sixty-yearold woman, stepped into the street to board the bus and slipped on a patch of ice. As the claimant was regaining her feet, the conductor of the bus gave the signal to start the vehicle, the driver set the bus in motion, and the bus struck the claimant. She sued the bus company under § 831 BGB for her injuries.

498  Appendix 2 Reasons The court held that ‘in view of the great danger of accidents [during departures at icy busstops], and especially of accidents caused by inopportunely placing the bus in motion, it is not enough that, as witness J testified, the driver received instructions during his training as to the need for appropriate conduct’. The defendant had to supervise the driver and conductor on a continuing basis. The OLG Düsseldorf correctly reasoned that, from a practical and legal standpoint, the measures for training and supervision demonstrated by the first defendant are insufficient to guarantee sufficiently the proper conduct of bus personnel and, in particular, their conduct in stopping and supervising departures from the bus at icy bus-stops. In view of the great danger of accidents during these departures, and especially of accidents caused by inopportunely placing the bus in motion, it is not enough that, as witness J testified, the driver received instructions during his training as to the need for appropriate conduct. Unless the driver and the conductor were given continual oral reminders, it was at least required that a written notice be kept before them in an accessible place advising them of precisely these dangers and the means for avoiding them. The first defendant, who has the burden of exoneration, has presented no evidence on such measures, and has also failed to prove that the personnel were instructed concerning the special dangers of icy bus-stops. The OLG also justifiably criticised the proof offered on the grounds that the inspections, which were only described in the testimony of witness J, should have been directed to the proper starting of the vehicle and to the attention required at icy bus-stops. Finally, the OLG correctly reproached the defendant for not having been able to present any evidence of both occasional unanticipated inspections and occasional covert inspections (the latter being normally impossible when personnel known to the driver are used). In view of the special responsibility of public commercial enterprises, such inspections by reliable employees cannot be neglected. Case 63 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 25 JANUARY 1966 VersR 1966, 364 Facts The first defendant was employed by the second defendant as a butcher boy and driver. While delivering a load of meat and sausage, the first defendant negligently collided with a vehicle parked by the kerb. The owner of the vehicle brought suit, and the second defendant, arguing that his employee had been adequately selected and supervised pursuant to § 831 BGB, prevailed in the lower courts. The claimant’s Revision was unsuccessful. Reasons Notwithstanding the opinion of the Revision, the conclusion of the OLG Celle that the second defendant adequately supervised his driver can be supported without proof being made of unexpected or covert inspections. The judge of the facts was aware that particular observation of a driver’s conduct is frequently necessary in order to satisfy the strict requirements governing supervision of one employed as a driver. He nevertheless held

Appendix 2  499 that the question whether such additional measures were taken no longer arises when the employer and his representative – here the second defendant’s brother – participate in the trips so frequently that their presence is no longer perceived as an inspection and the vehicle driver accordingly drives so as to show his customary behaviour. If no objection arises to his behaviour after this sort of observation, then no further information should be expected from following the driver occasionally in another vehicle, a procedure in which the possibilities for observation are limited. This point of view is in agreement with the decisions of this Senate which have repeatedly emphasised that, although supervision must be strict, it must still be conducted in accordance with what the individual case requires and that no simple catalogue of required measures can be given. Thus, in a very similar case, it was held to be sufficient that the driver had proved his ability by making trips for about two years without any accidents and that the owner or his representative had provided continual supervision by frequently accompanying the driver on these trips. Under such circumstances, it would be exaggerated to require particular inspections in addition, such as those conducted for the most part in large businesses and in any event in public enterprises. It has also been decided that a well-founded belief in the ability of the driver, based on careful selection and supervision, could possibly make exceptional and unexpected inspections unnecessary. The same must apply to the training, instructions, and supervision of speed which the Revision asserts is lacking here. If a need for such measures does not arise when the owner and his representative accompany the driver on trips that are no longer perceived as supervision, then the question whether such additional measures were taken cannot be decisive. The claimant has not cast doubt on the fact that the first defendant was actually supervised in the manner alleged without any objections arising to his conduct. Accordingly, there are no legal grounds for objecting to the conclusion of the OLG that the second defendant has fulfilled his duty of oversight. Case 64 BUNDESGERICHTSHOF (THIRD CIVIL SENATE) 25 OCTOBER 1951 BGHZ 4, 1 = NJW 1952, 418 = VersR 1952, 166 Facts The defendant is the owner of an estate. His manager, K, assigned B, a sixteen-year-old ­agricultural labourer employed on the estate, to transport petrol. B used a cross-bred horse. The horse bolted and seriously injured the claimant. The defendant contests the claimant’s claim on the grounds that the horse had been gentle, B had been a careful driver who was accustomed to driving horses, and the horse had pulled a milk wagon every day and was accustomed to jolting vehicles. The LG denied recovery, the OLG Köln reversed, and the Revision results in reversal and remand. Reasons The OLG held that the proof of exoneration required of the defendant had not been made because the defendant had paid no attention to the transport of the petrol. It held that the defendant has violated the duty of supervision incumbent on him because he himself did not take care that his manager gave adequate instructions to the boy for the particular trip

500  Appendix 2 with the cross-bred horse, which was not without its dangers. The OLG thought it had been demonstrated that manager K told B that he should drive carefully on this trip; however, it is thought that this instruction was not sufficient and that, in view of B’s youth, the disused street, and the use of a cross-bred horse (which, as a matter of common experience, is difficult to ride), K ought to have given more particularised instructions. In so far as the OLG derived the liability of the defendant from the fact that he did not personally concern himself with the trip, its opinion cannot be accepted. In the present case, the manager hired B and supervised his work. He intervened as an intermediate party between B, the worker, and the defendant, the proprietor. According to the decisions of the RG, the proprietor of a large enterprise is not to be expected to select and supervise the entire personnel. If a number of persons are employed in a manner such that one is subordinate to another, then the employer’s proof of care extends only to the selection and supervision of the higher employee chosen by him, the manager. This easier proof for purposes of § 831 BGB is to be permitted, in the RG’s view, on the basis of what is equitable and consonant with the section’s purpose. It is certainly true that the employer must institute a system of controls sufficient to guarantee reasonable supervision and conduct of business. Even if only the manager were required to exercise immediate personal oversight of the agricultural labourer, it remains the task of the estate owner to attend to the general regulation of the supervision which provides the guarantee for orderly conduct of the enterprise. If there is a defect in the organisational structure, then the employer is liable for negligence in providing general oversight as required by § 823 I BGB. Some writers have opposed the RG’s basic principles for the liability of large enterprises. They feel that this easier burden of proof is inequitable and inconsistent with the Code. If an intermediary between the employer and the worker is employed, then it should not be sufficient for the employer to prove that he carefully selected and supervised this intermediary, but he should also prove that the intermediary acted carefully in the selection of subordinate employees. If the employer had appointed a legal representative (Vertreter) to make this selection, he would answer for the fault of this representative as though it were his own (§ 278 BGB); otherwise, moreover, one would reach the inequitable result that an entrepreneur with large capital resources could escape liability even though the higher employees were not in a position to pay large damages. Nevertheless, these objections do not provide a basis upon which the RG can discharge its task of deciding cases. Prevailing law distinguishes as to whether the basis for liability for the conduct of employees rests on contractual or on non-contractual principles. If the provisions of § 278 BGB, which pertain to contractual liability, are applicable in a variety of cases involving relationships similar to contracts, such as the public law responsibility for the safekeeping of objects (Verwahrungsverhältnis), it is still not possible to expand these provisions to cover the case of tortious liability for which the code has expressly provided the particular dispositions of § 831 BGB. This provision makes it possible for the employer to make a proof of exoneration, and also provides that his liability does not rest on whether his employee has committed a fault. This general principle of § 831 BGB is not dependent on the size of the enterprise. There were large enterprises in existence at the time the Civil Code was enacted, and it was impossible then, in these enterprises, for the selection and oversight of every single employee to be left to the owner or a legal representative (gesetzlicher Vertreter) chosen pursuant to § 831 BGB. If establishment of a particular rule governing

Appendix 2  501 such enterprises had been desired and, in particular, if the expansion of the legal concept contained in § 278 BGB to include delictual liability had been desired, it would have been expressed in the Code. Accordingly, in the present case, the principal matter to be demonstrated was whether the defendant used the requisite care in the selection and supervision of his manager K … Case 65 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 6 NOVEMBER 1956 MDR 1957, 214 (with approving note by Josef Esser) Facts In February 1952, as the claimant was leaving a house on S Street in Hamburg where he had been visiting his sister, he slipped on a path which bordered the house and was separated from the pavement of S Street by strips of greenery, and suffered a compound fracture of the upper thigh. He contends that his fall was caused by a slippery patch of snow. He claims the defendant is liable for his accident as owner of the house and pavement because of a violation of a duty to sand the path. The LG rejected the claim. The OLG Hamburg held the claim for damages to be legally grounded. It granted the demand for a fixed sum of money and periodic payments, provided the claim was not paid by a publicly owned insurer. It also entered a judgment subject to the same reservation, declaring the defendant to be liable. The Revision is without success. Reasons The OLG found that it had been demonstrated that the path had a slippery patch of snow and had not been sanded and that the defendant was under a duty to pay compensation under § 823 BGB because, as owner of the path which was used by the general public and, in particular, by the residents of neighbouring houses and the customers of three stores located in them, the defendant had a duty to clean and sand the pavement according to the provisions of the Hamburg Road Cleaning Ordinance of 10 January, 1940 [reference omitted] and regulations made under this Act on the same day [reference omitted]; and that the responsibility falls on the defendant for not having taken care to fulfil the duty to sand the path in the required way. [The court rejects the defendant’s contention that sanding the pavement was not required on the day of the accident under the Act and regulations just cited, because weather conditions that day would have made the sanding of the walk useless.] Moreover, the conclusion that the defendant committed a fault stands up against legal scrutiny. In this regard, the OLG maintained that the assignment of the duty to clean and sand the walk to a married couple, W, living on the ground floor by a contract of lease had legal effect only in relations between the defendant and these lessees. The prerequisites for finding that the married couple W had a duty with public law effects to clean and sand the pavement under the provisions of the Road Cleaning Ordinance are absent. Therefore, as what is involved is a violation of a duty required of the defendant itself, and as the claimant’s claim for compensation is based on § 831 BGB, the case does not turn on proof of exoneration under § 831 BGB. The defendant, indeed, is a large enterprise, which must employ

502  Appendix 2 the help of others to fulfil its duty to sand. The OLG did not reject that the defendant had entrusted the lessees of the buildings with this task. But it correctly took as its premise that the defendant must organise the carrying out of the duty to sand so as to guarantee that it will be reliably performed. The OLG found that the defendant apparently placed the duty to clean and sand paths on the inhabitants of the ground floors of its buildings by simply inserting such provisions in form contracts of lease, and that the married couple W became obligated in this way without regard to whether the wife W, after the death of her husband and after attaining the age of seventy-six, still possessed the physical ability to do the cleaning. The OLG took the view that the method used by the defendant for the employment of persons for sanding the path does not satisfy the requirements imposed on him. The Revision contests this view as too extensive, arguing that the customary practice in Germany is for the lessee living on the ground floor to be responsible for the performance of the duty to clean and sand the pavements, and that an objection to this practice should not be made if the owner of the building demonstrates that the lessee adequately performs this duty by himself or with the help of a third person. The question can be left open whether placing the duty to clean and sand the pavements on the person living on the ground floor by a form contract of lease is consistent with the content of the duty of care in selecting persons to sand the pavements, a duty which concerns the building owner in the area of its responsibility under § 823 BGB to no less extent than the duty of care which falls on the employer under § 831 BGB concerning the selection of an employee. The owner of the building has at the least a duty of s­ upervision which is sufficiently broad for it to be required to ensure that the lessee actually performs – or has another perform – the obligations assigned the lessee in a regular manner. The duty of general supervision rests on one who makes a careful selection of persons to whom he, as the one responsible for fulfilling a general duty, assigns the actual performance of this duty. This applies particularly and in very large measure when regard to the competence and reliability of these persons was not a decisive factor at the time they were employed. According to the findings of the OLG as to the factual situation, the defendant failed to provide the supervision required of it. The measures taken by the defendant consisted of the employment of a building manager for three different blocks of housing, located six to ten minutes apart and containing a total of thirty separate buildings. It need hardly be argued here that, as a general rule, it must be held insufficient for an enterprise leasing houses to employ only one man for a housing area of this size to supervise the performance of the duty to clean and sand paths by lessees. The manner in which Mrs W performed the duty assigned her of cleaning and sanding the paths had given cause for complaints before the day of the accident – that the place where the accident occurred was often not adequately sanded. The defendant could not have remained in ignorance of this if it had organised supervision in the manner required by the duty just described to provide oversight. As a result, the conclusion of the OLG that the claimant’s accident was caused by the neglect of the defendant must be accepted. The defendant is accordingly liable on the basis of §§ 831 and 823 BGB.

Appendix 2  503 Case 66 BUNDESGERICHTSHOF (DECISION OF THE GREAT SENATE) 4 MARCH 1957 BGHZ 24, 21 = NJW 1957, 785 = JZ 1957, 543 (see article by F Wieacker in JZ 1957, 535 = VersR 1957, 288, 517, 783) Facts and Reasons 1. The case submitted to the Great Senate for Civil Cases is based on the following facts: The claimant took part in a family celebration and intended about 1.30 a.m. to return on the tramway run by the defendant enterprise from the ‘Apotheke’ stopping-place. When he tried to mount the forward platform of the tramcar he fell: he was run over by a car and his right foot so severely injured that his leg had to be amputated below the knee. The claimant made the defendant, the driver, and the conductor of the vehicle responsible for the damage and put forward the following grounds for his claim: The fall occurred because the tramcar started too soon. The conductor gave the departure signal and the driver started although both could have seen that the claimant was still just about to mount the forward platform. He had stood in front of the door when it started and had already grasped both the entrance handles. The driver did not stop immediately on getting the emergency signal from the conductor. In his action the claimant demanded damages from the defendant, the driver, and the conductor of the tramcar. The defendant, the driver, and the conductor admitted his claims in part … Otherwise they claimed that the action should be dismissed and urged that: The conductor gave the signal to start and the driver set the tramcar in motion only after the invitation to enter had been given and no one else was prepared to enter. The claimant had been standing by a group of persons who had not intended to ride, but had then hurried after the moving tramcar and tried to jump on. When the emergency signal was given the driver stopped at once. The claimant had been drunk and had only himself to blame for the fall. The LG allowed the claim, reduced to one-half. On appeal by the claimant and counter-appeal by the various defendants, the OLG dismissed the action against the driver and conductor and declared the defendant tramway company liable to pay compensation up to two-thirds. On appeal the defendant company moved for a complete dismissal of the action. 2. It was disputed in the first place whether the defendant company also was liable under § 831 BGB for the damage caused by its employees. This question required examination because the claimant’s claims were not completely supported by the Reichshaftpflichtgesetz, in particular in so far as he demanded damages for pain and suffering. The OLG found that the defendant company was responsible under § 831 BGB for the damage to the claimant, because the driver, and perhaps also the conductor, had caused the physical injury unlawfully and because the defendant company had not produced the proof necessary for exonerating itself under § 831 I sentence 2, case 1 BGB from liability for its ‘employees’. The OLG came to the conclusion that the way the fall occurred was not clear. It was possible that the claimant’s allegations of fact were correct, but it was also possible that the accident happened in the way described by the defendant. In view of this negative result of the evidence, the OLG felt that the possibility could not be excluded that a causal

504  Appendix 2 connection did exist between a presumable failure of choice and supervision on the defendant company’s part, and the occurrence of the damage (§ 831 sentence 2, case 2 BGB). 3. The Sixth Civil Senate had doubts whether to follow the OLG’s findings of law. The doubts were directed above all against the view that an ‘employee’ (for the purposes of § 831 BGB) engaged in tramway or railway traffic did damage unlawfully merely by causing physical injury. It is a matter for discussion whether the basis of the unlawfulness must be further gone into in order to show whether the conduct of the employees is objectively contrary to good traffic practice. For that purpose, reference is made to the traffic rules which regulate the conduct of participants in traffic in ever-greater detail. Recourse must also be had to the legal concept of social adequacy and to developments in modern criminal theory, more especially because according to this the concept of negligence includes essential requirements which relate to unlawfulness and not to fault. If a finding of unlawfulness in traffic accidents does not automatically follow from the resulting consequence but (is satisfied) only if a breach of the traffic regulations has occurred, then it seems probable, in view of the report laid before us, that the conception of the burden of proof hitherto followed in applying § 831 BGB can no longer be upheld. That must be true in particular of cases which resemble the one in question and are distinguished by the fact that, in view of the failure to clarify what happened on the occasion of the accident, no objectively irregular conduct on the part of the ‘employees’ can be established. The Sixth Civil Senate attaches fundamental importance to the clarification of these questions of law. In accordance with then § 137 Gerichtsverfassungsgesetz (GVG) it submits them for decision to the Great Senate for civil cases and formulates them as follows: Does a person employed in tramway or railway traffic do damage unlawfully to another within the meaning of § 831 I BGB merely by injuring his life, body, health, or property? Or is it a further condition of unlawfulness that the participant employed in the traffic conducted himself in an objectively irregular way? Is the employer who fails to exonerate himself from the charge of defective selection or supervision liable under § 831 BGB even if according to the evidence the possibility remains open that the ‘employee’ observed the objective duties of care and, in particular, the rules governing highway or rail traffic? (a) When § 831 BGB makes the employer’s liability depend on whether his ‘employee’ did unlawful damage to another person in executing his task, this requirement connects it with the factual situations of the law of delict in which the unlawful acts involving a duty of compensation are described and delimited. Not every doing of damage produces liability, but only such as falls within a liability situation of the law of delict, and, therefore, is an ‘unlawful act’ in the sense of §§ 823 ff BGB. Accordingly, for the purpose of traffic accidents as here in question, in the first place a reference is needed to § 823 BGB, especially § 823 I BGB. Claims for damages are constantly recurring from injuries to life, body, health, or property in tramway and railway traffic. Now the wording of § 823 I BGB requires that the injury to the enumerated legal interest be unlawful, that is to say repugnant to the legal order. The legislator, however, when describing in legal terms the factual basis of illegality, indicates that he regards the breach of the legal interests listed in § 823 I BGB as normally unlawful. By adding ‘unlawful’, however, he indicates that the mere breach does not necessarily involve unlawfulness, but that unlawfulness can for special reasons not exist. It may be questionable whether that indication was needed. It is certainly useful in applying the law,

Appendix 2  505 by making judges attentive to the fact that any factual description of unlawful conduct is bound to be incomplete and that therefore they are under a duty to examine whether a finding of unlawfulness based on a fulfilment of the factual conditions must be withdrawn on special grounds. Further, the BGB does not provide an exhaustive formulation for defining when there is a legal justification. The initial provision about consent as a justification was struck out in the discussion of the draft because it was desired to leave to practice the task of marking out the limits of justification. Moreover, the jurists and judges have also developed slowly those principles to which they may have resort for the purposes of excluding unlawfulness, such as on the basis of negotiorum gestio, the protection of vested rights, or the balancing of interests. There is, therefore, no exhaustive legal catalogue of justifications, no numerus clausus which would set limits to legal development. Accordingly, the matter must be gone into now that the report of the Sixth Civil Senate has submitted for discussion the question whether, in the special field of tramway or railway traffic, conduct fulfilling on its face the factual condition of § 823 I BGB must no longer be adjudged unlawful if it was in harmony with the legal regulations laid down for the traffic. The line of thought in that direction found in the report must in principle be approved. The draftsmen of the BGB may indeed not have recognised that these are matters for discussion which concern objective unlawfulness and not merely fault in the sense of personal blameworthiness. Only with the technical development of traffic and the increase in its dangers did modern mass traffic produce problems calling for regulatory legislation. The legislator was faced with the need to regulate by increasingly detailed provisions the duties of participants in traffic, so that the possibilities of danger should be reduced to a minimum. At the same time, the legal provisions dealing with liability for risks were developed in order to apportion with social fairness in their economic effects the dangers and risks rendered inevitable by modern traffic. In the process, it was more and more recognised that what was in question was not a liability for wrong but a duty on those in control of dangerous operations to assume responsibility for certain typical risks. With that legal development there is no longer any place in the law of delict for a doctrine that looks upon unavoidable injuries in tramway and railway traffic as unlawful injuries to persons or property and denies liability only for lack of fault. The legal order, in permitting dangerous traffic and prescribing in detail to its participants how to conduct themselves, declares that conduct conforming to those prescriptions is within the law. It is not right that conduct which takes full account of the orders and prohibitions of the traffic regulations should nevertheless be adjudged unlawful. The actual consequences do not afford sufficient ground for it, for, in deciding whether conduct is unlawful within the meaning of the BGB provisions about delicts, one cannot leave out of consideration the act that produced the consequences. The rule must therefore be laid down that orderly conduct of a participant in tramway or railway traffic conforming to traffic regulations does not produce unlawful damage. Whether the result implies a special application of the legal idea of so-called social adequacy may be left unanswered. Since the question here is restricted to the field of traffic law, there is also no need to go into whether the same result could equally be obtained through reliance on modern criminal theory, which splits up the concept of negligence by treating the enquiry into the observance of objectively required care as appertaining to unlawfulness, and only the question whether the disapproved conduct should be imputed to an individual doer as an enquiry into fault. Doubt must in any case be expressed as to whether, if this complex concept of negligence in modern criminal theory were to be taken over into civil

506  Appendix 2 law, in the law of civil responsibility, also, under cover of a special enquiry into fault, a special standard of judgment should be imposed on the conduct of the doer of damage that took account of his personal characteristics. That might, indeed, appear to harmonise the legal concepts, but it would not allow for typical differences which arise from the specific characteristics and purposes of two different branches of the law. In particular, this view would not be in accord with the provisions of § 276 I 2 BGB [now: § 276 II BGB] as it has always been understood in applying the law. (b) The question submitted to the court now makes it necessary to enquire what are the consequences produced by the standpoint adopted for apportioning the burden of proof. Here it must be recalled that the legislator, by establishing a separate factual basis for delicts, intended to lighten the judges’ task of examining whether a wrongful act exists or not. Unlike the cases where delict is governed by a general clause, leaving a wide scope for judicial interpretation (§§ 823–25 BGB), in describing casuistically the wrongs giving rise to liability, the legislator affords a solid basis for applying the law, by suggesting, at least provisionally, the criterion of unlawfulness. Thus, an injury to one of the legal interests especially named in § 823 I BGB to which the law affords a preferred protection, needs a special justification if it is not to be adjudged unlawful. That applies irrespective of whether the act was done intentionally. This relation of rule and exception established as part of the system of our law of delict and upheld in its application has, in accord with the recognised principles of the law of evidence, the consequences that the proof of a justification is for the person who infringes a protected legal interest. In this respect, the justification afforded by conduct according to rules in tramway and railway traffic can claim no separate status. This apportionment of the burden of proof in applying § 823 I BGB to traffic accidents means that the doer of damage can provide a basis for justification by proving that his conduct conformed to traffic rules. If the proof is supplied, proof of fault ceases to have any substance, because there is to start with no unlawful infliction of injury. If on the other hand the question whether his conduct in traffic was regular is not cleared up, one starts with an unlawful injurious act. The question of liability however is not yet decided; for § 823 I BGB also requires the injurious act to have been intentional or careless. The injured party must therefore prove that the doer acted intentionally or negligently, in the meaning of § 276 I 2 BGB, that is to say omitted to take the care required in daily intercourse. For that enquiry also it will, of course, be essential to know whether the provisions of the traffic regulations have been observed. That the question of conduct according to the traffic rules can be significant for unlawfulness and fault is due to the shape and legal classification of the concept of negligence. For the practical application of the law it remains that the injured party must prove in full the conditions of a claim for compensation under § 823 I BGB and that accordingly – unless there is a prima-facie case – an insufficient elucidation of the facts is to his disadvantage. The apportionment of the burden of proof in applying § 831 BGB is different. There the legislator consciously made the employer’s liability depend only on the ‘employee’s’ acting unlawfully and not also on his doing the damage intentionally or negligently. In so far therefore as concerns the ‘employee’s’ conduct, only those principles governing the burden of proof apply that affect the sphere of unlawfulness. Thus, the injured party must prove that the ‘employee’ by an adequately causal act injured one of the legal interests protected in § 823 I BGB. On the other hand, it is for the employer to prove that the ‘employee’s’ conduct

Appendix 2  507 was regular, because it conformed to the legal rules of tramway or railway traffic. So far, doubt is to the disadvantage of the employer. On the other hand, if regular conduct of the ‘employee’ is proved, the conditions for a claim under § 831 BGB are unfulfilled, so that there is no longer any need to go into whether proof can be provided that there was no causal connection between the prima-facie presumption of faulty selection or supervision, and the damage. From that last-mentioned point of view the RG had denied the employer’s liability when the judge was convinced that even a carefully chosen and supervised ‘employee’ could not have acted differently in the given case. That the production of the exonerating proof under § 831 I and II BGB makes it unnecessary to go into the question of unlawful injury is self-evident. It is clear that as regards a traffic accident the cause of which remains obscure, the regulation of the burden of proof set out above makes it better for the injured party if the ‘employee’ and not the employer himself has caused the accident. In the latter case the employer’s liability is as a rule excluded, because no fault can be established, whereas where it is caused by the employee, the employer is liable if he cannot exonerate himself from the charge of imperfect choice and supervision. This preferential treatment was clearly intended by the legislator, for there is here a certain allowance for the fact that otherwise the injured party’s legal position is quite unfavourable because exoneration is possible and usually successful. It is precisely for that reason that it would be wrong in applying the law to do away with the part favourable to an injured party in the regulation of the BGB of delictual liability for ‘employees’. If one observes that emphasis is there placed – even though incompletely – on responsibility for enterprise risks, it is not unfair to impose on the one in whose sphere of influence the risk originated the burden of proof about the way the damage occurred, which he is usually, though not always, in a better position to satisfy than the one to whom it occurred. Also so far as the provision of ‘appliances and implements’, which include the means of transport, is concerned, the law has for the same reason imposed on the employer within the framework of § 831 BGB an enhanced duty of elucidation and proof. If the evaluation of the employee’s conduct is under discussion, attention must also be paid to the point of view that the employee – that is the meaning of the reversal of the burden of proof – must be considered to have been unfit for his task, until the employer proves that he showed the care described more fully in § 831 I 2 BGB. Case 67 BUNDESARBEITSGERICHT (GREAT SENATE) 12 JUNE 1992 BAGE 70, 337 = NJW 1993, 1732 = JZ 1993, 908 = NZA 1993, 547 Facts The claimant, who runs a building business, had to build a boundary wall around a house plot. Its foreman for this work was the defendant. Ditches 80 cm deep and 16 cm wide had to be dug with an excavator for the foundations. The claimant’s director showed the defendant the site in the presence of a fellow employee. During the excavation, the excavator driver damaged a gas pipe. Gas escaped into the cellar rooms of the house and exploded. Damage amounting to DM 244,263 was done to the house. The claimant seeks compensation from the defendant for the part of the loss not covered by its business liability insurance. It claims that the defendant had been shown the location of the pipe from the gas main to the cellar and that the plan and the street excavation had shown where the house connection ran.

508  Appendix 2 The defendant had been advised that in this area the digging ought only to be by hand. Nevertheless, he had failed to instruct the excavator driver accordingly, and told him that he did not need to take care, as there were no pipes there. The claim was unsuccessful at earlier instances. The Landesarbeitsgericht stated that there was no liability as the defendant was not grossly negligent. It considered that, contrary to the case law of the highest courts, this should also apply to non-dangerous work, as here. The claimant lodged an appeal in law. The Eighth Senate of the BAG wished to depart from the view of the Great Senate, and apply the principles developed by the case law about limiting employee liability in the case of dangerous work to non-dangerous work as well, if it results from the business and is carried out on the basis of the employment relationship. It has therefore asked the Great Senate of the BAG to decide on this legal issue under § 45 II 1 of the Arbeitsgerichtsgesetz (hereafter: Labour Courts Act). Reasons The Great Senate of the BAG agrees with the legal opinion of the Eighth Senate to the effect that the limiting of employee liability is not conditional on the dangerous nature of the work. The limiting of employee liability should instead apply in all cases in which an employee causes harm in connection with work which is carried out for business reasons. I.1. The BAG since the decision of its Great Senate of 25 September 1957 [references omitted] proceeds on the basis that, for harm which an employee has negligently caused in the carrying out of dangerous work, he is only liable to his employer in accordance with the following principles: In the case of gross negligence the employee has as a rule to bear the total loss alone. In the case of the slightest negligence he is not liable. For normal negligence the loss is as a rule to be divided between the employer and the employee proportionately and in this connection all the circumstances regarding the causing of the harm and its consequences are to be balanced against each other in a reasonable way in accordance with the principles of fairness [references omitted]. But these principles alleviating liability which evolved by development of the law apply (according to the case law so far) only where dangerous work is concerned. The Great Senate considers it necessary no longer to limit the alleviation of liability to cases of dangerous work, because otherwise, under §§ 276 and 249 BGB, employees who do not carry on any dangerous activity would in principle have to bear the whole of the loss where there is a violation of duties of care and protection in the employment contract which leads to loss for the employer. To burden an employee with such a risk of liability is not justified, having regard to the possible extent of the harm (and also that present here) and the fact that compensation for it can lead to serious inroads into his lifestyle. It would contradict the principle of proportionality [references omitted]. 2. The Great Senate is authorised, according to Article 20 III GG and § 45 II Labour Courts Act, to adapt employee liability law to actual business conditions by developing it beyond the existing case law [references omitted]. (a) The provisions of the BGB do not contain a closed regime for employment contract law [references omitted]. Even on the enactment of the BGB, a gap in the law was assumed in relation to employee liability. In the materials, a special statutory regime for employment contracts ‘inclusive

Appendix 2  509 of compensation law questions’ was demanded ‘as soon as possible’ [references omitted]. In addition to this, employees have been increasingly exposed to liability risks since the time when the BGB came into force. Formerly, harm caused by employees was kept within boundaries, but since those days it has become capable of leading to unreasonable levels of liability for employees because of the substantially higher value of the means of production used by employers. In this respect, because of the gap in the BGB’s regime which was present from the outset, there is an obvious defective development which must not be accepted. Not just because of the special nature of work, but also because of the increase in value of means of production, the employee is exposed in the world of work today to a very much higher risk of harm, which in part threatens his very existence. (b) Until now, in spite of various plans, no statutory liability regime for employees has been enacted nor is this issue at present the subject of pending legislation … II. The Great Senate of the BAG takes the view that as to all harm caused by employees in the employment relationship which arises in connection with activities which are business related, limitation of employee liability is required. This view is propounded in the academic literature almost unanimously, although on the basis of differing reasoning [references omitted]. 1. According to § 254 BGB, the duty to compensate as well as the amount of compensation to be provided depends on the circumstances and in particular on how far the harm has been caused mainly by the one or the other party. § 254 BGB is applied to circumstances beyond its wording (that the person harmed has himself contributed in the origin of the harm) when the person harmed is jointly responsible for the harm which has arisen on the basis of a property or business-related danger for which he has to take responsibility. This will occur if he has been involved in the origin of the harm in a way that can be attributed to him. At the same time, it is recognised that a division of the harm can range from full liability of the tortfeasor and his complete exoneration, depending on assessment of the circumstances in the individual case [references omitted]. 2. These legal principles also apply in the employment relationship in relation to employee liability. The BAG proceeds – admittedly with the further prerequisite of the presence of a dangerous activity – in constant case law [references omitted] on the basis that the business risk has to be considered from the employer’s side. The employer cannot simply shift the loss which business risk brings with it on to the employee just because he has entrusted him with the execution of work to be carried out in the interests of the business. As the employer claims the results of the business activity for himself, he must assume liability for the risks associated with it. The business risk relates to the danger of, eg, the production plant, the production itself or the manufactured products and thereby encompasses only part of the sources of business-related harm. 3. Over and above this, there is the ground of attribution, and therefore of liability or joint liability, of the employer within the framework of § 254 BGB arising from his actual organisational and staff authority and the legal formulation of the employee’s personal dependence and responsibility to obey instructions. This justifies also imposing on the employer the organisation risk, as an element of the general risk of the undertaking. The employer puts at the disposal of the business the organisation predetermined by him. He can thereby direct

510  Appendix 2 the work process organisationally and technically. The employee is integrated into this business in order to realise, alone or together with the employees employed in the business, the technical work purpose of the business by activity which is directed by instructions. The employer can determine the technical work purpose of the business on his own responsibility, can formulate the business organisation in accordance with his plans and needs, and can exert influence over the employee’s activity. The employee’s pursuit of his job is directed by his integration into the business organisation and the actual conditions of the work process (eg, the type of technical plant available (which is often particularly valuable) and the arrangement of the work organisation and of the production process, with qualitative and quantitative requirements in relation to the work products). The employee cannot avoid these pre-determined conditions of work either factually or legally. The employer, on the basis of his right to give instructions, determines the performance of work owed under the employment contract in a concrete sense. He can decisively influence the conditions of the performance of work (eg, by organisational or technical measures). He can also authoritatively shape the temporal components of the performance of work within the framework of the maximum permitted limits. And finally he can lay down the place of performance of work in accordance with the regime in the employment contract. The organisation of the business established by the employer thereby determines the risk of liability for the employee. By virtue of his power in the organisation, the employer can create, maintain or alter conditions for risks of harm eg, he can take steps to prevent danger factors by alteration of the work process, better supervision, safety precautions or other planned risk protection, like effecting insurance. In a risk situation of this kind created by the employer, he himself must allow risks of harm to be attributed to him within the framework of § 254 BGB and cannot, or cannot only, offload them on his employee even if the employee is at fault in the causing of the harm. III. The protective scope of the regime under § 254 BGB in the employment relationship is also influenced by constitutional law guarantees under Article 12 I 2 in combination with Article 2 I GG. 1. According to the constant case law of the BVerfG, the basic right norms do not only contain subjective defensive rights of the individual against the state. They also embody at the same time an objective order of values which applies as a basic constitutional law decision for all areas of law and thus also for civil law, and gives directives and impulses for legislation and case law. No civil law provision may exist which contradicts the principles which are expressed in the basic rights. This applies primarily for those provisions of private law which contain compulsory law and therefore set limits to private autonomy [references omitted]. 2. The statutory regime under § 254 BGB admittedly gives no indication that it intrudes into the basic rights contained in Article 2 I and Article 12 I GG or that it secures basic right protection. However the scope of the protection which these basic rights are meant to secure can also be affected by provisions which have a close internal connection with the exercise of a vocation and display a tendency to regulate it [references omitted]. These prerequisites are present here, because, depending on how employee liability law is formulated legally, there is a tendency for an intrusion into the employer’s economic

Appendix 2  511 freedom of action and activity, the development of the personality of the employee and the exercise of the vocation of the employer and the employee. If the employee is liable for harm for which he is responsible, this has an effect on the development of his personality and affects the exercise of his vocation. If the employer is liable wholly or partly, this intrudes into his economic freedom of action and activity and the exercise of his vocation. 3. Article 2 I GG guarantees the general freedom of action in the full sense [references omitted]. It includes on the one hand the freedom of economic activity as an employer and at the same time gives with this an appropriate amount of space for development of entrepreneurial initiative [references omitted]. On the other hand, this basic right protects the general right of personality [references omitted] and thereby the development of the personality of the employee. This increases in importance specifically in view of modern developments in working life and the new dangers to the human personality associated with this. The vocational activity for which Article 12 I 2 GG guarantees the necessary scope for the employer as well as for the employee does not only serve the personal development of the working man in society. It also guarantees citizens who have to rely on the use of their capacity to work the possibility to make for themselves an economic basis for existence [reference omitted]. In the framework of employment law, this typically occurs through contracts in which the employer and the employee reciprocally limit their vocational freedom of action in the exchange of stipulated counter obligations. Vocational freedom under Article 12 I 2 GG thereby protects the exercise of the vocation of the employer as well as that of the employee with a view to the free development of their individual capacity to earn a living and provide services [references omitted]. 4. Proceeding from this constitutional law basis, an unlimited liability for harm on the part of the employee represents a disproportionate intrusion into the employee’s right to the free development of his personality (Article 2 I GG) and into his right to free exercise of his vocation (Article 12 I 2 GG). (a) The duty of protection under Article 12 I 2 GG to guarantee the exercise of vocation represents a substantial part of the realisation of the right of personality [references omitted] and, in combination with the social state principle in Article 20 I GG, secures the general requirements for life and the minimum for existence [reference omitted] as the lowest prerequisite for an existence consistent with human dignity. On the basis of the value order of these interests protected by the basic rights, a disproportionate interference with the exercise of the right of vocation must be assumed if, in an employment relationship, unreasonable financial burdens or even danger to the economic existence of the employee can arise through general risks of harm associated with business. This would be so in an employment relationship if the employee had to assume unlimited liability for all negligently caused harm, even where the negligence was only slight. The employer is by the organisation of the work, with regard to the actual and legal arrangement of the activity as well as through integration into the business organisation, exposed to risks which he cannot avoid. These conditions created by the employer and the value of the means of production used by the employer determine the extent and scope of the employee’s risks of liability

512  Appendix 2 [reference omitted]. With such an extensive determination of the work by another party, the employee’s interests protected by the basic rights are violated if the income from the work is substantially disproportionate to the level of the harm to be compensated for, or if the employee’s duty to compensate leads to his economic existence being endangered. Such an excessive and therefore disproportionate financial burden for the employee represents an unacceptable disturbance of the relationship of equivalence between salary and harm to be compensated for. It compels the employee and his family to live with the minimum for existence which is determined by the limits to enforcement proceedings for a lengthy or even unforeseeable period. This can have the ultimate consequence of leading to every incentive for a further exercise of the employee’s vocation being taken away from him, because it seems to him to be useless. (b) Over against this, the basic right position of the employer is not unreasonably affected by the imposition of risks of liability in the scope in question here. The employer must put up with limitations of his freedom of economic action and activity (Article 2 I GG) and exercise of his vocation (Article 12 I 2 GG) as protected by the basic rights, because he sets the conditions of work and business himself on his own responsibility and is thereby jointly responsible for the employee’s risks of harm [reference omitted]. In these factual and legal conditions, there is no equality of power between the parties to an employment contract, so through the regime of § 254 BGB, a proper balancing of interests by limitation of the employer’s freedom of exercise of vocation should be allowed. The possession and use of assets available in the business must take second place to the employee’s ability to work and perform services if this is necessary for the protection of his existence. Therefore the attribution of the risk situation created by the employer on his own responsibility should be seen as a socially adequate formulation of the employer’s freedom of economic action and activity and exercise of vocation. (c) Such an attribution is not unreasonable, having regard to the legal position in favour of the employer which is at issue in constitutional law. The question of whether and, if appropriate, in what sum the harm is to be attributed to the employer should be governed by the circumstances of the individual case as a whole having regard to the causes of the harm and its consequences. Besides this, the points of view mentioned in the case law so far [references omitted], insofar as they are based on the work relationship, are to be considered within the framework of § 254 BGB, on weighing up the circumstances of the individual case. This includes, for example, the danger involved in an activity, a risk which can be taken into account by the employer and covered by insurance, the position of the employee in the business, the level of salary, the personal circumstances of the employee, as for instance how long he has been part of the business, his age, his family circumstances as well as the employee’s conduct so far under his contract of employment. 5. So as not to burden the employer with the general risks in life of the employee, the activity which has led to the harm must be caused in connection with the business and based on the employment relationship. Activities caused in connection with the business are those activities of the employee which have been entrusted to him for business purposes or which he carries out in the interests of the business, which are in close relationship with the business and his area of operation in the business and which in this sense are caused in connection with the business [references omitted] …

Appendix 2  513 2. § 278 bgb (or § 831 bgb) Case 68 REICHSGERICHT (SIXTH CIVIL SENATE) 7 DECEMBER 1911 RGZ 78, 239 = JW 1912, 191 Facts and Reasons According to the findings of the KG Berlin the claimant, after making several purchases in the defendant company’s department store, went to the linoleum department to buy linoleum floor-cover. She mentioned this to W, the sales assistant who served there, and looked through the patterns which he displayed for her to make a choice. W, in order to pull out the roll she pointed to, put two others aside. They fell, hit the claimant and her child, and struck both of them to the floor. The purchase of the linoleum was not completed because, in the claimant’s words, she became seriously disturbed by the fall. The KG rightly attributed the claimant’s accident to W’s fault, on the ground that he had put the rolls, which were not stable enough because of their relatively small bulk, insecurely on one side, instead of furnishing them with lateral protection on leaning them against the wall, and this even though he could have foreseen that the claimant, as usually happens with the buying public, would approach the place where the goods she had asked to be displayed were stored. The KG’s view is comprised in the simple conclusion that the rolls would not have fallen if W had placed them carefully and regularly on one side. The KG’s opinion that the defendant company is liable for W’s fault under § 278 BGB cannot, in spite of the appellant’s contention, be rightly objected to; and it conforms to the case law of this Senate. W was acting for the defendant company (§ 164 BGB, § 54 HGB) when he entered into negotiation with the claimant. The claimant had asked for a piece of linoleum to be laid out for inspection and purchase. W had acceded to her request in order to make a sale. The proposal and its acceptance had for their purpose the conclusion of a sale, and therefore the production of a legal transaction. That was no mere factual proceeding, a mere act of courtesy, but a legal relationship came into existence between the parties in preparation for a purchase; it bore a character similar to a contract and produced legal obligations in so far as both seller and prospective buyer came under a duty to observe the necessary care for the health and property of the other party in displaying and inspecting the goods. The judgments of this Senate have already proceeded on similar grounds, and it has been recognised in several decisions of the RG that duties of care for the life and property of the other party can arise from bilateral or unilateral obligations, which have nothing to do with the legal nature of the relation in a narrower sense, but nevertheless follow from its factual character. The defendant company made use of W’s services for the fulfilment of the aforesaid obligation to the prospective purchaser, and is therefore answerable for his fault. This is in line with the thought expressed in § 278 BGB, that whoever himself owes a performance that he must carry out with the required amount of care must, when he makes use of an employee, answer for his careful performance, and that accordingly the other person to whom the performance is due must not be put in a worse position because he does not do it himself but commits it to an employee. It would be contrary to the general feeling of justice if in cases where the person in charge of the business of displaying or laying out goods for exhibition, sampling, trial, or the like carelessly injures a prospective purchaser, the proprietor of

514  Appendix 2 the business – with whom the prospector wished to make a purchase – should be answerable only under § 831 BGB and not unconditionally, so that the injured person should, if the proprietor succeeds in exonerating himself, be referred to the usually impecunious employee. There is no need to go here into the legally questionable view of the KG that the mere entry into a department store of a prospective purchaser or even a visitor without any intention of buying creates a contractual relation between him and the proprietor, including the widely discussed duties of care … Case 69 BUNDESGERICHTSHOF (EIGHTH CIVIL SENATE) 28 JANUARY 1976 BGHZ 66, 51 = NJW 1976, 712 = JZ 1976, 776 with approving note by Kreuzer = VersR 1976, 589 Facts The claimant, who at the time of the accident was 14 years of age, went with her mother to a branch of the defendant’s, a small self-service store. Whilst her mother, after selecting her goods, stood at the till, the claimant went round to the packing counter to help her mother pack the goods. In doing so she fell to the floor and suffered an injury which necessitated lengthy treatment. Alleging that she had slipped on a vegetable leaf, she sued the defendant for breach of his duty to provide safe access. The OLG Koblenz, having dismissed as timebarred the claim for damages for pain and suffering, the parties are now in dispute only on the question whether the defendant is obliged to compensate the claimant for her economic loss as well as prospective damage. The LG rejected the claim as time-barred. The OLG granted it – after deducting one-fourth for contributory fault. The defendant’s further appeal was unsuccessful for these Reasons I. The OLG found as proved that the claimant slipped on a vegetable leaf lying on the floor near the packing counter and suffered injuries which necessitated the expenditure in question and may possibly lead to future loss. These findings disclose no legal error; they are in fact undisputed on appeal. II. According to the OLG’s opinion the defendant had not furnished the proof incumbent on him that he had taken all necessary care for the safety of movement in his store and that the accident could only be attributed to the fact that another customer had shortly before let a vegetable leaf fall to the floor. These findings also cannot be faulted legally. They conform to the settled case law of the BGH (NJW 1962, 31; cf also RGZ 78, 239) both on the duty of a shopkeeper to ensure safety of movement and on the reversal of the burden of proof required by § 282 BGB [the actual § 282 BGB has a different content after the Schuldrechtsreform of 2002] in cases of claims for damages based on culpa in contrahendo [now codified in § 311 BGB]. This point also is not contested on appeal. III. The defendant therefore is liable – so continued the OLG – after taking the contributory fault of the claimant into account, for three-quarters of the existing and prospective loss, and that not only in delict, but also for fault in concluding contract, since in opening the self-service store he infringed the contractual duty of protection and care which he had

Appendix 2  515 undertaken to the claimant. Moreover, the claimant also has a claim for damages under a contract with protective effects towards a third party because her mother was during the accident preparing to contract with the defendant and the claimant was being included as an assistant within the scope of that contract-like obligation. For claims, however, arising from fault in concluding a contract the limitation period is 30 years, so that the claim was brought in good time. IV. These explanations stand up to examination – at least in result. Admittedly, the main line of the OLG’s reasoning, that the defendant is directly liable to the claimant for fault in concluding the contract, irrespective of whether a contract with protective effects towards a third party needs to be brought into the picture, gives rise to doubts. Liability for culpa in contrahendo, which in cases like the present one is more favourable to a claimant than the general liability in delict for breach of the duty to provide safe access – because of the increased liability for employees (§ 278 BGB in contrast to § 831 BGB), the longer limitation period (§ 195 BGB in contrast to § 852 BGB) [both with partly different content after the Schuldrechtsreform of 2002], and the reversal of the burden of proof (§ 282 BGB) – rests on a legal obligation created by way of supplement to the written law. It arises from the process of bargaining for a contract and is largely independent of the actual conclusion or efficacy of a contract [reference omitted]. The liability for a breach of the duties of protection and care arising from this obligation finds, in cases of the present kind, its justification in the fact that the injured party entered the other party’s sphere of influence for the purpose of negotiating for a contract and can therefore rely on an enhanced carefulness in the other party to the negotiation [reference omitted]. This is borne out exactly by the present case in which the mother entered the sales department of the defendant for the purpose of making a purchase and in doing so had to subject herself to a risk involved in the increased congestion, especially near the till, in a self-service store. It is, however, always a presupposition of liability for culpa in contrahendo in this type of contract of sale that the injured party enters the sales department with the purpose of contracting or of entering into ‘business contacts’ – and therefore at least as a possible customer, though perhaps without a fixed intention to purchase [reference omitted]. It need not be decided whether it is enough, in view of the peculiarities of sale in a self-service store, for a customer (when entering the sales department) to have intended at first only to have a look at the objects offered and be possibly stimulated to buy or only to make a preliminary comparison of prices with those in competing enterprises. In any case there is insufficient justification for a contractual liability for culpa in contrahendo stretching beyond liability for delict when the person entering the store never intended to buy, perhaps because – leaving aside the shop-lifter mentioned by the OLG – he is sheltering from a shower or using the store as a way through to another street or even only to meet other persons. The line may be difficult to draw in particular cases, above all because it depends on the difficult proof of unexpressed intention. In the present case, however, it is beyond dispute that the claimant from the start did not intend to make a contract herself but only to accompany her mother and help her in buying. A direct application of liability for fault in concluding a contract with the defendant is therefore excluded. V. Nevertheless, the appellate judgment is proved right in result, because it is supported by supplementary considerations.

516  Appendix 2 1. If the claimant’s mother had been injured in the same way as her daughter, there would have been no objection to making the defendant liable for culpa in contrahendo – as is also clearly stated in the appeal. In that case nothing need be said about the question, disputed in academic circles, whether in a self-service store the display of the goods constitutes an offer and the contract of sale is concluded by the buyer’s accepting it in presenting the selected goods at the till – thus reserving a final decision until that moment – or whether the display of the goods constitutes only an invitation to make offers, which the customer for his part makes by showing them to the cashier and the latter accepts by registering it on behalf of the self-service store. In any case, the general run of the reasons for the judgment, even though it contained no express statement by the OLG, makes it obvious that at the moment of the accident the goods intended for the purchase had already been finally chosen and a legal obligation already existed between the defendant and the claimant’s mother justifying liability for culpa in contrahendo. 2. It is on the legal obligation that the claimant can rely to justify her contractual claim for damages. It accords with the long-standing case law of this Senate in particular that in special circumstances even bystanders who do not themselves participate in a contract are included in the protection afforded by it, with the consequence that although they have no claim to have the primary contractual duty performed, they are entitled to the protection and care offered by the contract and can make good in their own name claims for damages arising from the breach of those subsidiary duties … It is not necessary to consider here the theoretical question whether such a contract with protective effects toward third parties, on which the courts have proceeded hitherto, is derived from the supplementary interpretation of a contract incomplete to that extent (§§ 133, 157 BGB), or whether, as is increasingly accepted in the literature, direct quasi-contractual claims arise on grounds independent of the hypothetical intention of the parties, perhaps from customary law, or on the basis of legal developments by the courts. In any case, according to both views it is essential that the contract, according to its sense of purpose and the requirements of good faith, demands an inclusion of third parties in its sphere of protection; and that one party to the contract can in honesty – and in a manner discernible by the other party – expect that the care and protection owed to it will be equally extended to a third person. There is no good reason to exclude sales in general from this legally possible configuration as this is shown in particular by sales in shops to which buyers, in certain circumstances, must enter the sphere of influence of the seller. And that is also the view of the Sixth Senate in BGHZ 51, 91, 96. 3. Admittedly the inclusion of third persons in the sphere of protection of a contract – if the contract between contractual and delictual liability established by the legislator is not to be destroyed or blurred – needs to be confined to narrowly defined cases. Whether the mere fact that the customer makes use of a third person in initiating and concluding a purchase in a self-service store is enough for the protected effect to be accepted as possible may be left undecided; for in the present case it must be added that the claimant’s mother was responsible for her daughter ‘for better or worse’ [reference omitted] and therefore – and this should be known to the defendant also – for that reason alone it could reasonably be inferred that the daughter accompanying her should enjoy the same protection as herself. In such a close family relationship the courts have always seen themselves justified in extending contractual protection.

Appendix 2  517 4. That in the present case the sale was not concluded at the moment of the accident is, in the result, unimportant. If one looks upon the duty of protection and care as the determining element of the legal obligation based on negotiating for a contract, and if one considers that the other party owes this duty of care both before and after the conclusion of the contract, the inclusion of third persons (who are equally worthy of protection) in the obligation follows. Moreover, there would be no rational ground for making the contractual liability depend on the chance of whether the negotiations had already led to a contract when the damage occurred; that is impressively shown by the present case, where the ‘sale negotiations’ had, in essence, been completed and the conclusion of the contract – possibly subject to a delay on the mother’s part in completing it at the till, and for which the claimant’s mother was not responsible – was in any case imminent. The appellant’s contention that a cumulation of liability for culpa in contrahendo and inclusion of a third party in the protective effect of a contract would lead to an unforeseeable widening of the risk on a seller, is directed in principle against justification of both institutions in general. The danger of a flood of litigation, which cannot be dismissed out of hand, has, as has already been explained, long been taken into account by the courts, which have imposed strict requirements on the inclusion of third parties in the protective sphere of a contract. As regards to merely pre-contractual relations some reservation may be indicated. But in any case with so narrow a limitation there is no objection to an extension of protection if – as here – the person causing the damage could not reasonably have opposed any desire expressed by the mother, when negotiating for a contract, to have from the start the same protection expressly given to the child who was subsequently injured herself. Finally, in so far as the appellant contends that the long limitation period – combined with the reversal of the burden of proof – would intolerably worsen the evidentiary position of anyone sued for damages in such situations, the remedy must be found in laches (Verwirkung) of the existence of which there is no indication in this case. Case 70 REICHSGERICHT (THIRD CIVIL SENATE) 3 JUNE 1921 RGZ 102, 232 Facts The claimant and her husband lived on the third floor of a house belonging to the defendant and rented from him by the husband. On the morning of 23 October 1918 her husband was found dead and she was found unconscious in their bedroom. This was due to gas poisoning, the gas having come, according to the claimant, from the floor below. On the floor below the defendant was having gas replaced with electricity, and had retained G, a master plumber, to remove the gas pipes. At the end of his work on 21 October 1918, one of G’s workmen failed to plug the gas pipe leading from the gas meter to the apartment of one Gr, a publican. The gas meter was turned off at the time, but it was turned on by Gr on 22 October 1918, and gas then flowed out of the unstopped pipe and filtered through the ceiling into the living quarters above, those of the claimant and her husband as well as those of Gr himself. The claimant claimed compensation for her own illness and for the loss she suffered through her husband’s death, the claim being based on the contract of lease which her husband had entered as well as on tortious negligence. The defendant denied the claimant’s assertions

518  Appendix 2 about the gas poisoning and contended that the accident had occurred because a gas tap in their apartment had carelessly been left on either by the claimant or by her husband. Both lower courts (LG and KG Berlin) dismissed the claim, but the claimant’s appeal was allowed. Reasons The KG accepted the claimant’s version of the cause of the gas poisoning. It held, in accordance with decisions of this court [reference omitted, that the contract of lease concluded by the claimant’s husband was one for the benefit of the claimant under § 328 BGB and that therefore the claimant had a personal contractual claim against the landlord for breach of his contractual duty of care under §§ 536, 538 BGB [both provisions with partly different content after the Schuldrechtsreform of 2002]. It is held, correctly, that the landlord was contractually bound to each of his tenants not to damage them by works being effected on the premises and to indemnify them for any harm due to culpable breach of his duty. The court nevertheless rejected the claimant’s claim because the defendant was neither personally at fault nor liable for the negligence of an agent for performance (§ 278 BGB). There was no personal fault in the defendant because the person to whom he had entrusted the work, the master plumber G, was a specialist. He had thereby fulfilled his duty of care to see that the works were carried out properly and in a manner not involving risk to the occupants of the house, all the more so since what was involved was a simple and easy task which the chosen specialist could be expected to carry out properly. It was not common practice for the landlord himself to supervise specialist tasks which he was in no position to evaluate, nor to appoint a representative to do so for him. It therefore could not be expected that the defendant should supervise G’s work. Nor was the defendant liable under § 278 BGB, because the work being done on the gas pipes was not in execution of any duty owed by the defendant to the claimant, but of a duty owed by the defendant to the occupant of the lower apartment; G and his workmen could therefore not be regarded as the defendant’s agents for performance vis-a-vis the claimant. The appellant criticises the KG’s opinion of both points. Criticism of the finding that the defendant was not personally at fault is without merit. In the case of work such as was here entrusted to the master plumber G, the defendant was under no duty, either personally or through a clerk of works, to see that the work was being carried out properly or to check it as soon as it had been completed. A subsequent inspection, perhaps in the defendant’s own interest, would not have prevented the accident. On the other hand, the appellant is right to say that there has been misapplication of §§ 278, 536, 538 BGB. The KG itself recognised that the landlord has a contractual duty to all his tenants not to injure them by work being done on the premises. This duty stems directly from the basic duty imposed on the landlord by § 536 BGB, which is not simply to make the rented property available at the outset of the lease in a condition suitable for use in accordance with the contract, but also to maintain it in this condition for the duration of the lease. But this is not a duty merely to avoid doing harmful work on the premises, it is a positive duty to see that the rented property is maintained in a condition suitable for contractual use. It therefore includes the duty to take care that the tenant’s use of the premises is not unacceptably affected by any work being done on the premises, including the work done in parts of the building other than those demised to the tenant for his exclusive use. If the landlord allows work to be done in the house which runs the risk of affecting the tenanted

Appendix 2  519 premises, he is bound under the contract of lease so to effect these works that this danger is averted, regardless of where in the house or why the work is being done. The landlord of a house whose ground floor needed strengthening or whose gas or water supply was defective at any point would clearly be contractually bound as against tenants anywhere on the premises who were endangered thereby to do any repairs properly. If he entrusts the work to someone else he is using that other person for the performance of his duty towards all such tenants: he must therefore answer for his assistant’s fault under § 278 BGB as if it were his own. The same is true if the danger arises from works undertaken in rooms rented to others. For example, suppose a supporting wall on the ground floor is to be removed in order to enlarge the window. The landlord’s contractual duty to do these works is owed only to the tenant of the ground floor and not to other tenants, but if he actually engages on the work, he owes to all the tenants in the house a contractual duty so to manage it that the rooms they rent are not adversely affected. To this extent, therefore the workmen whom the landlord employs for modification of the building are his agents for performance under § 278 BGB not only as against the tenants of the ground floor but also as against all tenants whose rooms could be affected by the work of reconstruction. So here, taking the claimant’s assertions as true, although the defendant was indeed under no contractual duty towards the claimant to replace the gas pipes by electric wiring, he was responsible to the claimant and to the other tenants in the house for seeing that the gas pipes were removed without risk of gas flowing into their rooms. Those persons to whom the defendant entrusted the removal of the gas pipes were consequently his agents for performance vis-a-vis the claimant too. Such an application of § 278 BGB in respect of the landlord’s obligation to maintain the leased property so that it remains fit for contractual use is correlative to the tenant’s liability for his employees arising from his duty to treat the leased property properly: those whom the tenant engages in the business he runs on the tenanted premises are his agents for performance of his duty to treat the premises properly, even if he owes the landlord no duty whatever to run the business in which those persons are employed [reference omitted]. Case 71 BUNDESGERICHTSHOF (SECOND CIVIL SENATE) 11 APRIL 1951 BGHZ 1, 383 = NJW 1951, 798 Facts The claimant, who had ingrowing toenails, was referred for outpatient treatment to the defendant city’s hospital by the local Medical Union of which he was a member. He was made to sit down on a three-piece settee, about 30 inches high, designed for gynaecological examinations but used as an auxiliary operating table, the back part having been fixed in a horizontal position. The second defendant, who had been the hospital’s chief doctor for many years, gave the claimant a local anaesthetic, an injection of 2 per cent novocaine solution, in either one big toe or both. While waiting for this to work, the claimant suddenly lost consciousness and fell off the settee. He injured his cervical column in the fall, and has since experienced severe stiffness and loss of function in both arms. At the time of the accident, the second defendant was standing at the door of the small operating theatre, speaking to his chauffeur, and the operating sister was quite close to the claimant, treating a patient for burns.

520  Appendix 2 The claimant claims that the defendants are liable on the following grounds. No one told him to lie down after the injection, so he was still sitting when he suddenly became unconscious. Had he known he should lie down, he would have done so, and not fallen. The second defendant should have realised and guarded against the risk of a sudden faint, in particular by making him lie down, but instead of taking any such steps he left the claimant to his own devices after giving him the injection. This was the sole reason for the accident, which had rendered him wholly and, as it seemed, permanently unfit for work. The claimant claims an annuity for lost earnings and damages for pain and suffering from both defendants. The LG rejected the claim, but the OLG Köln held the claimant entitled to a monthly sum for loss of earnings and damages for pain and suffering. The defendants’ appeal was successful only in part. Reasons The claimant has a good contractual claim against the first defendant. The RG always held that when a General Health Insurance Scheme (AOK) refers a member to a hospital, the contract it makes with the hospital is one in favour of the patient whereby, under § 328 BGB, the patient acquires a direct claim to proper treatment against the operator of the hospital [reference omitted]. The first defendant entrusted to the second defendant the treatment of the National Health patient referred to it, so he became the first defendant’s agent for performance and the first defendant is accordingly responsible to the claimant under § 278 BGB for any fault committed by the second defendant in the execution of his ­professional medical activity. Between the claimant and the second defendant there were no direct contractual relations. A hospital doctor’s contractual duty to undertake the proper treatment of public health patients is normally owed only to the hospital which appoints him. But if a hospital doctor actually does embark on the treatment of a union patient and injures him in his health by infringing a widely recognised rule of medical science, he is liable to the patient under §§ 823ff BGB, whether or not he has any contract with the patient. It is immaterial whether the fault of the doctor is one of commission or of omission. The doctor may be under no obligation to the patient to treat him at all, but if he does so, he must avoid injuring him in body or health by breach of the rules of medical science [reference omitted]. In the instant case the OLG was right to find that it was the second defendant’s fault that the claimant did not lie down after the injection; he should have told him himself or got the operating sister to do so. The appellant contends that the failure to tell the claimant to lie down was not an adequate cause of the consequent harm. This is not so. The decisions of the RG cited by the appellant on consequences for which the actor is not responsible because the causal connection is not adequate refer to consequences which occur only under extremely peculiar circumstances and through quite improbable concatenations of events and which can be ignored in the normal course of things. The consequences here, according to the expert, are not of this kind. On the contrary, the expert expressly emphasised that the reason for the good old rule that a patient should always be prone or supine during all manipulations and injections is precisely the possibility of a faint and a fall; it may be true that this rule cannot always be observed in practice and often is not, but such practical considerations cannot relieve the doctor of the charge that he ignored a duty of care. In such a case there can be no question of

Appendix 2  521 any interruption of the adequate causal connection. The appellant is also wrong to say that the OLG pitched the doctor’s duty of care too high. The court was right to follow the expert, whose evidence was based on his knowledge of the rules of the medical art, and who stated in clear terms that there was undeniable negligence in this case unless perhaps it could be proved that the sister had been enjoined to attend to the patient and that the patient had disobeyed her instruction to lie down. It follows that the claimant’s claim for monthly payments is established against the first defendant under §§ 276, 278 BGB and against the second defendant under § 823 BGB. However, the second defendant alone is liable for the damages for pain and suffering under § 847 BGB [see after the Schadensersatzrechtsreform of 2002 § 253 II BGB]. Only under § 831 BGB could the first defendant be held liable for such damages. The defendant city asserts that it has satisfied the requisite exculpatory proof. We agree. It was common ground that the second defendant had been chief doctor in the first defendant’s hospital for many years and that the nurse had served as operating sister for nine years without any criticism. The claimant did not even assert, much less prove, anything that tended to show that the second defendant had been guilty of any fault during his 20-year service in the defendant city’s hospital. Under such circumstances, the hospital management cannot be expected to adduce any further exculpatory proof. Case 72 BUNDESGERICHTSHOF (TENTH CIVIL SENATE) 17 JANUARY 2012 NZV 2012, 226 Facts The claimant bought a ticket for a high speed train run by the first defendant (the Train Operating Company DB) from Solingen to Dresden. On the way to the platform at Solingen station, the claimant slipped on sheet ice and was injured. The upkeep of the station was under the control of the Rail Infrastructure Company, DB Station & Service, who had confided the task of winter clearing to the second defendant. The OLG Düsseldorf rejected the claimant’s appeal against the LG Wuppertal which had rejected his claim against the first defendant. Reasons The appeal by the claimant to the BGH was allowed for the following reasons: A Train Operating Company (TOC) has a duty under a contract of passenger transport to ensure that the passenger suffers no harm in the transport. This also includes the transport process, from getting on to the train and getting off. Furthermore, the TOC is bound under the contract of transport to make it possible for the passenger to get on and off the train safely. If this ancillary contractual duty is breached, the TOC is liable under §§ 280 I, 241 II BGB. If the station premises which the passengers must use to get on and off the train are made available by a Rail Infrastructure Company (RIC), the TOC uses the RIC as an assistant in performance and is liable for its fault to the same extent as for its own fault (§ 278 BGB). Before the reform of the railways, case law recognised that the rail company was liable under the contract of transport to ensure that passengers got on and off safely, and that

522  Appendix 2 the ­platforms which passengers had to use were kept safe for traffic [reference omitted]. This was not changed by the legal separation of transport and infrastructure through the New Order for Railways Act [ENeuOG] of 27 December 1993.It does not matter that a TOC cannot personally ensure the safety of the station premises because of the legal division between transport and infrastructure. It is sufficient that it is possible for it to achieve through the RIC, which it uses in the performance of the transport contract. The TOC uses the infrastructure of a passenger station on the basis of a station use contract with the RIC, here DB Station and Service. Under the station use contract, the RIC is bound towards the TOC to ensure that the infrastructure of the passenger station is kept safe for traffic in relation to its own passenger transport contracts. … As a result, the TOC cannot direct the passenger to seek delictual remedies against third parties for compensation for harm suffered on premises necessary for the performance of its contractual duties. Instead, the possible fault of a RIC (and, where the performance of such duties has been delegated to third parties, their fault is to be treated within the same scope as its own fault. Notes to Cases 56–72 1. Giliker (Vicarious Liability in Tort (2010) 146) argues that ‘the courts have struggled to provide a response which is able to balance society’s concern for the victims of torts against providing a clear and workable test for litigants which does not impose an unjustifiable burden on innocent defendants’. This is a common concern of different legal systems. In broad terms, there are two approaches. In contract, one party is liable for the acts of their employees because this is a risk which they assumed when making the contract (and typically for which they are paid through the contract price). In delict, a party is liable for their employees because it is a risk which is part of their social or business activity and from which they benefit by achieving their social or business purposes. On the whole, common law is stricter with those who have accepted a risk and especially with those who have been paid to assume it. The cases and the commentary which follow make it clear that there exist some important structural differences between German law on the one hand and the common law on the other when it comes to articulating these principles. At the same time, it is important to recognise that the German starting point in delict in 1900 was not to focus on the risk created by a business, but at the fault in supervision. That establishes not only a structural difference, but also a policy difference. The fundamental question is how far this policy difference has been maintained both in the solution to particular cases and in the body of constant case law and scholarly writing which has followed the enactment of the Code. 2. Most of these cases illustrate (i) the difficulties experienced by German law as a result of § 831 BGB and (ii) the ways used by the courts to produce a more sensible result. Thus, cases 60, 62, 63 and 64 show how the employer must supervise his employee properly and constantly or otherwise run the risk of being held liable under § 823 I BGB for breach of his own primary duty. How far is the duty of supervision strict? If we look at cases 62, 63 and 64, would these just amount to a duty on the employer to establish a safe system of working through which the employees are appropriately skilled in performing their tasks; or are the courts requiring levels of supervision which are not really possible in complex modern organisations? If the first is true, then the courts are retaining, but modernising, the concept of supervision. If the latter is true, then the concept of supervision is being subverted for other purposes.

Appendix 2  523 3. Cases 58 and 66 discuss the thorny question of ‘unlawfulness’ in the context of § 831 BGB (though much of the reasoning in the latter case appears to have become obsolete). Where does the level of unlawfulness need to lie – in the action of the employee or in the action of the employer? This helps us to understand how far the liability is really vicarious rather than direct. 4. Case 57 discusses issues relevant to § 31 BGB. The development of corporate responsibility avoids the issue of supervision altogether. The issue becomes whether the act can fairly be said to be the act of the corporate body. The case illustrates the way in which companies may well have many outlets through which they deal with individuals. This enables them to make more profit, but it carries higher risks, not least the inability to supervise all senior employees. § 31 BGB allows (in combination with § 823 BGB) a more realistic solution to be reached, rather than relying on § 831 BGB. 5. Cases 68–72 illustrate what is, perhaps, the most ingenious way of bypassing § 831 BGB, namely by invoking the aid of the law of contract. As Zweigert and Kötz put it (An Introduction to Comparative Law (2nd edn, 1987) vol II, 147, a passage not included in the 3rd edn): The sole purpose of these contract decisions is to put the accident victim in a better position than if his only claim for damages were based on delict. Under German law, with regard to limitation periods, burden of proof and especially vicarious liability, a victim is in a much better position to claim damages if he can claim in contract for the harm he has suffered. Not the slightest blame attaches to the German courts for using the contract for the benefit of third parties in order to get round the misconceived legal policy contained in § 831 BGB; nor is there anything wrong with what they have done as a matter of positive law. Nevertheless, it must be seen that these are cases where the harmful consequences of accidents are attributed to the person responsible, not because he is guilty of any breach of specifically contractual duties but because he has committed a breach of general duties of care imposed by the law of delict. The position of German law may be excused by the necessity caused by the unfortunate policy of § 831 BGB, but the comparative lawyer has to classify problems according to the true significance of their actual facts. These cases must therefore be put in the law of tort, as is done everywhere else in the world. In doing so, the comparatist must realise that it may be necessary to study a person’s contractual relations with third parties in order to discover to whom he owes his delictual duties of care not to cause harm. Since 2002, claims formed in contract can compensate the claimant for his pain and suffering, so the value of invoking contract rather than delict is increased (see § 253 BGB). Case 72 neatly shows the way in which tasks are outsourced in the modern world and how a contractual solution enables the victim to retain an intuitively right view of who is liable for the wrong done to them. 6. The tendency to invoke § 823 I BGB, by discovering what the common lawyers would call non-delegable duties, is an alternative route that will be appropriate when there is no prior relationship between the person to be made liable and the victim. From the little said in this paragraph, it should be clear that these cases must be read in close conjunction with the text of chapter three, section I.

524  Appendix 2 7. Once the above points are well digested, the comparatist should experience no difficulty in understanding what is happening in ‘the other system’, the differences being differences in emphasis or detail rather than substance. Thus, the rationale for imposing vicarious liability is the same everywhere: the belief that it is more efficient to place the risk on the employer’s shoulders than on the employee’s. The same rationale also seems to favour the more modern tendency not to allow employers (or, more likely, their insurers) the right to claim contribution or an indemnity from the employee unless the latter’s conduct was intentional and grossly negligent. (For English law see Markesinis/Deakin, 567–80.) The tendency to make employers rather than employees liable also accounts for the increased willingness to give a wide meaning to such inherently ambiguous notions as ‘course of employment’. As already noted, German law is, perhaps, the strictest in this respect. In the leading French decision of 1988, the Cour de cassation held that an insurance company was liable for the acts of an employee who defrauded a client for his own ends (Cass.ass. plén, Guyot D 1988, 513 note Larroumet.) It was held that the employer could only escape liability by showing that the act was without authorisation, that it was undertaken for purposes external to his role and was outside the normal duties of his position. In that case, providing advice to clients was part of the duties of his position. The key concept is whether the wrongdoers was engaged in an abus de fonctions. (For an analysis of French law and the possibility that the insurance factor may in some cases account for such wide interpretations see Markesinis, ‘La perversion des notions de la responsabilité civile délictuelle par la pratique des assurances’ (1983) Rev int dr comp 301.) 8. The common law has struggled with the question of who is an employee. In the child abuse cases, vicarious liability has applied to people who were not, technically, employees but were entrusted with a mission on behalf of the employer and so came within the general concept of the enterprise. The terminology used here of ‘business’ or ‘employer’ used in English common law cases is distracting. More usefully, Article 6:102 PETL sets out liability for a person who is an ‘auxiliary’ and Weir described him as a ‘helper’ (An Introduction to Tort Law (2nd edn, 2006) 105) – the person who is put out into the world to be the presence of the enterprise in the situation where harm was caused. As Lord Phillips suggested, ‘Vicarious liability is imposed where a defendant, whose relationship with the abuser put it in a position to use the abuser to carry on its business or further its own interests, has done so in a manner which has created or significantly enhanced the risk that the victim or victims would suffer the relevant abuse’ (The Catholic Child Welfare Society v Various Claimants and the Institute of the Brothers of Christian Schools [2012] UKSC 56 para [86]). The enterprise may not have created a risk, but, as Lord Millett stated in Lister v Hesley Hall Ltd [2002] 1 AC 215 [65], [83], the potential danger may be something which happens in that kind of enterprise and which is a potential burden to be accepted alongside the benefits (not necessarily financial) to the enterprise. The English common law has moved away from the idea that the enterprise could realistically control its employees and merely seeks to establish the link with the enterprise’s activity. That is much the same as French approach. By contrast, German law under § 831 BGB is locked into a different paradigm.

Appendix 2  525 LIABILITY FOR THOSE NEEDING SUPERVISION, ESPECIALLY CHILDREN (§ 832 BGB) Case 73 Landgericht München I 19 June 2008 MMR 2008, 619 Facts The parties are in a dispute about copyright claims in order to obtain disclosure and damages for the then underage third defendant making collages in video format publicly accessible on an online platform. The claimant is the photographer and claims to be the originator (Urheber) of the 70 children’s photographs to be seen in exhibit A which she had published on her website. On this website there is the following copyright notice: ‘© 2005–2007 … – Alle Bilder unterliegen dem Urheberrecht von’ (all pictures are subject to the copyright of). The third defendant (year of birth 1990) is a pupil and since spring 2006 posseses user accounts on the internet portals www.myvideo.de and www.video.web.de. The first and second defendants are the parents of the third defendant. They made an access to the internet available to her. On 19 May and 22 May 2007, the defendant put videos online on both internet portals without the consent of the claimant. The claimant takes the view that the videos contain a collage of the 70 children’s photographs in exhibit A which are shown one after the other as well comprising the text of poems of unknown origin which are displayed in the form of a slideshow or a multimedia presentation respectively. She claims this is a non-independent processing of the photographs created by her so that she is entitled to an injunction, an action to disclose, an affidavit, damages and exemption from the pretrial attorney fees against all three defendants. The third defendant is to be liable as the perpetrator. Allegedly, she made the videos in question herself and put them online using her parent’s internet access. The first and second defendant are equally liable according to the principles of interference liability as they supposedly breached their duty to instruct and control. They had provided internet access to their daughter and let her do as she pleased without monitoring the use of the internet as part of their parental duty of supervision any further. The first and second defendant submit that the third defendant used the internet independently since spring 2006. During this time, there had never been any infringements of others’ rights. Besides, the third defendant had never before been prosecuted for violations of the law. She was, as far as the internet is concerned, more experienced than her parents. She was taking an IT course at school since the end of 2005. Moreover, she had free access to the internet at school. Likewise she could access the internet at her friends’ homes. At no time have the first and second defendant been reproached for a breach of their supervisory duty. According to MyVideo’s terms and conditions of use, registration as a user requires the age of legal majority. The third defendant, however, could register herself by providing her real age. The first and second defendants did not need to contemplate this. The first and second defendant supposedly would not have had a legal option to prevent the conduct in dispute. A 17-year-old is simply capable of getting on the internet at all kinds of locations. It would simply be impossible to keep a 17-year-old adolescent away from the internet completely. As the first and second defendants thus supposedly did not have the

526  Appendix 2 possibility to prevent the alleged copyright infringements, the requirements for a claim are not met. The third defendant submits that she grew up in a sheltered environment and that she is lacking experience in legal and business dealings. She had assembled a video in the form of a slideshow with pictures to which she had had access through the website … In the case of the third defendant, she claims, no reproachable breach of a duty of care exists. The danger of a copyright infringement through the creation of a video from pictures which can be downloaded and saved to a personal PC without any problems, is not foreseeable for the average 16-year-old. The law of intellectual property is a complex matter. For persons with limited legal capacity who possess no experience in business operations, the consequences resulting from downloading pictures and the publication of their own videos on an internet portal such as MyVideo, are incomprehensible. Reasons B. Case against the third defendant The claimant is entitled to the demands asserted against the third defendant. I. Claim 1 (disclosure): The claimant is entitled to the remedy of disclosure under §§ 97 I, 16 I, 19a, 72 I Copyright Act (Urheberrechtsgesetz) § 242 BGB as demanded under Claim 1 as the alternative claim to the established claim for damages against the third defendant: 1. Insofar as the third defendant challenges the claimant’s standing to sue with her ignorance, this does not work. Because in view of the copyright mention included on the website, according to § 10 Copyright Act, it must be presumed for the benefit of the claimant that she, as the photographer, was the owner of the copyrights under § 72 I Copyright Act. 2. The third defendant concedes that she created the videos in question which are available online by using pictures she took from the website without the consent of the claimant. By downloading and saving the images, she unlawfully interfered with the right to reproduce under § 16 Copyright Act belonging solely to the claimant and by putting the videos online she equally interfered with the right to grant public access under § 19 a Copyright Act which also appertained solely to the claimant. 3.The third defendant is also accused of being culpable, at least in the form of being careless (§ 276 II BGB). For who uses others’ works, must first ascertain his rights to use them (Schricker, UrhG, 2nd edn, § 97 UrhG no 52). This also applies to minors, at least from the age of 15 (see OLG Hamburg NJOZ 2007, 5761, 5763 [= MMR 2007, 533], in respect of a 15-year-old internet user, further references omitted). In the present case there was reason for this simply because of the copyright mention. 4. The third defendant was, at the time of the offence, fully capable of delictual liability within the meaning of § 828 III BGB. (a) According to this provision, someone who has not completed the 18th year of their life is not responsible for the damage he has caused to another, if – at the time the damaging act was committed – he did not have the discernment necessary for the knowledge that he will be responsible (die zur Erkenntnis der Verantwortlichkeit erforderliche Einsicht). b) This is the case, according to case law, if the minor has the discernment necessary to know that she will be responsible, ie, is, according to her individual mental development, able to

Appendix 2  527 ascertain the danger of her doing and be aware of the responsibility for the consequences of her doing, or in other words, if she has the ability to discern the injustice of her actions vis-a-vis her fellow human beings and at the same time to discern the obligation of having to answer herself, in some way, for the consequences of her actions. The lack of the ability of discernment is to be asserted and proved by the underage tortfeasor [reference omitted]. c) In the present case, the third defendant was indisputably only 17 years old at the time of the offence so that the application of this provision is available. The third defendant did, however, not prove that she was lacking the necessary discernment at the time. She did not offer proof for her assertion contested by the claimant. Besides, her own parents attribute to her full discernment at the relevant point in time … The extensive computer and internet skills the third defendant acquired through the IT course at school and displayed in committing the offence also point against a lack of discernment that others’ works are not allowed to be simply downloaded and put online elsewhere [reference omitted] … C. Case against the first and second defendant The claimant is also entitled to the demands asserted against the first and second defendant. I. Claim 1 (disclosure): The claimant is also entitled to the remedy of disclosure as demanded under Claim 1 as the alternative claim to the established claim for damages under § 242 BGB against the first and second defendant because the first and second defendant are at least liable for the breach of their parental duty of supervision under § 832 I 1 BGB. 1. The first and second defendant are not liable as accomplices or accessories under § 830 BGB because what is missing is an intentionally committed main offence, as well as a deliberate contribution to it. 2. The first and second defendant have, however, breached their parental supervisory duty so that they are jointly and severally liable with the third defendant according to §§ 832 I 1 sentence 1, 840 I BGB: (a) According to § 832 I BGB, the person who, by virtue of the law, is obliged to supervise another person who needs supervision because of minority or their mental condition, is liable to compensate the damage that person unlawfully inflicted on a third party. The duty to compensate does not arise if they satisfied their duty to supervise or if the damage would also have arisen in the case of appropriate supervision. (aa) According to the case law of the BGH minors always require supervision (BGH NJW 1976, 1145), merely its content and therefore the exonerating evidence under sentence 2 varies with the specific circumstances of the individual case [reference omitted]. The parents’ supervisory duty arises from the law (§§ 1626 ff, 1671 ff, 1757, 1765 BGB). In view of satisfying the characteristic elements of the offence of unlawfully caused damage (widerrechtlichen Schadenszufügung) it suffices to satisfy the actus reus of an unlawful action. It depends just as little on the culpability of the person requiring supervision as on their capability to be responsible for a delict [reference omitted]. (bb) The person with the duty of supervision can bring forward the proof of exoneration of sentence 2 by comprehensively and specifically presenting and proving that he either satisfied his duty of supervision, or that the damage would also have arisen in the case of due

528  Appendix 2 supervision or repeated instruction. The person with the duty of supervision has satisfied his duty if he did what was necessary in view of the age, nature and character of the person needing supervision as well as in view of the specific situation leading to the infringement of a protected interest (Rechtsgutverletzung) [reference omitted]. Supervision means watching and monitoring (beobachten und überwachen), instructing and enlightening the person needing supervision, if necessary guiding and influencing them in respect of their behaviour. The intensity of the supervision required in this respect depends on the person of the individual requiring supervision, their knowledge and abilities and on the other hand the extent of the danger to third parties’ protected interests (Rechtsgüter) emanating from the specific situation, and therefore the specific circumstances [reference omitted]. The measure of the required supervision for minors is determined according to age, nature and character of the child as well as the foreseeability of the damaging conduct, all in all according to which necessary and reasonable measures prudent parents must be taking in specific situations to prevent damage to third parties caused by their child. With respect to the external circumstances, an enhanced duty of supervision exists where the risk is greater for third parties. With respect to the person of the child, one must consider the aim of teaching independent and responsible conduct, conquering and exploring unknown territory is to be made suitably possible. Instruction, supervision and monitoring, however, have to be all the more intensive the smaller the educational success is, even in the case of older children. The person with the duty to supervise must, therefore, to ascertain the scope of their duty, concern themselves with what the children keep busy with in their free time, thus occasionally watch them in this respect, pay attention to objects with which the children play when tidying up the child’s room and cleaning the clothes [reference omitted]. In case of the surrender of dangerous objects by the person with the duty of supervision, instruction as to the dangerousness is necessary in principle [reference omitted]. (b) In the present case, the claimant has adequately shown the requirements, as set out above, for the first and second defendant’s liability to pay damages under § 832 I 1 BGB: (aa) The first and second defendant were undisputedly the legal guardians of the then minor third defendant. (bb) The third defendant infringed the claimant’s copyrights without the permission of the claimant (cf above) … (c) The first and second defendant did not succeed with their proof of exoneration under § 832 I 2 BGB: They did not present any measures whatsoever as to the instruction or moni­ toring with respect to the use of the internet access provided by them to their daughter. (aa) An introductory instruction is principally to be demanded though [references omitted] because the use of a computer with internet connection – insofar as no flat rate has been agreed upon – cannot only cause significant charges, but also carries significant private law liability risks, not to mention the dangers emanating from content which is harmful to minors. A computer connected to the internet is therefore equivalent to a ‘dangerous thing’ in the sense of the above cited case law. The remarks of the LG Mannheim (MMR 2007, 267 f), which the Chamber follows in the judgment of 4.10.2007 (CR 2008, 49, 51 [= MMR 2008, 422]) are not contrary to this because in both previously decided cases the ­subject-matter

Appendix 2  529 was the relinquishment of the internet connection to a fully legally competent person (to the major son still living at home and an employee respectively). The OLG Mannheim also considers an introductory instruction and explanation of the dangers related to the use of the internet to be the mandatory minimum of necessary information in the case of children and adolescents. bb) Insofar as the first and second defendant refer to the fact that an instruction was dispensable by way of exception in this case because their daughter was technically considerable more versed in the area of computers/the internet, this is not to be equated with the question of the liability risks related to the use of the internet. Neither can it be deduced from the IT course the third defendant attended at school that the necessity to instruct can be omitted because its teaching and learning content were not discussed. Whether the necessity to instruct can be omitted in the case of the third defendant in view of the general discussion, particularly concerning the admissibility of file-sharing sites on the internet under copyright aspects, is doubtful. There would have been good reasons to use this as an occasion to have an instructing conversation. This question may, however, be left open at present. (cc) Because independently of the necessity of an instructing conversation, the parental supervisory duty also requires constant surveillance as to whether the child’s internet use stays within the framework set out by the introductory instruction [references omitted]. The first and second defendant did not present evidence as to when and how such surveillance took place. Neither did they present substantive evidence that continuous surveillance was dispensable by way of exception. Reference is made to the above remarks on the allegedly better knowledge of computers and the attended IT course. Even if it was presumed to be true, it cannot be deduced from the submission that the first and second defendant had to date not become aware of any other copyright infringements by the third defendant committed with the aid of the parental internet connection that the duty of surveillance was dispensable by way of exception. Because this assertion does not comment on whether the third defendant had hitherto actually behaved in a law-abiding manner. The question of the scope of such surveillance measures required in the particular case can therefore be left open in the present case. At least a one-off surveillance along these lines would have been reasonable to expect. (d) The first and second defendant are also at fault, at least in the form of carelessness (§ 276 II BGB). Because they carelessly misjudged the scope of the parental supervisory duty incumbent on them. 3. The disclosure is also possible for the defendants because they are the owners of the internet connection and can, moreover, also question their daughter. Case 74 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 10 JULY 1984 NJW 1984, 2574 Facts The claimant claims damages under § 832 BGB against the defendant husband (defendant 1) and wife (defendant 2) – hereafter the defendants – for the breach of their supervisory duty in respect of their then eight-and-a-half year-old son M. On 23 October 1979 around

530  Appendix 2 6.45pm, the claimant’s shoe storage – located in a hall he rented in the inn leased to the defendants – was consumed by fire. The fire had spread from a former oil storage room located under the hall’s stage. Three children, namely the co-defendants M, T and A, all aged between eight-and-a-half and nine years, had been playing there. They had entered through a window into the so-called screening room, the ‘Butze’, which had served as an occasional lounge for a drunkard until a week before the accident and which is situated next to the hall’s stage. In this room which had neither been rented by the claimant nor leased by the defendants, the children found matches. They then crawled into the oil storage room where they ignited a fire with hay and straw. Which child ignited and fuelled the fire has, so far, not been determined. In order to put out the fire, M placed a paving slab on it. This did not suffice, however, to extinguish the fire definitely with the result that it spread to the stage and the hall after about 1.5 to 2 hours. The claimant has sued for half, so an amount of DM 131,900, of the damage he calculated to be DM 263,800. The defendants submitted that their son M had merely forcibly opened the window of the screening room with a rod; according to them, he had neither taken the matches nor ignited or maintained the fire; he allegedly only went into the oil storage room with the others to kill spiders there. Furthermore, they deny having breached their supervision duty: The defendant husband was allegedly en route as a bus driver for the whole day. The defendant wife allegedly looked after M while working at the inn; the latter checked out first to cycle around and then to play in the garden; she supposedly saw for herself what he was doing by checking up on him regularly. M is said to have developed normally and had not drawn attention to himself in any way; in particular, he had supposedly never before played with matches. The LG held the defendants liable on the merits to pay damages. It dismissed the action against T and heard evidence as to the accountability of M. The OLG Celle rejected the defendants’ appeal. The defendants’ appeals lead to the judgment being reversed and the case being remanded. Reasons I. The appeal court is of the opinion that the defendants have not satisfied the burden of proof of exoneration incumbent upon them according to § 832 II BGB. Neither did they demonstrate that they satisfied their supervisory duty on the day of the fire or generally, nor that the fire would also have occurred if they had satisfied their supervisory duty. The defendant wife, in particular, did not demonstrate when and how often she checked up on M on the afternoon in question and why she had not noticed that the ­children had sneaked into the oil storage room and started a fire there, and why she finally also did not notice the thick smoke escaping. M would, at the very least, have told her about the fire if she had asked him about what he had been doing after he returned. Supervising him was necessary because the area around the house was an ideal but not visible play area; the room serving as a ‘flatlet’ for the drunkard was bound to inspire the children’s imagination. Neither did the defendant husband satisfy his burden of proof by claiming that he had been en route as a bus driver for the whole day; moreover he would have had to show from when to when he was on duty on the day in question. If his shift had begun early in the morning, he would have had enough time to, by 6.45pm – the time of the fire – get into conversation with M or to check that everything was in order when the latter was playing

Appendix 2  531 in the garden. Besides, the defendants did not demonstrate either that they had generally satisfied their supervisory duty, in particular to have forbidden M to play with fire and to sneak into the screening room. Even if one does not proceed from M’s account of the course of events in the preliminary proceedings according to which he himself started the fire, but rather from the defendants’ submissions, M’s contribution to the act is that, knowing that T had seized the matches in the ‘flatlet’ to make a fire to warm their hands he had gone into the oil storage room with him. This means that because he did not object to setting fire to the hay and straw, he took away T’s feeling of being solely responsible and encouraged him in his actions, therefore psychologically encouraged the fire, especially because, in the eyes of the other children – who, moreover, were pupils with special needs – he, as the child of the tenants, appeared as the ‘master of the premises’. II. These observations do not sustain the appeal court’s decision. 1. However, the appeal court’s starting point that the defendants had to prove that they satisfied their supervisory duty or that the damage would also have occurred in the case of proper supervision, is right. 2. The appeal court overstretches the standard of the parents’ supervisory duties though, by demanding that they had to forbid their 8½-year-old son generally to go into the ‘flatlet’ and that they had to monitor his activity constantly by constantly checking up on him in a way that the children breaking into the ‘flatlet’ and the starting of the fire could not have escaped them. (a) The degree of the required supervision of minors is determined according to age, nature and character, although the limit of the measures required and deemed acceptable depend on what prudent parents have to do in specific situations according to sensible demands to prevent damage, such as the one in question, caused by their child to third parties [reference omitted]. In particular, it depends on the child’s nature and his level of upbringing, to what extent general guidance and prohibitions suffice or whether their observance must also be monitored [reference omitted]. It is also to be considered that there is a correlation between the success of parenting and the degree of the supervision to be exercised: the less successful the parenting, the higher the degree of supervision must be [reference omitted]. According to the defendants’ submission – which is to be interpreted in their favour on appeal – M had, until this incident, developed normally and had not drawn attention to himself through particular, bad behaviour, notably in dealing with matches. Therefore, the requirements of the supervisory duty over an eight-and-a-half year-old child of normal development in a rural area are to be considered. At this age, as the appeal court holds, not only watching every step would be out of the question but also regular checkups in short intervals – eg, every half-an-hour as is necessary in the case of a younger child [reference omitted]. In principle, children of the age of eight to nine years must, if they are normally developed, be permitted to play outdoors without supervision, even in an area which does not allow the parents to intervene immediately [references omitted]. It is part of the children’s games to discover and ‘conquer’ new territory. This does not have to be prohibited in general unless it involves particular risks to the child or others. Instead, it must, as a rule, suffice in the case of children of this age group who also usually make their own way to school that the parents get a general overview of the activities and going-ons, as long as no specific reasons call for

532  Appendix 2 special precautions. Otherwise all reasonable progress of the child, particularly the process of learning how to deal with risks, would be inhibited. Here, the defendants have submitted without challenge that M – apparently as directed – informed his mother that he was going to cycle around and then to play in the garden. Thereby the parents’ duty to inform themselves was discharged. They did not have a duty to check up in the present circumstances with the result that the mother cannot be criticised for the fact that M’s temporary presence in the former oil storage room escaped her. (b) Contrary to the view of the respondent’s submissions, the defendants did not need to forbid access to the building with the hall either. Besides, as is part of every upbringing, raising awareness to generally respect the property of others – which is generally accomplished less in verbal prohibitions and more in dealings with the things of others experienced together and by example – a particular prohibition not to enter a specific building is only necessary if there is a special reason for it. Indeed, with the submission on appeal, one cannot fail to recognise that the ‘flatlet’ could stimulate the children’s curiosity and thirst for adventure. The parents did not need to anticipate the children being in the ‘flatlet’ or even the former oil storage room simply because access to these rooms which led through the hall, was locked. They did not, without concrete evidence, have to contemplate that the children would forcibly gain access; there are no reasons for this. For this reason, they were not bound to exercise greater diligence even if they had known of the presence of the matches in the ‘flatlet’ or should have done so if they had exercised due diligence. (c) Neither did the defendant – contrary to the view OLG’s – breach her supervisory duty by not having M tell her, after his return from playing on the day in question, about what specifically he had gotten up to in the meantime. She would have only been required to question the child immediately if she must have had the tangible suspicion that M had gotten up to something. There would have been grounds for this if one had proceeded with the assumption of the OLG that the defendant should have noticed from the smell of her son’s clothes that he smelt of smoke; thus had had something to do with a fire. Meanwhile, the appeal reprimands with good reason that the circumstance that the fire ‘had given off a lot of smoke’ alone, does not permit the conclusion that M’s clothes smelt so strongly of smoke that his mother must have noticed this, as long as it is not established how long the children had stayed in the oil storage room even when it was already filled with smoke. There is no general duty of the parents to question children of this age about what specifically they had done each time they return from their ventures. Such requirements to the duty of care would disrupt the necessary development process to become self-sufficient and would not reflect the reality of life. (d) For the same reasons one cannot assume a breach of M’s defendant father’s supervisory duty. 3. Ultimately, it was a procedural error that the OLG alleged that the defendants had not complied with their supervisory duty even in general. (a) Indeed, the requirements of the duty to inform children of the dangers of a fire, particularly in dealing with matches, are tough [reference omitted]. The – not infrequent – causing

Appendix 2  533 of a fire by playing children does not primarily belong to the risks of life to be carried by the general public. On the contrary, the risk posed to third parties by children – as the Senate has repeatedly pointed out – should, according to the rationale of § 832 BGB, be carried primarily by the parents to whom it can be imputed more easily than to the innocent bystander, and who, as those charged with the upbringing, also have the possibility to convey to the child the necessary awareness as to the dangerousness of a fire, especially inside a building. Which style of measures they deem to be the most successful pedagogically is largely left to their decision. However, if the danger has materialised, it is part of the parents’ proof of exoneration under § 832 BGB, to present and prove in detail that they have complied with their obligation to inform (Aufklärungspflicht). Nevertheless, the court must consider the difficulty of a line of argument about such educational methods taking place within the family, which are moreover applied broadly and are therefore difficult to pinpoint in time. This can justify not putting too great demands to the hearings of the parents and in particular, to admit it when it is proved that the parents have taken their supervisory duty seriously in general. (b) However, it was a procedural error that the OLG alleged that the defendants had not performed their duty to inform and supervise in this respect. The defendants’ submission on this question may not have been exhaustive but the appeal does rightly point to the fact that the court’s duty would have been, according to § 139 ZPO, to prompt the defendants to complement and expand their submission. Because their assertion that M had ‘never before played with, let alone ignited a fire or even shown a particular interest for matches’; ‘he has been a child of normal development who had not caused difficulties with respect to his upbringing and supervision and had not displayed and conspicuousness’, can, in connection with the assertion that they had ‘always warned M, within the limits of what is normal, to be careful and not to get up to nonsense’, reasonably be understood in a way that M was instructed and warned sufficiently as to the dangers in handling matches. Admittedly, strict requirement are to be attached to the exonerating proof under § 832 I 2 BGB; neither does the proof that M has never played with matches before this incident suffice, nor a general instruction ‘not to get up to mischief ’; the defendants rather have to show that they forcefully made the ban to play with matches clear to their child while illustrating the associated dangers. In this, the defendants could however – at the court of second instance – trust that their submissions would be understood in this way by the opposite side and the court, as neither the LG, nor the claimant had pushed this point particularly. If the OLG had had doubts in this regard, the duty to provide clarification (Aufklärungspflicht) demands that the defendants should be instructed to fully explain themselves with respect to this. Because it is the objective of this provision to protect the parties from a mere oversight which suggests itself here [reference omitted]; the party should not be ‘caught out’ [reference omitted]. III. The disputed judgment therefore does not stand up. The matter had to be remitted to the appeal court for further clarification. At the new hearing and adjudication, the OLG will need to examine the defendants’ concerns stated before the appellate body as to whether its earlier findings as to M’s participation in the offence are sufficient.

534  Appendix 2 Case 75 BUNDESGERICHTSHOF (THIRD CIVIL SENATE) 13 DECEMBER 2012 NJW 2013, 1233 Facts The claimant makes a claim for damages against the defendant town as the one responsible for a children’s day care centre (nursery) for the paint damage on his vehicle. On 22 June 2010, the claimant parked his vehicle in the entrance area of a school building in which he – as the owner of a plumbing business – was removing damage caused by water. There is a nursery in the school building the 20m by 25m outdoor area of which is fenced off with a metal wire netting fence. On the day the damage occurred, a group composed of eight children from the nursery was busy with gardening activities under the direction of a nursery school teacher. Three children from this group wandered off and threw multiple pebbles – which were lying around the building of the nursery as decoration – on the claimant’s vehicle which was parked approximately two metres away from the outdoor area of the nursery. The claimant held the position that the defendant town council is liable for the damage caused to his vehicle by the rocks being thrown due to the breach of the supervisory duty by the nursery’s teacher. The LG Trier had – after hearing the evidence – dismissed the claim. The OLG amended the judgment of the first instance court on appeal by the claimant and sentenced the defendants to pay €1125.58 but dismissed the claim. The appeal of the defendants was unsuccessful. Reasons [12] II.1.Rightly and with accurate reasoning, the appeal court proceeded from the assump­ tion that the teachers of the nursery which was in public ownership are exercising a public office and that therefore the town’s liability is to be assessed according to the principles of the liability of officials under § 839 BGB in conjunction with Article 34 GG. The appeal does not question this anyway. [13] 2. The OLG also correctly identified the scope and the content of the supervisory duties incumbent on the teachers of the nursery – also for the protection of third parties [references omitted]. The circumstances of the specific case are always decisive, especially the age, nature and character of those requiring supervision, the local surroundings, the seriousness of the impending danger, the foreseeability of the behaviour causing damage as well as the reasonableness of the supervisory measures for the one with the duty to ­supervise [references omitted]. According to this, the young children from the group supervised by the witness K, may not have had to be supervised all the time but should have been checked up on in short regular intervals [reference omitted]. This also applies because it did not appear impossible – due to the location of the nursery’s outdoor area and the particular activities of the children in this group (gardening with the aid of garden tools) – that the children themselves or third parties could be endangered as a consequence of childish games and the processes of group dynamics.

Appendix 2  535 [14] The appeal does not challenge the scope of the supervision determined in this way. [15] 3.(a) Further, the appeal court’s finding – that it remains unclear in the end whether and to which extent the teachers responsible for the supervision of the children in the outdoor area of the nursery, namely the witness K, have complied with their supervisory duty – is unobjectionable on procedural grounds. (b) According to this, what is at hand – as the OLG rightly recognises – and of decisive importance, is the question of the burden of proof and producing evidence for the performance of the supervisory duty and the causal role of a potential breach of the supervisory duty for the claimant’s damage. In particular, it is problematic whether the § 832 BGB’s principle of the burden of proof is applicable in the framework of public liability under § 839 BGB. This is disputed in case law and academic writing: [20] (aa) The Senate, in an older decision (BGHZ 13, 25 [27 f] = NJW 1954, 874), has denied the application of § 832 BGB and the proof of exoneration dealt with thereunder in concurrence with a claim under § 839 BGB … The liability of the public official is purportedly dealt with conclusively and independently under § 839 BGB so that alongside these provisions, the terms of §§ 823 BGB ff on the general delictual liability cannot be applied … This is said to also apply to the provisions of § 832 BGB which do not only contain a rule of proof but establish autonomous elements of an offence. It cannot be denied that the public official with the supervisory duty is in a better position than an ordinary person with a supervisory duty who, according to § 832 BGB, would need to produce the exonerating proof. Such a privilege of public officials who carelessly breach their official duty is, however, not generally unknown to the law, as seen in § 839 I 2, II and III BGB. On the other hand, an obligation to pay damages under § 839 BGB could also be justified if one of the other elements of an offence is not or not fully realised. Insofar as the exercise of public authority is concerned, the injured person benefits from the fact that he can turn to the state rather than a potentially insolvent public official (BGHZ 13, 25 = NJW 1954, 874). [22] (bb) According to a different point of view which the OLG has endorsed, the burden of proof determined under § 832 I 2 BGB should also be applied in the case of supervisory relationships governed by public law [references omitted]. It cannot make a difference whether the supervisory duty in question can be presented as an official duty or not [reference omitted]. According to more recent case law of the BGH the rules on the burden of proof under § 833 sentence 2 BGB (cf BGH, VersR 1972, 1047 = BeckRS 1972, 30398713) or under § 836 I 2 BGB (cf BGH NJW-RR 1990, 1500 [1501]) would also be considered in the case of liability for animals as well as liability for the condition of buildings in the context of § 839 BGB. A plausible reason why something else should apply to § 832 I 2 BGB is not apparent. [23] (cc) The Senate endorses – in abandoning its previous case law (BGHZ 13, 25 = NJW 1954, 874) – the latter view. The rule on the burden of proof under § 832 BGB also applies in the context of the liability for the breach of supervisory duties subject to public law under § 839 BGB in conjunction with Article 34 GG.

536  Appendix 2 [24] The supervisory duty incumbent on the employees of a nursery to supervise the children entrusted to them is, insofar as it serves the avoidance of damage to third parties, a special form of the duty to implement safety precautions (Verkehrssicherungspflicht) as generally conceived by the fundamental norm of § 823 BGB. In the realm of private law liability, it is governed by § 832 BGB which constitutes an autonomous ground for liability within the framework of §§ 823 BGB and following [reference omitted]. Meanwhile, this does not mean that the special rule on the burden of proof of §§ 832, 833 sentence 2 and § 836 BGB cannot be applied in the context of public liability. What is superseded by the special facts of § 839 BGB are merely the grounds of liability of §§ 823 BGB ff in themselves, not however the special rules on the burden of proof contained in them (cf Senate, NJW-RR 1990, 1500 [1501] on the applicability of § 836 BGB as well as VersR 1972, 1047 [1048] = BeckRS 1972, 30398713 on the applicability of the rule on the burden of proof under § 833 sentence 2 BGB). [25] If the Senate’s decision of 15 March 1954 (BGHZ 13, 25 = NJW 1954, 874) establishes the non-applicability of the rules on the burden of proof) contained in § 832 BGB in the context of public liability, the Senate no longer adheres to this. The normative nature of § 832 BGB as an autonomous ground for liability which is drawn upon in that decision is not of decisive importance to the applicability of the rules on the burden of proof) also contained in it, in the context of public liability. In particular, the replacement of the ground of liability under § 832 BGB by the special facts of § 839 BGB does not necessarily mean that the rules on the burden of proof contained in § 832 BGB are to be disregarded. Notes to Cases 73–75 English law essentially bases liability for the acts of children and incapacitated adults on a failure in supervision (Carmarthen County Council v Lewis [1955] AC 549). French law now has two bases of liability. Article 1242 IV CC is fault in supervision with a reversal of the burden of proof. But the Cour de cassation has more recently used Article 1242 I CC to create a general liability for the acts of people whom a person has under their control (Cass Ass Plén 29 March 1991 Blieck JCP 1991 II 21673 conclusions Dontenwille, note Ghestin). Harm-causing people are treated similarly to harm-causing things with liability without fault on the part of the keeper (gardien). Following the principles of duties of supervision, the cases above try to establish when the duty of supervision is satisfied. Like case 75, Carmarthenshire CC is about the liability of a public authority for the conduct of a school – in that case a school which let its pupils cross the road without adequate supervision, thus causing harm to a driver swerving to avoid a child. Similarly Dorset Yacht Co v Home Office [1970] AC 1004 is a leading case on the supervision of potentially harm-­causing teenager offenders who were in custody. But there is also the possibility that a landowner will be liable in nuisance for the acts of children who play on his land in such a way as to disturb the enjoyment of neighbours: Dunton v Dover DC (1977) 76 LGR 87. Whereas in negligence, it is the responsibility of the claimant victim to show that there has been a failure in supervision (unless res ipsa loquitur applies), in nuisance the fact of harm will be sufficient. The importance of case 75 is to align the liability of public authorities with that of private bodies, a solution which the common law achieves without really noticing it. The context-specific analysis of duties of supervision is found equally in the common law. Cases 73 and 74 demonstrate the detail required to discharge the burden of proof placed

Appendix 2  537 on parents. In the first, case 73, there is detailed discussion of how much freedom should be left to a teenage girl, whereas the court in case 74 is happy with the freedom to roam given by parents to a child who is over eight years old. In case 73, there was discussion of the education given by parents to their children about how to behave. This is contrasted in case 74, where there was ample evidence of proper education. The structure of English law does not require such detail. By contrast, in French law, the liability becomes very strict: see Cass Civ, JCP 1966 II 14567, note Tunc. In that case, a nine-year-old boy aimed a kick at a ball, missed and sent a clod of earth into his friend’s eye. The Cour de cassation reasoned: ‘Having found that young Baier had, following a badly aimed kick struck not the ball, but a clod of earth and sent it in the direction of his friend, the cour d’appel had rightly deduced that the clumsiness committed had the character of a fault’! As Tunc remarked in his note, there is no moral blame here, but a social fault. It is a fault which could handicap financially the future life of the inexpert footballer who has to pay for the harm done to his friend. The German system does not go so far as to create strict liability for those who are supervised. It remains within the fault paradigm, though, as will be seen in chapter eight, the liability of public authorities can be much wider. CASES TO CHAPTER 6 MEDICAL LIABILITY The cases reproduced in this section relate to delictual liability under § 823 I BGB before the Schuldrechtsreform and the Schadensersatzrechtsreform (both of 2002) and the reform of 2013 through the Patientenrechtegesetz 2013 (PatRG), which added eight new paragraphs (§§ 630a–630h BGB) dealing explicitly with (contractual) medical liability. Issues of consent to medical treatment are discussed in chapter two, section II.B and in chapter six. Case 76 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 7 FEBRUARY 1984 BGHZ 90, 96 = NJW 1984, 1395 = JZ 1984, 629 Facts On 3 July 1979 the claimant was admitted to the S hospital of the defendant Regional District for unexplained pain in his right femur. The first examination was carried out by Dr K, the Duty Doctor. He also discussed with the claimant that in order to exclude the possibility of a tumour, a colonoscopy was indicated. Subsequently it was carried out by Dr B, the Senior Medical Officer. In the course of it, the sigmoid colon was perforated and the defendant abandoned the investigation. After an X-ray picture had confirmed the injury, the claimant was operated on immediately – complications subsequently occurred. The claimant sued the defendants for adequate damages for pain and suffering as well as for a declaration that they were liable to compensate him for all present and future material and mental damage. He stated that he had not effectively agreed to the colonoscopy and alleged that he had not been informed sufficiently of the character of the investigation or of any possible risks nor that it might be accompanied by considerable pain. He had suffered much pain when the instrument had been inserted in the intestine and had said so at the time. The perforation of the intestine had been caused by a culpable mistake of the second defendant in carrying out the colonoscopy.

538  Appendix 2 The defendant contended that before the colonoscopy the investigation had been sufficiently explained to the claimant. They were of the opinion that in view of the fact that complications occurred extremely rarely, it had not been necessary to inform the claimant of the risk of a perforation of the intestine. They denied that by this treatment they committed a medical error. The LG held that ‘the claim raised in the action is justified in principle’. The OLG Oldenburg dismissed the appeal of the defendants, declared that the claimant’s claim for damages for pain and suffering was justified in principle and allowed the action for a declaration in respect of material damage; as regards mental injuries in the future, it referred the case back to the LG. Upon a second appeal by the defendants the case was referred back to the OLG. Reasons I. The OLG has interpreted the judgment of the LG to the effect that it decided not only the claim for damages for pain and suffering by an interim judgment in principle, but also the claimant’s action for a declaration. Contrary to the LG, which held the second defendant to have committed an error in his treatment, it regards the claim as well founded on the ground that the medical investigation which resulted in the injury to the claimant was illegal because the claimant had not been given sufficient information and because therefore his consent was invalid. In so holding, the OLG argued essentially as follows: It is possible to agree with the LG that the information had to be given concerning the risk of a perforation of the intestine as a result of a colonoscopy since complications occurred seldom. However, the claimant should have been informed that in certain circumstances the investigation could cause the claimant considerable pain. This should have been done, in particular because the diagnostic measure was not of vital importance. No such information had been given. Without having to consider the question as to whether the claimant had risked his consent during the colonoscopy or whether the second defendant had, in treating the claimant, committed an error, he was liable according to §§ 823 I, 847 BGB [§ 847 BGB repealed after the Schadensersatzrechtsreform of 2002; see now § 253 BGB] to pay damages for pain and suffering. The defendant Regional District was liable according to § 831 BGB for the second defendant as its agent in performing his duties. It was not sufficient for the Regional District to plead as a defence that the second defendant was a specially competent doctor of long experience; nor was the fact that the medical heads of department had regularly called together the doctors working in their department, including the second defendant, for instruction and further education. A proper organisation of a hospital required also that the doctors should be given advice concerning the general principles governing the duty to provide information and to control their observation by random inspection. This had been omitted. In addition, the liability of both defendants for the material damage resulted from a violation of the contract for medical treatment. As regards future mental damage, a further investigation of a factual kind was necessary. II. The reasoning of the decision under appeal cannot stand up to legal scrutiny. 1. The OLG has held rightly that the information given to the claimant about the proposed colonoscopy was incomplete because she did not also tell the claimant that this diagnostic investigation might have disagreeable effects, psychological as well as physical. The claimant was aware of this having learnt about the technique of colonoscopy. However, he should also have been told that in certain circumstances this might cause him considerable pain.

Appendix 2  539 A patient who has not experienced colonoscopy previously and has not heard about it from others could not expect this or even regard this as normal. For a patient to decide whether to consent to a physical investigation, it is relevant, among other considerations, what he must accept in the course of it and what pain he will have to suffer which exceeds that to be expected in connection with a diagnostic medical examination. This knowledge must not be withheld from him merely because he might be frightened and might object to what is normally a harmless investigation or because he may stiffen and thereby make the investigation more difficult for himself and the doctor. It is for the doctor to calm a frightened patient and so to explain to him the need for a painful investigation that he can be certain of the patient’s consent and cooperation. In the case of a colonoscopy this may include the information that the doctor would immediately abandon the investigation should he find the pain intolerable. Since neither the duty doctor at first examination nor the second defendant before the start of his investigation told the claimant what might ensue, the claimant’s consent was invalid and the colonoscopic investigation was unlawful because he was not aware of all the circumstances affecting his decision. 2. It does not necessarily follow therefrom, as the OLG assumes incorrectly, that the second defendant is vicariously liable for the injuries to the person of the claimant as a result of the perforation of the intestine. The facts as found by the OLG so far are insufficient for holding the second defendant liable for having provided defective information concerning the unpleasantness of a colonoscopy. (a) In as far as the required information of the patient was held to have been incomplete because he was not told before the proposed diagnostic investigation of the possibility of considerable pain (without resulting in a serious and permanent injury to his health), it is not immediately obvious that the patient, if correctly informed, would have declined the investigation. It is even less obvious in the case of a patient who is not normally given to complain of pain. In the present case the claimant has described himself in the course of proceedings as a man who is not really hypersensitive; moreover, he has not argued that he had been insufficiently informed because he had not been told of the possibility of pain in the course of the investigation. In these circumstances the mere allegation by the claimant that he would have declined to undergo the investigation for fear of pain would be insufficient to accept this account (see the decision of this Senate of 7 February 1984, reported below, BGHZ 90, 103 and the order of this Senate of 27 October 1981 – VI Z R 63/81, VersR 1982, 74, 75 = NJW 1982, 700). Since the claimant made no such allegation, the fact that the defendants have not pleaded expressly that the claimant would have consented to the investigation in any case, cannot be held against them. Instead, the claimant’s pleadings until now are insufficient to support the conclusion that his right to decide himself whether to agree to the investigation had been violated on the legal ground relied upon by the OLG. (b) In addition, this Court must accept that in the view of the OLG the risk of which the claimant should have been informed, namely that the investigation might be accompanied by considerable pain, did not materialise in his case. It is true that the claimant has made allegation to this effect, but to the detriment of the defendants, who denied from the outset that the investigation had been accompanied by considerable pain; the OLG did not make any findings to this effect. Evidence taken on this question was not taken into account by it. If, however, the colonoscopy did not cause the claimant considerable pain, the investigation also did not cause him any injury. Even if his right to determine himself whether to agree to the investigation has been violated in some respects, he did not suffer any personal injury

540  Appendix 2 for which compensation would have to be paid. This conclusion is not vitiated by the fact that in carrying out the colonoscopy leading to the perforation of the sigmoid colon an entirely different and remote risk materialised provided that the latter did not have to be disclosed. The reason is that the damage arising therefrom falls outside the sphere of protection of the rule establishing liability which imposes a duty upon the doctor to pay damages for a physical investigation which is illegal in the absence of a valid consent by the patient. (aa) It is unnecessary in the present case to determine the question of law as to whether no connection exists between the illegality of the physical investigation of the patient in the absence of effective information and the resulting physical injury whenever culpably the basic risks inherent in the investigation have not been set out, but another link has materialised which did not have to be explained to the claimant [references omitted]. Certain objections could be raised against this view because in the case of medical investigations involving risks which are not quite inconsiderable, the right of the patient to determine himself whether to agree to the investigation and who also agrees without any knowledge and without any information, always includes his freedom of decision for or against an investigation covering his body as a whole. (bb) The objections set out here do not apply in the present case. Admittedly, the action of the second defendant does not cease to be illegal for the reason only that the claimant’s consent certainly covered an investigation free of pain. The consent of a patient to a medical investigation is not a declaration of intent which can be divided into one concerning the violation of personal integrity on the one hand and another, on the other hand, which involves exposing oneself voluntarily to danger by accepting certain possible risks [references omitted]. It is true that in substance it covers both [references omitted], but this only defines the legal significance of the declaration of intent. However, it has no bearing on the question as to what is the substance of the declaration made to the doctor in consenting to the medical investigation. The substance is clear: if the consent is valid, it applies without restriction. If it is refused (or what is the same, if it is invalid for failure to receive sufficient information), the declaration of intention means, and cannot be interpreted otherwise, that the patient will not agree to the medical measures, as advised, that is to say in their entirety [reference omitted]. The motives for his refusal are legally irrelevant as is the question whether hypothetically he would consent to all investigations without complications. If he did not give his consent, he did not consent either to an investigation which was unlawful and to which he did not agree, but which was successful. At best the disregard of his right to determine himself whether to undergo the investigation did not result in any damage. It is possible, however, that in such cases the claim for damages may not succeed for a different legal reason. The duty to supply information concerning the remote damages of considerable pain is designed to protect the patient’s right to decide freely whether he will consent to the medical investigation, having regard to the advantages of a diagnostic assessment of his state of health and to the physical unpleasantness which he will experience if he undergoes the investigation. The medical duty of contract which is to provide information concerning the potential danger of considerable pain is therefore not designed to facilitate the independent decision of the patient whether he is willing to accept possible dangers to his health. Instead it is to enable the patient to decide whether he is willing to face a potential temporary impairment of his wellbeing as a result of sudden pain. In such cases, a connection between the unlawfulness

Appendix 2  541 consisting of the doctor’s neglect of his duty and that consisting of the violation of the patient’s right to determine himself whether to undergo a medical investigation exists only if the risk of a painful treatment has materialised. If apart from this no risk of any damage to health exists, having regard to the fact that the investigation does not present any danger of which the patient should have to be informed, the failure to inform him of the possibility of pain cannot form the basis of liability in respect of a complication which occurred nevertheless in the course of the diagnostic investigation [references omitted]. In the present case the claimant cannot, therefore, base his claims for damages on the ground that he was not informed of possible pain in the course of the colonoscopy. Case 77 BUNDESGERICHTSHOF (SIXTH CIVIL DIVISION) 9 DECEMBER 1958 BGHZ 29, 46 = JR 1959, 418 Facts The claimant was a patient in the hospital for nervous diseases in L. He claims damages against the local authority in respect of the consequences of electric-shock treatment. The claimant was a chronic alcoholic. When his mental powers continued to deteriorate, he received unsuccessful treatment for alcoholism in the summer of 1954. He was then received by the hospital for nervous diseases. There medicinal treatment had no lasting effect. For this reason, the assembled medical staff suggested that the claimant should receive a series of electric-shock treatments. Dr N, the head of the neurological psychiatric department, discussed this method of treatment in October 1954 with the claimant’s brother and sister and with his wife. They consented to the electric-shock treatment. The parties disagree as to what was said during the remaining part of this discussion. After receiving shock treatment on five occasions without incident, the claimant suffered a complicated comminuted fracture of the head of the left femur when he received his sixth and last treatment on 2 November 1954. As a result his left leg, which was already deformed since birth (club-foot and atrophy), was shortened. In addition, a so-called false joint appeared in the area of the head of the femur. The claimant contends as follows: he had been given shock treatment without his consent and had not been informed of the dangers of this treatment. Moreover, he had not consented validly since he had lacked the capacity at the time. A guardian, who would have acted in his place, had not yet been appointed. His brother and sister and his wife had not consented validly either to the shock treatment since they, too, had not been informed of the nature and the attendant danger. The claimant continued, further, that the treatment had been carried out inexpertly; in particular no drugs relaxing the muscles had been administered, although this was necessary in order to prevent injuries resulting from cramp. The claimant has asked that the defendant should pay DM 2,931 as compensation and an adequate sum for pain and suffering. He has asked, further, for a declaration that the defendant is obliged to compensate him for all damage which may arise in the future. The defendant contends as follows: The claimant and his relatives had agreed to the shock treatment. They had been warned that this treatment carried a certain risk. No duty to provide this information existed, for the methods of shock treatment had been greatly improved since the early days when this treatment was first applied, and the danger of injurious consequences was extremely low. The treatment had been carried out correctly and

542  Appendix 2 with the help of the most modern appliance, … which caused a mild effect of the cramps. Any use of muscle relaxing drugs had been ruled out because the claimant’s heart, his circulation, his liver, and his lungs had not functioned properly. The LG of Landau dismissed the claim. In the course of his appeal the claimant abandoned his claim for pain and suffering but maintained his claim for damages amounting to DM 2,931 and for a declaration. The OLG Neustadt allowed the claim to the extent that it had not passed to the Social Insurance by way of subrogation and granted the declaration. On the second appeal by the defendant, the judgment of the OLG was quashed and the case referred. Reasons I. The OLG starts from the proposition that by accepting the claimant in their hospital in L a contract had been concluded between the parties. By virtue of this contract the claimant was entitled, as against the defendant authority responsible for the hospital, to be treated expertly by the doctors employed by it. This proposition cannot be faulted, nor has the appellant done so. According to the OLG the evidence does not disclose any violation of the standards of medical care … The OLG regards the doctor who administered the treatment as liable on the ground that he acted in the absence of a legally valid consent. The OLG left it undecided whether the claimant was legally capable of acting or physically capable of expressing his wishes and therefore able to give a valid consent. The OLG believes that the question as to whether the claimant consented is irrelevant, because he had not been informed of the possible danger accompanying the treatment. In considering the duty of a medical practitioner to inform the patient, the OLG relied on the principles enunciated by this Senate [reference omitted] following the practice of the RG and held that the claimant or his legal representative should have been informed of the risks connected with shock treatment. It is not clear whether the claimant’s wife and his brother and sister were given sufficient details of the danger. It seems that the OLG regarded this question as irrelevant, because none of those persons had been appointed the claimant’s guardian at that time. As a result the OLG held that Dr N had acted negligently and in breach of contract for having administered electro-shock to the defendant without any real consent; the defendant was responsible for his according to § 278 BGB. II. … Doctors and lawyers agree that the consent of the patient is required before medical treatment can take place, especially if it interferes with the body. Apart from special, exceptional cases, none of which is in issue here (eg, where there is danger in delay), any interference with the body of a patient is only lawful if the patient consents. This follows from Article 2 II GG which guarantees integrity of the person to everybody. A right to compel treatment, as it was being discussed under National Socialism, but as always rejected by the RG [reference omitted], is not being called for by anybody today. Opinions are divided as to the nature of this consent, whether and to what extent it presupposes, in particular, that the patient is aware of his condition and whether, therefore, he must be informed of the nature of his illness as well as of the character, importance, and possible deleterious consequences of the treatment. This question of the duty of a medical adviser to give information … can no longer be answered by relying on the advice of Hippocrates to conceal most from the patient and not to tell him anything of what awaits or threatens him. This advice cannot be reconciled with modern ideas about the calling of a

Appendix 2  543 medical practitioner and the right of patients to self-determination [reference omitted]; also it no longer serves as a guideline for medical conduct … It is unnecessary in the present case to decide to what extent the patient must be informed, for if it is correct … that the claimant was capable of acting, he was informed of the nature of his illness and also of the nature of the treatment, at least at the start of the sixth application of the electro-shock treatment which led to the injury and is therefore essential for the present purpose. The discussion can therefore be limited to the question which has given rise to most doubts, as to whether and to what extent the information to be given to the patient must also include the potentially dangerous consequences of the treatment. 1. In response to the demand for such information it is pointed out in medical circles, first of all, that a patient is often incapable of understanding the nature and the consequences of the treatment; that since any serious illness affects the person as a whole and causes a disturbance, not only physically but also emotionally, he is unable to assess rationally the advantages and the disadvantages of the proposed medical treatment or to force himself into reaching a decision free from uncontrollable moods, fears, and prejudices [references omitted]. This aspect is important in assessing the legal position in as much as naturally the information is only indicated if the patient is capable of appreciating the kind, purpose, and consequences of the treatment and to come to a decision, for only a patient who is able to do this can validly consent to the proposed treatment. These problems did not arise in the case decided previously by this Senate, for it was found in that case that the patient was able to consent validly to the electro-shock treatment because his state of depression did not affect his judgment or his ability to act freely … [reference omitted]. The question whether a sick person can act freely in the sense set out above is primarily one to be answered by the medical profession. In most cases a court cannot decide it without medical witnesses or experts. However, even if a patient lacks the ability to act freely, the need for consent remains. This must be given by the person who, after having been given the necessary information, must decide instead of the patient himself whether the operation should take place. According to the opinion of some medical practitioners the nearest relatives of the sick and incapable person are not necessarily qualified to do so. It is true that they are the persons with the strongest and humanly closest interest in the wellbeing of the patient. However, as long as the law has not conferred upon them the right to decide upon the treatment of a patient who is incapable of acting himself, the practice current in many hospitals to obtain the consent of the nearest relative to the treatment of the patient cannot suffice, even if a consultation with the relatives, where danger exists in delay, may be a relevant means of ascertaining the presumed intention of the patient. In the absence of a dangerous situation which requires immediate or speedy action, it is necessary to appoint a guardian for the patient, who must decide in the place of the sick person whether the planned medical action is to take place. Such an appointment of a guardian is possible under § 1910 BGB [repealed] if the sick person is unable as a result of his infirmity to handle his affairs in the particular circumstances … 2. … as regards information to be given to a patient, the position of the doctor has been compared with that of the lawyer. It is said that it is unsatisfactory to treat the relationship between medical adviser and patient as a contract of service, seeing that the relationship is distinguished by a special human characteristic and often touches the deepest and most confidential areas of human feeling. It is alleged that a legal relationship sui generis is created in which the personality of the patient plays an important role which must not be

544  Appendix 2 overlooked and that the personal relationship between doctor and patient is the basis of a successful treatment … lawyers are said to be too formalistic and do not consider sufficiently the real situation. … observations to this effect cannot be accepted. It is unimportant for the purpose of the problem of a medical practitioner’s duty of information whether in law the relationship between doctor and patient is regarded as a contract of service or as a relationship sui generis. For, irrespective of the legal characterisation of this relationship a court cannot and must not, in examining this question, regard the doctor and the patient merely as parties to a private law contract. If a court wishes to ascertain the nature and extent of the duty to provide information required by a doctor, all the circumstances of the individual case must be assembled and considered. The court must not overlook either that the relationship between doctor and patient presupposes profound confidence, that it is strongly based on a human relationship, in which the doctor comes to the aid of the patient, and that, therefore, it constitutes much more than a contractual relationship … The health of the patient is the doctor’s principal concern. It is his duty to restore it and to preserve it. It is reasonable that a conscientious doctor often regards himself as entitled, or even as obliged, to assist by interfering physically if the life and the health of his patient is at stake. Nevertheless, these efforts must find their limit if they conflict with the right of the patient to determine the fate of his body. This situation can arise if the doctor begins a treatment without having informed the patient of its nature and consequences [reference omitted]. It is true that a sick person, who consults a medical practitioner or visits a hospital in order to seek relief for his illness also often consents in advance to a limited extent to the administration of physical treatment which is necessary as a means of recovery. It cannot be concluded therefrom, however, that the patient is not interested in being told in broad terms about the proposed treatment, the usual development, the likely result, and possible danger to his health arising from this treatment. Not being an expert in medical matters, the patient also regards the doctor as an adviser and expects normally to be instructed by him in these matters and to be advised. Only if the patient is aware of his situation, and knows broadly what his consent to the administration of physical medical treatment implies can his consent satisfy the meaning and purpose which is to absolve the administration of physical treatment from the charge of illegality and to shift part of the doctor’s responsibility to the patient. It is true that cases will arise in which the patient wishes to be relieved of his sufferings in all circumstances and indicates clearly that he places his full confidence in the doctor. In such a case the doctor may be justified, in view of the clear wish of the patient, in omitting to provide further information. In such a case … the patient looks to the doctor as the authority which relieves him from considering the matter on his own and assuming responsibility himself. The patient does not really wish to know but wants to comply. This does not, however, apply normally, for in many, if not most cases the patient wants to know his situation and thus the prognosis and the risks of the intended operation or of another medical administration of physical treatment and wants to decide himself whether this treatment is to take place. If the doctor respects the patient’s right to decide himself, the confidence of the latter in the doctor will be enhanced rather than diminished. A sick person may have very good reasons … for refusing to undergo an operation and thus possibly for accepting responsibility for a considerable shortening of his life [reference omitted]. The freedom and dignity of human personality require that this wish of the patient is to be respected. All this shows that in protecting the freedom of a patient to decide for himself, the courts are far from paying homage to what is a formal principle only. On the contrary, they protect

Appendix 2  545 a right enshrined in the Constitution, which is to be respected and applied as much as the right to health. In the present context of the decision concerning the duty of a medical adviser to provide information too, much more is at stake than purely formal matters, for in this connection, too, substantive considerations are in issue as to how the responsibility for treatment is to be decided reasonably and justly between doctor and patient [reference omitted]. 3. … attention has been drawn … to the dangers to the health and to the recovery affecting in particular those suffering from psychosis, if they are informed of their illness. It is said, inter alia, that only the medical expert and not the court can decide, having regard to the special situation in the individual case, to what extent a patient can be informed of the risks involved in the administration of physical treatment. It was the duty of the medical practitioner to calm the patient and to dispel the fear of an operation and not to produce the opposite effect by providing detailed information. Unrestricted information concerning possible complications would so deter and frighten a sufferer from a psychosis who was willing in principle to undergo the treatment that in most cases he would refuse his consent to shock treatment and would thus deprive himself of the chance of recovery [reference omitted]. In determining the duty to provide information the above-mentioned consideration cannot be attributed the degree of importance which the medical profession ascribes to it. If the provision of information to a patient who is capable of acting is unlikely to endanger his health or his recovery, and if only the serious possibility exists of the patient refusing his consent to the treatment, contrary to his true interest, it follows that the medical adviser is not relieved of his duty to draw the patient’s attention to the typical dangers connected with the treatment … the information serves to invite the patient to decide himself. In making up his mind he is to be given the opportunity of considering not only the chances of recovery but also the deleterious effects of the treatment which are not too remote. Only if the patient knows this too, can his consent relieve the doctor of part of his responsibility. Admittedly the doctor must seek to calm the patient and to set his mind at ease, following the information. The doctor may also seek to influence him to undergo urgently needed treatment by patient persuasion and by a discussion of his fears and objections, as well as by pointing out forcibly the disadvantages if the treatment does not take place. On the other hand, the medical adviser must not seek to influence the decision of the patient by concealing relevant facts from him [reference omitted]. The real difficulty is presented by the problem … whether and to what extent the duty to provide information must give way to other duties and interests, if serious objections exist against informing the patient having regard to his personality and his mental state, especially if by providing the information his health or even his life may be endangered. The previous decision of this Senate has been understood wrongly to state that the BGH regards this circumstance as irrelevant. Admittedly it is stated in the reasons given by the judgment, following the practice of the RG [reference omitted]: if, as a result of the information the mood or the general wellbeing of the patient should be affected adversely, this fact must be accepted as an inevitable disadvantage. The passage in question does not state, however, as has been thought erroneously, that exhaustive information is to be given even if, as a result, the life or the health of the patient is seriously endangered. The principle has been stated meanwhile by this Senate in its decision of 10 February 1956 [reference omitted] where it is stated that a doctor is not obliged to prejudice recovery by excessive information. The question as to how such a case is to be judged in law [reference omitted] and how the doctor

546  Appendix 2 must act in this situation was irrelevant in the previous case. It need not be decided here either, for, then as now, neither the defendant nor the doctor in charge has pleaded that in this respect doubts existed as to whether the patient should be informed. If a medical adviser has failed to point out the typical dangers connected with the administration of physical treatment, the burden of proof is on him to show good reasons for having omitted to provide information [reference omitted]. This court cannot agree with the claim of the medical profession to decide on their own whether and to what extent in the individual case a patient is to receive information if it is implied thereby that the courts are precluded altogether from reviewing the medical decision. The question as to whether in a particular case the patient received sufficient information touches upon the sphere of law; upon it depends the determination of the legal question, to be decided by the court, as to whether he has validly consented to the treatment. Naturally, the court in determining questions of this kind, will rely extensively on expert medical assistance. This is true … in particular in assessing the capacity of the patient to give his consent, but also when the question is whether complete information would have resulted in injury to the claimant’s health or would have seriously endangered recovery. The court cannot be deprived of the power to review the question whether the doctor has complied with his duty to provide information and whether the patient has validly consented to the treatment. 4. According to the judgment of the BGH, information must only be provided where typical dangers exist inherent in the treatment, that is to say dangers which are normally connected with it and the occurrence of which can be expected according to medical experience and research … The assumption is incorrect that the BGH requires a sick person to be made aware of every possible side effect of the treatment. No such requirement has ever been laid down. Instead it is acknowledged that a doctor is not obliged to draw the patient’s attention to those dangers which can be avoided without difficulty, having regard to modern standards of operating techniques [reference omitted]. Nor is he required to advise the patient that in unfavourable conditions even the smallest operation may result in some complications, despite all precautionary measures. Generally every patient knows this, and no special warning is necessary [reference omitted]. 5. In conclusion, it appears that the problem of the duty to provide a patient with information incumbent upon medical advisers as a condition for the validity of the patient’s consent to the treatment continues to be governed basically by the principles which predominate in practice and in the literature. III. In applying these principles to the facts of the present case the OLG rightly assumed that according to medical experience complications may arise in the course of electroshock treatment … Even incurable mental disease can be alleviated thereby at a stroke and sometimes cured; an electric current causes a cramp, accompanied by a sudden cramp-like contraction of all the muscles of the body and by a temporary loss of consciousness. This cramp-like tension can result in damage to joints and bones … In its previous decision the BGH assumed on the basis of the expert evidence and of the factual findings of the OLG that at the time of the treatment then in issue, ie, in the year 1951, complications arose in seven per cent of the cases of electro-shock treatment and that, consequently, it was normally required to inform the patient of this possibility … in the present case the question is only what the rate of complications appeared to be in 1954, when the claimant received electro-shock treatment. As regards this question the claimant, in agreement with statements made by some doctors, has argued as follows: like

Appendix 2  547 every t­herapeutic measure shock treatment had become less dangerous with increasing ­experience and with improvements in technical handling. For some time, and certainly in 1954, complications had become extremely rare and only occurred in one out of a thousand cases of shock therapy. This objection is relevant, for it is correct that the dangerous nature of the physical treatment cannot be assessed by reference to the frequency of complications during the early stages of a new therapy, when the necessary experience was still lacking. Instead the state of medical science and experience is determining which exists at the time of the particular medical treatment in issue [reference omitted]. The OLG, too, adopted this view. It stated: The court realises that the dangers arising from shock treatment may have been less in 1954 than in 1951 … In examining the question of the need to provide information it is impossible to rely on the positive experience of one medical expert which, moreover, extends to the present time. It must be considered that at the relevant time, in 1954, the Siemens-Convulsator III which was used in treating the claimant was … a new instrument, the effects of which had not yet been tested by an extensive practice. In determining a duty to provide information and the extent of the information to be provided, the state of experience at the particular time must supply the standard. Even if in 1954 fractures, injuries to the spine, and other damage had become so rare as no longer to count as typical, they still occurred to an extent which made it appear necessary to draw attention to them. These observations of the OLG give rise to legal criticism. Even if in 1954 the application of shock methods as practised in the hospital for nervous diseases led only very seldom to complications, these complications nevertheless remain typical of shock treatment, for injuries of this kind … occur precisely on the occasion of this treatment, and at no other. This does not, however, assist in determining the duty of the medical adviser to inform the patient, for it is also unnecessary to draw attention to typical injuries, if they occur in extremely rare cases only and if it can be assumed that a reasonable patient would not consider such injuries seriously in deciding to give his consent. This would be the case if, as the defendant contends, in 1954 complications occurred in less than one in a thousand cases of shock treatment where the Siemens-Convulsator III was used. In such cases information must only be given if the patient enquires specifically about possible dangers. Since the OLG has found that this did not happen, it should have ascertained the rate of complications in 1954 accompanying this method of treatment … The fact that the OLG came to the conclusion, without exhausting [these] sources of further evidence, that injuries still occurred at that time to an extent which made it necessary to inform the patient to this effect discloses … an error of law. Consequently the judgment under appeal cannot be upheld on the basis of the reasons set out therein … Case 78 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 21 NOVEMBER 1995 NJW 1996, 776 = JZ 1996, 518 Facts The claimant’s big toe was fractured on 26 January 1991. He was fitted with a leg plaster, which permitted walking, at the clinic of the former co-defendant, on the orders of the second defendant (hereafter called the defendant) who was a doctor. At the same time, he

548  Appendix 2 was given a leaflet about what to do if there were complications with the plaster cast. It mentioned the danger of interference with blood circulation. The claimant had pressure pains and called at the outpatients department on 6 February 1991. Small pressure marks on his heel were revealed on removal of the plaster, so no new plaster was put on, and he was given crutches instead. He then came to an appointment in outpatients on 20 February 1991, complaining of severe calf pains. Vein thrombosis was diagnosed, which was treated in hospital, but it could not be healed operatively or with drugs, as it was several days old. The claimant sued the defendant and the former co-defendant for compensation for defective treatment and insufficient explanation. The claim failed at both earlier instances. The claimant lodged an appeal in law but withdrew it against the former defendant. It led to quashing and reference back. Reasons II. These statements do not stand up to legal examination in the appeal in law. 1. … 2. The appeal in law is correct in objecting to the fact that the OLG did not regard an explanation to the claimant about the risk of thrombosis as necessary. According to the case law of the Senate, the doctor must give an explanation to a patient about the specific risks of a treatment if they would severely cramp his lifestyle if they were realised. These dangers include those of deep leg vein thrombosis. The OLG obviously proceeds on this basis. It considers however that here no explanation was needed at the point in time of the treatment, because ‘the danger of a thrombosis from immobilisation on outpatient treatment and therefore the prophylaxis in this situation’ was ‘admittedly under discussion but was not in any way the norm’; the patient did not need an explanation about a step which was not the medical norm. The appeal in law correctly disputes this view as erroneous in law. The assumption of the OLG is flawed from the outset. The OLG takes into account according to the nature of the case that the prophylaxis for thrombosis was not yet at that time the medical norm. But the duty to explain is not about the necessity of a prophylaxis to avert the risk of thrombosis nor about whether such a step was already at that time the medical norm or not. The question of the necessity for an explanation about the risk of thrombosis is only about whether the danger of a thrombosis arising on the prescribing in outpatients of a plaster permitting walking, as here, was sufficiently known in medical circles at that time. As the Senate decided in its judgment of 12 December 1989, the medical duty of explanation presupposes that the particular risk concerned is known according to the state of medical experience at the point in time of the treatment [reference omitted]. In any case, in cases in which, as here, alternative treatments were available, like the prescribing of crutches or of a special shoe, it is not necessary for this purpose that the scientific discussion about particular risks of a type of treatment is already closed and has led to generally accepted conclusions. It will then suffice that serious opinions in medical science indicate definite dangers connected with the treatment, which cannot be merely dismissed as insignificant outsider opinions, but must be regarded as important warnings [reference omitted]. Thus in the case in question even an ongoing discussion in medical science about the dangers of thrombosis and the possibilities of combatting it by prophylaxis with drugs in outpatients would suffice to trigger the duty to explain. This is because in such cases the patient’s right

Appendix 2  549 of self-determination requires the dangers possibly associated with the chosen treatment methods to be communicated to him, and for it at the same time to be indicated to him that such dangers can be avoided or reduced by the other treatment methods which are available … III. Because of all this, the disputed judgment must be quashed in so far as it concerns the defendant, in order that the appeal court can make the necessary findings about whether and to what extent the risk of thrombosis was serious and under discussion (and in a way that the defendant could recognise) at the time of the treatment. Case 79 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 15 FEBRUARY 2000 BGHZ 144, 1 = NJW 2000, 1784 = JZ 2000, 898 Facts The claimant, who was born on 8 February 1994, seeks compensation from the defendant paediatrician for harm caused by vaccination. The claimant was brought by her mother to the defendant on 11 May 1994 for a routine child care investigation. She gave her a primary immunisation against a number of diseases and a threefold live oral vaccine against poliomyelitis, with the agreement of her mother. The defendant’s receptionist gave the mother beforehand a leaflet about the vaccinations which she looked at in the waiting room and gave back again without signing it. The side effects of the vaccination against poliomyelitis were stated in the leaflet, among others, to be that: ‘Feverish reactions seldom arise, and paralyses extremely rarely (one case in five million vaccinations)’. The defendant asked her if she had read the leaflet and she said she had. After examining the claimant, the defendant said a vaccination was now possible if the mother wanted it. On 13 June 1994 the mother came to the defendant again because the child had a skin rash, and the second vaccination against poliomyelitis was then carried out. On 18 June 1994 she was found to have fever and on 25 June restraint in the use of her left leg. Investigations revealed that she was suffering from poliomyelitis. The social security office at F found harm caused by vaccination with a reduction in ability to work of 80 per cent, and awarded a vaccination benefit. The claimant claimed defective treatment and insufficient explanation resulting in no effective consent; and that there was no consent by the father either. She claimed damages for pain and suffering of at least DM 100,000 and a declaration that the defendant was under a duty to compensate for all consequential harm. The LG rejected the claim. The OLG allowed it in substance, awarding damages for pain and suffering of DM 80,000. The appeal in law by the defendant was successful. Reasons I…. II. These statements do not stand up to legal examination in the end result. The claimant is not entitled to a claim to compensation against the defendant for unlawful harm to her health. The appeal in law is right in objecting to the fact that the assumption by the OLG that the claimant’s mother did not effectively consent to the vaccination because of the lack of sufficient explanation by the defendant was based on requirements which were too strict.

550  Appendix 2 1. The appeal court has admittedly correctly stated that an effective consent was not lacking simply because the claimant’s father had not agreed to the vaccination. It is true that in cases in which, as here, parental care belongs to both parents jointly (§§ 1626 ff of the BGB), the consent of both parents is needed for a medical operation, which also includes a medical vaccination. But it will in general be possible to proceed on the basis that the parent appearing at the doctors with the child has the power to give consent to the medical treatment on behalf of the absent parent as well; and the doctor may rely on this within limits, as long as no circumstances which would indicate the contrary are known to him. This applies, as the Senate has already stated in its judgment of the 28 June 1988 [reference omitted], and it adheres to this, at any rate in routine cases, which include routine injections. The oral vaccination against poliomyelitis with live attenuated polio pathogens carried out in the first half year of 1994 is a routine vaccination, as the appeal court has stated without legal error. It was recommended a long time ago by the Standing Vaccination Committee of the Federal Health Office [references omitted] and was also publicly recommended in Baden-Württemberg by the relevant health authority in accordance with § 14 III of the BSeuchG [the Bundesseuchengesetz has been repealed, see now Infektionsschutzgesetz], in particular in 1994 [reference omitted]. It had been carried out millions of times since the introduction of oral polio vaccine in 1962. The question of undertaking of such vaccinations arises for everyone having custody of children in the first months of a child’s life [reference omitted] and usually on the occasion of the routine child care investigations of babies and small children, and this was generally known. On a vaccination recommended in this way, which a large number of parents let their children receive, the defendant might therefore rely on the fact, in the absence of concrete indications to the contrary, that the claimant’s mother made her decision in favour of vaccination with the father’s authority, especially as the mother – as the appeal court correctly observes – always (and this included previous occasions) appeared alone with the claimant at the surgery. 2. The appeal court further correctly assumes that the consent given by the claimant’s mother to the vaccination was only effective if the risks associated with it had been previously explained to her. Such an explanation of the risks is also necessary for a voluntary vaccination and even when the vaccination is publicly recommended [reference omitted]. The necessity for an explanation about the danger that a person who has been vaccinated might contract spinal poliomyelitis because of vaccination with living polio viruses did not – contrary to the view of the appeal in law – cease to apply simply because it was an extremely rare consequence of vaccination. The appeal court, referring to Braemer [reference omitted] took as a basis a frequency of harm of 1:4.4 million. In the leaflet given by the defendant to the claimant’s mother a risk of 1:5 million is given. Although the reply to the appeal in law claims that these figures are incorrect, and that on first vaccinations the risk in fact rises to 1:750,000 vaccinations, no more precise clarification of the frequency of harm is necessary as statistical risk figures have a comparatively low value [reference omitted]. The decisive factor for determining whether there is a medical duty to advise is not a particular degree of risk, and especially not a particular statistic; it is whether the risk concerned is specifically attached to the operation and on the realisation of the risk it would be especially burdensome to the patient’s lifestyle [reference omitted]. The Senate therefore adheres to the view that in principle even extremely uncommon risks of this kind must be explained. Contrary to the view of the appeal in law and statements to the same effect in the academic literature [reference omitted] this applies also for publicly recommended vaccinations, for which the

Appendix 2  551 primary immunisation of the whole population is in the public interest in order to prevent an epidemic spread of a disease. In cases of public recommendation of vaccination, it is true that the health authorities have already balanced the risks of vaccination for the individual and his environment on the one hand, and the dangers threatening the general public and the individual in the case of non-vaccination on the other hand. But that does not change the fact that the vaccination is nevertheless voluntary, and the individual person receiving the vaccination can therefore also decide against it. This person must therefore not only be aware of the voluntariness of the vaccination [reference omitted], which, in relation to the claimant’s mother, is not questioned here. He must also make a decision about whether to take the risks associated with the vaccination or not. This presupposes knowledge of these risks, even if they are only realised extremely rarely; they must therefore be communicated to him by medical explanation. 3. The Senate also agrees with the appeal court that the written advice on vaccination against poliomyelitis in the leaflet which was given to the claimant’s mother is not open to objection as to its content. (b) … (aa) … According to the case law of the Senate, the patient only needs explanation about the chances and risks of the treatment ‘by and large’. Exact medical description of the risks coming into consideration is not necessary … Although the reply to the appeal in law mentions other risks (meningo-encephalitis, convulsions etc, see [reference omitted]) which had not been explained, this does not justify any different conclusion. If, as in the present case, the precise risk which had to be explained, and actually was explained, has in fact been realised, it does not as a rule matter whether other risks needed to be mentioned as well in the explanation. The patient has given his consent in the knowledge of the risk which was realised, so for this reason no liability can arise from the operation. Considerations as to whether he would possibly have refused approval on being advised of another risk are necessarily speculative and can therefore not be the basis of a claim for compensation … 4. However there are serious reservations about the view of the appeal court that the explanation could not be regarded as having been given in time, having regard to the manner in which it was made … (b) The appeal court is exaggerating the requirements for an explanation to be given in time in connection with a routine vaccination, as the appeal in law correctly argues. According to the established case law, an explanation on the day of the operation in principle suffices in the case of outpatient operations [reference omitted]. The only case when that does not apply is if the explanation only occurs so immediately before the operation that the patient is under the impression that he can no longer extricate himself from a course of events already set in motion (eg, an explanation at the door to the operating theatre). The multiple vaccination undertaken here did not require an explanation at some earlier point in time, separated from the vaccination. In particular, no requirement can be made (as the OLG thought was necessary) for the leaflet to be given to the mother to take home, so that she could read and consider it there in peace, and for the vaccination then to be carried out on a separate date. This places excessive requirements on the doctor. The oral vaccination, even if it was not completely free from risk, did not present the parents with difficult decisions which would first have needed thorough weighing up and careful consideration. It was a question, as has been observed, of a routine vaccination in

552  Appendix 2 c­ onnection with which the element of conflict in the decision was to a large extent removed from the parents by the balancing of the advantages and disadvantages undertaken by the health authorities and the recommendation for vaccination made by them. The necessity for vaccination had been generally recognised for a long time among the population and parents everywhere saw to it that it was done to their children, in order to avoid the feared disease of poliomyelitis. In this situation the defendant could assume that the claimant’s mother was familiar with the vaccination and was in the picture about the generally accepted need for it. If a person having custody of a child should in such a case exceptionally want a period for reflection, then he could be expected to state this to the doctor and to decline an immediate vaccination. (c) The explanation which had been given to the claimant’s mother was also not insufficient simply because the defendant did not make it in a personal conversation about the vaccination and its risks. According to the case law of the Senate ‘conversation based on trust between the doctor and the patient’ is admittedly necessary for the purpose of making an explanation [reference omitted]. That however does not in any way exclude the use of leaflets in which the necessary information about the operation, including its risks, is set out in writing. Written advice of this kind is normal today to a large extent and has the advantage of giving a precise and comprehensive description of the subject of the explanation, as well as providing the doctor with substantial means of proof. It is in particular appropriate for routine treatments and therefore also for publicly recommended protective vaccinations. Such leaflets can admittedly not replace the necessary discussion with the doctor [reference omitted], in which the doctor must satisfy himself as to whether the patient has read and understood the written advice, and which gives him the opportunity to go into the individual interests of the patient and answer possible questions. But this requirement of an explanatory conversation, which must be adhered to in principle, does not require an oral explanation of the risks in every case. In certain circumstances, as with the present facts, having regard to the routine character of the publicly recommended vaccination, the doctor can by way of exception proceed on the basis that the patient does not attach any importance to an additional presentation of the risks in discussion. For such routine treatment, it can suffice if, after a written explanation, opportunity is given to the patient for further information by a conversation with the doctor … Note to Cases 76 to 79 Lawful consent is required for otherwise the interference with the patient’s body would be ‘unlawful’ according to the view taken by German case law. The action will, typically, be based on § 823 I BGB. In the common law systems on the other hand total absence of consent or fraudulently obtained consent will justify an action in battery. In practice, however, negligence actions are much more common than trespass to the person because: (i) the rules on limitation and causation in trespass are thought to be too oppressive to defendant/doctors and (ii) intentional torts are usually not covered by insurance (though see Freeman v Home Office [1983] 3 All ER 589). Consent is thus crucial, but the problems it raises are far from solved. One could, perhaps, categorise the cases into three groups. The first includes situations where the answers are reasonably clear. For example, in the case of an infant or a young child consent must come from those responsible for his care (usually the parents) §§ 1626, 1631 BGB; S v McC; W v W [1972] AC 29, 37

Appendix 2  553 (Lord Hodson) (England). Older children, mature enough to understand the implications of their consent, are free to give it themselves: BGHZ 29, 37 (Germany); Family Law Reform Act 1969, § 8 (16 years) (England). An operation on an unconscious adult will usually be defended on the grounds of necessity. A second group of cases are controversial (and have this in common with the next group); but they also deal with problems which are relatively new to medical science and social life in general. For example, whose consent is necessary when professionals consider that a young person needs to be sterilised to prevent a pregnancy which she will not understand or be able to cope with: see Re B (A Minor) (Wardship: Sterilization) [1988] AC 199 (a child) and Re F (Mental Patient Sterilization) [1990] 2 AC 1 (for an adult)? The third group of cases deals with what is, perhaps, the thorniest aspect of the problem of consent – what exactly need be disclosed for consent to be valid? ‘Medicine’, wrote an international expert on this subject, ‘is a discipline which is enriched by … joint international contribution … The same is true of the law governing medical practice’. (Giesen and Hayes, ‘The Patient’s Right to Know – A Comparative View’ (1992) 21 AngloAmerican Law Review 101–22.) Judicial decisions from many jurisdictions confirm the accuracy of the statement and the value of the method (see Hondius, The Development of Medical Liability (2010) ch 1, so the summary that follows is comparative in nature and not focused on one system in particular). To the question of how much information must be disclosed to the patient before his consent to medical treatment can be legally valid three answers are possible. The first, basically, leaves the decision to ‘a responsible body of medical men skilled in that particular art’. This is known as the Bolam test from the leading English case of Bolam v Friern Hospital Management Committee [1957] 1 WLR 582 and is the most paternalistic in nature. This test was, essentially, departed from in Montgomery v Lanarkshire Health Board [2015] AC 1430, as explained above. The test of reasonable care is not defined by what the medical profession treats as an appropriate level of information. One reason why English law took a conservative view in the past was given by Lord Denning in Whitehouse v Jordan [1980] 1 All ER 650, 658, and is connected with the fear of increased malpractice litigation. However, such statistics as do exist in America and Germany do not seem to support this fear and further empirical studies are needed before a conclusive view can be expressed. Decisions such as Bolitho v City and Hackney Health Authority [1998] AC 232 and Montgomery would suggest that a shift of emphasis is taking place even in English law, which is a move towards a more balanced view of the patient’s rights and the doctor’s obligations. Already the Australian courts take the view that the doctor ‘should not lightly make the judgment that the patient does not wish to be fully informed’: F v R (1983) 33 South Australia State Reports 189, 193, and also Reibl v Hughes [1980] 2 SCR 880. By contrast, the German courts have forcibly stressed the right to self-determination. In the light of the recent past, they have been only too conscious of the dangers of ignoring human dignity and not preventing unwarranted medical interferences with the body and health of human beings. Thus, from the beginning of the post-War period, courts have stressed that ‘proper respect for the patient’s right of self-determination will further rather than damage the patient’s trust in his doctor’ and ‘to respect the patient’s own will is to respect his freedom and dignity as a human being’. (BGH, BGHZ 29, 46, 53–56. See, also, BGH, BGHZ 90, 96; 90, 103.) Thus, the principle of full disclosure is repeatedly stressed (see BGH, VersR 1980, 428, 429; BGH, NJW 1984, 1397);

554  Appendix 2 and in one case, involving ­diagnostic treatment, the court took the view that even a 0.5 per cent chance of a particular risk occurring should be disclosed (OLG Hamm, VersR 1981, 68). In the case of therapeutic operations disclosure will be geared to the patient’s individual circumstance such as his level of understanding (BGH NJW 1980, 633) and even the attending doctor’s degree of experience (OLG Köln, VersR 1982, 453). The urgency of the situation is also a factor that can be taken into account (BGH, VersR 1972, 153); and even the defence of ‘therapeutic privilege’ (no revelation of risks since patient might not be able to ‘handle’ adverse news) has been treated with caution, as a decision of the BGH of 28 November 1957 clearly shows (BGHSt 11, 111, 114). As mentioned above, consent is now governed by § 630d I BGB and the factors it identifies. The doctor has the burden of proving that he provided a thorough and accurate explanation: BGH, NJW 1990, 2928. In decisions before the reform of 2013, the BGH has continued this trend and emphasised repeatedly the patient’s right of self-determination. Thus, in case 78, the BGH held that where a number of alternative methods of treatment were available, it was not enough to inform the patient only about the orthodox and established methods. Even if a new method has not yet been fully worked out (in the instant case it could have avoided the risk of thrombosis) it must still be brought to the attention of the patient so long as some experts regard it as a serious and appropriate treatment. The decisive criterion in determining the scope of the duty to inform is thus giving the patient all the necessary information to make an informed choice for, in the end, it is the patient who will have to bear the consequences. A more restrictive approach was adopted in case 79. This case, involving a routine vaccination (against polio), raised two interesting points. First the claimant submitted that the defendant was liable. For though the risk which materialised had been brought to the attention of the patient, other risks, which should also have been mentioned, had not been mentioned to him. The BGH denied liability on the basis that the patient gave his consent knowing about the risk that did in fact materialise. Whether or not he would have not given his consent had he been informed of the other risks was a matter for speculation and could not be taken into account in the instant case. The second aspect concerns the question whether it was sufficient that the information about the risk was in written form and the patient was given the opportunity to clarify doubts in a personal conversation with the doctor. It was held that such an (informal) procedure was adequate at least as far as routine measures were concerned. Finally, it is interesting to note that German courts are not impressed by the statistical probability of a certain risk, a point also confirmed in the decision in question. Whether the risk is regarded as material depends on the circumstances of the individual case, the nature of the treatment, the seriousness of the risk. Overall, these decisions demonstrate that German courts have succeeded in striking a workable balance between the patient’s right of self-determination and the need to control in a reasonable way the extent of medical liability so that the profession is not unduly burdened by excessive costs. One further point related with informed consent which has troubled the courts of many systems is linked to the problem of causation that arises in such cases. For, once it has been decided that inadequate information has been given to the patient, the next point

Appendix 2  555 that arises is whether had there been proper disclosure this particular patient would have gone ahead with the proposed medical treatment. Once again, the doubt has centred as to how this question should be answered: objectively, by discovering the reaction of the hypothetical, reasonable man? Or by finding how this particular patient would have reacted. It would be impossible to deny that the question does not lend itself to an easy answer. Equally, however, it is noteworthy that despite the dangers of self-serving evidence (which arise if the test is to be subjective) many courts have adopted it as the right criterion. 6. Non therapeutic treatments – such as sterilisation operations – have been particularly controversial. In some systems, they require a court order. In England, a court order seems to be deemed desirable but not essential, eg, In re F (Mental Patient) [1990] 2 AC 1. The legal outcome may be more controversial depending upon whether the person that is about to be sterilised is a minor, an adult, or an adult of diminished intellectual abilities. The irreversible nature of the operation makes the decision that much more sensitive. 7. German law recognises the privilege of self-defence against persons, § 227 BGB (Notwehr) and the defence of necessity, § 904 BGB (Notstand). In § 228 BGB it also recognises (in certain circumstances) the right of a person to interfere with objects which belong to another person and from which the danger emanates in order to prevent harm to his own interests or those of others. Where this is the case the ‘unlawfulness’ of the act disappears and the actor cannot be sued under § 823 I BGB. CASES TO CHAPTER 7 There are no comments on the cases. All the explanation and commentary is provided in the text of chapter seven. 1. No Fault-liability in General See case 58. 2. Road Traffic Accidents See case 62 (liability of bus company to passenger for fault of driver). Case 80 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 9 DECEMBER 1959 BGHZ 29, 163 = NJW 1959, 627 Facts The claimant’s lorry (motor vehicle and two trailers) remained stationary on the right side of the Karlsruhe–Frankfurt autobahn in the night of 7–8 March 1951 because of damage to the engine. About 1.15 am the carrier K – husband of the defendant Sophie K and father of the defendant Herbert Bernhard K – driving a motor lorry with a trailer ran into the claimant’s stationary lorry. Both lorries sustained considerable damage. K, who had been driving his lorry, suffered such serious injuries that he died on the way to hospital.

556  Appendix 2 The claimant contends that the collision is exclusively attributable to the fault of K; for he would have been bound, if he had been attentive enough, to notice the red light of the stationary lorry and the hurricane lantern which had been set up, and could have deviated in time on to the lane for overtaking. He demanded damages from K’s heirs. The LG upheld the claim in principle. The OLG, on the other hand, in principle affirmed the defendant’s liability in damages, limited only as to one-half. The claimant’s application for review, in which he sought to have the judgment of the LG restored, failed for these. Reasons I. According to the findings of the OLG the carrier K, with his long-distance lights turned on, ran with the whole width of his vehicle into the stationary lorry, without braking in time or turning off to the left. During the previous one-and-a-half hours several other vehicles had driven past the claimant’s lorry, whilst it stood on the autobahn. According to the OLG’s view K also would have been bound to notice the stationary lorry if he had been attentive enough, even if it had been completely unlit, and could then still have moved on to the lane for overtaking. It went on to say: the fact that K did not react at all to the obstacle before him proves that he was guilty of gross inattention or, alternatively, that despite his being blinded by the light of oncoming vehicles he drove on with undiminished speed into a space where he could not see. On the basis of the established facts, this view of the OLG is unexceptional in law. It therefore also held rightly that the defendants, as heirs of K, must under §§ 823, 1967 BGB make good the damage to the claimant. II. The applicant for review objected that the OLG applied § 17 Straßenverkehrsgesetz (Road Traffic Act, hereafter StVG) and awarded to the claimant in principle compensation for only half his damage. He alleges that §§ 7, 17 StVG are not applicable, because the claimant’s lorry was no longer in operation and urges that a vehicle is no longer in operation, even when it has not reached the end of its journey, if it has come to a full stop from lack of fuel or a mechanical fault. Even if a failure of its engine causes it to stop on a traffic highway and it stays there for a not wholly inappreciable time, it is generally regarded as no longer in operation, since it has lost the capacity to move. This view of the appellant corresponds in result to the practice of the RG and of several OLG. According to that practice, a vehicle is no longer in operation in the sense of § 7 StVG if it is reduced to a complete standstill and owing to failure its engine can be set again in operation only after considerable time (eg, RGZ 122, 270; RGZ 132, 262). In so holding, the RG also did not start from the engineering notion of operation, according to which a vehicle is in operation only as long as the engine is working directly or indirectly. It preferred the traffic-orientated point of view and even then attributed an accident to the operation of a motor vehicle if it stood in a close local and temporal connection with a particular operation or a particular operating mechanism, irrespective of whether the engine propelled the vehicle or not. According to the RG’s point of view, approved by the BGH, the operation of a vehicle is therefore not interrupted as a rule when it stops on the highway with the engine switched off. But even in adopting this traffic-orientated point of view, the RG has interpreted the concept of the operation of a motor vehicle strictly, and assumed that the operation comes to an end when, for more than a short time, the vehicle can no longer move under its own power because of engine failure or lack of fuel.

Appendix 2  557 The BGH is unable to follow this practice of the RG because, in view of the enormous increase of motor traffic and its dangers, it no longer conforms to the sense and purpose of § 7 StVG. The purpose of the Act, to protect participants in traffic against the increasing dangers of present-day motor traffic, makes it necessary to give a broad interpretation to the concept ‘in the operation of a motor vehicle’ [references omitted]. In that decision this Senate denied that the vehicle was inoperative and so exempt from strict liability where a driver has left his lorry on the carriageway of a federal highway to have a good night’s rest. The Senate also attributed the accident that ensued because a car ran into the stationary lorry to the operation of the stationary vehicle in the sense of § 7 StVG. No other conclusion can be reached if similarly an accident occurs because a lorry remains standing for a considerable time on the carriageway of a high-speed highway owing to engine failure. The case that now calls for decision differs from the earlier one only because the lorry here had lost the capacity to proceed under its own power, whereas there, although its engine was turned off, it was ready to move on the highway. That distinction is irrelevant in applying § 7 StVG if one looks at the concept of operation in that provision from the traffic-orientated point of view, as the prevailing opinion now does. The risks which the motor vehicle produces in traffic emanate not only from the engine and its effect on the vehicle but, with the increase of traffic, more and more from its general flow and in particular from motor vehicles which stop or park on the carriageway portion of a high-speed highway. It is precisely on the autobahn on which the present accident occurred that stationary vehicles raise a typical risk for other participants in the traffic. In this case, as the BGH observed in its judgment of 8 April 1957 [references omitted] the risk of a stationary motor vehicle may even be greater than of a moving one. It is therefore permissible and justified by the sense and purpose of the provisions on liability of the Road Traffic Act to attribute an accident produced by a collision with a stationary vehicle not only to the operation of the moving but also of the stationary vehicle and hence to make both drivers strictly liable in damages. It is irrelevant whether the driver voluntarily pulled up for a break or was forced to stop on the carriageway owing to a defect in the vehicle. The decisive factor is that in both cases other participants in the traffic are put at risk by his vehicle standing on the highway. That an accident due to a defect in the vehicle or a failure of its mechanism should lead to liability of the driver is clear from § 7 StVG which expressly denies that this case constitutes an avoidable event which excludes liability. This liability for accidents which are attributable to a technical defect in the vehicle would, as the OLG Karlsruhe (VersR 1956, 260) accurately emphasises, be rendered nugatory to a considerable extent if it were held that an accident during a halt due to a technical failure was not within the operation of the vehicle and therefore did not lead to liability under § 7 I StVG. The wording of section II of that provision shows that the strict liability established by it extends also to accidents of this kind. This result follows a line which originated with the decision of the RG, RGZ 170, 1. There the RG held that an accident was within the course of operation of a lorry in a case where a railway train collided with a lorry stuck in a hole in the road, the left rear part of its loading flap extending over the rails and unable to move under its own power because the lifting arrangement had been torn off. In that case, the RG held that the operation of the motor vehicle continued. It explained that the lorry had moved to the place of accident and had thereby in the course of its operation set the cause which produced the collision. It is not

558  Appendix 2 essentially different when a lorry, as in the present case, blocks a portion of the highway because of engine failure. Here also the lorry drove up to the place of accident and therefore produced in the course of its operation a situation endangering traffic. In examining the question whether in such a case § 7 StVG is to be applied, one cannot neglect the criterion of how long a motor vehicle stands on the carriageway. If the defect in the vehicle can be remedied in a short time and it can soon go on its way, it is now generally accepted in accordance with the practice of the RG that the operation of the vehicle, for the purpose of § 7 StVG, is not interrupted by that halt (cf, inter alia, RG JW 1929, 2055 no 7 in a case where the petrol lead was blocked). If now one considers that the dangers from a stationary vehicle increase the longer it forms an obstacle for other participants in the traffic, it would be illogical from the traffic-orientated standpoint to treat favourably as regards liability the driver of a vehicle which is stationary for a longer period and which therefore creates a greater risk. It is wrong to exempt him from liability while a slighter operative risk of the vehicle attracts strict liability. If, as in the present case, a vehicle must stay for a longer time on the carriageway because it cannot be repaired at once, then if another vehicle collides with the obstacle, that accident must also be attributed to the operation of the stationary vehicle [references omitted]. The operation of this vehicle continues as long as the driver leaves the vehicle in the midst of the traffic and the dangerous situation thus created continues. For the purpose of § 7 StVG the operation is only interrupted when the vehicle is withdrawn from the carriageway and is placed somewhere away from the regular traffic. Only thus the interruption of the operation is made known to others, but also that typical risk is eliminated which arises if motor vehicles are stopped or parked on the fast traffic lane of the carriageway. Whether as Walther [reference omitted] contends, the answer should be different when an unauthorised user leaves a vehicle standing in the middle of the traffic, never to use it again, need not be examined since such a case is not in issue here. In the case for decision the lorry was on the way to a particular place and it was planned to continue the journey. This view is criticised by Roth Stielow [reference omitted] on the ground that it goes beyond the limits which the judge must observe in interpreting legislation. He starts by assuming that there is a ‘clear statutory direction to the contrary’ which it infringes. But this starting point is wrong. The enactment does not provide a detailed definition of the concept ‘in the operation of a motor vehicle’ and, as Boehmer (VersR 1957, 587) correctly explains, says nowhere that it only constitutes an accident within the operation if the vehicle is in motion or its engine is running. But if the legislator has not provided any further explanation, it is for the judge to interpret this ambiguous concept. The judge is therefore not prohibited from interpreting § 7 StVG broadly if in so doing he conforms to the sense and purpose of the enactment to protect participants in traffic against the dangers of motor traffic. It is therefore entirely within the scope of permissible interpretation if this protection of the participants is extended also to the dangers produced by stationary vehicles in present-day traffic conditions. Even if the legislature in 1908 saw the chief danger of motor vehicles in their rapid movement due to engine power and hence regarded the mechanical aspect of the concept of operation as paramount, that would not exclude the adaptation of the concept ‘in the operation of a motor vehicle’ to the experiences and requirements of present-day traffic. As was already emphasised in another connection, according to experience modern traffic risks

Appendix 2  559 arise, not only from the engine as such and its effect on the motor vehicle, but from the movement of traffic as a whole. The motor vehicle itself creates a substantial danger as part of the traffic. Accordingly, Wussow [reference omitted] rightly remarks that it is precisely from the point of view of risk, which the legislator takes as his starting point, that the trafficorientated aspect becomes much more prominent than the danger produced by the engine. The judge would not be true to his task if under these circumstances he clung to the concept, which is far too narrow, of a mechanical operation. His duty towards legislation and to law (Article 20 III GG) allows him not only to develop the law by interpretation in the direction of its further evolution, but obliges him to do so if the finding of a just decision requires it. The wording of the enactment gives way to its sense and purpose. To give effect to them in applying the law in the individual case and to provide an equitable and reasonable solution to the dispute is the judge’s task [references omitted]. As Radbruch [references omitted] expresses it, not only must he follow the thoughts of the legislature, but he must also think them through to their final conclusion. But the judge does nothing else when he adapts the concept of operation in § 7 StVG to the experiences and requirements of the modern age in order to give effect to the legislative intent which is to afford extensive protection against the dangers of motor traffic. In any case, it cannot be assumed that the characterisation of the concept of operation from the traffic-orientated point of view, which has long prevailed in the courts, conflicts with the intent of present-day legislature, for while it has repeatedly altered other provisions of the Road Traffic Act, it has retained the wording of § 7 I StVG, although it was aware of the long-standing practice concerning the term ‘in the operation of a motor vehicle’. III. In view of these considerations, the OLG was right in dividing the damage of the claimant according to § 17 StVG, and, when examining how far it was caused predominantly by the one or the other side, considered in the first place the risk arising from the operation of both lorries. [A discussion of the apportionment follows.] Case 81 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 23 NOVEMBER 1955 BGHZ 19, 114 = NJW 1956, 217 = VersR 1956, 36, 126 Facts On 23 December 1948 the AH Limited Partnership held a Christmas party for its personnel in a restaurant. E, the partner personally responsible, instructed the defendant, a bookkeeper in the firm, to take home two drunken employees, Sch and H, in the firm’s car. The car was struck by a train on a level crossing and H was killed. The appropriate professional association claimed from the claimant reimbursement of its payment under § 1542 of the Reichsversicherungsordnung (Imperial Public Insurance Act, henceforth referred to as RVO) [like most of the provisions of the RVO also § 1542 RVO and all RVO provisions mentioned in this judgment have been repealed] and the provisions of the Reichshaftpflichtgesetz [replaced by the Haftpflichtgesetz in 1978]. The claimant, the German Federal Railway, met the claim of the professional association. It demands of the defendant compensation for its disbursements on the ground that he had alone caused the accident by his gross negligence. Its claim for compensation failed in all instances.

560  Appendix 2 Reasons I. The OLG rightly proceeded from the principle that the claimant can under § 17 of the Road Traffic Act (hereafter StVG) claim from the defendant compensation for the payments made to the professional association only if the defendant as driver of the car involved in the accident was bound by statute to make good the damage suffered by the dependants of the deceased. For that purpose it is material whether H lost his life in an industrial accident and whether the defendant’s liability is excluded by § 899 RVO in combination with § 898 RVO. 1. The appropriate professional association acknowledged that the fatal accident of H was an industrial accident requiring compensation. The court is bound by this decision under § 901 RVO. If the defendant were to be regarded as an agent or representative of the entrepreneur, or as a superintendent of his business and work, he would be liable to H’s dependants under § 899 in combination with § 898 RVO only if it was established in criminal proceedings that he caused the accident intentionally. Since no such finding was made, and the defendant was only convicted of a criminal act committed negligently, it is necessary to examine first whether the defendants belong to one of the classes of persons who are assimilated to the entrepreneur in § 899 RVO. The LG and OLG regarded the defendant as a superintendent of the business and work. The OLG came to that conclusion on the basis of the following findings: The defendant supervised the whole business in the absence of the managing partner. He had prepared and carried through the staff Christmas party on the entrepreneur’s instruction. That the managing partner, on leaving the party about four o’clock in the morning with his co-partners, entrusted to the defendant, and not to one of the professional drivers who were present, the task of taking the drunken employees home was not only because he seemed to be quite sober but because the whole conduct of the party had been placed in his hands. The managing partners, on leaving the party, had wished to hand over the responsibility for its smooth ending to the man who possessed the highest authority in their absence. By virtue of the order given him, the defendant had to perform independently and responsibly the task of getting the inebriates properly and safely home and, in accordance with the entrepreneur’s duty of care, to assure the safety of the employees who were his passengers. Contrary to the view of the applicant for review, these findings justify the conclusion that the defendant enjoys the protection of § 899 RVO. The applicant maintains that the OLG drew the character of superintendent too widely and therefore misunderstood it. That is not correct. In its judgment, the OLG accurately started from the principles regarding the notion of character of a superintendent of business and work developed by the RG in its decision RGZ 167, 685 and 170, 159. It did not fail to realise that the only person who can be regarded as a superintendent is a member of the ­workforce who has the duty to supervise others so engaged or at least one of the departments of the enterprise. As the RG (RGZ 170, 159) correctly states, he must stand out from among the other employees by the fact that he must care for the cooperation of several employees or for the smooth interlocking of the establishment and the plant, and therefore for the harmonious interplay of personal and technical forces and must be responsible for these.

Appendix 2  561 It must be conceded to the appellant that this is of course not generally the case of a car driver who has no other duties. The performance of the necessary journeys and the care and upkeep of the car are not a supervisory activity contemplated by § 899 RVO. It is established, however, that the defendant was not appointed as chauffeur. As the OLG found, even when he undertook the fatal journey he did not act only as a chauffeur but was engaged in a task that exceeded the general duties of a driver. As the OLG found, he was given the responsibility for the smooth ending of the party after the managers had left, and therefore a position was entrusted to him that raised him above the other employees. The applicant is in error in maintaining that the order did not fulfil the conditions for rendering him responsible for the regular cooperation of several employees or the smooth interlocking of the establishment and the plant, for such a range of duties demanded a delegation of at least some duration. There is no need here to decide whether the position of a superintendent of business and work requires that the responsibility is to be delegated for a longer period, for in the present case there is a finding, overlooked by the applicant, that the defendant had the task not only for the time being, but generally of supervising the business in the managing partner’s absence. In this situation the OLG’s characterisation of the defendant as a superintendent of business and work is free from objection. It can therefore be left undecided whether he was also an agent in the sense of § 899 RVO, because in driving several employees home on the order of the entrepreneur he discharged the latter’s duty of care. In any case, the finding of fact makes it free from doubt that, even on the journey which led to the accident, the defendant acted as a person assimilated to the entrepreneur as mentioned in § 899 RVO. 2. Moreover, the application of §§ 898, 899 RVO is not excluded by § 1 second sentence of the Act of 7 December 1943 (RGBl. I 674) on the extended admission of claims for damages arising out of service and industrial accidents. According to that provision, insured persons and their surviving dependants can make good their claims for compensation without limit against the persons mentioned in §§ 898, 899 RVO, if the accident occurred when they were participating in general traffic. On this point the OLG followed the case law of the Supreme Court for the British Zone, according to which there is no participation in the general traffic if the injured person was a passenger in a private vehicle driven by the person who caused the injury and the injured party stood in causal and organic connection with the employment (BGHZ 1, 245 = NJW 1949, 263). It assumed that such was the case here. The present Senate decided (BGHZ 8, 330, 336 ff) that so-called works traffic (constant transport of workers in a works vehicle to the place of business) constitutes transport within the business and that the transported workers do not participate in general traffic. It left unanswered the question whether also in the case dealt with in the Supreme Court of the British Zone, in which the entrepreneur took an employee from the place of work in his own car, there was no participation in the general traffic. In the dispute between the present parties there is also no need to decide whether the principle established by the Supreme Court is invariably to be followed. In any event in the present case, in agreement with the OLG, no participation in the general traffic can be said to have taken place. The Act of 7 December 1943 deals principally with accidents suffered by a worker on the way from or to the place of work and which count as industrial accidents according to § 543 RVO. If an entrepreneur or a person assimilated to him (§ 899 RVO) should run down an employee on the way to the place of work, §§ 898, 899 RVO would exclude claims of a private law nature against the entrepreneur and the persons mentioned in § 899 RVO, although in

562  Appendix 2 such cases only a slight connection exists between the accident and the worker’s activity in the business. The Act, according to its preamble, wishes to do away with the unfairness that was produced because in cases of this kind a person injured in the course of service or work is placed in a worse position than other participants in traffic. This unfair disadvantage was to be removed in all cases where the accident occurs in the course of participation in general traffic. As this Senate has already said (BGHZ 8, 330 [337]), in deciding whether there is such participation it must first be asked whether the insured person suffered the accident as an ordinary participant in traffic or as an employee. Whether the former or the latter is the case or predominates must be decided on the facts of the particular case. If an employee, like H in the present case, is driven home after a staff party in a works car on the entrepreneur’s order, that journey is occasioned by the operation of the enterprise and is so closely connected with the enterprise and with the injured party’s membership of the enterprise that the character of the passenger as a participant in the traffic recedes into the background. That applies especially if the journey, as here, served only to take the employees home and, as the OLG also found, was ordered out of a feeling of care for the drunken employees. That an insured person in a case of this kind does not participate in the general traffic, in the meaning of § 1 II of the Act on the extended admission of claims for damages arising from service and industrial accidents, conforms to the principles on which both the courts and writers proceed in similar cases. The prevailing opinion recognises that taking an employee home as a passenger from the place of work in the works car is not a participation in the general traffic [references omitted]. The OLG thus held correctly that the Act of 7 December 1943 on the extended application of claims for damages arising out of service and industrial accidents does not stand in the way of applying §§ 898, 899 RVO in the present case. II. The applicant for review also asks for an examination as to whether the statutory exclusion of liability in § 898 RVO affects the claim for compensation at all. He refers to the judgment of 3 February 1954 (BGHZ 12, 213) in which this Senate decided that a contractual exclusion or reduction of liability, eg, between driver and passenger, cannot adversely affect the claim for contribution by a second tortfeasor under § 17 StVG or § 426 BGB. The applicant wishes to apply to the present case the notion that the effectiveness of such an exclusion of liability would stultify the equitable contribution intended by the legislator, and maintains that since the entrepreneurs and those assimilated to them under § 899 RVO are liable to the professional association for his expenditure according to § 903 RVO, the limitation of liability under §§ 898, 899 RVO is only justified in relation to the person directly injured in order to avoid litigation within the enterprise. But the legislator, the applicant continues, cannot have intended by this provision to interfere with the rights of third persons and thus to curtail provisions whose purpose is to produce an equitable compromise. Since the professional association sought the reimbursement of its expenditure from the claimant only but did not make any claims against the defendant under § 903 RVO, the claimant, who was responsible only on the ground of strict liability, was saddled with the damage, whereas the defendant, who was to blame, was not called upon to pay. The applicant regards this as unfair and as an infringement of §§ 898, 899 RVO and 17 StVG. These arguments of the applicant for review cannot be of help to it. It may, of course, at first sight appear unfair that the claimant, who has to answer for the damage only on the basis of strict liability, must perform in full, whereas the defendant, who was to blame,

Appendix 2  563 is relieved of responsibility. But this objection of the applicant does not take sufficiently into account the special conditions of accident insurance law, which consciously aims at protecting the entrepreneur, agent, and business superintendent against claims exceeding the liability under § 903 RVO [reference omitted]. The provisions, indeed, of §§ 898, 899 RVO serve also, as must be conceded to the applicant, the purpose of avoiding, in the interest of industrial peace, disputes between workers and employers over the responsibility for business accidents (BGHZ 8, 330 [339]) … It is, however, essential here that the Act has in relation to industrial accidents excluded claims for compensation by injured parties against an entrepreneur because the latter has to bear the burden of accident insurance and because the insured are allowed claims for compensation when the entrepreneur and his agents are not to blame and even if the employer himself has caused the accident through his own negligence. Likewise § 899 RVO in principle relieves agents as well as business and work superintendents of liability towards the workers because under § 903 RVO they must reimburse the professional association the expenses incurred by the latter, if they caused the accident intentionally or by carelessly neglecting their official, professional, or industrial duties. Hence the exemption of the entrepreneur as well as his agents and superintendents from liability towards the injured constitutes a compensation for the latter in return for their statutory liability to the professional association (RGZ 170, 159 [160]; cf also RGZ 153, 38, 41, 42 and BGHZ 8, 330 [338]). This compensation would only be incomplete if the entrepreneur, agents, and superintendent were exposed, along with the liability under § 903 RVO, to a further claim and had to pay damages to a second wrongdoer in whole or in part by way of compensation. That would contradict the purpose of the law of social insurance, for the protection afforded by it to the business entrepreneur and those assimilated to him according to § 899 RVO would in that way be nullified again. That cannot be the intention of the statute. It shows that as a rule the insured has no claim against the individual entrepreneur, agent, or superintendent and that such a claim lies only in the exceptional case, not in issue here, where the entrepreneur, agent, or superintendent causes the accident intentionally (cf RGZ 153, 38 [43]). If, however, the injured party has no claim whatever against them, an essential condition is lacking for a claim to contribution by the second wrongdoer. Contribution is a consequence of the common duty of several wrongdoers to pay damages and hence presupposes as a matter of principle that several wrongdoers are liable as joint debtors for the damage (BGHZ 11, 170 [174] and 12, 213). Since in the case to be decided the liability of the defendant to the injured party’s surviving dependants is excluded, a joint debt is lacking and with it the foundation for a claim to contribution. It is another question whether the claimant could have resisted the professional association’s claim to payment, on the ground that it would be contrary to good faith, in spite of the possibility of recourse against the defendant (§ 903 RVO) to claim the full payment from the claimant. That question, however, need not be decided here. III. The applicant for review now maintains that the claim has none the less a basis in § 426 II BGB. Both parties are alleged to be liable to the professional association as joint debtors, the defendant under § 903 IV RVO and the claimant because the claim of the surviving dependants under § 1542 RVO had been assigned to the professional association. Since the claimant has satisfied the association, their claim has passed to the claimant under § 426 II BGB.

564  Appendix 2 It must be conceded to the applicant that both parties were debtors of the association for the reasons adduced by it. But that could lead to a duty of contribution between them under § 426 BGB only if to that extent they had stood in a true joint debtor relationship towards the association [reference omitted]. That, however, is not the case. A true joint debtor relationship presupposes an internal connection of the two obligations in the sense of a legal community of purpose (BGHZ 13, 360 [365], Great Civil Senate with references to practice of the RG). That is missing from the obligations on which the claims were based which the association had against parties to the present dispute. It has lodged against the claimant a claim of the dependants of the injured party which is based on the Reichshaftpflichtgesetz and falls within the sphere of private law; it had been assigned to the association by operation of law (§ 1542 RVO). On the other hand, the association had against the defendant in its own right a claim to compensation of a special kind based on a statutory provision forming part of public law (§ 903 RVO) against which a contributory fault of the injured party could not be pleaded (RGZ 96, 135; 144, 31 [35]). It is adapted to the structure of accident insurance in the Imperial Insurance Act and to the relationship of the association to enterprises belonging to it which must pay contributions and has the purpose of indemnifying the association for its expenditure arising from the accident. Admittedly the existence of a true joint debt is not absolutely excluded by the differing bases of the obligations and of their origins. Instead it is decisive that in the present case an internal connection is lacking between the two obligations in the sense of a legal community of purpose. Both claims stand only in loose economic connection with each other, for they both had for their object the reimbursement of payments which the association was bound to make on the occasion of the accident arising out of the enterprise. The claimant and the defendant thus owed identical performance to the same creditor (the professional association) to the extent that the economic purpose of the obligation is attained by a single performance to the creditor who can therefore claim only one payment. This happened, however, without the internal connection required for a true joint debt. Since there was no legal community between the debtors, which is required by § 426 BGB as a presupposition for a duty to contribute (cf BGHZ 13, 360, 365), only a joint debt in a non-technical sense can be envisaged. §§ 421 ff BGB, and in particular the regulation of contribution in § 426 BGB, do not cover a relationship of this kind. Hence there is also no room for an analogous application of that provision. This emerges also from another point of view. The Imperial Insurance Act does not wish to force the professional association to make claims on its members to cover its expenditure if they only acted negligently. Accordingly § 905 RVO provides that the meeting of members of the professional association or, if the by-laws so permit, the directors can renounce their right to recourse. If the directors wish to claim reimbursement, § 906 RVO allows the person liable to appeal to the meeting. Accordingly, the question whether a claim should be made on a member of the association under § 903 RVO is referred to the exclusive decision of the association. If the claimant were to be granted a claim for contribution by an analogous application of § 426 BGB, that would indirectly involve an outsider bringing a claim against the tortfeasor indirectly, which the professional association did not wish to make. This would be an admissible attack on the insurer’s authority to decide. This view of the Senate that the claimant cannot bring a claim for contribution under § 426 BGB conforms to the practice of the RG. It took the same standpoint in its decision in SeuffArch, 65 no 32; and in its judgment published in DR 1940, 1779 no 10 dealing with a

Appendix 2  565 similar case without, however, going more deeply into the matter it came to the same result that no joint debt and therefore no duty to contribute existed [reference omitted]. IV. Before the OLG the claimant, by referring to the fact that the defendant had endangered transport, also based its claim on § 823 II BGB. The OLG regarded this as a modification of the claim which was inadmissible owing to irrelevance (§ 264 ZPO). It can be left undecided whether the arguments of the OLG on this question merit approval, for even from that legal standpoint contrary to the view of the applicant, a claim by the claimant for the reimbursement of its expenditure is not well founded. The claimant does not allege that as a result of the defendant’s conduct it suffered damage to its locomotive or any other direct damage to itself. It relies only on the damage which is suffered because it was called upon to pay under the Reichshaftpflichtgesetz. A claim for compensation of that damage cannot be derived from § 823 II BGB in combination with §§ 315, 316 StGB [provisions with partly different content now]. It is true that those criminal law provisions are protective statutes, which also serve to protect the claimant. Moreover, the mere circumstances that the sum which the claimant claims involves indirect damage does not, contrary to the view of the respondent, lead to a rejection of the claim, since, according to a general principle of civil law, a person who has suffered direct damage can claim compensation not only in respect of any direct but also of any indirect damage which he suffered. It is however always a presupposition that the damage falls within the scope of the interests protected by the protective statute, ie, that it arose from the invasion of a legal interest for the protection of which the legal rule was enacted [references omitted]. In the case for decision the danger which the protective statute is intended to avert did not in fact arise. The provisions on endangering the operation of a railway (§§ 315, 316 StGB) protect the health and property of railway entrepreneurs and the other persons directly affected by railway traffic, but not their general economic interests [references omitted]. The damage that the claimant suffered through the claim for compensation on the basis of the Reichshaftpflichtgesetz affects only its general economic interests and therefore a sphere of interests which is not protected here. Hence § 823 II BGB, in combination with §§ 315, 316 StGB, also fails to provide a legal basis for the claim made in the claimant’s action. Case 82 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 27 MAY 1975 NJW 1975, 1886 = VersR 1975, 945 Facts The claimant owned a chicken-farm. The hens were housed in a building where they were arranged in so-called batteries. The first defendant supplied the claimant with concentrated chicken feed. On 8 September 1969 the second defendant, employed by the first defendant, delivered 10 tons of chicken feed loaded on a lorry which was equipped with two tanks in which the feed was contained. The chicken feed was to be deposited in a silo attached to the building. The walls of the silo consisted of chipboard sheets of a thickness of 20 millimetres. On the outside of the silo, a feed-pipe leading to within 70 centimetres below the roof turned vertically into the silo and terminated at a distance of 1.25 millimetres from the opposite chipboard wall. The second defendant connected the tanks of the lorry with the feed-pipe by means of a hose-pipe. Using a compressor attached to the lorry, he blew

566  Appendix 2 the feed into the feed-pipe in order to deposit the feed in the silo. The force of the pressure broke the chipboard sheets of the opposite wall and the escaping feed was deposited on the adjacent roof of the building which collapsed under the weight. Many laying hens were killed or had to be destroyed. The claimant claimed damages in respect of the damage to the roof and to his livestock. The Court of First Instance allowed the claim and the OLG Oldenburg rejected an appeal by the defendant. Upon a second appeal the judgment below was quashed and the case referred back for the following. Reasons I. The OLG left it open as to whether the first defendant is liable in contract, as the Court of First Instance has held. Instead it found that the first defendant was liable under § 7 I of the Road Traffic Act because an object belonging to the claimant had been damaged ‘in the course of operating the defendant’s motor vehicle’. According to the OLG, the necessary connection existed in space and time between a certain operational use or installation and the accident, at any rate if, as in the present case, a load was discharged from a vehicle with the aid of a motor, thereby causing an accident. II. These conclusions cannot be maintained in face of the objections raised by the appellant. It is impossible to accept the view of the OLG that the accident occurred ‘in the course of operating a motor vehicle’ in the meaning of § 7 I of the Road Traffic Act. 1. According to the so-called engine-orientated view, which was enlarged by the traffic orientated view first put forward by the RG [reference omitted] and subsequently adopted and developed by the BGH [reference omitted] in respect of certain cases, a motor vehicle is ‘in operation’ if its motor has been started and moves the vehicle or one of its operational parts. To that extent, as the OLG states correctly, it makes no difference whether during the operational activity the motor vehicle is located on a public highway or (as here) on private land (building site [reference omitted]; works compound [reference omitted]). As a result of technical developments, the motor power of motor vehicles is being used not only to transport persons and goods, but also for other works processes which can hardly be regarded as merely loading or unloading goods for transport. Thus many specialised vehicles exist today which are constructed for special tasks but serve ordinary purposes at the same time. The heavy goods lorry of the defendant was also such a specialised vehicle, since it was fitted with special containers for transporting feed and was provided, inter alia, with a mechanical installation for discharging it. If an accident occurs in the course of employing operational installations of such special vehicles which do not serve directly the purpose of transport, it is not obvious that such an accident has occurred ‘in the course of operating a motor vehicle’ in the meaning of § 7 of the Road Traffic Act. In the present case, this cannot be said to have happened, contrary to the view of the OLG. (a) The OLG, too, states that the question is whether the accident is still to be regarded as arising from the operation of the motor vehicle. According to the OLG the test is whether the accident was ‘closely connected in space and time with an operational process’ of the heavy goods vehicle (for this notion see the decisions of this Senate [reference omitted]). This formula indicates, in the first place, that a link of adequate causality must exist between the operation of the motor vehicle and the actual damage. However, the meaning of this

Appendix 2  567 formula is not completely expressed thereby. To that extent it only defines a minimum requirement for a causal link to exist. In addition, the effect caused by the operation of the motor vehicle for which damages are to be paid must be covered by the meaning and the purpose of the rule creating liability, ie, by the protective range of § 7 I of the Road Traffic Act [references omitted]. It is insufficient for the OLG to argue that the process of discharge falls within the sphere of operation of the lorry because the compressor employed for the purpose of discharging the load was impelled by the motor of the lorry. This establishes only the causal link between the operation of the motor and the damage which, however, cannot be in doubt. On the other hand, contrary to the opinion of the OLG, the occurrence is not to be attributed to the operation of the lorry, against the danger of which § 7 I of the Road Traffic Act is to provide protection, as the appellant correctly points out. (aa) It is true that in accordance with the recent practice of the Courts of Appeal the discharge of a vehicle with the assistance of its motor constitutes a use of an operative installation corresponding to the purpose of the vehicle and therefore takes place ‘in the course of its operation’ [references omitted]. These decisions are frequently cited in the literature, albeit without a more detailed discussion of possible objections against them [references omitted]. This Senate has expressly left the question open in the cases which have come before it hitherto on appeal from the OLG Nürnberg and OLG Hamm as to whether an accident caused on the occasion of oil being loaded or discharged by a road-tanker can be also attributed to the operation of the latter in the meaning of the Road Traffic Act [references omitted]. The decision of this Senate dated 25 April 1956 [reference omitted] also does not show any other attitude in principle. It is true that this Senate held that a ‘close connection in space and time with the operational process’ existed in the case where a motor lorry dropped its load on a rubbish dump with the help of its engine power and thereby caused an accident. However, in that case, too, this Senate observed that no need arose to decide whether such a connection ‘always’ exists when damage is caused on discharging a motor lorry. (bb) Whether, as in the present case, an accident caused in the course of the unloading of a specialised motor vehicle with the assistance of its engine is still to be attributed to the operation of a vehicle in the meaning of the Road Traffic Act depends upon the answer to the question against what perils § 7 of the Road Traffic Act is to provide protection and whether the user of this ‘operative installation’ which led to the accident still falls within this range of protection. Naturally only such perils are involved which emanate from the motor vehicle in its capacity of an engine serving transport (see §§ 1, 2 of the Road Traffic Act). As soon as a connection no longer exists with the purpose of the motor vehicle as a means of transport in traffic, and the motor vehicle is only used as a means of performing work, the danger emanating specifically from a motor vehicle used for its natural purpose has ceased to exist. (See also the RG [reference omitted], concentrating on the nature of a motor vehicle as a means of transport.) Since our legal system does not know a general principle of strict liability for operating engines supplying power at work, § 7 of the Road Traffic Act cannot be applied to accidents which occur in consequence of technical processes which cannot any longer be reasonably connected with the character of the engine employed as part of a motor vehicle. As this Senate has already stated in its decision of 10 January 1961 [references omitted] it is not decisive that the engine of the motor vehicle has been started up if this is done independently of an operational process characteristic of a motor vehicle for purposes other than moving it [reference omitted]. In the case referred to, the engine of a moped served only to operate its lights which were

568  Appendix 2 required as a source of illumination for purposes other than to drive the moped (but see critically Boehmer [reference omitted]). In what circumstances the power of the engine and the operational installations of the vehicle driven by it have lost their connection with the latter’s function as a means of transport and with road traffic, with the result that from the point of view of legal liability only the function of the engines as a source of power is in issue, can only be determined in the individual case, having regard to all the circumstances. If, as in the present case, the engine is used for purposes of unloading, it will be decisive whether the damage was caused by the special construction of the vehicle and the operational installations connected therewith (as for instance in the case of discharging a load with the help of a tipping-device; see the decision of this Senate of 25 April 1956 [reference omitted] or in the case of a towing vehicle equipped with a crane or of a vehicle for transporting long loads which is provided with a grip [reference omitted]) or whether its function as a source of working power was predominant, as for instance in the case of a mobile building-crane. If the present case is examined in accordance with these principles it follows that it is not to be regarded as part of the operation of a motor vehicle if feed is blown into a silo with the engine of the motor vehicle running the compressor. The occurrence of damage is entirely independent, both technically and legally, of the specific peril emanating from a motor vehicle, be it even a specialised vehicle. Instead, the only peril is that flowing from the engine providing power for work, which is supplied by the engine of the motor vehicle. The damage thus caused does not come within the range of protection provided by § 7 of the Road Traffic Act. (b) The traffic-orientated approach to the term ‘operation’ in § 7 of the Road Traffic Act does not lead to any different conclusion. It was developed for the protection of those involved in traffic in order to cover the after effects of the perils created by a motor vehicle present in the area of public traffic, even if the motor vehicle which had been put ‘in operation’ had come to a standstill [reference omitted]. A dangerous situation of this kind has not occurred in the present case. The motor vehicle was standing on private land belonging to the claimant and did not represent an obstacle for other users of the road in the place where it stood. Case 83 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 6 JUNE 1989 BGHZ 107, 359 = NJW 1989, 2616 = JZ 1989, 1069 Facts The claimant, who suffered from high blood pressure, was involved in a road accident around midnight on 28 April 1984 while driving his wife’s car. His car collided with another vehicle driven by M. The liability insurer for this car was the defendant. Soon after the accident had occurred and the police had taken the details of the accident, the claimant suffered a stroke. Since then, he has been unable to work and draws disablement benefit. Between the parties it is not disputed that the defendant must compensate the claimant for all the damages of the accident. On the basis of these facts, the claimant claimed from the defendant compensation for his loss of earnings, a declaration of the defendant’s continuing responsibility for the loss since the claim was brought, and damages for pain and suffering;

Appendix 2  569 in particular the claimant made the following allegations: the stroke, which occurred as a result of the rupture of a blood vessel and a resulting brain haemorrhage, was caused by the excitement brought on by the conduct of M and his three passengers after the accident and the measures taken by the police officer who was at the place of the accident in order to test whether the claimant was driving under the influence of alcohol. After the accident, M and his passengers approached the claimant in a threatening manner. One of the passengers ran at him and shouted, incorrectly, that he was driving too fast. Another of the persons accompanying M drove his vehicle to the side of the road, so that he feared that it would no longer be possible for the facts of the accident to be clarified. All four occupants of M’s vehicle falsely alleged to the police that he was under the influence of alcohol; that caused the police officer to breathalyse him, although the results of the test were negative. As a consequence of this test and the subsequent conduct of M and his fellow passengers, the shock which he had suffered as a result of the accident grew more intense. When he later drove on, he experienced symptoms of paralysis which were the symptoms of his stroke. The claimant’s claim was unsuccessful in both lower courts, and his application to the BGH was rejected. Reasons I. [According to the OLG] … the claim as a whole had no legal basis. A direct claim against the defendant on the basis of § 3 no 1 PflVG [Pflichtversicherungsgesetz = Act Concerning Compulsory Insurance] [provision has different content now] failed because the loss claimed by the claimant was not suffered as a consequence of the operation of the vehicle insured by the defendant (§ 10 I AKB [Allgemeine Bedingungen für die K ­ raftverkehrsversicherung = General Conditions for Motor Vehicle Insurance]). Furthermore, M himself was not liable to the claimant. There was no liability under §§ 7 and 18 StVG [Straßenverkehrsgesetz = Road Traffic Act] because the invasion of his health alleged by the claimant did not occur in the context of the use of the vehicle by M. There was no liability under § 823 I BGB because there was no basis for holding that M was at fault. A claim for compensation based on § 823 II BGB failed because even if there were a breach of a protective law (§§ 164 and 185 ff StGB), a reasonable bystander would not have expected the ­occurrence of a stroke as a consequence of the damage inflicted upon the claimant. II. The claimant’s appeal fails. The judgment of the OLG is correct in its result, even if not in its reasoning (§ 563 ZPO). The claim has no basis in law. The prerequisite for a claim against the defendant on the basis of § 3 no 1 PflVG is that the claimant has claims for compensation in respect of the alleged loss against M or the keeper of the vehicle driven by M (§§ 823 ff BGB and §§ 7 and 18 StVG) and that the loss is caused in the context of the operation of the motor vehicle insured by the defendant (§ 1 of the PflVG; § 10 I AKB). That is not, however, the case here. 1. A claim for compensation against M based on tort (§§ 823 ff BGB), which is the only way a claim for damages for pain and suffering could be justified (§ 847 BGB) [see after the Schadensersatzrechtsreform of 2002 § 253 BGB], has no basis in law. (a) Loss of earnings and non-pecuniary loss on the part of the claimant should not be recoverable from M under § 823 I BGB simply because M caused damage to the claimant’s

570  Appendix 2 property as a consequence of the crash caused by his fault and was consequently guilty of an interference in the ownership rights of the claimant and because the impairments claimed by the claimant could be seen as consequential loss. First, the property damage caused by M to the car driven by the claimant was suffered not by the claimant, but by his wife as the owner of the vehicle. Furthermore, there is no evidence from the pleadings that the state of excitement which the claimant believes led to his stroke was in any way caused by his being upset by the damage to the vehicle [emphasis added]. (b) The claimant’s request for damages is furthermore not justified in so far as it is based on an argument that there was an invasion of the claimant’s health actionable under § 823 I BGB. (aa) Following the claimant’s arguments, and rejecting the view of the OLG, it must be concluded that M did make a contribution to the injury to the claimant’s health in so far as he acted unlawfully and negligently by contravening the priority rules (§ 8 StVO = ­Straßenverkehrsordnung) and consequently causing the crash. For by causing the accident he led the claimant to become upset and thus created one precondition which, in conjunction with the consequent conduct of M and his passengers, and the attendance at the accident by the police, caused the claimant to suffer a critical increase in blood pressure in his brain and led to the rupture of the blood vessel and the consequential brain haemorrhage when the claimant later drove away from the accident [references omitted]. It is not relevant to his responsibility in tort that M did not cause the impairment of the claimant’s health through a physical invasion of his bodily integrity; an invasion of the claimant’s health can occur, as here, through a psychological impact upon the victim [references omitted]. Contrary to the view of the OLG, it is equally irrelevant to the tortious responsibility of M that the impairment to the claimant’s health may only have occurred because, unbeknown to M, the claimant was suffering from high blood pressure. For it is established case law that a person who causes loss must also take responsibility for those consequences of his actions which are the result of the fact that the victim is already suffering from some form of bodily injury or some other weakness in his constitution [references omitted]. A tortfeasor must always reckon with the possibility that a person affected by his breach of the priority rules may be a person suffering from high blood pressure. It is also not wholly unforeseeable that as a consequence of the upset caused by the accident that such a person may suffer impairment to his health. It is not necessary to foresee the precise circumstances in which this might occur or how the risk might result in the occurrence of damage [references omitted]. (bb) The linkage of the invasion of health suffered by the claimant and the infringement of the priority rules by M for the purposes of liability is, however, precluded by the fact that this damage in fact only occurred as a result of the conduct of M and his passengers after the accident and the events which occurred when the police attended the scene of the accident. For the traffic rule contained in § 8 StVO breached by M is not intended to provide protection against the possibility that an accident caused by a failure to observe this provision leads to the claimant suffering a stroke in the manner alleged by the claimant as a consequence of pressures experienced by the victim solely as a result of the upset occurring in the context of the aftermath of the accident. It is also established case law that in the context of damages claims which are based on § 823 BGB it should be examined whether the event in respect of which compensation is claimed falls within the protective scope of the norm, and thus whether the risks materialised

Appendix 2  571 through the event which breached the rule of conduct was intended to protect against [references omitted]. This condition is not satisfied here. For the provision contained in § 8 StVO breached by M is intended, according to the basic principle set out in § 1 II StVO, to protect above all the bodily integrity of other persons; its protective scope extends, however, as is apparent from § 1 I StVO, to cover only the prevention of the risks of accidents and the prevention of injuries to health associated with primary threat to life and health. These can include those injuries which occur in the aftermath of the accident, for example in the context of salvage work or while making the accident report, which themselves constitute the realisation of one of the risks of road traffic at the scene of the accident. It is the view of this court that this argument cannot extend to cover psychological pressures associated with disagreements regarding the clarification of how the accident occurred or regarding the question of fault, such as those which were primarily responsible for the claimant’s stroke, leaving aside the impairment of his condition caused by the accident itself. In this case the claimant, himself, admitted that the breach of the priority rules by M engendered in him merely a state of general excitement which, in itself, did not represent an invasion of his health [references omitted]. The fact that this state of excitement became more intense as a consequence of the subsequent conduct of M and his passengers before and during the presence of the police, and the fact that this led to the claimant suffering a brain haemorrhage leading to a stroke, fall beyond the protective scope of § 8 StVO. It is not the task of this provision of road traffic law to protect the person who had priority on the highway against the psychological and physiological impairment which he might suffer as a consequence of a criminal investigation or criminal proceedings being mounted against him, or against his own need to take action in civil or criminal proceedings to recover his loss. Nor is this provision aimed at providing protection against an invasion of the claimant’s health suffered as a consequence of a state of excitement regarding the police attendance at the accident, whether this is caused by measures taken by the police, or by statements made by the tortfeasor or third parties which make it more difficult to clarify the issue of responsibility. Protection against detriment stemming from errors or attempts to manipulate the facts when the circumstances of the accident are being clarified is subject to separate rules; it is not included within the scope of the rule of conduct contained in § 8 StVO which is intended to ensure the safety of traffic on the roads. Having regard to the assessment which has been made, it must be concluded that as a matter of the ascription of responsibility, the stroke suffered by the claimant was linked to the conduct of M and his passengers after the accident. However, even from this perspective the conduct of M cannot give the claimant an action for damages under § 823 I BGB. For the fact that, as the claimant alleges, M and his fellow passengers might have given an incorrect description of the accident to the police officer charged with making a report after the crash or might have ‘invented’ allegations about the claimant having driven too fast or being under the influence of alcohol does not, of itself, render their conduct unlawful. Such an attempt by those using the highway to shift the blame for an accident onto the other side does not in itself violate, in the absence of other circumstances, the standard of conduct which is to be expected of every person who uses the roads but who has no claim for compensation, after an accident. The same applies to the unsubstantiated allegation made by the claimant (though only before the OLG) that the passengers in the other vehicle came towards him ‘in a threatening manner’ [references omitted].

572  Appendix 2 Finally, it is not possible to conclude that the conduct of M after the accident was unlawful simply because the OLG, when it was examining the claimant’s claims which it ultimately rejected, reached the conclusion under § 823 II BGB that M and his passengers had breached the protective laws contained in §§ 164 and 185 ff StGB as a result of their conduct following the accident. Quite apart from the fact that the defendant, as the insurer, could only be liable for the conduct of M and not for that of his fellow passengers (cf § 10 I d AKB), the findings of the OLG should be viewed as findings of law, not as findings of fact, that is as a presumption of the truth of the claimant’s allegations. For the facts as pleaded by the claimant reveal no evidence of a breach of the provisions of the criminal law by M. 2. As a result, the OLG was correct to deny, on the basis of § 3 no 1 PflVG, a claim for compensation by the claimant leading to the liability of the defendant under §§ 7 I and 18 I StVG. Such a claim, which in accordance with § 11 StVG can in any case only extend to compensation for pecuniary loss, presupposes that the invasion of the claimant’s health occurred in the context of the operation of the vehicle driven by M and that the loss claimed by the claimant is attributable to the risks associated with the operation of this vehicle. The OLG was wrong to conclude that the first condition was not present; the second requirement is not, however, fulfilled. (a) Damage occurs ‘in the context of the operation’ of a motor vehicle where the risk which emanates from the vehicle as such has had an impact upon how the damage actually happened, and thus where the occurrence of damage has in this way been (partially) shaped by the motor vehicle. Evaluated from this perspective, the case law of this court leads to the conclusion that the condition of liability that the damage must occur ‘in the context of the operation’ of a motor vehicle must in principle be construed extensively in accordance with the broad protective scope of § 7 I StVG [references omitted]. (b) In this case, however, as was stated above in the context of liability under § 823 BGB, the accident caused by M’s operating the vehicle in breach of the road traffic rules did contribute to the stroke suffered by the claimant as a result of the impairment of the general condition of a victim such as the claimant who suffered from high blood pressure. However, as with liability in tort, the responsibility of M under §§ 7 and 18 StVG requires that the loss suffered should fall within the protective scope of the norms in question [references omitted]. Any attribution of this loss to the risk of the operation of the vehicle driven by M must, however, be denied on the same grounds as those which justified the refusal to link, as a matter of the law of tort, the loss with the wrongful breach by M of the provisions of § 8 StVO. For since liability under § 7 StVG represents, so to speak, the price for the fact that the use of a vehicle on the roads offers a permissible source of risk, then the responsibility of the keeper and the driver which is based on this provision must be limited to those losses which represent the realisation of precisely those risks which result as such from motor vehicles. It is not possible to establish the necessary internal link between the risks of operation of a motor vehicle and the loss in the form of the claimant’s stroke and the damaging consequences of that stroke. In this context, rather, it is a separate sphere of risk which is involved also as regards the risk-based liability contained in the Road Traffic Act, and this sphere of risk must, according to the standards imposed for this form of liability, be attributed to the general risks of life.

Appendix 2  573 Case 84 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 13 APRIL 1956 BGHZ 20, 259 Facts In order to enter a private driveway, the defendant made a sharp left-hand turn from the right-hand side of the highway. The claimant came round a bend behind him on a 490 cc motorcycle, and struck the defendant’s vehicle near the left-hand kerb. The claimant was thrown onto the pavement and suffered serious injuries. The LG granted the claimant’s claim for damages for pain and suffering, and held the defendant liable for all other damage as well. On the defendant’s appeal, the OLG held that the claim for damages for pain and suffering should be allowed only as to two-thirds, and that the defendant was liable only for a like proportion of the other harm suffered by the claimant. The claimant sought to have the decision of the LG reinstated and the defendant sought to have the claims dismissed. Both appeals were unsuccessful. Reasons It was alleged that the claimant could and should have foreseen the defendant’s improper left turn in time to brake or swerve and so avoid the collision. The trial judge, however, held – unobjectionably in law – that this was not established. But an accident does not constitute an ‘unavoidable event’ in the sense of § 7 II Kraftfahrzeuggesetz (Motor Vehicle Act, hereafter KrfzG) (now StVG (Road Traffic Act)) just because the claimant is not proved to have been at fault in contributing to it. Supposing that the defendant, as is possible, had put out his direction indicator and was proceeding slowly, and that the claimant had been driving with abnormally scrupulous care, alertly and attentively focusing all his faculties on the situation (NJW 1954, 185 no 1), then the claimant might, despite the unexpectedness of the defendant’s manoeuvre, have avoided the damaging collision by braking or swerving, given that his own speed was perhaps only 20 mph. If in this sense the accident could possibly have been avoided by the claimant, the danger attributable to his motorcycle is a factor which must be taken into account in any claim he may make (BGHZ 6, 319). It is true that some writers have criticised the decisions of the BGH (BGHZ 6, 319; VersR 1953, 337) to the effect that, except in the case of an unavoidable event, the claim of the injured custodian is subject to reduction by reason of any contribution made to the accident by the danger due to his vehicle [references omitted], but despite these criticisms this Senate proposes to adhere to the established case law. If someone else as well as the custodian of a car is liable to an injured third party and the question is how the loss should be borne as between the two of them, it is quite obvious that the custodian will have to bear part of his loss. The same must apply when the custodian of a vehicle which the legislature has stigmatised as dangerous, suffers damage while in the vehicle whose dangerous nature contributed to the accident, even if he himself was not at fault, or not provably so. Theoretically one might avoid splitting the loss in this way by drawing a distinction between the capacities of custodian and occupant, and attaching strict liability only to the capacity of custodian, but this would be unduly theoretical and quite unrealistic. The danger attributable to the custody of a motor vehicle exists equally if the custodian happens to be in his own car, as

574  Appendix 2 passenger or driver, and so in such a case also he must bear the consequences which flow from having it in his custody. It is irrelevant that § 8 StVG exempts him from liability to any other occupant. Berchthold is wrong to draw the conclusion that even a scrupulously careful custodian will always have to bear part of the loss he suffers [references omitted], since if the event is unavoidable, the dangerous nature of the vehicle has no part to play. If the danger does fall to be taken into account, the trial judge must in each case determine whether and to what extent the loss should be divided. Even then, as Gelhaar and Wussow have pointed out with reference to decisions of this Senate, the custodian is not inevitably saddled with part of his loss. As against a tortfeasor whose conduct was gross or reckless, it might be right to ignore an insubstantial contributory danger. On the other hand (and this supports the view here put forward), it would not be right to require a person who has been only slightly negligent to bear the whole of the custodian’s loss when the custodian’s vehicle made a significant contribution to the harm. The same must apply when a custodian-occupant brings a claim for damages for pain and suffering. It is true that in JW 1931, 3315, the RG stated that the loss should not be divided unless the custodian would have been liable to any third party injured in the accident, and it refused to use § 17 KrfzG to curtail the claim for damages for pain and suffering brought by an injured custodian who was responsible for nothing other than the custody of a dangerous motor vehicle. On the other hand, in RGZ 149, 213, the RG held that the part of the loss which an injured custodian must bear if he himself was in part responsible was not subject to the monetary limit laid down by § 12 KrfzG. To this extent, therefore, according to the RG, different rules may apply on the same facts depending on whether the issue is one of liability to a third person or of the duty to bear part of one’s own loss. It is certainly clear that the main reason the legislature set the monetary limit on the strict liability introduced by the KrfzG was to enable custodians of vehicles to insure themselves against liability without undue cost (see RGZ 149, 213, 215 and the reasons there given). But the idea of so limiting the amount of a claim based on strict liability has no application when the question is whether the claimant should bear an appropriate part of his own harm. It would be irrational to say that the custodian need not bear any part of his loss when his claim is based on the BGB (loss of income, § 842 BGB; loss of services, § 845 BGB; damages for pain and suffering, § 847 BGB) [references partly outdated] but that his claim is reduced if it is based on the StVG when it is in any case limited in quantum (§§ 10–12 StVG). The result would be that a reduction would take place only in those very claims whose satisfaction the legislature thought particularly urgent, as the enactment of the KrfzG/StVG shows. The legislature cannot have intended this result to flow from the limitation on the amount of the defendant’s liability. It is rather for the judge whenever the situation is appropriate for a division of the loss between the victim and the person who caused the injury, to apply § 17 I, 1 StVG, which is analogous to § 254 BGB, and decide whether the victim is to bear an equitable part of his own loss. This conclusion is logically consistent with the decisions of the BGH on the question of contribution between common debtors liable for the same harm under § 17 StVG (BGHZ 6, 319, 322). The relationship between common debtors and their respective contribution claims depends exclusively on the actual facts, especially the extent to which they respectively contributed to the harm, and not on the basis of their legal liability to the victim; the adjudication of contribution claims is entirely divorced from the legal basis of the individual debtor’s liability, to the point where it is irrelevant whether the actual causes

Appendix 2  575 of the harm were a ground of liability to the victim (reference omitted). Now, since the same considerations apply, and the results should be the same, when one is weighing up the respective responsibility for harm as between several common debtors on the one hand (§ 17 StVG) and as between those causing and suffering harm on the other (§ 254 BGB), so in the latter case also one should take no account of the basis of liability, but only of the totality of the facts, especially the extent to which each contributed to the harm as a matter of causation (reference omitted). Just as one is to ignore the legal basis of liability in the individual case when it comes to dividing the loss (BGH VersR 5, 163), so one should ignore the question whether the harm is of such a kind that a third party could claim in respect of it. The only safe way to an equitable division of the loss is to have the judge make the custodian bear part of it by applying the standards of § 17 I, 1 StVG, as would be the result of applying § 17 StVG and § 254 BGB [reference omitted]. Accordingly, the OLG was right to hold that the claimant’s claim for damages for pain and suffering was also affected by the danger contributed by his motorcycle. Case 85 BUNDESGERICHTSHOF (SIXTH CIVIL SENATE) 16 JUNE 1959 BGHZ 30, 203 = NJW 1959, 1772 Facts About 9 pm on 5 September 1952 the claimant was riding his moped out of town on V St. He crossed the intersection with I St, and was about to pass the E. petrol station on his right when the defendant E. drove out of the gas station in his Opel Olympia 1937 and turned right into V St in front of him. In overtaking E’s car, the claimant got between the tramlines in the middle of the highway. He overtook E’s car but had not yet regained the right hand side of the road when he collided head-on with B’s Mercedes 170S, 22 metres before the intersection with E St. The claimant suffered serious injuries in the collision, and his left leg had to be amputated. The claimant asserts that E came out of the petrol station right in front of him, so that he was forced to overtake. In doing so the claimant had to get between the sets of tram-lines in the middle of the road, because E’s left-hand wheels were over the right-hand tram lines by reason of cars parked on the right hand side of the road. The claimant took some time to overtake because E accelerated as he was doing so, and he was therefore unable to regain the right hand side of the road in due time. The defendant B. had also crossed the tramlines while overtaking a car in front of him, and would have seen the claimant if he had been paying proper attention. The claimant claims compensation from the defendants for one-half of the damage he suffered, and the defendants answer that the accident was entirely due to the claimant’s fault. The LG dismissed the claim against E, and granted the claim against B as to one-fifth of the total damage. On appeal by the claimant and B, the OLG held that both defendants were liable under the Straβenverkehrsgesetz (StVG) for two-fifths of the total harm, and that the defendant B was also liable under the BGB for two-fifths of the amount claimed by the claimant. The defendants’ appeals were allowed in part, the BGH holding that while each defendant was liable for one-fifth of the total damage, they were not together liable for more than one-third.

576  Appendix 2 Reasons The OLG was right to hold that the defendant E was liable for one-fifth of the claimant’s total damage, so E’s appeal on this point must be dismissed. B’s appeal equally fails in so far as it argues that he is not liable at all. The OLG then added together the two liabilities for one-fifth each, and consequently held the defendants jointly liable for two-fifths of the total harm (four-fifths of the amount actually claimed by the claimant, for he claimed for only one-half of his harm). The defendants are right to object to this. 1. The OLG was right to start out by weighing the claimant’s contributory fault against each of the defendants separately, and correctly applied § 254 BGB first as between the claimant and E, and then as between the claimant and B. This separate apportionment is necessary because the claimant has an independent claim for compensation against each defendant. Each defendant is responsible for providing an adequate cause of the harm, and has thereby met the conditions of statutory liability (§ 823 BGB, §§ 7, 18 StVG). Had the claimant sued only one of the defendants, he could claim only one-fifth of his total damage (= two-fifths of the sum actually claimed). The fact that he sued both defendants in one suit does not justify an apportionment under § 254 BGB on the basis that the responsibility of the two defendants should be treated as a unit and compared as such with that of the claimant. Where several persons have caused harm, there is only one case where it is right to combine their spheres of responsibility and thus make each responsible for the contribution to the harm made by the others, and that is when the requirements of § 830 I, 1 BGB are met, namely that the various persons causing the harm caused it by means of ‘a wrongful act committed jointly’. There is no question of that here. Indeed, it may be that this provision is inapplicable on the mere ground that whereas E. was guilty of an unlawful act in the sense of § 823 BGB, B. was liable only on the basis of the strict liability in §§ 11, 18 StVG. Be that as it may, there was here no ‘act jointly committed’ by the defendants. True though it is that together they produced the harmful result, this was through different independent individual acts, not through a common act. To several acts of negligence of this kind (fahrlässige Nebentäterschaft) § 830 I, 1 BGB is not to be applied [reference omitted]. If in RGZ 58, 357 the RG indicated otherwise, this court cannot agree. When the harm has been caused by the concurrence of several individual acts, the fact that these acts may coincide closely in time and place does not justify an apportionment which burdens each debtor with the contributions of the others. Nor did the RG itself hold that when several drivers had caused an accident by various independent acts of bad driving they were ‘joint actors’ (Mittäter) in the sense of § 830 I, 1 BGB. 2. The OLG believed that § 840 BGB empowered them to add together the portions of the harm, namely one-fifth each, for which the defendants were responsible. In this they failed to see that since under § 840 I BGB the debtors’ obligations must coincide before there can be a relationship of common debt, the defendants could be common debtors only in respect of one-fifth of the claimant’s harm. In contrast with § 830 I BGB, there is here no legal basis for treating the contributions of the two defendants as a unit imputable to both and opposing it to the claimant’s quota of responsibility. Such a solution is irreconcilable with the recognised principles concerning the factors relevant to an apportionment under

Appendix 2  577 § 254 BGB. It would improperly extend the limits within which the law of tort allows the imputation to one person of another person’s fault. And it is inequitable because each of several defendants would bear the risk of the insolvency of the others, whereas the claimant would not be exposed to this risk at all, even though he was equally to blame, if not more so. 3. According to the decisions of the RG and those of the BGH hitherto (BGHZ 12, 213, 220; VersR 1957, 167), several tortfeasors whose liability as a result of the individual weighing process is equal in amount (as with the defendants here, one-fifth each) are liable for that amount as common debtors under § 840 BGB, and the claimant must bear the remainder of the loss himself. This is an unsatisfactory solution, because it gives the victim less than he should, if one views the accident as a whole, recover. The example given by Dunz in JZ 1955, 727 makes this quite clear. If 10 people, all equally at fault, cause damage to an eleventh, the victim can claim the full amount of his loss from any of the ten. But if one of the ten who are equally careless is himself the victim, the result of the individual weighing is that each of those causing the harm is liable to the claimant for half of his harm. If we apply the rule of common debtors as the courts have done until now, the victim recovers only half of his harm altogether whereas, if all the debtors are solvent, he should get nine-tenths. On the other side, the effect of contribution proceedings would be that each person causing the harm would pay only one-eighteenth of it. The main reason for the unsatisfactory nature of the law hitherto applied in such cases is that the rules of common debt have been applied too soon and too formalistically. Of course § 840 I BGB applies in the case of several as well as joint tortfeasors (see BGHZ 17, 214). This makes for no difficulty if the several tortfeasors are each liable for the whole harm, for then we have the situation which is characteristic of a common debt, namely that performance by any one debtor satisfies the whole of the creditor’s interest. But this identity of the content of performance is lacking to some extent if the victim is himself guilty of contributory fault so that his damages claims against the several tortfeasors fall to be reduced under § 254 BGB. It is also lacking in the case before us today, for the one-fifth for which E is liable as a result of the individual apportionment is neither economically nor legally identical with the one-fifth of the harm which B has to pay. Payment of one of these two parts of the harm does not give the victim of the accident all he ought to get from E and B together. This is the second reason for the unsatisfactory nature of the law applied until now: the traditional comparison of the contribution of the victim with that of each individual causing the harm fails to give a global view of the accident and leads to a division of the loss which, on a global view, is unsatisfactory. 4. It might seem that one could equitably deal with the consequences of an accident by dividing the harm between the parties involved in the occurrence of the harm in relation to their respective contributions to it, and burdening each only with the appropriate portion of the harm he has caused. In support of such a view one might adduce the idea that all those involved in an accident, including the responsible victim (§ 254 BGB, §§ 7, 17, 18 StVG), form a kind of community, entailing a duty to resolve it so that no member has to bear more of the loss than is appropriate under § 17 StVG or § 254 BGB. Such a method brings the apportionment of the loss between the various persons who caused it (the inner or contribution relationship) into the suit brought by the victim against any or all of the

578  Appendix 2 persons causing the harm (external liability). There are several reasons which render this unacceptable. There is no statutory basis for such apportionment proceedings. In admiralty law, indeed, there is such a rule (§ 736 HGB) [provision repealed]: if a collision between two or more vessels results from the fault of the crews involved, the owners of these ships are only liable in proportion to the gravity of their respective faults, at any rate so far as concerns damage to the ships themselves or to property on board, personal injury being dealt with otherwise. Here, several liability is introduced in lieu of joint liability, and the division between external liability and internal contribution which the law has maintained for good reason in other areas is abolished. But § 736 I HGB only applies in this particular area of admiralty law: it cannot be applied to the law of road traffic or to the general law of tort. Certainly nothing in § 17 StVG would justify abandoning the distinction between external liability and internal contribution in the case of a collision between motor-cars and making the drivers and custodians involved in the accident liable to the victim only for their several parts (see also BGHZ 15, 123, 135). Several liability such as is exceptionally provided for by § 736 I HGB would often be detrimental to the victim, for it would deprive him of the security and advantages offered to him by the principle of joint liability and by the separation of external liability and internal contribution. To take Dunz’s example once again, if several liability existed, the claimant could recover only one-tenth of his harm from each person causing it; yet each of them had provided an adequate cause for the harm and was, in relation to the claimant, as much to blame for it as the claimant himself, so it would seem right to give him a claim for half his harm against each individual causing it. Finally, several liability would greatly complicate the trial of many tort cases. Very frequently, the victim does not sue all those liable for the harm resulting from an accident; to minimise the risk, he often sues only the person whose liability can most easily be established. Now if the principle of several liability applied, one could only decide how much the defendant must pay by ascertaining the extent to which all the other persons responsible for the accident were to blame and contributed to it as a matter of causation. Thus in every traffic accident case, one would have to ask whether anyone not in court might be liable for the harm, though any such determination would lack the force of res judicata against such a person. Wide-ranging enquiries would often be necessary although the actual issue was quite simple. To complicate matters like this would conflict with the policy of the Code, especially § 421 BGB, to assist the victim, even when he, too, is at fault, for it is in the victim’s interests to limit the issues in trial and to make a quick decision possible. For all these reasons the principle of several liability does not provide a solution. 5. Solutions are suggested by Dunz (JZ 1955, 727 and JZ 1957, 371) and Engelhardt (JZ 1957, 369) but as Dunz himself admits in his second article, they are not ideal. 6. In order to achieve a satisfactory result one must somehow harmonise the principle of common debt (joint liability) with the principle of apportionment of § 254 BGB (§ 17 StVG) and combine the individual apportionment with a global apportionment achieved by looking at the accident as a whole. An example may make this clear. Suppose that A is injured in an accident due to his own carelessness and the careless driving of B and C. If the contribution of all three parties is equal, and the damage suffered by A amounts to DM 3,000, the individual apportionment will be that A’s contribution to the accident is equal to that of

Appendix 2  579 B (1:1). A may therefore claim DM 1,500 from B. The same applies as between A and C. Now if A claims damages from B and C together, one must follow this individual apportionment by taking a global view of the accident, and asking how much each of them contributed to it. Since from this point of view A, B and C are each responsible for one-third, A should have to bear only one-third of his harm (DM 1,000) and should be able to claim a total of twothirds (DM 2,000) from the others. The results of these two processes of apportionment (the individual and the global) leads to the conclusion that: ‘B and C together must pay A total of DM 2,000, but neither of them need pay more than DM 1,500’, or, to put it another way: ‘A may claim DM 1,500 from B, and he may claim DM 1,500 from C, but he may not claim more than DM 2,000 in all’. The question of contribution between B and C remains a matter of their relationship inter se. If B has paid A the DM 1,500 he owes him, then C owes B DM 500 as contribution under § 17 StVG. C remains liable to A, but only for DM 500, since A has already received DM 1,500 from B. While maintaining the legal structure of joint liability, this solution accommodates it to the particularities of the law of tort liability arising from the principle of apportionment of § 254 BGB and related provisions, and the solution is a just one in that all those involved in an accident bear the loss in a measure which reflects their responsibility for it. By linking individual and global apportionment, it avoids the disadvantages to which the victim has hitherto been exposed when claiming damages from several defendants (hitherto A has obtained judgment for DM 1,500 against B and C as common debtors, and had to bear half his loss himself). On the other hand, the individual apportionment ensures that no person causing the harm pays more to the victim than is fair in view of their relationship inter se (B pays A here DM 1,500, and so does C). So far as these debts overlap, the victim has the security and other advantages which the principle of joint liability is designed to give him (§§ 840, 421 BGB). The step of making the global apportionment and ascertaining the respective quotas of harm is naturally only to be taken when the victim sues several persons at the same time, or if there are successive suits. 7. We can now apply these principles to the case in hand, taking the individual apportionments made by the OLG as correct in law. Here as between claimant and E the total harm must be divided in the proportion 4:1, and likewise, under the StVG, in the same proportion of 4:1 as between the claimant and B. Taking the global view next, as we must, the harm must be divided between the three parties involved so that the proportion of the harm borne by the two defendants remains the same and that on the other hand the proportion of 4:1 is maintained both in the relationship between the claimant and E, and in the relationship between the claimant and B. It follows that the global apportionment must be in the ratio 4:1:1. This means that the claimant is responsible for four-sixths (= two-thirds) and the defendants are each responsible for one-sixth. In the end result, the claimant will have to bear two-thirds of the total loss, and the defendants must make good one-third, though each defendant is liable only for one-fifth of the harm and B is liable only under the StVG. The claimant’s claim being limited to half of his total harm, the end result is that his claim succeeds against E for two-fifths and against B for two-fifths under the StVG, subject to this, that the total sum he may recover from both is not to exceed two-thirds of the sum he has claimed.

580  Appendix 2 Case 86 REICHSGERICHT (SIXTH CIVIL SENATE) 11 JANUARY 1912 RGZ 78, 171 Facts On 5 August 1908, while flying from Mainz to Friedrichshafen, the defendant’s airship was forced by engine failure to land on a field near Echterdingen. Since thousands flocked to see the sight, the landing area was sealed off by the military, while the fire brigade, and various army units were placed at the defendant’s disposal. Around 3 pm a sudden storm caused the airship to break loose from its moorings and to be dragged for some 1,200 metres before exploding and burning up. The claimant, who was among the spectators standing near the place of anchorage, was struck by the anchor-chain. He sued the defendant for damage alleging that the accident was caused by the defendant’s negligence. Both lower courts rejected the claimant’s claim and his application for review was denied for the following. Reasons 1. The claim was considered by the OLG in the light of §§ 823 and 831 BGB and it refused to consider the applicability of other statutory provisions imposing liability for dangerous objects (Gefährdungshaftung). This conclusion is entirely justified by existing law. In cases such as this, where the claimant’s injuries have been sustained outside any contractual relations, the provisions of the Civil Code dealing with torts are the only ones that can apply. According to these provisions, however, the defendant can only be liable to the claimant if the latter’s damage is due to the former’s ­culpable conduct. Special provisions of the Civil Code imposing liability without fault, eg, § 833 BGB concerning the liability of keepers of animals, the principles of the Imperial Act on Liability (Reichshaftpflichtgesetz) [now Haftpflichtgesetz], or of the statute of 3 May 1909 (Straßenverkehrsgesetz) concerning automobile accidents, which (statutes) impose liability based on risk, cannot be applied to aerial navigation given their exceptional character. 2. With regard to liability for damages resulting from illegal acts, the older view can no longer be accepted which postulated with respect to the dangerous nature that constitutes a fault (Verschulden). Consequently, it cannot be said that because aerial navigation is fraught with great dangers the defendant, as initiator of this dangerous undertaking, can be regarded as being at fault in the sense required by § 823 I BGB. This approach has not been misapplied by the OLG taking the view, which pays due attention to the requirements of general safety and which is legally correct, that in the circumstances the defendant was under a duty to take particular care. The Court thus held the defendant was under a duty to take exceptional care, not least because at the time of the accident there was little experience in landing such an airship … 3. Given that in view of the above points the position taken by the OLG is free from legal error, the question arises whether the findings of fact justified it in holding that the defendant had discharged this duty. The claimant denies this on two grounds.

Appendix 2  581 (a) First, he insists that the defendant was at fault, if for no other reason than the fact that he decided to go ahead with the flight even though he had insufficient experience in landings. In his appeal he therefore alleges that the defendant should not have gone ahead on the assumption that everything would necessarily proceed smoothly. At the very least he should have, from the outset, warned the public of all incidental dangers; and, if common sense and experience suggested that such warning of possible dangers would not be sufficient to avert them, then he should have cancelled the flight altogether. This argument is misconceived. The facts of this case show that the defendant embarked upon this journey, which would have lasted for several days, in excellent weather conditions and was aided by an experienced crew. As the OLG suggested, he had every reason to believe that a carefully executed landing would pose no dangers to any crowd assembled for the spectacle. His principles of anchorage were correct and his means for anchoring were ample. The defendant knew that wherever this happened competent assistance would be on hand. In his opinion, his experience in such matters was more than adequate and he entertained no doubt that, even in the event of a storm he would be able to anchor his airship safely. Given all this, he could undertake this flight without hesitation. And past experience had also shown that public warnings against possible future risks were ineffective. Instead he is entitled to believe that if need be injuries could be prevented by a cordon and by warning the crowds. In view of the above no legal error can be found in the conclusion that the defendant’s conduct during the preparation of the flight was careful in the sense of § 276 BGB. The applicant’s view that the defendant should have had absolute certainty that the flight posed no dangers whatsoever is too far-fetched. Any enterprise of this type is bound to entail some dangers, also for third parties, and this could never be entirely eliminated, even if great care was taken. In the circumstances, therefore, it would be unjust to demand that such flights were banned altogether because their inherent dangers cannot be entirely eliminated. All that one can demand is that all care required in the circumstances should be taken. This, indeed, occurred since the defendant undertook the flight after proper preparations were carried out in accordance with prevailing experience. The flights went ahead when the weather conditions were good and everything could normally be expected to go well and safely. Consequently, he is not guilty of any recklessness constituting a danger to the community nor, indeed, can he be regarded as having carelessly breached his duty to take care. (b) The applicant’s second complaint is against the finding of the OLG that the defendant took sufficient measures at the landing-field both in respect of his anchoring his airship and in cordoning off the landing-space. This argument, too, is unacceptable. With regard to the anchoring the OLG found the following facts. Prevailing experience, on which the defendant was entitled to rely, clearly suggested that since the emergency landing was only expected to last a few hours, the airship was quite properly anchored. Thus at the front, where it pointed downwards, the ship was secured to the ground by means of an anchor and posts and sacks while at the rear end the airship was held down by men, and deliberately kept in suspension so that it could swing in the direction of the wind. Forty men held the anchor rope and the front cabin of the ship while 30 men, properly instructed as to how to handle the side movements of the airship,

582  Appendix 2 controlled the ship’s rear cabin. And reinforcements were also at hand should the need arise. When the defendant left the airfield, the weather did not indicate that there might be any change in the direction of the wind, but even if such a change occurred, the airship was sufficiently secured to remain on the ground so long as its back remained free to swing in the new direction of the wind. The OLG also examined how, despite the above, the airship could cut loose from its anchor. In its view what happened was that the first gust of wind was quite suddenly followed by a second and extraordinarily violent gust which hit the airship on its side before it had time to swing to its direction and raised it with great force. Whatever method of anchorage was adopted there was no absolute proof that it would have managed to secure the ship to the ground. The applicant is also wrong in arguing that since no one was to be responsible to the defendants for such extraordinary occurrence, he should have taken precautions against such an exceptional situation. This allegation is unsupported by the findings of facts. For given the initially prevailing favourable weather conditions, no sudden changes of wind were foreseeable at the time of the landing; thus, the defendant was not in breach of the duty of care required in the circumstances given that he had anchored his ship in accordance with the dictates of human experience and knowledge believing that his anchor could hold well even in a storm. That the airship was nevertheless torn away, as a result of the unexpected and violent gust of wind, and would probably have been torn away whatever system had been adopted for the anchoring, must be seen as the consequence of an act of God (höhere Gewalt). As for the cordoning off of the landing place, the OLG admitted that the claimant would probably not have been hurt if the cordon had been considerably wider. But again it is established that in taking these measures the defendant had done all that could have been expected of him. Thus, towards Echterdingen – from where the wind was blowing – ropes were used and soldiers were employed, while in the direction of Berhausen soldiers alone were posted at a close distance since no more ropes were available to drive the surging crowds back over and over again. Nevertheless, the applicant feels that the defendant took insufficient precautions in this respect and insists that ropes should have been used in the direction of Berhausen; and soldiers could also have been used at much shorter intervals. But on the findings of facts this argument, too, fails. For as stated, the defendant cordoned off the place with all disposable means and achieved this as best he could despite the fact that curious crowds kept surging in the direction of the airship. If this forced landing, which was only meant to last for a few hours and carried out in favourable weather conditions, had not been disturbed by an unforeseeable change of weather, taking place against all reasonable expectation, the cordon would have been perfectly sufficient and no accident would have occurred. The defendant had no reason to anticipate that a storm, the result of an act of God, would suddenly blow up and tear his airship away from its moorings and then carry it over the heads of the public at such low height as to cause injury to some bystander. The requisite standard of crew did not, therefore, require the taking of such precautions that might protect the public against dangers which could in no way be foreseen as the likely consequence of a more or less normal forced landing …

Appendix 2  583 CASES TO CHAPTER 8 Because German law is so different from English law in this area, there are no specific comments on the cases. The commentary on the cases is incorporated in the text of chapter eight. 1. LIABILITY OF PUBLIC AUTHORITIES (§ 839 BGB in combination with Article 34 GG) Case 87 BUNDESGERICHTSHOF (THIRD CIVIL SENATE) 30 APRIL 1953 LM § 839 [FG] BGB NO 5 Facts The claimant suffered a burglary on 28 March 1950 in his shoe shop, in which shoes were stolen whose value according to the claimant was DM 450. The theft was carried out by N and A, two members of the so-called ‘Halle Robber Gang’ which was operating in that area. Two police officers, H and K, in the service of the defendant took part in the crimes of the ‘Halle Robber Gang’ in that they received the stolen goods from the gang and assisted in making available pistols to it, and in otherwise concealing them. The claimant brought an action against the defendant for breach of official duty to obtain compensation for the harm caused by the burglary and requested DM 450 plus costs. The defendant presented the argument that the conditions for official’s liability according to § 839 BGB and Article 34 Basic Law did not exist. The defendant also contested the circumstances of the loss. The LG found the claim to be justified and the OLG Hamm rejected the appeal. Reasons 1. The defendant asks first for a re-examination of the OLG’s opinion that the police officers, H and K, were under an official duty to take action against the members of a gang of thieves, two of whom later committed a break-in at the claimant’s residence. The appeal in law refers in this connection to the decision of this Senate of 11 June 1952 [reference omitted]. In that case, it is spelt out that § 14 PrPVG (Preußisches Polizeiverwaltungsgesetz) does not set out a ‘legality principle’ with the meaning that, whenever they find a breach of the law, the police not only may intervene, but must intervene and there is no room for administrative discretion. The consensus of legal opinion agrees that the police not only have a choice of means, but also whether to intervene, a fundamental principle of discretion. The recognition of the principle of discretion, which leaves the police the right to intervene in application of § 14 PrPVG ‘according to dutiful assessment’ is not to deny any duty on the part of the police. Even Drews (Preußisches Polizeirecht (1936)), the strongest advocate of the discretionary principle, points out that ‘dutiful assessment’ by the police does not leave a fully free hand … But all other representatives of the discretionary principle recognise that there are circumstances in which the police must intervene, otherwise they will be challenged for failing to exercise their administrative discretion … [T]here is no room for discretion insofar as the danger point of ‘harmfulness’ is reached where the police must intervene; this goes beyond the point of ‘excess’ where they no longer simply allowed to intervene … At this point the

584  Appendix 2 inaction by the police would be so harmful, that the law requires them to intervene, and so they can no longer rely on their ‘discretion’. There is no ground to deviate from the principles set out in that decision. Accordingly, it cannot be doubted that the police officers were under a duty to take action against those members of the gang who were known to them and who were committing crimes in their area of operation. According to the indisputable facts of the case, it was known to H (one of the police officers) that, among other things, N, who took part in the later break-in at the claimant’s residence had committed a burglary with two other people. However, in his examination as a witness in the main proceedings before the Schöffengericht (lay assessors court) because of this theft, he deliberately gave false evidence in order to help N, who was in fact acquitted, as were the other perpetrators, for lack of evidence. Shortly afterwards, K as well as H found out the names of all those involved in the burglary. Both, however, still failed to bring a criminal charge. H and K therefore had definite knowledge of the serious crimes committed by the gang and in particular of the co-perpetrators of the break-in later committed at the claimant’s property. This left them no room for discretion when deciding whether measures were necessary against the perpetrators known to them. Criminal prosecution of law-breakers and preventing crimes came within the scope of the official tasks of the two officers as police officers. Non-intervention by them in the given situation could not be justified by any sort of objective or policing considerations. Remaining inactive was unambiguously outside the boundary of discretion of ‘harmfulness’. A situation of danger was present which made action by the police officers an unconditional duty. The question was raised in the said decision of how the establishment of the boundaries of discretion of ‘harmfulness’ or of ‘excess’ is to be treated in the individual case. Was it a pure issue of law and to be undertaken by the court ‘in accordance with relevant considerations’ [reference omitted]? Or was it a question here of a ‘pure issue of discretion’ to be decided by the appropriate authority, which the judge cannot generally re-examine [reference omitted]? No final position needs to be taken here on this question. Even if the establishment of the boundaries of discretion is in principle regarded as a ‘pure issue of discretion’ which cannot generally be reviewed judicially, the police officers involved were still under a duty to take action. This is because we have a case here in which even a decision based on discretion (which is not in principle subject to judicial review) can still be subjected to such a review. The officer’s failure to act was not based on a weighing-up of the arguments for and against in accordance with objective considerations but was based exclusively on irrelevant and purely personal grounds. They therefore have acted with such a high degree of impropriety that their behaviour – and this needs no further explanation in the given circumstances – is irreconcilable with the requirements of proper police administration and does not satisfy the needs of proper administration from any possible point of view [references omitted]. 2. The further question of whether the official duty violated by the police officers by failing to act against the gang also existed against the claimant as a ‘third party’ in the sense of § 839 of the BGB was, likewise, correctly answered in the affirmative by the OLG. According to the case law of the RG [reference omitted], which the Senate followed in [reference omitted], the question of whether an official duty is owed by an official to a third party is to be adjudged taking into consideration the officer’s official area of activity and the type of work which he is carrying out. In this connection the main emphasis is on the purpose which the official duty is to serve. If this is imposed on the officer in the interests of individual persons, everyone whose interests are, according to the special nature of the

Appendix 2  585 official business, affected by it will be a third party. But if the purpose of the official duty is only the maintenance of public order or the interest which the state has in officials carrying out the responsibilities of their office properly, the official owes no duty to third parties, even if there is indirect intrusion into the interests of third parties by the exercise of this duty. The task of preventing crimes is not however owed by the police in the interest of the general public alone, but, as to crimes which also intrude directly into the protected legal sphere of the individual, to the endangered individuals as well. If the police do not properly fulfil this task, this not only violates a duty owed by the police to the general public but also a duty owed by it to the endangered individuals. The appeal in law refers in this connection to the decision of the RG in [reference omitted] in which the duty imposed on the state prosecutor by § 152 II of the Criminal Procedure Code (Strafprozessordnung, StPO) to prosecute for crimes is described as a task serving exclusively the interests of the general public. It then takes the view that in this respect the task of the police could not be regarded in any different way. But it can be left open in this case whether and, if appropriate, how the area of responsibility of the state prosecutor and of the police is to be judged differently in relation to the prosecution of crimes. This is because the issue is not the duty of criminal prosecution incumbent on both authorities but the duty to prevent crimes, which falls on the police as a task arising directly from their duty of protection from danger. For the state prosecutor a general direct responsibility to prevent crimes does not exist; at the most it arises only insofar as the purpose of prosecution for crime is to prevent further crime. In this respect therefore the reference to the decision of the RG mentioned above misses the point. The appeal in law further takes the view, having regard to [references omitted], that the general duty of protection by the police (and therefore also their duty to prevent crimes) is not a duty owed to third parties but only to the general public. This would be so at least as long as no concrete relationship to a definite third party has yet developed and the actual person harmed has not so far stood out from the mass of people who could be harmed. In the present case, no such actual relationship to a particular person harmed has yet been established. The possible crimes which lawbreakers known to police officers might commit could have been directed against simply any inhabitant of the area concerned and therefore against an entirely undetermined circle of people. The duty of the officers was owed only to the general public and not the claimant as a member of the general public, which should be protected. That cannot however be agreed. A person who stands out from the mass of people at risk because he was specially at risk is not the only person to be regarded as a third party to whom the police owe a duty to prevent crimes, as was the case with the facts which formed the basis of the decision [reference omitted]. The circle of third parties should be drawn much more widely. Thus the RG has, among other things, regarded the fulfilment of the general protective duty of care (subject to the prerequisite that exercise of public power is in question) as among the official duties owed by an official to every third party [reference omitted] and confirmed that the official duty of a teacher supervising a ball game is owed to anyone not participating who could come into the area of the game [reference omitted]. Accordingly, the duty of an official to prevent improper use of service vehicles has also been described by the Senate in the decision [reference omitted] as an official duty which exists against every highway user with whom the vehicle could come in contact while it is being improperly used. Therefore the duty of the police to prevent crimes must also be regarded as an official duty which is owed to anyone whose legal interests are endangered by a violation of this duty.

586  Appendix 2 In the present case the following additional considerations also arise in this connection. All officials entrusted with the exercise of public power have an official duty to refrain from any misuse of their office. An official can make himself guilty of an improper exercise of office by omitting to act within the framework of the public power entrusted to him. That is always the case when the official duty unambiguously requires such action but the action does not take place because of completely irrelevant, purely personal and reprehensible reasons. It needs no further discussion that the police officers H and K have made themselves guilty in this respect of a misuse of office. However, the duty to refrain from any misuse of office is owed by the officials to anyone who could be harmed by the misuse [references omitted]. It cannot therefore be doubted that the official duty of the police officers to act as police against the gang was also owed to the claimant. Case 88 BUNDESGERICHTHOF (THIRD CIVIL SENATE) 10 JULY 1980 NJW 1980, 2194 = VersR 1980, 946 Facts The claimant demands compensation from the defendant city because of violation of the duty of protective care in relation to highways. On 3 June 1975 at about 9.45 pm the claimant’s wife, who was driving the claimant’s car, turned left at a dual carriageway (the A Ring). There was a hedge (which has since been removed) approximately 1.2 metres in height on the central reservation. The claimant’s wife crossed the lane which led to her right, drove through a gap in the central reservation, tried to turn into the lane leading left and collided with a car approaching from the left. The claimant claimed that his wife edged carefully into the lane and could not see the other vehicle in time because the hedge was too high. Reasons I. The OLG Braunschweig found no violation of the defendant’s duty of protective care and in this connection stated that the central reservation did not form part of the highway. It was true that a duty to warn about limitations on visibility, which were not obvious (or to remove them), could also exist for areas outside the street. But here the restriction on visibility caused by the hedge was obvious anyway. The danger was in the end due to the conduct of the claimant’s wife, who turned to the left without taking sufficient precautions. A reasonably experienced driver would have been able to cope with the situation in question. Besides this, a claim under § 839 I 2 of the BGB would not arise as the claimant has another option for compensation by claiming against his wife. There are fundamental legal objections to this judgment. II. 1. The OLG’s starting point, that a violation of the duty of protective care in relation to highways by the officers of the defendant is to be assessed in accordance with the provisions on official liability (§ 839 of the BGB, Article 34 GG), is certainly correct. According to § 10 I of the Highways Act of Lower Saxony of 14 December 1962 (Niedersächsisches Straßengesetz, NStrG) the building and maintenance of public highways (inclusive of the federal trunk roads) and surveillance of their safety for traffic falls on the organs and public employees of the body dealing with them, as an official duty in exercise of state activity. This formulation contained in the public law statutes of the state (Land) of the duties of the office

Appendix 2  587 holder of a municipality (Gemeinde) in ensuring traffic safety on public highways is – as the Senate has explained in the judgments [references omitted] – permissible in the context of the division of legislative competence between the Federation and the states. Nor are there any other constitutional law objections to it derived from the Basic Law. 2. The Senate’s judgment [reference omitted] explains in detail that a body liable for breach of official duty cannot rely on the provisions of § 839 I 2 of the BGB as they contradict the basic principle of the equal treatment of highway users in liability law. These principles also apply, as the Senate has explained in more detail in the judgment [reference omitted] (issued after the publication of the judgment in the appeal) for cases like this one involving surveillance of traffic safety on a public highway, if this duty falls on the office holder as a state responsibility. The official duty to ensure safety of road traffic is closely related to the duties owed by an official as a public highway user. Accordingly the defendant city cannot exonerate itself by reference to the possibility that the claimant’s wife is liable for the accident. 3. The OLG’s finding that there was no violation of the duty of protective care in relation to highways cannot be endorsed either. (a) The official duty formulated in public law to ensure the safety of road traffic corresponds in its content to the general duty of protective care [references omitted]. Its scope is determined by the type and frequency of use of the highway and its importance. It includes the necessary measures for the creation and maintenance of road conditions, which are sufficiently safe for road users. It is true that a road user must in principle adjust to the given road conditions and accept the highway in the form in which it appears to him. A party under a duty of protective care must, in an appropriate and objectively reasonable manner, remove (and if necessary warn about) all those dangers (but no others) which are not visible or not visible in time for a highway user who is exercising the necessary care and to which he cannot adjust or cannot adjust in time. (b) In applying these principles to the present case, an official duty by the public employees of the defendant must be accepted to keep the hedge at a height which prevents serious obstruction of visibility for road users on turning into the highway from an access. The OLG interprets the concept of the highway too narrowly when it includes in it, apart from the carriageway, only those surfaces which ‘also serve traffic in some way or other, eg, for escape in case of emergency’. According to both § 2 II no 1 Lower Saxony Highways Act and § 1 IV no 1 Federal Highways Act in 1 October 1974 version (Bundesfernstraßengesetz, FStrG) separation strips, verges, and marginal and safety strips are also included in public highways [references omitted]. As federal and state law agree here, it has no significance for the outcome of the case whether the A Ring was a federal, state or municipality highway. According to these statutory rules, the duty of protective care extends to the central reservation as a part of the highway. It is therefore not necessary to fall back on the case law cited by the OLG according to which the duty of protective care extends to things not forming part of the highway insofar as they represent a danger for the use of the highway, as for instance trees and shrubs in front gardens [references omitted]. Nor is it necessary to refer to the duties, which fall on the owner of the hedge as such. (c) A high hedge created special dangers in a place where there was a gap in the central reservation to enable highway users to turn in and out of it. Drivers turning in could only

588  Appendix 2 be sure of seeing the traffic on the other side of the hedge if the hedge was at least, for an appropriate distance from the entrance, kept low enough for it not significantly to conceal moving vehicles behind it. Contrary to the view of the OLG, this danger did not cease in whole or in part to arise just because the hedge could be seen, and because this was so even in darkness, with the help of street lighting and car headlights. The danger was not the hedge itself, but the hindrance to visibility, which it caused, and this hindrance did not cease to exist just because the hedge was visible. (d) The defendant city claimed in its submissions that it complied with these principles. According to these submissions, hedges are cut once-yearly, and twice-yearly at traffic focal points, and kept in ‘shape’. The end sections of a hedge before and after accesses are cut back further than the middle parts of the hedge. Actually, however, the defendant has not kept to these principles in the area of the site of the accident, according to the findings of the OLG. The shrubs situated on the central reservation had reached a height of about 1.2 metres on the day of the accident. The OLG has described the hindrance to visibility consequently occurring as ‘obvious’ and in another place has spoken of a hedge height ‘undoubtedly hindering visibility’. But it regarded this as insignificant for the outcome of the case, because every driver could escape the threat of danger which this caused, either by increased attention on turning in or out or by the choice of another driving route. This view is, it should be acknowledged in support of the appeal in law, affected by legal error. (aa) A driver must certainly in principle accept the highway as it presents itself to him, and therefore make his own investigations as to whether he has sufficient visibility. The hedge height of about 1.2 metres could however seriously hinder the necessary visibility even for an attentive driver, and the OLG has not paid sufficient attention to this. According to the findings of the LG, the height of vision of the claimant’s wife in his car used in the accident … was 1.1 metres, and that of an assessor of the LG 1.2 metres. Cars of the usual construction, as is revealed by type surveys in the press, are without exception between 1.3 and 1.5 metres high. Cars of this type protruded, at the most, only marginally above the hedge. The extent to which they were visible depended to a large degree on their type of construction. The defendant city could in any case not act on the basis that drivers would, on turning at the site of the accident, see cars approaching behind the hedge in time in every case. This possible danger which, as the OLG has pertinently explained, could not be removed by a warning sign, resulted in the hindrance to visibility caused by the 1.2 metre high hedge at the site of the accident being dangerous even for an attentive driver. A careful tentative entry – which the OLG did not even consider to be necessary – into the lane situated on the other side of the hedge could not remove these dangers. This is because a sufficient view could not be obtained of this lane before turning into it. That follows from the finding of the OLG about the effect which the hedge had in restricting visibility. (bb) The duty of ensuring traffic safety did not cease to apply, as the OLG thought it did, just because no driver had to turn in at the place in question. It cannot in principle be held against highway users by a party under a duty of protective care that they should have avoided dangerous places. This would enable the party to shift its responsibility to the driver in an impermissible manner. It is the task of the party under the duty of protective care either to remove or at least to defuse danger spots which it can recognise as such so far as is reasonable and as soon as possible.

Appendix 2  589 (cc) The party under the duty of protective care must further protect traffic from the mistakes which, according to experience, are exactly what has to be reckoned with in heavy traffic in large cities – here, underestimating the dangers caused by restriction of visibility and possible violations of the right of way. The principle of trust, which applies to the mutual relationship of highway users, has no application in the relationship between the party under a duty of protective care and highway users. On the contrary, the duty of protective care can include in individual cases those measures which have the purpose of protecting traffic from the consequences of inappropriate conduct of individual highway users [reference omitted]. These prerequisites are present here. In the heavy traffic in inner cities, violations of rules of priority are not rare. If visibility of the road having priority is substantially impaired, and a particularly careful driving style is indicated (taking up more time than usual), one must reckon on more frequent violations of these duties. The defendant city could also have recognised this. Regular cutting of the hedge down to 70–80 centimetres in height was therefore obviously required. This relatively simple and cheap measure was to be expected of the defendant – and pertinently the OLG accepted this. 4. The disputed judgment also cannot be based on different reasoning. It is not possible to proceed on the basis that the violation by the defendant city of the duty of protective care is completely superseded by the contribution of the claimant’s wife to the accident. According to her statement as witness, the claimant’s wife – in contrast to the case decided by the Kammergericht which was otherwise similar [reference omitted] – did not turn into the space behind the hedge without any regard to the restriction on visibility. Instead, she claims at first to have stopped briefly and only after starting off again to have collided with the other car, which had approached in the meantime. It may be that, as a result of carelessness, she did not pay attention or sufficient attention to the distance and speed of this vehicle, because it approached on the left lane of the carriageway (its driver wanting to turn to the left further on). Nevertheless, it cannot be assumed that there would have been a collision even without the restriction of visibility by the hedge, especially as it has to be borne in mind that the driver of the other car was also unable to see, in sufficient time, the car driven by the claimant’s wife turning in because of the hedge. 5. The matter must be referred back to the OLG, because the weighing-up in accordance with § 254 of the BGB of the extent of the contributions to the accident from both sides is not possible according to the findings which have been made, and must remain an issue for the judge of fact. Case 89 BUNDESGERICHTSHOF (THIRD CIVIL SENATE) 28 MARCH 1996 NJW 1996, 2373 Facts The A Group offered facilities for investment of capital for small investors. In October 1987, because of a fall in share prices, the group suffered heavy losses so that the whole capital investment was exhausted. This was concealed from the investors, and the group carried on advertising investment facilities. The state prosecutor took investigatory proceedings

590  Appendix 2 against those responsible. The group’s money deposited with a bank was first seized, but the AG quashed the seizure and the state prosecutor discontinued the investigatory proceedings. Five months later, the claimant made a financial management contract with the A Group. Over a year later the A Group suffered further heavy losses and the investigatory proceedings were recommenced against those responsible which led to their conviction for deceit. The claimant, who had lost about three-quarters of his capital, claimed compensation from the defendant state (Land). Reasons The case is not of significance on an issue of principle; and the appeal in law has no prospect of success [reference omitted]. 1. The OLG Düsseldorf denied that the official duty of the state prosecutor to pursue crimes, to carry out investigatory proceedings against the perpetrators and, if necessary, to start a public prosecution is owed to third parties. It stated that this duty was exclusively to serve public interests, namely the fulfilment of the criminal powers of the state. The arguments raised in the appeal in law against this are unsuccessful. The introduction of investigatory proceedings in criminal law, the initiation and execution of a search order, a decision about the starting of a public prosecution and measures in proceedings for fines can represent violations of the official duty owed to the suspect if they are undertaken without justification [references omitted]. But there is no official duty on the part of the state prosecutor to intervene in the interest of a person possibly affected by a crime – in contrast to the position in relation to the police (see case 87). The duty of the state prosecutor to pursue crimes, to arrest an accused, etc, exists only in the public interest. Failure to carry it out cannot therefore, as a rule, violate an official duty against the person harmed by the crime [references omitted]. It can be otherwise if concrete protective duties to the person harmed by a crime are acquired by the state prosecutor in current investigatory proceedings, perhaps to secure stolen property in the interests of the person from whom it has been stolen [references omitted]. The principles set out above also apply to the prevention of crimes, which is the issue in the case of claimant. 2. As the OLG further states, the claimant did not, in May 1988, come within the category of those who had already paid their money to the A Group. They could not therefore possibly have been protected from harm by the seizure being kept in force and the proceedings against the suspects being pursued on the grounds that those steps would have deprived the suspects of access to further accounts. As the claimant first made his investment on 18 June 1988, he was not directly affected by the decision of the state prosecutor to order the quashing of the seizure and to discontinue the proceedings on 2 May 1988 [reference ­omitted]. The harm he has suffered is based on the fact that the accused persons had not been forced to give up their activity. It can however be left undecided whether, if an ­official duty on the part of the state prosecutor owed to third parties suffering harm could be accepted, this would stand in the way of including the claimant within the circle of those protected (see case 87), as the duty is not owed to third parties. 3. The OLG judgment does not reveal any other legal errors, which are significant in the context of the decision and are to the disadvantage of the claimant.

Appendix 2  591 Case 90 BUNDESGERICHTSHOF (THIRD CIVIL SENATE) 16 OCTOBER 1997 NJW 1998, 751 = MDR 1998, 43 = VersR 1998, 493 Facts The claimant was until the end of 1988 a member of the board of directors of the KHG Aktiengesellschaft. On the application of the state prosecutor, the AG ordered the arrest on the 27 February 1990 of the claimant and others for suspected breach of trust (Untreue) to the detriment of KHD. He was arrested on the 14 March 1990 in Italy, and brought to Germany. On 11 May 1990 he was released from custody on conditions. The order for arrest was later revoked and the investigatory proceedings against the claimant discontinued. The order for arrest was based effectively on an accusation by B (who himself was in custody awaiting trial). B had claimed that he had arranged with the claimant at a hunting event in the Westerwald in 1983 to manipulate accounts for wood deliveries to the detriment of KHD (‘the hunting hide agreement’); and that the claimant had received substantial sums of money for this. This accusation was substantially incorrect. At the time of his arrest the claimant was also managing director of the V-GmbH (a German limited company) and had a consultancy contract with the P firm, at an annual fee of DM 50,180. This firm terminated the contract on 11 May 1990 with immediate effect after the press had reported the arrest of the claimant. On 15 May 1990, the claimant and the V-GmbH agreed to cancel the managing director’s contract. The AG decided that the claimant should be compensated for the harm resulting from the arrest from 14 March to 11 May 1990 in accordance with the Compensation for Measures related to Criminal Prosecution Act. The claimant claimed as material harm his loss of earnings with the V-GmbH and the P firm and legal and other expenses. The Ministry of Justice of the defendant state (Land) accepted liability for material harm in the sum of DM 16,664.64. This sum consisted of part of the legal and other expenses. In the present claim the claimant seeks among other things compensation for loss of earnings due to the termination of the consultancy contract with the P firm, further legal costs and a finding that any further harm resulting from the termination of the consultancy contract should be compensated. Reasons II. The investigating state prosecutor when examining whether an order for arrest should be made against the claimant, stated there was strong suspicion of breach of trust (§ 266 of the Criminal Code and § 112 I 1 of the Criminal Procedure Code). The OLG Köln regarded this as a culpable violation of official duty on his part. That satisfies legal examination in the end result. 1. According to the case law of the Senate certain measures by the state prosecutor, which include application for issue of an order for an arrest are not to be examined in official liability proceedings for their ‘correctness’ but only as to whether they are justifiable [references omitted]. Proceeding from this legal principle, the OLG held that the assumption by the state prosecutor that there was strong suspicion at that time of breach of trust by the claimant was

592  Appendix 2 unjustifiable. It interpreted the statements of B, on which the state prosecutor principally based his assessment, as meaning that the claimant and B in their conversation of August/ September 1983 (the hunting hide agreement) had agreed to a future manipulation of accounts. This would mean that the manipulations would only have begun after this point in time. In reality, so the OLG found, it was already obvious at the point in time of the application for the order for the arrest (on the basis of witness statements and other documents on the investigatory proceedings) that accounting manipulations of this kind had been going on since the nineteen sixties. In these circumstances, the accusation made by B was incredible from the start, and the application for the order for arrest was unjustifiable. This assessment can only be examined by the court hearing the appeal in law by considering whether the judge of fact misunderstood the concept of justifiability, violated rules of logic or general principles of experience and considered all the circumstances which were of significance for the judgment [references omitted]. The appeal in law does not reveal mistakes of this kind. Insofar as it complains of a violation of rules of logic it puts its own assessment of the facts in place of those of the OLG in a manner which the rules about appeals in law do not permit. The procedural objections raised by the appeal in law in this connection have been examined by the Senate and not considered to be decisive. No ground was therefore found here either (§ 565 a of the Civil Procedure Code) [provision repealed]. It accordingly has been established in a binding manner that the assumption of strong suspicion on which the application by the state prosecutor for an order for arrest was based was unjustifiable and making the application for an order for arrest was therefore contrary to official duty. 2. The OLG also, without any legal error, found the investigating state prosecutor to be culpable. In this connection it basically assumes that no blame as a rule attaches to an official if a collegial court with several legal experts sitting on it has regarded the official action as objectively lawful [references omitted]. According to the view of the OLG, this general principle, from which the Senate has repeatedly permitted exceptions [references omitted], did not apply here. There are no legal grounds for objecting to this in the end result. (a) The OLG denied that the principle applied here, even though the civil chamber of the LG regarded the conduct of the state prosecutor as justifiable and therefore as objectively in accordance with his official duties. It considered that the chamber basically proceeded in this assessment from a legally flawed approach. Whether this is correct does not need to be considered, because in any case there is another ground for the said principle not applying here. The principle is based on the consideration that a better understanding of the law cannot as a rule be expected and demanded from an official than from a collegial court with several legal experts sitting on it [reference omitted]. This justifies a denial of culpability only in those cases in which the collegial court – after careful examination – has affirmed the legality of the official action. If on the other hand the collegial court has merely approved the action on the basis of a yardstick for testing – here the yardstick of justifiability – which is reduced in comparison with the official’s own duty of testing, this does not necessarily mean that the conduct of the official should be assessed as lawful. Whilst therefore in cases like the present one the official himself has a duty to regulate his conduct entirely by the yardstick of legality, the judicial examination in the official liability proceedings decides merely on the basis of the reduced yardstick of justifiability whether he has acted in accordance with his official duty. In such cases the principle becomes subject

Appendix 2  593 to a further exception over and above the group of cases decided by the Senate so far. The defendant state cannot therefore successfully rely in the present case on the first instance judgment for saying that no accusation of culpability can be levelled at the investigating state prosecutor. (b) The OLG was also right in not considering itself to be required to apply the general principle by the decision of the 14th great criminal chamber of the LG in the proceedings concerning the complaint about arrest. This is because a comprehensive and careful examination of the issue of lawfulness which could justify the application of the principle did not, according to the findings of the OLG, take place in those proceedings. The OLG explained in this respect, in its assessment as a judge of fact of the circumstances which influenced the proceedings concerning the complaint about arrest, that the criminal chamber had ‘tested in an extremely summary fashion’ the question of strong suspicion ‘and instead of this, concentrated on the question of the … danger of flight’. It concludes this from the fact that the decision by the chamber was issued on the same day as the decision by the AG that there would be no review. In a ‘fast-track’ procedure of this kind, a dependable formation of opinion by the collegial court was not possible in the light of the scope of the documentation. This assessment, the real core of which was not addressed by the appeal in law, is confirmed by the content of the decision about the complaint: The AG in the original order for arrest had suspended its execution. The state prosecution service complaint against this only disputed the exemption from arrest. The attention of the criminal chamber was therefore principally directed to the question of whether the danger of flight was to be assessed as so small that a suspension of execution should be considered. It is true that the criminal chamber was also obliged of its own motion to examine the question of strong suspicion. In this respect however it contented itself, according to the wording of its decision, with referring to the order for arrest and pointing out that this was essentially based on the testimony of the co-accused B, who severely incriminated the claimant. This reasoning makes it clear that the assessment of strong suspicion which influenced the order for arrest and formed the basis of the application for the order for arrest, and which the OLG regarded without any legal error as unjustifiable, has left its mark on the decision by the LG about the complaint. On the basis of the findings made by the OLG the starting point must accordingly be that the criminal chamber did not assess the established facts of the case carefully and exhaustively; or it formed its conclusion that there was strong suspicion from facts established on the basis of procedural irregularity. In such cases the general principle does not apply [references omitted]. 3. The statements of the OLG about the extent of the claim for official liability awarded to the claimant and about the calculation of the period covered by the declaration are not challenged by the appeal in law. Case 91 OBERLANDESGERICHT OLDENBURG, 20 MAY 1988 VersR 1991, 306 Facts On 22 December 1982, the claimant was committed to the secure section of the state (Land) hospital X at the request of the defendant. On the same day the defendant applied for

594  Appendix 2 committal of the claimant in accordance with §§ 10 ff of the Niedersächsisches Gesetz über Hilfen und Schutzmaßnahmen für psychisch Kranke (hereafter PsychKG ND). The medical opinion supporting the application diagnosed ‘paranoia (delusions of jealousy and persecution)’. It said the illness was a risk to the claimant and others. Dr D, the defendant’s medical officer, signed the opinion after telephone conversations with the doctor in attendance, Dr F, who also signed it. Dr D did not personally examine the claimant. The AG decided on 23 December 1982 to commit the claimant for a maximum of six weeks for observation. From 29 December 1982 to 4 January 1983 the hospital gave him leave of absence. He lodged a complaint, and the LG quashed the committal decision on 13 January 1983. By a letter of 18 July 1983 the defendant’s road traffic division asked the claimant to submit a medico-psychological report about his fitness to drive. He did not reply, so the defendant withdrew his driving licence on 29 August 1983. It did not order immediate implementation of this decision. The Oberverwaltungsgericht (upper administrative court) quashed the defendant’s decision, because the claimant had not been proved unfit to drive. No severe mental illness had been shown for the period from the end of 1982 to the beginning of 1983. The claimant was justified in refusing to undergo the examination demanded. The claimant now claimed from the defendant payment of compensation for distress estimated at DM 100,000, and payment of loss of earnings of DM 140,626.60. He also wanted a declaration that the defendant was obliged to compensate for future material harm. The claimant claimed that the medical officer, who had approved the committal without making his own investigation, and the official in the administrative office, who had ordered the committal without a previous court decision, had violated their official duties. There was no risk to either to the claimant himself or others. This was not the typical consequence of paranoia, and the official would have realised this if he had shown proper care. Even the withdrawal of the driving licence had been a breach of duty because it had been based on the unlawful provisional committal (or the temporary committal) without a proper investigation. The withdrawal of the driving licence had resulted in the claimant losing his job. (The BGH in its decision of 29 March 1990 (III ZR 160/88) (BGH VersR 1991, 308) rejected the claimant’s appeal in law against the judgment set out here). Reasons The claimant has a claim against the defendant for compensation for distress in the sum of DM 5,000 for unlawful deprivation of freedom. On the other hand he cannot ask for compensation for his loss of earnings because it cannot be established that the loss claimed was caused by a culpable violation by the defendant of official duty. The claimant’s claim for a declaration in relation to his future harm is accordingly likewise unfounded. 1. The prerequisites for the granting of compensation for distress in accordance with § 847 of the BGB are present [provision repealed, see now § 253 BGB]. The claimant has been deprived of freedom by a tort by the defendant in the sense of § 839 of the BGB in combination with Article 34 GG. The medical officer in the service of the defendant, Dr D has violated an official duty owed by him to the claimant in that he signed a medical certificate for the instigation of the committal procedure, without making it sufficiently clear that the findings of Dr F which formed the basis of it had been made several days before the

Appendix 2  595 submission of the opinion. Therefore a provisional committal of the claimant on this basis in accordance with § 16 of the PsychKG ND could not be considered. The opinion which was sent to the administrative section of the defendant on 22 December 1982 contains no date. Nor can it be deduced from the text of the opinion when the claimant was examined and when the findings which were decisive for the opinion were ascertained. And yet the opinion form signed by the medical officer gives the impression that it was filled up immediately after the ascertaining of the findings. This is because in the first line (which contains the word ‘Urgent’ in bold) and in the text of the request before the signatures of the doctors (which asks for an immediate decision) it is made clear that the committal procedure could not be postponed and that the medical experts had also taken that into account. But actually the claimant had last spoken with the doctor in attendance, Dr F, on 15 D ­ ecember 1982, as the medical officer indicated in his testimony in the investigatory proceedings. Further contacts after this point in time, for instance on 21 December 1982, indisputably broke down. The medical officer himself did not examine the claimant at any time. The medical officer was under a duty to provide appropriate explanations in his area of work and therefore in particular in the content of the opinion. It was true that it was not part of the responsibility of the medical officer to arrange directly for the committal of the person affected or to apply to the court. It should however have been obvious to him that the competent official in the administrative section of the defendant would rely on the statement by the doctors and because of the urgency of the matter would very probably first of all arrange for a provisional committal in accordance with § 16 of the PsychKG ND. It was therefore a duty of the medical officer, which he owed to the person affected, to ensure that this foreseeable unlawful provisional committal did not take place. The violation of duty by the medical officer led with adequate causality to the unlawful deprivation of the claimant’s freedom. The responsible officer in the administrative office relied on the statements in the opinion without himself investigating at what point in time the findings were ascertained and he arranged for a provisional committal of the claimant in accordance with § 16 of the PsychKG ND. It is true that the defendant has not expressly issued a formal administrative act in respect of the committal. The claimant was however indisputably moved to the state hospital X with the official assistance of the police before the issuing of the judicial committal decision. This amounts to conclusive conduct (schlüssiges Handeln) on the part of the defendant which was made known to the claimant when it was carried out. If the point in time when the findings were ascertained had been known to the official of the administrative office, the provisional committal would not have taken place, since it must be assumed that the authorities would act in accordance with their duties. It can be left open whether the claimant, had the medical officer acted lawfully, would possibly on 22 December 1982 have been examined again, perhaps compulsorily, whether the diagnosis would have been confirmed and whether he then would likewise have been provisionally committed. This is because the defendant cannot rely on the fact that it could have achieved the deprivation of freedom in a lawful manner which would have not formed the basis of a duty to compensate (reliance on lawful alternative action). When a person causes harm by a breach of duty, the question of the extent to which the consequences of his conduct can rightly be assessed as attributable to him is to be answered according to the protective purpose of the violated norm involved [references omitted].

596  Appendix 2 In the present case, there has been a violation of the conditions laid down in § 16 of the PsychKG ND. This provision is the expression of a constitutional guarantee according to which the state is only permitted to limit the freedom of a person on the basis of a formal statute and only if it takes into account the provisos described in it (Articles 2 and 104 GG). The protective purpose of the statute thus lies in permitting a deprivation of freedom only under the conditions prescribed in it. In this particular case it should also be ensured that, up to a point directly before the decision to commit, the state of health of the person concerned has not improved to such an extent that deprivation of freedom is no longer justified. The special urgency of immediate deprivation of freedom must thus be accepted in each case. Unless it is certain that the state of health will continue, the deprivation of freedom must not occur. It is therefore a question of a fundamental protective norm to guarantee the rights of the citizen, which is not allowed to lose its significance in the context of compensation law just because some form of alternative action would have been lawful [references omitted]. On the same basis the argument of the LG that the AG, if it had been in a position to make a decision on the relevant day, would have ordered the committal cannot exonerate the defendant either. Here also the protective purpose of the violated norm excludes appeal to lawful alternative action. The medical officer has also acted culpably. By using the required care, he could recognise and foresee that the official of the administrative section would see himself as compelled, on the basis of the dangerous situation for the claimant and other third parties as certified in the opinion, not only to arrange for a judicial committal but also to order immediately a provisional committal in accordance with § 16 of the PsychKG ND to avert the danger. (details are given). The defendant must therefore pay to the claimant compensation for distress for the non-material detriments suffered in consequence of the deprivation of freedom. In this connection, when calculating the amount of the damages for distress not only must the length of time of the provisional committal to be taken into account, but also that of the judicial committal. This is because it can be assumed that the court also would have come to another conclusion in its decision in accordance with § 15 of the PsychKG ND if it had known that the last examination of the claimant by the medical expert had taken place a week ago. Taking into account all the circumstances, damages for distress of DM 5,000 seem fair but also sufficient to the Senate. The claimant was committed from 22 to 29 December 1982. According to his own account he was given leave of absence on 29 December 1982 so that the consequences of the deprivation of freedom did not continue beyond this point in time. At the most the possibility remained of the further detriment of revocation of the leave of absence. This however did not happen. Long-term harm to the claimant did not therefore occur. Even if freedom is to be regarded as a legal interest worthy of the highest protection, the claimant’s ideas about compensation (DM 10,000) for distress seem greatly exaggerated. They bear no relationship to the compensation which is payable for unjustified criminal arrest. Admittedly the claimant was temporarily arrested by the police in order to implement the committal order, and these circumstances and the fact of committal in his home town have been talked about and have had a disadvantageous effect on his social relationships and his reputation. But even bearing these matters in mind compensation for distress in the approved sum is the most that should be considered.

Appendix 2  597 The claim of the claimant is not excluded by § 839 I 2 of the BGB. First, Dr D has disregarded the protective provisions of PsychKG ND not merely negligently but (at least) grossly negligently. Besides this, the claimant has no other option for compensation available. The issue of whether a possibility exists of obtaining compensation from the state can remain open, as this is also a public law body and the claim would therefore likewise be directed against the public sector; and it is necessary to proceed on the basis of the unity of the public sector [reference omitted]. The claimant can also not claim against the other medical expert, Dr F (details are given). II. On the other hand, the claimant has no claim against the defendant under § 839 of the BGB and Article 34 GG to compensation for his loss of earnings nor to a declaration that the defendant is obliged to compensate for future harm. This is because it can neither be established that the defendant has culpably violated an official duty in taking proceedings for withdrawal of the driving licence nor that the alleged harm to the claimant arose as a consequence of the measures taken by the defendant. In the present case no blame, as the LG has already pertinently explained, attaches to the defendant in any case, since in relation to this measure, a collegial court in which three professional judges sat, namely the Verwaltungsgericht, has adjudged its conduct to be objectively justified. The conditions developed in this respect for justifying a denial of the culpability of the office holder are present. The Verwaltungsgericht in its decision used the right facts as a basis, evaluated these carefully and in its assessment of the legal situation neither misjudged clear and unambiguous rules nor blatantly falsely interpreted unambiguous rules. With reference to the grounds of the court decision of 27 November 1984 the ­Verwaltungsgericht proceeding on the basis of the relevant provisions (§§ 4 I of the Implementation of Punishment Act (Strafvollzugsgesetz, StVollzG) and 15b I of the Road Traffic Licences Order (Straßénverkehrszulassungs-Ordnung, StVZO) looked carefully at the documents which were available about the claimant’s psychological condition and came to the conclusion that they justified doubts about the fitness of the claimant to drive. It accepted that this, together with the claimant’s lack of preparedness to dispel the doubts by producing a medico-psychological opinion, justifies the conclusion that the claimant wanted to conceal defects which made him unfit to drive a vehicle. One must therefore, so it explained, proceed on the basis of his unsuitability to drive vehicles. These considerations of the Verwaltungsgericht do not violate rules of logic. The legal views referred to are at least defensible, taking into consideration the provisions cited. Beside this it is not evident that the withdrawal of the driving licence was the cause of the harm claimed by the claimant (details are given). Case 92 OBERLANDESGERICHT HAMM, 15 JULY 1992 NJW-RR 1994, 394 = FAMRZ 1993, 704 = VersR 1994, 677 Facts The claimant married couple and their adopted son, the former third claimant, sought compensation from the defendant town because of violation of official duty in connection with an adoption placement.

598  Appendix 2 Reasons The appeal of the defendant is permissible, but unsuccessful. I. The LG was correct in accepting the claimants’ claims for official liability against the defendant on the basis of § 839 of the BGB in combination with Article 34 GG and allowed the demands for payment and a declaration. 1. The appropriate officials who were involved in preparing and carrying out an adoption by the claimants have negligently violated their official duties owed to the claimants by not informing them that there was a suspicion that the child N, who was very disturbed, was mentally retarded. (a) It is necessary to proceed on the basis that the actions of the Youth Welfare Department in the area of adoption placement, even according to the legal situation in the years 1981 to 1983 (which is the relevant period here), are the exercise of public office in the sense of Article 34 GG [reference omitted]. Action in exercise of public office occurs if the real objective in the context of which the official is acting is part of the area of sovereign activity of a public body. There must also be an internal and external connection between this objective and the act (or omission) which causes the damage, so that the act (or omission) must also be regarded as belonging to this area of sovereign activity [reference omitted]. Such a connection exists for the actions of the Youth Welfare Department in the framework of adoption placement. According to § 2 I 1 of the Adoption Placement Act in its 2 July 1976 version [reference omitted] adoption placement is a task for the Youth Welfare Department (and for the State (Land) Youth Welfare Department). Adoption placement is bringing together children under the age of majority and persons who want to adopt a child (adoption applicants) with the object of adopting it as well as providing the evidence of adoption (§ 1 of the Adoption Placement Act). Leaving exceptions aside, the Youth Welfare Departments who have set up an Adoption Placement Office and the State Youth Welfare Departments have a placement monopoly (§§ 2 I 2 and 5 I of the Adoption Placement Act). The actions of the Youth Welfare Department in the area of adoption placement are accordingly a public task, the purpose of which is to find appropriate and suitable parents who are prepared to adopt for a child who does not have the care of its natural parents. These actions are therefore to assist the young. (b) The employees of the Youth Welfare Department of the defendant acted contrary to their official duty because they neglected to inform the claimants as adoption applicants about the suspicion of mental retardation due to brain damage which was known to them and not dispelled. The content and scope of the official duties of a public employee are determined by the provisions regulating the area of his tasks and duties, whether they are statutes, regulations, administrative provisions or individual directions in the context of employment; and from the kind of tasks to be carried out [reference omitted]. The duty to inform the claimants about the suspicion which existed arose in the present case from the kind of tasks to be carried out by the officials within the framework of the adoption placement. The Adoption Placement Act itself admittedly contains no express regulations which make it a duty of the Adoption Placement Office to inform the adoption applicants about the state of health of the child to be adopted. However, according to § 7 I 1 of the Adoption Placement Act, the Adoption Placement Office must make without delay the enquiries which are

Appendix 2  599 necessary for preparing for a placement, and these must also extend to the state of health of the child. Admittedly the implementation regulations provided for in § 7 II of the Adoption Placement Act have not so far been made. But the Working Group of the State Youth Welfare Departments has worked out guidelines which at that time applied in the version of the third edition of 1966 and which provided in para 2.22 that the physical as well as the mental and psychological state of health of the child was to be ascertained by a doctor experienced in these areas – if possible a paediatrician or a psychiatrist specialising in the young. Further, it says in para 2.23 I that an investigation by a specialist, if necessary even inpatient observation, was to be arranged if enquiries revealed that the child has educational difficulties, suspicion of illness or unexplained abnormalities. Even if these guidelines (which were replaced in the meantime by the ‘Recommendations of the Federal Working Group of State Youth Welfare Departments and Non-local Education Committees on Adoption Placement’ – version of 28 November 1988) were merely for practical work assistance, and they therefore did not represent legal or administrative provisions, they nevertheless express what a proper individual adoption placement requires. This is that the adoption applicants should be able to decide to adopt a child in the knowledge of all important facts, so that a successful parent–child relationship which is free from anxiety can come into existence for the welfare of the child. § 9 I of the Adoption Placement Act which makes it a duty of the Adoption Placement Office to give detailed advice and support not only to the child and its natural parents but also to the adopters is in harmony with this. It follows from the duty of enquiry mentioned above (§ 7 I of the Adoption Placement Act) as well as from the duty of advice owed by the Adoption Placement Office (§ 9 I of the Adoption Placement Act) that the adoption applicants have a right to be notified of all the relevant circumstances affecting the child, and especially of suspicion of an illness [reference omitted]. The guidelines of the Working Group of the State Youth Welfare Departments, if and so far as they required that the state of health of the child was to be established by medical examination, therefore corresponded with these requirements. Admittedly the adoption of children with physical or mental peculiarities should also be facilitated. But that can only be considered if the adopters feel they are ready for this in the knowledge of all the circumstances and the consequences of their decision (para 2.23 II of the Guidelines). (c) The defendant’s officials knew of the suspicion of mental retardation on the basis of brain damage at birth or in early childhood. That emerges clearly from the memorandum by the witness N dated 7 October 1981, in which the possibility of mental retardation on the basis of inborn brain damage was expressly taken into consideration. Even the official doctor, Dr M, who had examined the child, regarded the mental retardation as so significant that, according to the memorandum of the witness M referred to above, she thought a ‘very meticulous examination’ in a hospital was necessary. Arrangements were consequently made to examine the child in the children’s clinic B; but this did not happen. But the doctors at the children’s clinic at the St V hospital in P, according to their letter of 11 November 1981, of which the defendant’s Youth Welfare Department received a copy, diagnosed not only wildness and behavioural disturbance in the child but also the suspicion of mental retardation, which could have meant that this retardation had its cause in brain damage. The appropriate officials could not regard this suspicion of mental retardation as dispelled by the interim report of the 8 December 1981 by the witness T. The only thing which emerged from this report was that a particular positive development had occurred on the basis of psychotherapeutic treatment

600  Appendix 2 by the witness T. No grounds for saying that N had been subjected to a detailed specialist examination were revealed by the interim report. T made no comment at all in it on the question of mental retardation based on brain damage. From the outcome of the evidence taken by the Senate, it is not possible to proceed on the basis that the witness T (who in any case was not a neurologist or a psychiatrist, but a psychologist) explained to the witness M (as it says in her memorandum of 4 December 1981) that the child had a normal intelligence and no mental handicap could be established. The witnesses T and M who were heard on this issue made contradictory statements. The witness T denied having expressed himself in this way to the witness M. But even if T had so expressed himself to the witness M, as she describes, the employees of the defendant cannot reassure themselves by saying that the suspicion of mental retardation was dispelled. This is because the statement by T did not in any case mean anything more than that he – as a psychologist – had not established any such damage. (d) The employees of the defendant did not tell the claimants about the suspicion which existed of mental retardation. The witness M has stated that she did not speak about this with the claimants. According to her testimony, the witness Ü had had nothing to do with the adoption placement. The claim by the defendant that the claimants had been advised in detail by the witness T as well as by the Adoption Placement Office is unsubstantiated, as it cannot be deduced from this allegation whether the claimants were also informed about the suspicion which existed of mental handicap. According to the account of the defendant’s representative in the hearing before the Senate of 15 May 1992, nothing was known to the witness B who was summoned to this hearing of the suspicion of mental handicap, so she could not explain about this to the claimants. As the witness M was at least informed by the defendant’s Youth Welfare Department about the suspicion which existed, she would have had to take care that the claimants were correctly, clearly, unequivocally and completely informed about this suspicion. That did not happen. 2. This duty to inform was also owed to the claimants as third parties in the sense of § 839 I 1 of the BGB. This follows – for the reasons given more precisely above – from the fact that the adoption applicants should have been able to make their decision to adopt in the knowledge of all the important facts and that this is not ensured if such facts – even if it is only a question of suspicion of a serious illness – are not communicated to them. 3. The employees of the defendant culpably, ie, negligently, did not inform the claimants about the suspicion which existed of the child N being mentally handicapped, although they must have realised that the knowledge of this suspicion was of fundamental importance for the claimants as adoption applicants. They ought not, without arranging a detailed specialist examination to make matters clear, to have proceeded on the basis that the suspicion was dispelled by the interim report of the witness T, a qualified psychologist, or in some other way. Without satisfying themselves in this respect, they ought not to have relied on T informing the claimants about a suspicion of mental retardation. It is true that the employees of the Youth Welfare Department cannot be assumed to have the knowledge of a doctor or a psychologist. But they had medical statements before them about the child N, from which it was to be inferred that there was suspicion of mental retardation. They ought to

Appendix 2  601 have informed the claimants about this, so that they could then freely decide whether they wanted nevertheless to adopt the child. 4. The violation of official duty was also the cause of the harm which is the subject of the claim. (a) It has to be asked here what course things would have taken if the official had acted in accordance with his duty and what the financial position of the injured parties would have been if the official had not committed the breach of official duty, but had acted in accordance with it [reference omitted]. This question is to be decided in accordance with § 287 of the Civil Procedure Code. If – as here – the violation of official duty consists in an omission, then there is only a causal connection with the harm if action according to duty would have prevented the occurrence of the harmful consequences [reference omitted]. (b) If the appropriate officials had informed the claimants about the suspicion which existed, they would not have adopted the child N. This follows from the fact that the claimants had stated with sufficient clarity in the application form that they did not want to adopt a mentally handicapped child. This is not changed by the fact that they had made this declaration subject to limitations which did not affect its essential content. (c) It would certainly have been possible for the claimants, after receiving information about the suspicion of mental retardation, to have made the adoption dependent on a prior detailed neurological or psychiatric examination. Such an examination could not be expected to have dispelled the suspicion which existed, in the face of the child’s evident behavioural symptoms. Such an examination would either have – as in the case of the later examinations in the children’s hospital O and in the university clinic – revealed the presence of childhood brain damage or would have had an outcome which was admittedly unclear, but which would not have dispelled the suspicion. But even in the latter case, the claimants would have refrained from adopting the child N because of the risk of adopting a mentally handicapped child. As they did not want to adopt such a child, they would also not have taken the risk of possibly having to bear the responsibility and burdens of such a child. 5. (a) The claimant can claim from the defendant compensation for her loss of earnings in the undisputed sum of DM 30,610.44. The claimants have, without being contradicted, argued that the claimant giving up her job had been a prerequisite for the adoption placement. According to the testimony of the claimant, which likewise remained uncontradicted, when she gave evidence at the Senate hearing of 15 July 1992, she had given up her job on 16 December 1981, when the claimants took N into their care. The claimant would have not have suffered loss of earnings if the defendant’s officials had fulfilled the duty to inform which they owed to the claimants; because then no adoption would have taken place and the claimant would not have needed to give up her job for the time being. The defendant, in this respect under a duty of explanation, has not substantiated that the claimants, who certainly wanted to adopt a child, would have had the actual opportunity before the lapse of 19 months – reckoned from 16 December 1981 – to adopt another child, and that the loss of earnings would therefore still have arisen in whole or in part. (b) On the same grounds the court costs and notarial expenses borne by the claimant in the undisputed sum of DM 91.59 are to be compensated.

602  Appendix 2 6. The claim for a declaration by the claimants in relation to the duty of the defendant to compensate for possible future harm is also well founded. The prerequisite for the issue of a declaratory judgment is merely that there is a certain probability that claims have arisen or could arise from the legal relationship which is to be established [reference omitted]. The prerequisite is fulfilled in this case. The future harm exists predominantly in the expenditure on maintenance which the claimants must provide for the handicapped child, possibly for the whole of its life. The duty to compensate for harm is not limited to the additional expenditure on maintenance which arises through the special needs of a mentally handicapped child. The defendant must instead reimburse the claimants for the whole of the expenditure on maintenance. The provision of information about all the important facts and circumstances of the adoption to the adoption applicants which was due from the employees of the Youth Welfare Department is not only to protect them from the additional expenditure which they incur for the maintenance of a handicapped or sick child. The fulfilment of the duty to give information is also to ensure freedom of decision by the adoption applicants, and this consists of not adopting a mentally handicapped child at all. If such a child is adopted, the risk of providing full maintenance has been realised, and fulfilment of the duty to provide information should protect the adopters from this. In this respect the legal situation is similar to the one which arises when a doctor advises a pregnant woman during early pregnancy incorrectly or incompletely about the possibilities on early recognition of damage to the foetus which would have provided legal justification for the wish of the mother to terminate the pregnancy. Even in this case, the BGH has not limited the claim of the parents to compensation for harm to the additional expenditure on maintenance, but extended it to the complete maintenance requirement for the child who has been harmed [reference omitted]. In this case, the issue cannot be decided otherwise. II. No contributory fault for the origination of the harm can be laid at the door of the ­claimants in connection with the adoption of the child N (§ 254 I of the BGB). III. The appeal is accordingly rejected. Case 93 OBERLANDESGERICHT HAMM, 20 NOVEMBER 1996 ZFJ 1997, 433 Facts K was born in February 1976. The claimant was her mother and the sole person entitled to look after her. In November 1992 K presented herself at the Youth Welfare Department of the defendant district and told them about recent domestic difficulties with the claimant. (K had already been accommodated for a time by the Youth Welfare Department in the children’s home B in M, in early 1991.) She explained to the officer in charge, Me, that she could not stand things at home any more. She refused a mediation interview with the claimant. But K and the claimant had a conversation of at least one-and-a-half hours on the morning of 17 November 1992. Me was present for part of the time. No settlement was reached. The Youth Welfare Department applied to the Guardianship Court C, which arranged a hearing on the afternoon of 17 November 1992. K was heard first, and she repeated to the

Appendix 2  603 judge her statements contained in the report of the Youth Welfare Department, and said she did not want to go back home. Then the claimant was heard. The Guardianship Court tried to arrange a settlement between K and the claimant, but failed. It made a temporary order taking away the claimant’s right to determine K’s place of residence, and transferring this to the Youth Welfare Department as guardian. K was then accommodated by the Youth Welfare Department at first in the Youth Protection Centre in D and from 10 December 1992 in the children’s home B in M. On 5 September 1993 K left the home of her own accord and returned to the claimant. On 27 September 1993 the Guardianship Court transferred full custody rights back to the claimant. But because of a new argument, the claimant finally excluded K from home on 11 November 1993. The two have since lived separately from one another. The claimant lodged a complaint against the decision of the Guardianship Court. This was rejected by the LG on 2 July 1993 because K’s wish not to return home had to be respected. The claimant claimed compensation from the defendant district including damages for distress because the Youth Welfare Department deprived her of K in a manner contrary to their official duty. The action and the appeal were unsuccessful. Reasons The prerequisites for a claim for official liability under §§ 839 and 847 of the BGB [§ 847 BGB repealed, see now § 253 BGB] in combination with Article 34 GG, which is the only basis for a claim to be considered here, are not present. I. The work and tasks of youth assistance – and along with this the official duties of the Youth Welfare Department – arise from § 2 of the Gesetz zur Neuordnung des Kinder- und Jugendhilferechts (hereafter KJHG). This work includes among other things educational assistance and supplementary services (§§ 2 II nos 4, 27–37, 39 and 40 KJHG), and the other tasks include among other things taking children and young people into care (§§ 2 III nos 1 and 42 KJHG SGB VIII). On this basis, the Youth Welfare Department of the defendant district has not violated any official duties which could be the cause of the claimant’s alleged harm. 1. The decision of the Youth Welfare Department to take K into care on 16 November 1992 and to seek a decision of the Guardianship Court on 17 November 1992 was in accordance with their official duty. (a) According to § 42 II of the KJHG the Youth Welfare Department is under a duty to take a young person into care if he or she asks for this. It has to inform the person having custody about the taking into care without delay. These prerequisites are fulfilled in the present case. K asked to be taken into care by the Youth Welfare Department of the defendant district on 16 November as a so-called ­‘voluntary admission’. The duty of the Youth Welfare Department to take into care applies without any limitation, regardless of the grounds on which the young person asks for care and of whether these grounds are convincing; the requirements to be placed on the content of these grounds must not be too high [references omitted].

604  Appendix 2 The claimant as the person having custody had unquestionably been notified of the taking into care, and in this connection it does not matter for the purpose of the decision whether this notification was based on her own initiative or on that of the Youth Welfare Department. (b) According to § 42 II 3 of the KJHG the Youth Welfare Department must, if the person having custody challenges the taking into care, either hand the young person over to the person having custody (option 1) or obtain a decision by the Guardianship Court about the necessary measures for the welfare of the young person (option 2). These steps must take place without delay. (aa) Unquestionably, the claimant challenged the taking into care in the conversation on the morning of 17 November 1992. She accused the Youth Welfare Department of not having kept the appointment arranged at 12 o’clock for the continuation of the discussion, but it is not evident that this would have made a difference in the context of the claimant’s challenge. On the evidence of the memorandum of the hearing before the Guardianship Court, the claimant still stated to the Court that she did not agree with the taking into care – at any rate not unconditionally. (bb) In this situation, the Youth Welfare Department was under a duty to make an ‘immediate’ decision. No objection can be raised to the fact that it chose, out of the two alternatives to be considered, not to hand K over to the claimant, but to invoke the Guardianship Court. This was in accordance with their official duty. In the literature [reference omitted] the view is taken that when a person having custody challenges a taking into care, the Youth Welfare Department is always obliged to involve the Guardianship Court, even if the Department considers there is no danger to the child’s welfare. According to another view [reference omitted] the Youth Welfare Department only needs to obtain a decision of the Guardianship Court (and also must, without there being any discretion) if the welfare of the young person is endangered. Both opinions lead here to the same conclusion. In making its decision, the Youth Welfare Department could (and had to) take into account that help for K’s upbringing had already been necessary (in January/February 1991), that there were unquestionably school, alcohol and drug problems and that again K absolutely refused to go back home. As K was at that time already nearly 17 years old, the Youth Welfare Department could take this refusal seriously. Assuming a danger to the child’s welfare in this situation, and bringing in the Guardianship Court, were not contrary to the Youth Welfare Department’s official duty. It could regard the decisions of the Guardianship Court and of the LG based on §§ 1666 and 1666a of the BGB (endangering of child’s welfare) as retrospectively confirming this assumption. The urgency of the measures to be taken by the Youth Welfare Department also did not permit – contrary to the view of the claimant – the making of further enquiries, in particular the hearing of the witnesses who were later heard by the Guardianship Court. The necessary elucidation of the matter was ensured because the Guardianship Court was under a duty to investigate of its own motion (§ 12 of the Gesetz über die Angelegenheiten der freiwilligen Gerichtsbarkeit, FGG). 2. The Youth Welfare Department would certainly have acted contrary to its official duty if it had ‘wangled’ the right to determine K’s accommodation by – as the claimant claims – influencing K by insinuation to make untrue statements to the Guardianship Court.

Appendix 2  605 But the claimant has not substantiated this sweeping accusation in any greater detail, either in writing or at her examination in accordance with § 141 of the Civil Procedure Code at the Senate’s hearing; so taking evidence did need to be considered here. The claimant has merely asserted that the Youth Welfare Department stated to K that she must only stick to her point of view and say that she did not want to return home in any circumstances. The Senate cannot see any improper influencing of K in this. The decision of the Guardianship Court is based in substance on K’s wish, as stated to it, that she did not want to go back home. This stated wish was not however inconsistent with the truth. The claimant herself admitted on her personal examination before the Senate that K, at the point in time in question, did not in fact want to go back home and that even in the conversation on the morning of 17 November 1992 there were no prospects of this. Moreover, K stated this wish approximately eight months later to the Complaints Chamber of the LG. There is no allegation that the facts of the case were presented to the Guardianship Court in some other way which was inconsistent with the truth and based on improper influence by the Youth Welfare Department. 3. The Youth Welfare Department has also not violated its official duties by accommodating K after the decision of the Guardianship Court, at first in the Youth Protection Centre Ka in D and afterwards in the children’s home B in M. (a) On the basis of the decision of the Guardianship Court, the right to determine K’s place of residence was provisionally transferred to the Youth Welfare Department as guardian (§§ 1631 I, 1666 and 1666a of the BGB). The Youth Welfare Department could therefore decide on K’s place of residence without the agreement of the claimant [reference omitted]. The right to determine a place of residence also includes the authority to exercise care of the person concerned to the extent necessary for a parent. This includes entrusting the person to a family or – as here – the house parents in a home. This authority is part of the right to determine the place of residence. (b) Besides this, the claimant shows no alternative to accommodation in a home – which was in any case only provisional for the period of the temporary order – especially as she and K could not agree at the hearing before the Guardianship Court on accommodation with another appropriate care person. Accommodation with the claimant herself was out of the question as a serious alternative after the Guardianship Court had just taken this aspect of guardianship away from her. 4. Finally it cannot be established that the Youth Welfare Department violated its official duty just because it did not, following the decision of the Guardianship Court, provide any services – additionally to accommodation in the home – under § 2 II of the KJHG. (a) In this connection, the Senate can leave open the question of whether the Youth Welfare Department, under the given circumstances of the claimant, ought to have offered such services, namely educational assistance (§ 27 of the KJHG), educational advice (§ 28 of the KJHG), or socio-pedagogical family assistance (§ 31 of the KJHG). The Senate can therefore also leave open the question of whether it was due to lack of readiness on the part of the Youth Welfare Department or on the part of the claimant that this did not occur; even at the Senate hearing this could not be resolved by examination of the parties on both sides.

606  Appendix 2 (b) But this does not need to be resolved in order to decide the legal dispute; that is why it is not necessary to go into the question of whether the memoranda submitted by the defendant district were – as the claimant asserts – made out after the event or not. Because even if the Youth Welfare Department breached its duty in not offering to the claimant and K services in accordance with § 2 II of the KJHG, it cannot be established within the framework of the necessary examination of causality that matters would then have taken such a course that the harm which is the subject of the claimant’s claim would not have arisen. (aa) Even according to the claimant’s own allegation, no sufficient grounds were present for saying that if services under § 2 II of the KJHG had been obtained the relationship between the claimant and K would have improved. The claimant herself described K as a ‘very egocentric girl with a very strongly demanding nature’. K’s behaviour, in so far as this is of importance for the resolution of the legal dispute, confirms the claimant’s own assessment. Within the framework of § 287 of the Civil Procedure Code, which is to be applied here, success from services under § 2 II of the KJHG cannot in any case be established or even assumed; demonstrating this is the responsibility of the claimant who is under a duty of explanation and proof in respect of causality. (bb) Even if a different view is taken, there is nothing to indicate within the framework of § 287 of the Civil Procedure Code that services under § 2 II of the KJHG would have succeeded so quickly that the harm which is the subject of the claimant’s claim would thereby have been avoided or at least reduced; demonstrating this also falls to the claimant who is under a duty of explanation and proof in respect of it. The harm to her reputation which the claimant asserts – and the sale of her house in H associated with this – is based only on the taking into care under § 42 II of the KJHG, the ensuing deprivation of the right to determine the place of residence by the Guardianship Court and the subsequent accommodation of K in the Youth Protection Centre Ka and in the children’s home B. Even the legal costs and the costs of visits and telephone calls arose exclusively in connection with the taking into care, the deprivation of the right of determination of the place of residence and the accommodation. This harm would therefore also not have been avoided by additional services by the Youth Welfare Department under § 2 II of the KJHG. The same applies to the impairment which the claimant claimed occurred to her health. Apart from the fact that, according to the statements of the claimant to the expert D, this impairment must for the most part have existed previously, there is nothing to indicate that it would have been avoided or even significantly reduced by services by the Youth Welfare Department under § 2 II of the KJHG. Case 94 OBERLANDESGERICHT HAMM, 23 MARCH 1990 AZ: 11 U 108/89 (NOT PUBLISHED) Facts A child suffered from school phobia. His mother requested home tuition, but the headteachers of the local Grammar School (Gymnasium) and a local secondary school refused to pay for such tuition out of their budget. The mother sought damages under § 839 I of the BGB based on the official duty of the Education Office to provide tuition in ­accordance

Appendix 2  607 with § 7 I of the Schulpflichtgesetz Nordrhein-Westfalen (hereafter SchpflG). The pupil was diagnosed on 4 October 1984, but the Gymnasium did not produce a report until 5 March 1986 and the first attempt to arrange special tuition took place on 6 July 1987. The mother claimed the cost of private tuition which had been provided in the interim. On the claimant’s appeal (in other respects rejected) the judgment of the third civil chamber of the Bochum LG, delivered on 24 April 1989, is amended. The defendant Land is ordered to pay to the claimant DM 2,500.00 with interest at 4 per cent from 12 January 1990. The remainder of the claim is rejected … Reasons The appeal of the claimant is permissible and is largely successful. It results in judgment against the defendant Land for payment of DM 2,500.00 with interest. II. The claimant is entitled in her own right to a claim for damages in the sum of DM 2,500.00 against the defendant Land under § 839 I of the BGB in combination with Article 34 GG. This is because the employees of the education office for the … town and the head teachers of the … Grammar School and the … Secondary School did not ensure (or did not ensure in time) that the claimant’s son was given special education in the form of home tuition. 1.(a) It was a breach of official duty for the competent officials of the Education Office (in particular the educational supervisor, but also the head teacher of the W Grammar School and the head teacher of the … Secondary School) not (or not at the right time) to take steps which ensured that the claimant’s son was given special tuition. The setting up of special tuition was unreasonably delayed as a result. It must be assumed that a sick child has a subjective public right to schooling in a special school or to take part in special tuition, which corresponds to his duty to attend a special school or to take part in special tuition which is regulated in § 7 I SchpflG. But the entitlement following from this provision is limited by the educational standards of primary and secondary schools, so that no breach of official duty falls to be considered insofar as the Education Office has not enabled the claimant’s son to take part in special tuition at grammar school level. According to § 7 I 2 of the SchpflG, the education authority to be designated by the Minister of Education and the Articles by statutory instrument decides on the special tuition in which children required to attend school have to take part. The competent education authority is the Education Office (§ 1 of the Education Office Competence Regulations in combination with para 2 of the Appendix). The official duties of the Education Office officials and the head teachers arise from the Circular of the Minister for Education and the Arts of 17 July 1980, amended by the Circular of 10 and 23 October 1984 and the Circular of 16 November 1987. Until the amendment of the Circular of 17 July 1980 by the Circular of 16 November 1987 (with effect from 15 February 1988) a pupil had a claim to special tuition if he was prevented from attending school on the grounds of illness for longer than eight weeks (six weeks from 15 February 1988). If it is established from the start that a pupil will have to stay away from school lessons for more than eight weeks, special tuition can be given earlier (para 1.1 of the said Circular). According to para 5 of the Circular of 10 October 1984, applications for special tuition (home tuition) through the direction of the school so far attended by the pupil are to be directed or referred on to the Education Office. The Education Office then decides on the application in accordance with para 6 of the

608  Appendix 2 Circular and arranges the special tuition (home tuition). Before the decision it has to be established by medical opinion – in cases of doubt by the medical officer – whether the prerequisites for special tuition are present and whether the pupil is in a position to take part in the special tuition (para 3 of the Circular of 17 July 1980; but different provision is made in § 7 I 3 of the SchpflG, in which the obtaining of an opinion of the Public Health Department is essential). Until the report of the head teacher of the … Grammar School of 5 March 1986 [reference omitted], the claimant’s son had been absent from lessons for about one-and-a-half years, ie, from 3 September 1984 to 6 March 1986. This occurred without the responsible head teacher of the Grammar School and the Education Office having arranged anything to secure the fulfilment of the duty to attend school in accordance with §§ 1 I and 7 I of the SchpflG. The pupil had been ill from 3 September 1984. It is revealed by the report of the head teacher to the Education Office for the town of … of 5 March 1986 that the claimant had submitted to the school a psychological certificate which stated that her son had acute attacks of school anxiety and declared that school attendance was not possible for half a year for this reason. Even at that time the head teacher of the … Grammar School ought, according to the legal and administrative provisions previously mentioned, to have considered the giving of special tuition and arranged for the claimant to make an appropriate application. Then the Education Office would also have been immediately involved in the matter. According to the psychological certificate (possibly relating to certification by the qualified psychologist … of 4 October 1984) it was certain from the start that the pupil would have to be absent from school lessons for more than eight weeks. When the certificate had run out and the claimant appeared at the school with her son on 1 March 1985, he refused to attend school of any kind. It may admittedly have been proper to refer the claimant to an education advice centre. But no one at the Grammar School and the … Secondary School at which the claimant’s son was enrolled then troubled any further about the educational fate of this pupil. There was no coordination of any kind between the two schools. The Education Office too was not brought in at first, so it became possible for the claimant’s son to miss several years of compulsory schooling. It was true that the persons having the right of upbringing have, according to § 16 II of the SchpflG, to see to it that a child who is under a duty to attend school takes part regularly in lessons and in the other events of the school. But as the pupil had school phobia, which emerges from the certification of the clinics of the state capital D of 24 November 1987 and their opinions of 16 December 1987, the claimant could not urge her son to take part in lessons at the school. In this situation, the Education Office had to ensure that the necessary special tuition was given to the claimant’s son. In the same way as the persons having the right of upbringing, it has the task of encouraging pupils to fulfil the duties incumbent upon them (§ 14 III 2 of the SchpflG). These include in particular that the pupils should comply with their duty to attend school to the required extent. For this purpose, the Education Office has to ensure that it learns of school absences of long duration in good time, so that it can if necessary take the measures needed to fulfil the duty to attend school. Substantial absences must have occurred here, because a pupil could not otherwise have received no lessons for more than three years. Even after the receipt of the report of the head teacher of the … Grammar School of 5 March 1986, it was more than a year until the attempt at setting up special tuition from 6 July 1987 was undertaken. As indications of the existence of school anxiety emerged from the report anyway, the Education Office ought immediately to have clarified whether the pupil had a school phobia which made the arrangement of special tuition (home tuition)

Appendix 2  609 necessary. It should have done this by obtaining an opinion from the Public Health Office. The lawyer’s letter of 10 February 1987 in which it was announced that the pupil would attend a boarding school with immediate effect changed nothing in this respect, because it was immediately overtaken by the further lawyer’s letter of 16 February 1987 in which it was stated that the best thing would be to give private tuition to the boy until his psychological condition had been overcome. It was only on the basis of the letter by the claimant’s legal representative of 8 December 1987 that private tuition at home was set up, but admittedly only four hours a week initially. (b) The officials of the defendant Land, in particular the employees of the Education Office, have negligently breached their duties in that they did not arrange and expedite the setting up of the special tuition in a purposeful manner. Even the head teachers involved did not take sufficient steps to ensure compulsory school attendance and thereby likewise negligently breached their official duties. They have violated unambiguous legal and administrative provisions. Every official must possess or acquire the knowledge of law and administration necessary for the conduct of his office. (c) The defendant Land is liable in accordance with Article 34 of the Basic Law for the breaches of official duty. According to this provision, the liability applies in principle to the body which the official who acts contrary to duty serves. Here that is the Land of NW. The head teachers of the named schools are officials of the defendant Land. The same applies to the employees of the Education Office. Admittedly the Education Office in a town which is an administrative district in its own right … (is such a town) consists of the chief executive and the educational supervisor (§ 18 II 1 of the SchVG). It is not however here a question of breaches of the official duty of the chief executive, who is in principle a local official. It can therefore be left undecided whether on breaches of official duty by the chief executive as a member of the Education Office, the town of … or the defendant Land is the body liable in the sense of Article 34 of the Basic Law. The breaches of official duty established in the case in question are to be laid at the door of the educational supervisor. According to the Circular of the Minister for Education and the Articles of 10 October 1984 (para 7) competence for special tuition (home tuition) was to be transferred at the Education Office into the overall charge of an educational supervisor. According to the standing orders for the Education Office – § 3 III 2 of the Circular of the Minister for Education and the Articles of 4 December 1984 – the arrangement and carrying out of the special lessons is in any case predominantly in the educational service area. The former defendant’s reply to the appeal, which the defendant Land has clearly adopted, also proceeds on this basis. The educational supervisor is however an official of the defendant Land. 2. The official duties which have been breached do not only exist as against the pupil but also as against the claimant as the person having the right to bring him up. Whether in the individual case the person harmed belongs to the class of third parties in the sense of § 839 I of the BGB is not to be judged according to whether the official duty – even if not necessarily solely – has the purpose of looking after the interest of the person harmed. It must follow from the provisions which form the basis of the official duty and which outline it, as well as from the nature of the official business, that the person harmed belongs to the group of persons whose interests are to be protected and promoted according to the goal and legal purpose of the official business. Only then will a duty to compensate exist as against him following a culpable breach of duty. On the other hand, no duty to compensate is established

610  Appendix 2 as against other persons, even if the breach of official duty has had a more or less disadvantageous effect for them. A special relationship must therefore exist between the official duty breached and the third party harmed (constant case law of the BGH, see, eg, BGHZ 106, 323, 331 with further references). Such a special relationship exists here between the official duties breached and the claimant. It arises from the fact that education of her son (who is required to attend school) is incumbent on the claimant and she therefore has a paramount interest in his well-ordered school education in the same way as the pupil. According to Article 8 I 2 of the Constitution of the Land of North Rhine-Westphalia is the natural right of parents to determine the instruction and education of children. The defendant Land has taken over the public school system and exercises supervision over it. The competent officials are therefore breaching their official duties as against the parents as the persons having the right of upbringing, if they do not ensure (or do not ensure in time) that a pupil who has a long-lasting illness receives that special tuition which is provided for and formulated in the relevant legal and administrative provisions. 3. It cannot be in doubt that substantial deficits in the pupil’s education have occurred through the lengthy delays by the responsible officials. This is also expressly emphasised in the letter of the Institute for Remedial Education and Psychotherapy of the town of … of 23 February 1987. These deficits could not be made up for by the special tuition which was given in the end after a long wait. The expenditure claimed by the claimant for the giving of private tuition is therefore adequately caused by the breaches of duty by the officials of the defendant Land. On the basis of the credible testimony of the witness … it is established that the claimant’s expenditure on the private tuition amounted to at least DM 2,500.00. The witness stated that in the period from the end of September or the beginning of October 1987 to the end of June 1988 – with the exception of school holidays – she gave the claimant’s son a double hour of private tuition twice each week for a payment of DM 20.00 per hour. Altogether the claimant paid her almost DM 3,000.00, but at least DM 2,500.00. The last named sum is to be taken as a basis for the measurement of the harm. A higher level of harm cannot be established with certainty in the face of the testimony of the witness, especially as receipts are not available. 4. Contributory fault by the claimant for the origin of the harm (§ 254 I of the BGB) cannot be established. Contributory fault by the claimant could at best be deduced from the fact that in 1987 she did not arrange earlier for the Institute for Remedial Education and Psychotherapy of the town of … to give an opinion about her son and then make the report available to the Education Office. This first happened with the letter of 23 April 1987 by the claimant’s legal representative. But then the substantial deficits in education which were caused by the delays on the part of the officials of the defendant Land had already occurred. Also, it was not until the beginning of 1988 that the special tuition for the claimant’s son was at last arranged. 5. Finally, the claimant can also not be blamed for the fact that she omitted to avert the harm by the use of legal redress. The raising of a complaint in the administrative courts for failure to act would not have been able to change anything in relation to the onset of the harm, especially as the claimant might fairly have hoped that she could have achieved the arrangement of special tuition without taking legal action in the administrative courts …

Appendix 2  611 CASES TO CHAPTER 9: THE LAW OF DAMAGES Case 95 BUNDESGERICHTSHOF (GREAT CIVIL DIVISION) 6 JULY 1955 BGHZ 18, 149 Facts The Great Civil Senate has answered as follows the question referred to it by the Sixth Civil Senate as to whether in assessing the amount of reasonable compensation in money in accordance with § 847 BGB [see now § 253 II BGB] all the circumstances must be taken into account, including the financial circumstances and the degree of blameworthiness of the person liable to pay damages: In assessing equitable compensation in money in accordance with § 847 BGB all circumstances of the case can be taken into account, among them the degree of blameworthiness of the person who is liable and the financial circumstances of both parties. In this connection account must also be taken of the extent to which the person who is liable is indemnified by a liability insurance or a claim for redress. Reasons According to § 847 BGB ‘equitable compensation’ in money may be claimed in case of injury to the body or to health even in respect of damage which is not pecuniary. The older view, held in particular by the RG, was that compensation under § 847 BGB must be ‘equitable’ in respect of all the circumstances which characterise the damaging event in issue; it therefore took into account not only the extent and the duration of the pain, disfigurement, suffering and intrusion, which were always matters of primary concern, but also particularly the economic situation of the injured party and of the tortfeasor, the degree of blameworthiness, and the circumstances which led to the damage (eg, gratuitous transportation). According to a more recent view the compensation must only be ‘equitable’ with reference to the purpose, which is to compensate non-pecuniary damage; it therefore only takes into account the extent and the duration of the pain, disfigurement, suffering and intrusion as well as the means necessary to compensate for non-pecuniary damage; thus it takes into account only the general circumstances of the injured party. This more recent view was adopted by the Third Civil Senate in its decision of 29 September 1952 [reference omitted] to the extent that in assessing the amount of damages for pain and suffering it did not take into account the economic circumstances of the tortfeasor, while leaving open the question as to whether the degree of this blameworthiness should also not be considered. I. 1. The modern practice bases its view on the ground that claims for damages for pain and suffering, too, are true claims for damages; it therefore regards as decisive the non-­ pecuniary damage which the injured party suffered as a result of the tort; as in all cases of claims for damages it seeks to take into account only those consequences which the act giving rise to damages has had for the injured party. This view assumes correctly that as a result of the treatment of the Civil Code of claims in respect of torts – including those based on non-pecuniary damage – it is impossible to attribute to them a direct penal function. This applies equally to claims for non-pecuniary damage. However, by denying the penal character of claims for non-pecuniary damage no final answer has been given to the question for decision in the present case which is in respect of what circumstances damages to be awarded under § 847 BGB must be ‘equitable’.

612  Appendix 2 2. First, the provision of § 847 BGB must be considered as part of the system of the Civil Code as a whole, which in the most diverse places determines the extent of a performance in accordance with ‘equitable discretion’ or allows ‘equitable compensation’. In these cases, the Code intends normally that account should be taken of all the circumstances of a case which are relevant according to equitable considerations, and more particularly the situation of all the parties involved. (a) If a performance is to be fixed in accordance with ‘equitable discretion’, as §§ 315, 317 BGB require, or an act must be carried out in accordance with ‘equitable discretion’, as §§ 1246, 2048, 2156 BGB demand, it means undoubtedly in these cases that not only the economic circumstances of the creditor, but also those of the debtor must be taken into account. (b) In connection with claims for damages, too, the Civil Code refers not only in § 847 BGB but also in §§ 829, 1300 BGB [§ 1300 BGB repealed] to equitable compensation or to damages in accordance with the requirements of equity. When § 829 BGB speaks of equitable considerations, the Code refers expressly to ‘the circumstances of the parties involved’, and thus the economic circumstances of the parties must also be taken into account. It is true that normally § 847 BGB presupposes that the tortfeasor is to be blamed, while § 829 BGB establishes strict liability. Moreover, according to § 829 BGB both the ground for holding a person liable as well as the extent of his liability are determined according to the principles of equity, while according to § 847 BGB only the extent of liability is so to be fixed. Nevertheless, it is the express intention of § 829 BGB, also in so far as it determines the extent of the claim for damages in accordance with equity, that the circumstances of those involved should be taken into account, albeit on the basis of detailed particulars. It is not possible either to refer to § 829 BGB in order to further the argument in support of a restrictive interpretation of § 847 BGB, as adopted by the more recent practice, if only for the reason that the Civil Code by requiring that something is to be performed in accordance with the principles of equity intends not only in that case, but regularly, that all circumstances are to be taken into account which may be relevant. (c) A closer connection than that between § 847 and § 829 BGB exists between the claims arising under § 847 BGB and the claim for defloration under § 1300 BGB, in respect of which the law provides also that ‘equitable compensation’ in money is to be granted. It must be admitted that the liability under § 1300 BGB arises from the breach of an agreement which forms part of family law while that under § 847 BGB is based on a tort. However, in both cases the extent of liability is to be determined in accordance with equity. This history of § 1300 BGB shows that the legislature intended the considerations which had led it to allow ‘equitable compensation under § 1300 BGB’ to apply equally to ‘­equitable compensation in § 847 BGB’. Thus the proposal to replace the expression ‘equitable compensation’ in what is now § 1300 BGB by the term ‘adequate compensation’ was rejected together with the further proposal to grant, instead of ‘equitable compensation’, ‘compensation which takes into account the financial circumstances of either party to the engagement to marry as well as the reduced expectation of another marriage’. One of the reasons was that § 831 of the Bill, now § 847 BGB, which was followed by § 1283 of the Bill, now § 1300 BGB, also referred to equitable compensation and that in the case of a claim for damages under what is now § 1300 BGB, which follows closely the claim for damages under what is now

Appendix 2  613 § 847 BGB, no danger existed that the previous practice (opposed by the second proposal) in the case of claims for defloration would be continued. The substantive considerations expressed in respect of § 1300 BGB and applicable also to § 847 BGB, as appeared above, emerge from the reasons which accompany the rejection of the proposals referred to above. The first of these proposals was rejected on the ground that ‘the term “equitable” had a clear established technical meaning’. The second proposal was met by the argument that ‘it was not just in assessing the damages to take no notice at all of the financial circumstances and the situation in life of the girl, as might be feared, if the proposal were accepted; the best means of ensuring the development of a realistic practice of the Court was not in any way to restrict the judges in assessing damages’. Another proposal to fix the damages under § 1300 BGB at a minimum of fifty times the normal local daily wage was ‘countered by the argument that individual provisions concerning the assessment of damages were not advisable’ … Therefore the preparatory materials for the Civil Code permit the conclusion in respect of § 847 BGB as well that it was the intention of the legislature not to constrain the courts to disregard certain circumstances in assessing damages for non-pecuniary losses. This means that in fixing equitable compensation the courts may, as a matter of principle, take into consideration all the circumstances which may arise. 3. Contrary to the modern view the same conclusion follows from the legal purpose of damages for pain and suffering. In law, damages for pain and suffering have a dual function. They are meant to provide the injured party with adequate compensation for that kind of damage, for those handicaps which are not of a pecuniary nature. At the same time they are meant to indicate that the tortfeasor owes the victim satisfaction for what he has done to him. Of these two functions, that of compensation or redress is prominent. The purpose of the claim is redress for the loss suffered. The latter cannot, however, be assessed arithmetically. The underlying idea may perhaps be formulated as follows: the tortfeasor, who has not only inflicted pecuniary damage upon the injured party but also gravely affected his life, is to help the latter by his payments to alleviate his burden as far as possible. Having regard to this purpose of damages for pain and suffering it must be admitted that considerations of the seriousness, acuteness, and duration of the pain, suffering, and the disfigurement constitute the main basis for assessing equitable damages. The sum required to provide this redress, therefore, depends primarily upon the extent of this damage. It is the merit of the decision of the Third Senate of this court [reference omitted] to have shown this, with the result that damages for pain and suffering were treated more seriously than hitherto not only as to their legal significance, but also as to their factual evaluation. Since, however, the Code requires equitable compensation in the meaning set out above (I.2), the purpose of making good cannot determine alone the amount of damages, particularly since this purpose is insufficient alone to fix the amount with something approximating certainty. Furthermore, even if claims in tort for damages, including damages for non-pecuniary losses, no longer bear any penal character directly, nevertheless something inherent in the purpose of making good is a reminder of its former function as a fine or, to use the apposite term of the corresponding Swiss institution, as satisfaction. Legal history shows that damages for pain and suffering have their origin in criminal law and that in the laws of the German States in modern times different types were fashioned according to the respective

614  Appendix 2 stages of development, which still reflect in some respects their antecedents in criminal law. The following is significant: wherever damages for pain and suffering were not excluded altogether, as for instance in § 112 I 6 of the Prussian Allgemeines Landrecht of 1794 in respect of the persons other than ‘peasants or common citizens’ or in Article 14 of the Württemberg Act concerning the effects in private law of crimes and penalties of 5 September 1839 [reference omitted], the laws provided expressly that in assessing the amount of damages also certain circumstances were to be taken into account which cannot be reconciled with a limited notion of damages restricted to making good. Such are the degrees of blameworthiness mentioned in §§ 168, 125 I 6 of the Prussian Allgemeines Landrecht, or the degree of blameworthiness and ‘the financial circumstances of the tortfeasor’ as stated in § 15 of the Baden Act concerning the effects in private law of crimes of 6 March 1845 [reference omitted] or if, according to the Saxon decree of 1 August 1856 [reference omitted] damages were to be fixed ‘in the discretion of the judge, having regard to the pain inflicted on the victim’, which latter provision was interpreted to mean that the status and the financial circumstances of the claimant were to be taken into account [reference omitted]. Similar considerations influenced the unanimous view of the practice of the courts and writers up to the 1930s in dealing with § 847 BGB to the effect that in assessing damages for pain and suffering all circumstances must be taken into account which colour the individual case. It is true that the legislature has given the claim for pain and suffering the form of a claim for damages according to private law. However, in substance it does not bear the character of a usual claim of this kind, which is for compensation in respect of pecuniary damage. Its purpose to effect restitution cannot be achieved through restitution in kind, as is the case where the damage is pecuniary. To that extent restitution is impossible. Certainly an attempt is to be made to make good, but it cannot be done arithmetically. It is impossible to concentrate on the notion of making good, because non-pecuniary damage can never be expressed in terms of money and because the possibility itself of making good by means of money payments is very limited. Contrary to a view to be encountered occasionally, non-pecuniary losses concern ‘assets not to be valued in money terms’. The amount of money necessary to make good cannot be determined by ‘so to say balancing pain with those pleasures which are intended to wipe out the victim’s memory of his sufferings’. Even where it is to a certain extent possible to compensate physical and mental suffering by amenities and comforts, widely differing possibilities almost always exist as to how redress is to be effected and the purpose alone of the damages to make good does not provide a sufficient measuring-rod. The purpose of making good alone only provides a very rough standard for assessing damages the greater the non-pecuniary loss. This appears particularly if the non-pecuniary loss is so extensive that it is difficult to conceive of making it good, as for instance when restitution can hardly be achieved because the body of the victim has been extensively destroyed. This becomes particularly clear where the type of non-pecuniary damage cannot be made good at all, as for instance frequently in the case of psychological effects. It is generally recognised that damages for non-pecuniary losses must also be awarded if an assault, false imprisonment, or interference with physical integrity resulted in psychological and not in physical injuries. Especially in the case of psychological disturbances it will frequently be impossible to compensate the feelings of unhappiness since the injured party himself is not conscious of his damage. Nevertheless, damages for pain and suffering have been rightly awarded even in this case. The award of damages under § 847 BGB, it must be ­admitted, serves to make good non-pecuniary loss; it is not, however, a condition for a­ warding damages for non-pecuniary

Appendix 2  615 loss that this purpose can be achieved. The same would be the case if the injured party is so situated financially that no amount of money could raise a sense of happiness which would make good his non-pecuniary damage. Precisely in these situations of non-pecuniary damage, the function of making good, which is intimately connected with the legal regulation of damages for non-pecuniary loss, acquires its special significance. The function of making good underlines that the injurious act has created a certain personal relationship between the tortfeasor and the victim – which, by its nature demands that in assessing how much the tortfeasor must pay the victim all the circumstances of the case must be taken into account. This appears also from the special provision that this claim dies with the claimant and cannot be assigned. II. In accordance with the foregoing observations, the severity and the extent of the reduction in the enjoyment of life must be considered in the first place for the purpose of assessing damages for pain and suffering. This is the preponderant aspect. In addition, other circumstances may, however, be taken into account as well which are salient features of the injurious act. 1. One of these is the degree of blameworthiness on the part of the tortfeasor. The degree of blameworthiness is not only relevant, as the more recent interpreters of § 847 BGB would have it, with regard to its effect upon the injured party: the fact that the injury was caused by the reckless or even intentional behaviour of the defendant, may naturally have left the injured party embittered, while he may be more inclined to accept as his fate an injury caused by slight negligence. Leaving aside the reaction of the injured party, it may accord with equity and the notion of satisfaction in assessing compensation under § 847 BGB if, in the individual case, intention and recklessness count against the tortfeasor, while especially slight negligence counts in his favour. It would be incomprehensible if the trial judge could not award higher damages for pain and suffering in the case of a crime than where the external consequences are the same, but occurred as result of an error in normal human intercourse which might be committed by anybody. For this reason, many foreign legal systems, too, have taken, and still take, into account the degree of blameworthiness of the tortfeasor in assessing the amount of damages payable by him. The fact that German law does not offer this opportunity where the damage is pecuniary does not preclude its use where the Code offers it in arriving at the equitable compensation for non-­pecuniary loss. On the contrary, this possibility is a great merit of the regulation of damages for non-­pecuniary losses. Apart from the degree of blameworthiness, the cause of injury or of the injurious act may be relevant in certain circumstances. Even if the degree of blameworthiness is the same, different acts may bear very different characteristics (injury in the course of the enjoyment of some pleasure on the one hand, or in connection with the exercise of a profession, the administration of help, or any other necessary activity on the other). This is particularly valid in those cases in which the tort was committed on the occasion of an activity which the tortfeasor carried out in order to oblige the injured party and which the latter welcomed – perhaps even gratefully – as, for instance, where the victim suffers an injury on the occasion of a journey as a gratuitous passenger in the car of the tortfeasor, who sought to do him a favour, as a result of the latter’s negligence. In such a case it may even be inequitable if the victim claims damages for pain and suffering to an amount equal to that which a pedestrian could have claimed who had been run down by the tortfeasor.

616  Appendix 2 2. It is possible the economic circumstances of the injured party may also influence the assessment of damages on grounds of equity. The economic circumstances of the victim may, for instance, affect the notion of making good inasmuch as the function of making good is less significant if, for example, the injured party is so favourably circumstanced economically that sums of money paid by the tortfeasor can hardly make good the nonpecuniary damage suffered by him. In such cases the function of damages as satisfaction assumes primary importance. On the other hand, it is not impossible that in individual cases the higher standard of living to which the victim is accustomed may also lead to increased damages for pain and suffering. 3. Finally, the economic circumstances of the tortfeasor may also be taken into account in assessing the damages under § 847 BGB. (a) Viewed from the angle of equity, ie, by taking into account the circumstances of both parties, the idea of making good should not normally result in the tortfeasor’s serious and lasting penury. It is true that here, too, the need to offer satisfaction and to make good the damage is preponderant. The fact that the tortfeasor is not well off must be of greater or lesser importance having regard to the cause of the damaging event, and especially to the degree of blameworthiness. Any behaviour of the tortfeasor which is especially reprehensible, such as inconsiderate recklessness or, even more so, acting intentionally, may consign into the background any concern to preserve him from economic distress. On the other hand, if the tortfeasor’s economic situation is particularly favourable it may appear equitable in the exercise of the court’s discretion to award higher damages. Moreover, the smaller the amount of damages required to make good non-pecuniary losses, the more it will be possible to disregard the economic circumstances, in particular those of the tortfeasor. Equally the economic circumstances of the victim may be relevant in this connection. If the victim is comfortably off, it may appear equitable in assessing the damages to exercise in favour of the tortfeasor the power of discretion inherent in the consideration of the economic circumstances. On the other hand, if the victim is in straitened circumstances it may seem equitable to exercise this discretion in favour of the tortfeasor to a lesser extent than if the victim is well situated financially. However, even if the tortfeasor is penniless considerations of his financial position can never release him from the duty to pay damages for pain and suffering, for the financial position of the tortfeasor constitutes only one aspect among many, and not even the most important, which must be taken into account. (b) Any such consideration of the economic circumstances of the parties involved is not contrary to the intention of positive law – express or implied. It is, however, true that in the case of a debt consisting of fungibles the debtor is always liable, even if he cannot supply them and that therefore in the case of a debt of fungibles, he cannot plead his adverse economic circumstances. The significance of any considerations of the economic circumstances of the tortfeasor, is, however, completely misunderstood by those who argue that, as a result of his adverse economic circumstances damages for non-pecuniary loss which are appropriate ‘as such’ are reduced and that therefore the victim is receiving less than is due to him ‘as such’. This view assumes that in fixing equitable damages only the extent of the losses is to be taken into account. In reality the amount of damages for pain and suffering is ascertained only when all the circumstances of the individual case have been considered. Taking into account all the financial circumstances of the tortfeasor does not reduce in any way the

Appendix 2  617 damages which are appropriate ‘as such’; instead ‘equitable damages’ are being assessed for the first time in accordance with § 847 BGB by taking into account all circumstances which can be evaluated, including the economic circumstances of the parties involved; without considering all the circumstances, and thus also where appropriate the economic circumstances, no assessment would be possible. For this reason, it cannot be contended that such an interpretation amounts to ‘breaching the principle which governs the entire area of law in the matter, which is that the extent of an obligation is always independent of the ability of the debtor to perform’. This principle applies to pecuniary damages. On the other hand, the Code intends the extent of the damages for non-pecuniary losses envisaged by § 847 BGB to be assessed having regard to all the circumstances of the case. For the same reason it follows that an injured party whose economic circumstances are taken into account in his favour cannot be awarded more than his damage. The decision DR 1941, 280 does not permit the conclusion that the RG abandoned its current practice and assumed that there is something like damages for pain and suffering ‘which are appropriate as such’. If such a complete change of practice had taken place, it would certainly have been accompanied by more detailed arguments; where the RG employed the term ‘damages for pain and suffering which are appropriate as such’, it clearly used an imprecise formulation. If it is acknowledged that the economic circumstances of the parties involved may be taken into account as one of the possible bases for assessing the amount of pecuniary damages for non-pecuniary losses, this constitutes a facet of the facts before the court, as are also the extent of the non-pecuniary damages and the possibility of providing an opportunity for making good. It is therefore wrong to say that it is contrary to the principle of equality to take the economic circumstances of the parties into account; for if the same victim suffers non-pecuniary damage inflicted by two tortfeasors whose economic circumstances differ from each other, the two situations are not identical. It is not clear why, as is said occasionally, the consideration of the economic conditions of the parties involved should be regarded as unsocial. Surely the fundamental principles of a social state based on law are not violated if in assessing damages the economic circumstances of the parties involved are balanced against each other. (c) Considerations of the economic circumstances of the parties do not lead to insoluble difficulties either. The view that considerations of the economic conditions of a penniless tortfeasor must – in strict logic – lead to a complete denial of damages under § 847 BGB has already been refuted above. The view is also incorrect that the principle of taking into account the economic conditions is breached in those cases where the Fiscus is the tortfeasor. It must be conceded that in these cases, and also where the tortfeasor is a ‘charitable institution’ of public law, the practice of the courts, especially that of the RG, does not take notice of the financial situation of the tortfeasor. The reason is that the assets of the Fiscus serve public purposes and are tied to this extent. The conclusion is drawn therefrom that these assets do not reflect a financial situation in the nature of private enterprise; they cannot therefore be related to the assets of the victim, representing private enterprise, so as to balance them against each other. In the light of this view of the assets of the Fiscus, the financial situation of the Fiscus and that of the injured party are so different as to preclude a comparison. In these cases, the tortfeasor (ie, the Fiscus) lacks a characteristic (ie, the economic circumstances) which, if existing,

618  Appendix 2 would have to be taken into account where engaging in considerations of equity. In the case of the Fiscus ‘economic’ circumstances defy evaluation. They mitigate neither in favour of nor against the Fiscus as a debtor. The Fiscus can never plead straitened economic circumstances, just as the victim cannot point to the particularly favourable circumstances of the Fiscus which is liable to pay damages for pain and suffering. No objections can be raised against the admissibility of considerations concerning the economic circumstances of the parties on the possible ground that the assessment of damages for non-pecuniary losses, which is difficult in any event, will be ‘rendered unpredictable and complicated’ if the economic circumstances of the parties are taken into account. Apart from the fact – stressed more than once before – that the amount of damages depends primarily on the extent of the damage, the possibility of making good, and the amount of the means necessary to achieve this, none of these conceivable difficulties rules out the admissibility of considering economic circumstances, now that the legislature has abolished the more or less fixed rates for assessing damages to be awarded for non-pecuniary losses. The view that ‘non-pecuniary damage can be assessed and also that certain maximum and minimum amounts can be laid down as to how objectively ascertainable non-pecuniary losses can be compensated’ results of necessity in the re-adoption of the fixed tariffs which were established by the law of some German States (eg, §§ 113, 118 I. 6 of the Prussian Allgemeines Landrecht; § 1497 of the Saxon Civil Code) which were abolished by the Civil Code. Not only does the variety of possible non-pecuniary losses preclude the adoption of such ‘maximum and minimum tariffs’ altogether or the latter would not do justice to the individual character of non-pecuniary damage, but it restricts the opportunity created by the code of reaching a decision based on the discretion of the court. Moreover, the fact that the adverse economic circumstances of the tortfeasor are taken into account does not make it difficult or inequitable if later on, in the course of execution (by way of a judicial adjustment, a composition with creditors, or of bankruptcy), the tortfeasor seeks to obtain a reduction of his debts and thus also of his liability to pay damages under § 847 BGB which had already been fixed as appropriate in view of his unfavourable economic situation. The conclusion derived therefrom that in these cases the adverse financial position of the tortfeasor leads twice to a reduction of the claims under § 847 BGB is influenced by the incorrect assumption that damages which are appropriate ‘as such’ are being reduced if the economic circumstances of the tortfeasor are taken into account. Here, too, the damages awarded under § 847 BGB are ‘reduced’ only once, ie, in the course of execution. Moreover, regarded from the economic point of view, the same result is reached not only in § 847 BGB but wherever the amount of the performance owed depends upon the economic circumstances of the debtor, as for instance where the extent of a performance or act is to be determined ‘in accordance with equitable discretion under §§ 315, 317, 1246, 2048, 2156 BGB, where a contractual penalty is to be reduced in accordance with § 343 BGB, or where damages for breach of promise under § 1300 are in issue’. (d) Once it is realised that where the claim is for non-pecuniary losses, damages which are appropriate ‘as such’ do not exist and cannot therefore be increased or reduced in view of the economic circumstances of the parties, the case where several tortfeasors acting together have committed a tort resulting in non-pecuniary damage – which is that before this court – can be solved without difficulty. Here, too – if necessary – damages under § 847 BGB must be assessed independently in respect of each tortfeasor. The same task is incumbent upon

Appendix 2  619 the courts if, as regards pecuniary damage, one tortfeasor is only liable under § 7a of the Haftpflichtgesetz (Strict Liability Act), § 12 of the Straßenverkehrsgesetz (Road Traffic Act), or § 23 of the Luftverkehrsgesetz (Air Traffic Act) while the other has incurred more extensive liability under § 843 BGB. The two tortfeasors are only liable as debtors in common to the extent that the amount of their liability is the same; as regards the excess, that tortfeasor is only liable who must pay higher damages. In taking into account the economic circumstances, the question may arise as to whether in so doing the possibility of compensation between the tortfeasors should be considered. Since the fact that the economic circumstances are taken into account means that economic potential counts and since, on the other hand, economic potential is increased if enforceable claims for redress exist against the co-tortfeasor, it follows naturally that such enforceable claims for redress must be taken into account in determining economic potential. It must be admitted that if several tortfeasors who are liable in common have claims for redress against one another, each is liable in the end to pay only a portion of the total damages. The reason is that even in the presence of several tortfeasors the victim can only demand to be compensated once. This principle is not violated if the damages for non-pecuniary loss are fixed at a higher level because the value of the claims for redress against other tortfeasors is taken into account in determining the economic potential of one of the tortfeasors. In this case, too, the injured party can only recover once the sum of money which was awarded to him in respect of non-pecuniary losses. Therefore, no principle of positive law is being violated in this respect either. (e) It was much disputed – especially in recent times – whether in considering the economic circumstances of the tortfeasor it is relevant that he is insured against liability. The view was expressed in particular by the RG at an early stage, that the claims of the tortfeasor arising out of liability insurance could not be taken into account since the purpose of liability insurance was to indemnify the insured in respect of payments which the latter was obliged to make because he was liable, and that this must be established first. However, this view concentrates exclusively on the relationship between the tortfeasor and the insurer of his liability; in reality the question must be as to whether and how the fact that the tortfeasor is insured against liability can affect the extent of his liability towards the injured party. For this purpose, the following consideration applies quite generally to damages according to § 847 BGB: a tortfeasor who is entitled to be reimbursed by the insurer against liability to the extent of the amount insured is in a more favourable financial position than a tortfeasor who carries himself alone the burden of paying damages. The claim acquired by the payment of premiums to protection by the insurer is a financial asset in so far as any payment of compensation for damage caused is concerned. Since in taking this financial approach it is only relevant whether the tortfeasor must bear the cost of the damages himself or will be reimbursed – at least in part – on the strength of his liability insurance, it can make no difference whether the insurance against liability is voluntary or compulsory. Finally, it cannot be concluded that liability insurance must be disregarded because the assets of the insurer against liability constitute a special fund which is dedicated to a special purpose, similar to the assets of the Fiscus, which must be disregarded. This view overlooks that the assets of the Fiscus are not assets in the meaning of private law for the reason that they are not only dedicated to a special purpose, but because the special purpose is a public

620  Appendix 2 one. Therefore, they cannot be related to the assets of the injured party, which are within the private sector, so as to balance them. The assets of a liability insurer, however, contrary to those of the Fiscus fall within the private sector. For this reason alone, the reference to the treatment of Fiscal property is inappropriate. Moreover, in taking into account the existence of liability insurance no ‘purpose linked special fund’ of the insurer is being considered, but the claims of the tortfeasor to be indemnified by the liability insurer. Consequently, it is admissible in assessing damages under § 847 BGB to take into account also that the tortfeasor can demand an indemnity from the insurer – up to the amount of the sum insured. (f) In taking into account the economic circumstances of the tortfeasor it may be relevant that the damages for pain and suffering are not being awarded in the form of a lump sum but of periodic payments. Thereby the result can be achieved in some cases that the victim receives damages for pain and suffering which are largely in keeping with their purpose, namely to make good, even if the tortfeasor’s financial circumstances are unfavourable, seeing that such periodic payments do not burden him that heavily for the time being. If damages for pain and suffering are assessed in the form of a right to periodic payments the question arises, however, as to whether a subsequent change in the financial circumstances of the tortfeasor must be taken into account under § 323 of the Code of Civil Procedure [ZPO]. The answer must be in the affirmative. It is true that when the amount of damages for pain and suffering is fixed by a judgment or a compromise, the claim for damages in respect of non-pecuniary loss loses its character as a claim for damages in money; thus the amount of the claim under § 847 BGB is henceforth fixed for the future, at least in principle. However, just as any consequences of the injurious act which occurred or manifested themselves subsequently, and therefore had not been taken into account in assessing damages under § 847 BGB, may give rise to a supplementary claim under § 847 BGB, so no objections exist in principle against reviewing the periodic payments if the conditions laid down by § 323 ZPO are fulfilled, especially if a fundamental change in economic circumstances has occurred, in particular on the part of the tortfeasor. 4. As stated above on several occasions, among the circumstances to be taken into account on grounds of equity, the extent, the severity and the duration of pain and suffering must always contribute the determining criteria; the non-pecuniary damage inflicted, the adverse effect on life always occupies the first place among the circumstances to be taken into account. For the rest, it is impossible to establish a general order of priorities among the circumstances to be considered, for their extent and importance in assessing equitable compensation emerges only when they coincide in the individual case, as was shown above, especially in II.3(a). It is therefore necessary to consider the individual case. The extent to which the circumstances enumerated previously, or any other which may be relevant, affect the assessment of damages for pain and suffering must be determined in accordance with equity. Such an examination may also lead to the conclusion that certain circumstances, as for instance the financial situation, should be disregarded in fixing damages for pain and suffering. In the light of the foregoing, the question had to be answered in the general terms in which it had been formulated by the Sixth Senate of the Court, for only thus the substance of the question could be treated exhaustively. Nevertheless, it seemed appropriate to stress already by the manner in which the answer is formulated that not all the circumstances which have

Appendix 2  621 been mentioned must be taken into account in each individual case, but only that they may be considered, having regard to the facts. In order to eliminate doubts, it also appeared appropriate to include at this stage the treatment of possible claims of the tortfeasor for an indemnity under a policy of liability insurance or for redress against other tortfeasors. Case 96 BUNDESGERICHTSHOF (SIXTH CIVIL DIVISION) 11 NOVEMBER 1995 BGHZ 128, 1 = NJW 1995, 861 (Caroline of Monaco I) Facts The defendant publishes widely distributed illustrated magazines in Germany. On the front page (the title was ‘Caroline: the psycho-interview’) and inside of two of these magazines appeared a completely fictitious interview with the claimant, Princess Caroline of Monaco, along with an article containing false statements about her intentions to remarry and manipulated pictures. Besides other requests the claimant claimed monetary compensation for non-pecuniary damage to her right of personality. The OLG Hamburg’s decision provided a sum of DM 30,000 (around €15,000) as damages. The claimant considered this as (far) too low and appealed. II. … III. … 4. The further appeal also attacks the decision as to payment of compensation … According to the established case law of this court, the victim of a breach of the general right to one’s personality is entitled to monetary compensation where the intrusion is grave and the impairment cannot otherwise adequately be compensated. Whether there is a grave infringement of the right of personality requiring payment of monetary compensation, depends in particular on the severity and extent of the intrusion, the occasion giving rise to the article, the infringer’s motive and the degree of his culpability [references omitted]. Infringements of the right of personality like the one before the court are grave intrusions of this kind. In full knowledge of the fact that the claimant refused to be interviewed, the defendant created a fictitious interview on problems in the claimant’s private life and her psychological condition … In order to increase his circulation numbers and for commercial gain, the defendant exposed the claimant’s private life to the curiosity and sensationalism of hundreds of thousands of readers. In respect of two of the publications in question this was done deliberately. In the case of the third publication there was at least negligence. The claim for monetary compensation raised by the claimant is not barred by the fact that the defendant is also ordered to print the two corrections. Some legal authors are of the opinion that such retraction usually suffices to remove the breach of the right of personality [references omitted]. Others argue that a retraction does not in principle exclude monetary compensation, since it does not include an element of satisfaction, especially since it is the weakest means of protecting the general right of personality [references omitted]. In the opinion of this Senate, the facts of each case will determine the outcome. The decisive factor is whether or not the retraction provides a sufficient compensation for the interference with the claimant’s rights. This can be negated where the attack is aimed at the

622  Appendix 2 very essence of one’s personality [references omitted], or where the infringer refuses to print a requested retraction, so that the claimant can only obtain a corrective statement on the basis of a court order [references omitted]. Thus, a retraction and correction will not exclude the claimant’s right to monetary compensation. We are dealing here with injuries to the right of personality of a particularly grave nature given the contents of the publications, their distribution numbers, and the defendant’s motives and degree of culpability. Moreover, the claimant had to fight for a retraction and correction by taking the defendant to court, fighting the case through all three instances before finally, and after long delays, obtaining relief. IV. … 1. … 2. … the claimant is entitled to more substantial monetary compensation than the one afforded by the OLG. The claimant correctly argues that the court of appeal’s reasoning fails to do justice to the purpose of monetary compensation payable in the case of grave infringements of the general right to personality. In such cases, compensation is not really compensation for pain and suffering (Schmerzensgeld) under § 847 BGB [now § 253 II BGB] but rather a legal form of redress (Entschädigung) which is based on the protective mandate enshrined in Articles 1 and 2 I GG [references omitted]. Granting monetary compensation has its roots in the consideration that, without such a claim, impairments of a person’s dignity and honour would often remain unpunished with the result that legal protection of one’s personality starts to wither and decay. In contrast to compensation for pain and suffering, in cases of monetary compensation claimed for an infringement of the general right of personality (Entschädigung), the aspect of the victim’s satisfaction comes to the fore [references omitted]. Despite doubts raised in legal literature [references omitted], the court upholds this point of view. Moreover, this form of redress is meant also to serve a preventive purpose [references omitted]. The OLG’s reasoning as to the amount of compensation due here fail to do justice to these specific purposes which relate to any claim for monetary compensation for infringement of the right of personality. According to the OLG, the fact that the defendant infringed the claimant’s right of personality for reasons of personal gain must, like the idea of prevention, be left out of consideration when the compensation due is calculated. This court, however, is of the opinion that for cases like the one before it the OLG’s view is too narrow. The case is characterised by the fact that the defendant, by a deliberate tortious act, used the claimant’s personality as means of increasing the circulation of his publications and of pursuing his own commercial interests. Without any monetary compensation that the defendant can actually feel [as unpleasant], the claimant would practicably be unprotected against such irresponsible compulsory commercialisation of her personality. Court orders to retract or correct will only provide an insufficient protection for the claimant since, as shown, they may only be ordered by taking into account the defendant’s own rights arising from the guaranteed freedom of the press. An order to pay monetary compensation can only properly serve the purpose of prevention, required by the right of personality, where the amount of compensation due represents a correlation to the fact that, as here, the right of personality was infringed for reasons of personal gain.

Appendix 2  623 This does not mean that in such cases of shameless commercialisation of a personality the court must resort to a disgorgement of profits. But the gain aimed at and reached by the tortious act should be included in the calculation when deciding on the amount of monetary compensation due. Where a famous personality is commercially exploited, the amount of monetary compensation due must act as a real deterrent. The intensity by which the right to one’s own personality was injured can also be used in the calculation. In this context it must particularly be borne in mind that the publication of the fictitious exclusive interview weighs heavily against the defendant. On the other hand, it must be remembered that monetary compensations due may not reach such a pinnacle that the freedom of the press is unduly restricted. This will, of course, not be the case where, as here, the press is stopped from ruthlessly and commercially exploiting a particular personality. Since the decision on the actual amount of compensation payable to the claimant lies with the court dealing with the facts of the case [references omitted], the court quashed the OLG’s decision and referred the case back to the lower court. Notes to Cases 95 and 96 Both cases demonstrate the interesting development of the German case law with regard to the calculation of non-pecuniary losses under § 253 II BGB (previously § 847 BGB). Case 95 is of importance as it shows that for the calculation of non-pecuniary losses all circumstances of the case at hand should be taken into account (as, eg, the length and the intensity of the pain, financial circumstances and the degree of blameworthiness, etc). However, more important, this judgment introduced the idea that § 847 BGB (now § 253 II BGB) serves at least two functions: compensation (Ausgleich) and satisfaction (Genugtuung). While the idea of compensation can be traced back in the BGB itself, it is the function of satisfaction which was novel at that time and to some extent ‘alien’. Since then the thought of satisfaction plays its role in calculating non-pecuniary losses (during the last decades it even seemed that courts often put more emphasis on the idea of satisfaction than on compensation), even though it is still condemned by some academics as a criminal law element in German private law (see Ebert, Pönale Elemente im deutschen Privatrecht, 497; Honsell, ‘Der Strafgedanke im Zivilrecht: Ein juristischer Atavismus’ in Aderhold, et al, Festschrift für Harm Peter Westermann zum 70. Geburtstag (2008) 315). In England, aggravated damages occur where damages cannot be calculated precisely, eg, in relation to injury to feelings. They are used against serious infringements of bodily integrity (assault, battery or false imprisonment) and now in cases of misuse of private information. The defendant’s conduct may be high-handed, malicious or oppressive and that may justify the court in awarding higher than normal sums to reflect the gravity of the wrong (see Markesinis/Deakin, 795–97). This is distinct from the rare category of punitive or exemplary damages which are awarded on top of ordinary, compensatory damages, but only in very strictly controlled circumstances. Outside public law cases, these will only be awarded where the defendant’s conduct was calculated to make a profit for himself which could exceed the compensation payable to the claimant (see Markesinis/Deakin, 800–01). In these ways, English law goes beyond the strict compensation principle. Case 96 is a consequent further development of case 95 and it pushed the limits of damages for non-pecuniary losses (in cases of infringement of personality rights) to a next level not seen before – monetarily and dogmatically. Monetarily for the actual case as the BGH

624  Appendix 2 judgment led ultimately to DM 180,000 (€90,000) damages for the non-pecuniary losses of Princess Caroline (OLG Hamburg, NJW 1996, 2870) instead of initially only DM 30,000 (€15,000). But also on a whole this decision was monetarily a revolution as the awards for personality right infringements went up from a few thousand euros before the judgment to €400,000 nowadays (see chapter two, section II.E.iv). More interestingly than that is however the dogmatic reason behind this outlined development. The BGH confirmed in case 96 that damages for non-pecuniary losses have not only a compensatory function, but should also give the victim the feeling of satisfaction. However, the BGH went one crucial step further and argued that in infringement of personality rights cases the payment for non-pecuniary losses also have a preventive function (especially in cases of shameless commercialisation of a personality by the tortfeasor) and that even the illegal profit of the wrongdoer should be taken into account when determining the amount of damages (even though a precise and ‘real’ disgorgement of profits is not intended). Needless to say that the BGH was also strongly criticised by some academics for the introduction of the preventive function which according to them does not belong to German tort law (see Honsell, ‘Der Strafgedanke im Zivilrecht: Ein juristischer Atavismus’ in: Aderhold et al, Festschrift für Harm Peter Westermann zum 70. Geburtstag (2008) 315). Despite this criticism, the function of prevention plays an important role in case law and in academia this is also increasingly acknowledged (see Wagner, ‘Prävention und Verhaltenssteuerung durch Privatrecht – Anmaßung oder legitime Aufgabe?’ 206 AcP (2006) 352). In English law, disgorgement of profit is not a tortious remedy, but one linked to restitution (see McBride and Bagshaw, Tort Law (6th edn, 2018) ch 25). Of course, if the tort constitutes a breach of a fiduciary duty, then the wrongdoer will be liable to pay to the victim the gain made from the breach of that duty: see Northampton Regional Livestock Centre Ltd v Cowell and Lawrence [2015] EWCA Civ 615. Where there is a wrongful use of property, then the claimant is entitled to claim the value of the use, typically calculated on the basis of what would have been the price for the use that would have been negotiated between the parties: ‘the person who makes wrongful use of the property prevents the owner from exercising his right to obtain the economic value of the use in question, and should therefore compensate him for the consequent loss. Put shortly, he takes something for nothing, for which the owner was entitled to require payment’ (Lord Reed SJC, One Step (Support) Ltd v Morris-Garner [2018] UKSC 20 [30]. It is this kind of measure that would be used to assess the damages in case 96, rather than disgorgement of profits. The private information is seen as having a value which could be marketed and this provides a measure of the loss suffered by the claimant whose private information has been misused. This measure would be used in the tort of breach of confidential information: Douglas v Hello! (No 3) [2005] EWCA Civ 106; [2007] UKHL 21. In other cases, significant damages are awarded for the wrongful invasion of privacy, eg, Richard v BBC [2018] EWHC 1837, where information about a police investigation was wrongfully broadcast and damages awarded, including for distress and damage to health (£210,000).

INDEX Introductory Note References such as ‘178–79’ indicate (not necessarily continuous) discussion of a topic across a range of pages. Wherever possible in the case of topics with many references, these have either been divided into sub-topics or only the most significant discussions of the topic are listed. Because the entire work is about ‘tort’, the use of this term (and certain others which occur constantly throughout the book) as an entry point has been minimised. Information will be found under the corresponding detailed topics. abortion  237–41, 243, 246–47, 257, 305 absolute rights  181–82, 273, 392 abuse of process  84–85, 275 of rights  85–86, 211, 295, 386, 421 accessories  217, 292, 310, 324, 407–8, 527 accident insurance  149, 159–61, 165, 256, 563–64 accident fatal  30, 161, 202, 226, 230, 234, 560 road traffic see road traffic at work  159–62 accountants  83, 95, 422, 425 adequate causation  52–53, 355, 363, 398 adequate cause theory  56, 64–65, 67, 70, 363–64 administrative courts  186, 370, 610 administrative law  2, 19, 174–190, 598–99, 608–10 adoption  63, 78, 80, 147, 157, 253, 256, 598–99, 601–2 applicants  598–600, 602 placement  597–601 adulterous relationships  39, 48, 80 advertisements  110, 287–89, 291, 314, 413, 443–44 advice  76–77, 96, 244–45, 247, 376, 383, 415, 416, 430, 542, 551–52, 599 duties  377–78, 599 advisers, medical  239, 243, 542–43, 545–47 agents  76, 102, 120, 383, 483, 487, 518–19, 560–61, 563 for performance  518–19 statutory  128, 208 airships  156, 580–82 alternative medicine  141 American law  31–32, 34, 54, 56, 95, 97, 113, 194, 259, 283, 468, 470 amount of damages  48, 158, 291, 396, 400, 434, 613–16, 618, 624 for pain and suffering  196, 291, 611, 616, 620

Amtspflicht  176, 179 Angehörigenschmerzensgeld  30, 200, 231, 236 annuity  152, 197, 199–200, 208, 214, 520 appeal courts  4–5 apportionment  232, 343, 506, 559, 576–79 global  578–79 individual  577–79 Äquivalenztheorie see but-for test architects  368–69, 402–4, 419–20 arrest  179, 297, 358, 364, 590–93 art, state of  116, 218 assistance, medical  255–56, 546 assistants  209, 405, 412, 515, 519, 521 associations, professional  267, 559–60, 562–64 athletes  268–71 attorneys  92, 96, 284–87, 436–37, 439 attribution  7, 46, 261, 453, 509, 512, 572 objective  62, 360, 364, 453 audit  422–25, 434 compulsory  422–24 statutory  433–34 auditors  95–96, 423–25, 430, 434–35 Aufklärungspflicht  533 Aufopferungsanspruch  186–87, 189 authorised signatories  465, 467 authorities, local  59, 66, 77, 175, 188, 368, 395, 479, 541 autocomplete function  306–7 bacteria  440, 444–45 bad faith  81, 264, 337–38, 453 bankruptcy  373, 375, 383, 618 proceedings  373–76, 379, 413 banks  32, 81–83, 260, 385, 387, 397–98, 413–17, 590 basic rights see rights

626  Index Behandlungsfehler see treatment error Behandlungsvertrag see treatment contract behaviour  139, 250, 300, 327, 332, 344, 346, 356, 358–59 Berufung  4, 607 see also appeals Birth, wrongful  9, 19, 33–34, 237, 239–51, 253–54, 257, 258–59 blameworthiness,  162, 223, 354, 291, 473, 611, 614–16, 623 blood pressure, high  31, 568, 570, 572 boarding schools  134, 609 board of directors  465, 467, 591 bodily integrity  88, 297, 300, 491, 570–71, 623 body and health  31–34, 137, 224–60, 553 boni mores  79–80 bottles  439–40, 444–45, 447–55, 460–64, 469 boycott  40–42, 84, 270, 274, 276, 284, 388–89 economic  41–42 breach of contract  79–80, 239–40, 247, 249–50, 385, 420, 442, 444, 473 breach of legislative protective norms  72–86 breach of official duty  175, 178, 587, 601, 607, 610 breach of protected interests  29–71, 224–352 broadcasts  218, 292–95, 297, 336, 624 building contractors  155, 402, 404, 412 building operations  393, 400–401, 403, 417 building owners  404, 502 building plans  416, 478 building regulations  365–66, 368, 397 buildings  213, 368–69, 403–4, 419, 472, 477–80, 502, 532–35, 565–66 neighbouring  121, 478 burden of proof  108–9, 124, 128–29, 145–46, 445–49, 452–59, 490, 506–7, 535–36 business activities  40, 77, 154, 212, 268, 384, 400, 509, 522 businesses established and operating  39–43, 49, 51, 84–85, 93, 263, 268–70, 273–74, 412 one-man  447, 458, 486 business organisations  132, 510–11 business premises  56, 422, 426, 452 business purposes  512, 522 business reputation  106, 306 but-for test  61–62, 68 buyers, prospective  421, 513 cable cases  10, 36, 40, 92–93, 102, 387, 395, 409, 412 Canadian Supreme Court  90, 396 capacity, legal  50, 134, 135 care duties of see duties, of care parental  328, 550

reasonable  51, 57–58, 137–38, 340, 553 standard of  54–55, 58, 67, 114, 135, 139–41, 212–13, 178, 340, 346, 388, 393, 501, 505, 596 carelessness  76, 81, 83, 122, 379, 447, 526, 529, 577–78 carriage of goods  102–3, 158, 435 of persons  77, 370 carriers  3, 103–4, 555–56 cars  52, 163, 166–68, 202–4, 347, 360, 575, 588 casuistry  410–11 causality see causation causation  33–34, 52–53, 60–71, 145, 153, 235–37, 245, 248, 352, 356, 362–64, 390, 426, 429, 445, 448–49, 453–54, 490, 567, 606 adequate  52–53, 355, 363, 398 chain of  62, 362, 364, 445 normative theories of  65–66, 67, 69, 153, 201, 237, 364 causes contributory  353, 429, 490 decisive  358, 362 hypothetical  63 overtaking  63–64, 68 proximate  71, 230, 355 characterisation  142, 240, 396–97, 559 chauffeurs  179, 519, 561 chickens  88, 110, 439–41, 444–45, 565 children  33–34, 134–35, 237–43, 245–59, 322–23, 327–28, 528–37, 549–50, 598–602 adopted  199–200, 256, 599 disabled  239–41, 243, 246–47, 250–51, 254, 257, 601–2 illegitimate  21, 218, 251 young  135, 181, 534 children’s homes  602–3, 605–6 civil courts  3, 186, 246, 251–52, 277–78, 283–84, 324–25, 328–29 civil damages  60, 258 civil law  18–19, 21, 252–57, 280, 282–83, 289–91, 329, 378, 510 modern  97, 235, 396, 438 systems  15, 21, 30, 34, 60, 108, 128, 148–49, 438 civil liability  29, 76–77, 106, 157, 247, 257, 359, 383 additional  29, 73 civil partners  200, 215 civil procedure  37, 158, 307–8, 348–50, 363, 428, 592, 601, 605–6 civil servants  21, 176–77, 184, 282 clinics  491, 493–94, 547, 608 close relationships  30, 33, 100, 109, 200, 215, 226–27, 254, 512, 516 close relatives  32, 229–30, 348–49, 351 co-contractors  98–99, 103, 105

Index  627 co-defendants  530, 547–48 codification  1, 14, 24, 101 commerce  117, 372, 375, 383, 417, 440, 482 commercial activities  310, 370–72, 400 commercial enterprises  23, 40, 391, 400, 495 commercial interests  23, 309, 622 common law  16–18, 29, 33–34, 36, 53, 57–58, 70–71, 78–80, 81–82, 88–89, 97–98, 100, 108, 120–21, 126–28, 129–30, 151–52, 429–30, 522 English  44, 60, 78, 97, 137, 139, 163, 192, 524 comparative law  62, 70, 74, 92–93, 97, 100, 192, 258, 279, 435, 438, 523 compensation  130, 134, 151–52, 153, 157, 159–62, 164–65, 174–75, 184–89, 191–93, 195–98, 200–207, 211–15, 219–23, 559–65, 612–13, 621–23 for economic losses  249, 348 equitable  221, 290–91, 611–13, 615 fair  130, 198 for harm  88, 187, 188, 193, 251, 252–54, 256–57, 348, 358, 477, 522, 602 monetary  44, 48–49, 151, 157, 195–96, 200–201, 334, 337, 621–23 for pain and suffering  130, 157, 251, 253, 337, 622 partial  404 pecuniary  44, 175, 306 competition  90, 106, 267, 272, 338–39, 370, 372, 383, 387–89 unfair  7, 79–80, 106, 266, 370–72 components, defective  94, 114–15, 389, 401, 475–76, 479, 480 compulsory insurance  122, 159, 164–65, 339, 569 conduct blameworthy  162, 223, 354 defendant’s  29, 31, 50–51, 54, 60–61, 63–64, 265, 268–70, 623 employee’s  133, 507, 512 lawful  61–62 medical  140, 145, 543 negligent  103, 133, 146, 194, 197 unconscionable  83, 379 unlawful  57, 118, 176, 505 wrongful  61, 66, 78, 205, 216, 274 confidential information  45–47, 85, 335, 375, 443–44, 544, 624 conscience  49, 218, 264, 386–87 consent  50, 142–43, 208–10, 217, 324, 331, 491–94, 537–47, 549–54 effective  549–50 hypothetical  142 patients  50, 138, 142, 334, 492–93, 539, 546 real  492, 542 valid  492, 540, 542

consequences dangerous  148, 543 direct  79 economic  13, 118, 144, 158, 247, 249 negative  248, 313 consequential loss  63, 194, 201, 203, 396, 402, 436, 475, 624 constant practice  235, 237, 293–94, 374, 388, 391, 489, 491, 493 constitutional complaints  251–52, 257, 259, 277, 303, 322–24, 333 constitutionalisation  19–25, 275, 279, 411 constitutional law  243, 252, 254–56, 277–80, 294–95, 297, 327, 330–33, 512 objective  254, 277 constitutional review  186–87, 259, 278, 283 construction  187–88, 368, 393–94, 410, 430–32, 462, 470–71, 477–78, 588 defective  213, 470 consumers  110, 115–16, 444, 449–51, 453–55, 457–58, 462, 464–65, 476 ultimate  109–11, 468, 471 consumption  173, 449–50, 465 contra bonos mores  29, 66, 79–80, 211 contract(s)  83–86, 94–102, 107–9, 128–30, 237–47, 394–95, 416–25, 427–43, 513–23 breach of  79–80, 239–40, 247, 249–50, 385, 420, 442, 444, 473 employment  133, 431, 508, 510, 512 escape into  128–35 in favour of third parties  97, 109, 130, 430, 432 medical treatment, for  15, 25, 138, 209, 241–42, 237, 247, 538 of sale  98, 111, 441–42, 472, 515–16 of service  394, 543–44 standard form  402–3 terms, implied  100, 432 tort, and  54, 97, 137, 192, 248, 395, 427, 439, 458 of transport  521–22 contract law  91–92, 97, 99, 108–9, 128, 137–38, 254, 443–45, 478–80 contractors  38, 42, 394, 396, 401–2, 404–9, 412, 437, 441 building  155, 402, 404, 412 general  98, 404 independent  120–21 contractual claims  130, 216, 375–76, 378, 394, 427–28, 458, 472–73, 516 contractual duties  238, 242, 254, 256–57, 377–78, 385–86, 394, 518–20, 522–23 contractual negotiations  101, 208, 419 contractual obligations  15, 38, 76, 109, 129, 395, 400, 444

628  Index contractual relationships  76, 93, 101, 211, 246, 369, 378–79, 385, 403, 421, 401, 416, 458, 514, 523, 544, 580 direct  471–72, 520 contractual remedies  57, 96–9, 104, 109, 129, 428, 435 contribution, claim for  126, 131, 160–62, 223, 227, 232, 330–31, 384, 524, 562–64, 573–74, 576–79, 589 contributory causes  227, 232–33, 353, 412, 429, 490 contributory fault  151, 159–60, 167–69, 194, 226, 232, 342–45, 514, 610 contributory negligence  58, 67, 194, 200, 232, 341–42, 346, 413–14, 486–87 control  57–58, 119–21, 329–30, 372, 446–47, 450, 453–55, 457–58, 494 factual  37, 220 copyright  38, 284–86, 288, 525–26, 529 infringements  526, 529 laws  40, 45, 284 corporeal inviolability  492, 494 costs  39, 149–50, 161–62, 194–96, 201–4, 247–49, 347–49, 351–52, 474–75 legal  307, 591, 606 maintenance  246, 248–50, 258 of repair  202–3, 473, 479 counselling, genetic  244–46 court-appointed experts  25, 98, 183–84 courts administrative  186, 370, 610 American  34, 113, 259, 283 collegial  592–93, 597 District  206, 237–38, 297 English  11, 44, 93, 96, 139–40, 145, 346, 351, 387 European  185, 190 of first instance  4, 534, 566 general  1–13 German  3–5, 32–33, 47–48, 98, 130, 171–72, 184–85, 258–59, 553–54 highest  5, 245, 367, 495, 508 lower  5–7, 81, 83, 124, 367–68, 414, 420–21, 460, 462 ordinary  9, 176, 185, 219 regional  313, 339, 342 specialist  252–53, 255 creditors, interests  100–102, 104, 395, 577 creditworthiness  81, 83, 375, 413, 418, 487 crimes  17, 292–93, 295–300, 302, 360, 364, 583–85, 590, 614–15 preventing  182, 584–85 criminal law  14, 53–54, 64, 142, 178, 218, 238, 408, 613–14 criminal offences  64, 106, 164, 299–300, 384

criminal proceedings  46, 213, 233, 265, 290, 296–97, 299–300, 302, 571 culpability  54, 134, 178, 310, 339–40, 527, 592–93, 597, 621–22 culpable interference  29, 35, 389–90, 400 culpa in contrahendo  89, 98, 129, 444, 514–17 custody  536, 550, 552, 573–74, 591, 603–4 cycles  167, 530, 532 cyclists  67, 154, 333, 341–42, 344–45 damage caused to products  94–97 economic  265, 366–67, 385, 442, 472 genetic  245–46 to health  246, 541, 624 immaterial  231, 248–49, 289–91, 316, 334, 343 indirect  234, 366, 442, 565 to land  154 material  201, 226, 261, 396, 538 non-pecuniary  238, 611, 614–18, 620–21 to persons  478, 480 physical  29, 31, 92, 100, 183, 201, 203, 367, 429 property  94, 97, 105, 112, 150, 152, 158, 164, 166 to property  152, 158, 191–92, 201–3, 399, 401, 472, 474, 478 ricochet  172, 191, 199 shock  227–28 to third parties  482–83, 528, 536 unlawful  123–25, 504–5 damages  200–208, 211–16, 220–23, 245–50, 388–405, 439–46, 470–83, 565–75, 611–21 amount see amount of damages assessment  197, 240, 288, 613–18, 620 for breach of contract  436, 471 civil  60, 258 claims  475–76, 570, 577 equitable  616–17 law of  101, 191–204, 248–50, 288, 611 measure of  57, 85, 258 for non-pecuniary losses  171, 613–15, 617, 619, 623–24 for pain and suffering  196, 291, 347, 350, 455–56, 459, 520–21, 568–69, 573–74, 611, 613–18, 620 pecuniary  164, 238, 240–41, 289, 291, 307, 613–14, 617, 619 quantum of see amount of damages special  259, 347 dangerousness  344, 483, 488, 490, 528, 533, 543, 558, 568, 596 dangerous objects  347, 528, 580 dangerous products  112, 222, 443, 469 dangerous work  132, 508

Index  629 dangers  132, 206–7, 238–42, 301–2, 359–63, 482–85, 491–93, 540–43, 545–51, 584–89 special  181, 361, 482, 498, 587 data personal  310, 313–15 transmission  314–15 death  30, 33, 52–53, 197, 199–200, 214–15, 220–21, 224–25, 227–29, 232, 351–53 children, of  9, 234 debtors, joint  214, 466, 563 debts  38, 84, 208, 249, 283, 373–76, 405, 616, 618 deceit  79, 83–84, 211, 265, 383, 590 declaratory judgments  231, 303, 317, 342, 427, 479, 602 defamation  17, 19, 23, 43, 83, 106, 266, 334–35 defective components  94, 114, 480 defective construction  213, 470 defective genetic advice  251–52, 254 defective instructions, liability for  115–16 defective performance  254, 256–57, 403, 435, 473 defective products  107, 113, 128, 147, 462 defective treatment  548–49 defects  111–14, 171–72, 402–4, 441–50, 452–54, 461–62, 468–73, 475–77, 479–80 in design  107, 112–14, 470, 478–9 liability for  113–15, 403–4, 473 in manufacture  112–15, 171–72, 451, 462, 470 defence(s)  49–50, 116, 151, 158–60, 165–66, 168–69, 421, 432, 461–62 force majeure  150, 159, 168, 220 odd unit  171 delict  13–18, 39–40, 94, 106–7, 427–30, 440–42, 444, 504–6, 514–15, 522–23 delictual liability  87, 91, 97, 106, 109, 501, 507, 516, 526 for products  106–10 delictual remedies  108, 522 delivery efective  470, 473 demonstrators  404–9 dentists  38, 465 dependants  30, 161, 172, 227, 232, 351, 560, 564 surviving  226, 561, 563 deprivation of freedom  290, 594–96 of liberty  215, 290 of use  35–36, 261 designs defects in  107, 112, 114, 470 detriment  81, 95, 109, 214, 230, 433, 486, 591, 596 development risks  112, 115–16, 171, 462, 470 diagnosis  138, 143, 146, 209–10, 468, 492, 595 diagnostic investigation  538–39, 541 Dienstbarkeit  38 dignity  23, 43, 88, 141, 217, 256, 285–86, 544, 553 human  23, 44, 255–56, 277, 282, 289–90, 293–94, 334, 336

direct interference  51–52, 268–69, 273, 351, 388–90, 392 directness  42, 188, 274, 390–91, 412 directors  75–77, 81, 83, 179, 275, 373–75, 384, 494, 564 boards of  465, 467, 591 independent  381 managing  311, 379–80, 382, 384, 425, 591 disabled children  247, 254, 257 disclosure  141, 143–45, 300, 335, 525–27, 529, 553 errors  139, 145 remedy of  526–27 discretion  179, 182, 350, 371, 583–84, 604, 614, 616, 618 administrative  583 equitable  612, 618 disgorgement  623–24 dishonesty  387, 422 dissemination  43, 47, 217, 287–88, 324, 328, 330, 333 distress  175, 231, 594, 596, 603, 624 distributors  41–42, 112, 275–76, 416, 444, 450, 452 doctors  50, 244–47, 249–50, 255–57, 491–94, 538–48, 550–54, 594–95, 599–600 see also medical liability dolus directus  53, 79, 430 dolus eventualis  53, 79, 430 Drittschadensliquidation  12, 87, 97, 101–4, 110, 395–97, 410, 427, 437, 439–42 Drittwirkung  20, 22, 276, 279–80, 283 drivers  132, 163–64, 166–68, 223, 498–99, 503, 557–58, 560–62, 586–89 drugs  61, 134, 168, 541, 548 duties advice  377–78, 599 of care  52–53, 55–60, 112–13, 340, 364, 441, 479–80, 483, 517–18 notion  29, 37, 235 to compensate for harm  253, 359, 423, 602 contractual  238, 242, 254, 256–57, 377–78, 385–86, 394, 518–20, 522–23 fiduciary  81, 84, 386–87, 624 to inform  492–93, 532–33, 554, 598, 600–601 legal  71, 137, 227, 343, 359 medical  247, 540, 548, 550 non-delegable  121, 523 official  175–80, 368–69, 583–87, 590–92, 594, 597–98, 601, 603–7, 609–10 of protection and care  180, 515 public  176, 179, 182, 214, 321 statutory  67, 73, 75, 88, 180, 212, 256, 383–84 of supervision  133, 135, 212, 214, 382, 502, 522, 525, 527–36

630  Index earning capacity  161, 187, 214, 220–22, 234 earnings, loss of  68–69, 194, 196, 347, 349, 351–52, 520, 594, 601 economic boycott  41–42 economic damage see economic harm economic freedom  511 economic harm  95, 184, 265, 348, 366–67, 385, 411, 442, 472 economic interests  40, 73, 87–91, 93, 106, 117, 181, 283, 378–79 economic loss  36, 72–73, 75–76, 78–80, 87–116, 246–49, 348–52, 410–11, 429–31 at borderline of contract and tort  97–105 categories  93–97 pure  11–12, 36–37, 87–89, 91–95, 105, 410–11, 429–30, 432–33, 479–80 economic torts  79, 82, 84, 386–87 education, legal  10–11, 92 effective consent  549–50 Eigentum see property emotional harm  221, 230 employee liability  112, 131–32, 508–10 employees  117–27, 131–33, 160–61, 469, 488–89, 502–4, 506–13, 522–24, 560–62 conduct  133, 507, 512 negligence  126, 128 public  160, 586–87, 598 subordinate  459, 500 tortious liability for  117–28 unauthorised  395, 397 employer – employee relationships  119–21 employers  83–85, 117–23, 125–26, 128, 131–33, 160–62, 499–500, 506–12, 522–24 exculpatory proof  119, 125–26 liability  117–28, 135, 504, 506–7 employment  113, 119, 121–22, 126, 133, 270–72, 342, 431–32, 502 course of  121–22, 524 relationships  209, 508–12 encroachment  18, 185, 265–66, 276, 309, 371 quasi-expropriatory  185–87 sacrificial  185, 187, 189 England  95–98, 136, 192, 195–98, 241, 275, 438–39, 553, 555 English courts  11, 44, 93, 96, 139–40, 145, 346, 351, 387 English law  65–66, 82–86, 91–93, 103, 142–44, 178–81, 194–96, 230–31, 553 enrichment, unjustified  15, 83, 289, 405 enteignungsgleicher Eingriff, see quasi-expropriatory encroachment enterprises commercial  23, 40, 112, 268–9, 387–92, 397–400, 495

liability of  120–1, 379–82, 483–86, 499–501, 507, 524–25, 560–62, 581 environment  279, 476, 482–83, 551 equality  21–22, 217, 512, 617 equitable compensation  221, 290–91, 611–13, 615 error gross treatment  145–46 legal  354, 361, 416, 514, 550, 581, 588, 590, 592–93 medical  246–47, 452, 538 procedural  532–33 treatment  138, 145–46, 209–10 established and operating businesses  39–43, 49, 51, 84–85, 93, 261, 268–70, 273–74, 412 evaluation site  312–13 evidence  225, 239–40, 339, 407, 409, 446–47, 449, 460–61, 463–64 concrete  302, 532 expert  139, 141, 225, 546 prima facie  55, 57, 59, 62, 152, 341, 426, 448, 452 evidentiary burden  150, 453 see also burden of proof exceptional circumstances  123, 164, 234, 319 exculpatory proof  113, 119, 123–27, 131, 166, 521, 507, 533, 535 exemption clauses  472–73 exoneration proof of  128, 446–47, 499–501, 527–28, 533, 535 expenses  196, 214–15, 220–21, 348–49, 351–52, 400–401, 403–4, 481, 591 funeral  30, 161, 172, 199, 214, 230 medical  88, 152, 165, 194–95, 197 Expertenhaftung see experts, liability expert evidence  139, 141, 225, 419–21, 546 expert opinions  417–18, 420, 461, 463–64 experts court-appointed  25, 98, 183–84 independent  357, 481 liability of  95, 100, 183–84, 431, 434 medical  491, 494, 545, 547, 595–97 expert valuations  416–18, 421 expert witnesses  449–51, 455 explosions  63, 127, 449–52, 454–55, 460–61, 464, 494 expression, freedom of  41, 48–49, 84, 218, 276, 278–81, 290, 335–36, 406 expropriation  36, 174, 185–89, 219 Fabrikationsfehler see error, manufacturing factories  62–63, 121, 154, 157–58, 387–88, 392–93, 396, 457, 460–61 facts  7, 244–49, 287–89, 416, 485–88, 497–99, 571–75, 580–83, 591–93 undisputed  238, 415, 420

Index  631 fair compensation  130, 198 fairness  17, 80, 133–34, 180, 193, 338–39, 508 false information  35, 82–83, 89 families  21, 24, 56, 199–200, 218, 241, 250, 256–57, 458 family law  20, 22–23, 240, 248, 254, 257, 612 family relationships  257, 327, 394, 431 delictual protection  39 fatal accidents  30, 161, 226, 230, 234, 560 fault  36, 51–55, 67–70, 79, 118, 122–25, 168–71, 177–79, 430, 442–46, 456–62, 520–22 contributory  51, 125, 151, 159–60, 167–69, 194, 226, 232, 342–45, 347, 514, 610 intentional  127 organisational  128, 445–46 in performance  247, 430 presumption of  51, 58, 123, 128, 145, 171, 442, 446 principle  55, 115, 148 proof of  157, 459, 506 in supervision  522, 536 and unlawfulness  49–55 fault-based liability  16, 57, 70, 73, 107, 111, 113 fictions  169–70, 289, 303, 305, 431 financial compensation  44, 175, 221 financial interests  41, 238 financial loss  90, 101, 104, 130, 244, 246, 250, 253, 256, 274, 367, 435 finished products  11, 114–15, 128, 172, 446 foetuses  237, 242, 256, 602 force majeure  150, 159, 168, 220 foreign law  104, 175, 178–79 foreseeability  53, 64, 70–71, 82, 100, 357, 363, 528, 534 formalities  209, 413 France  14–16, 21, 70, 170, 184, 197, 316–17, 321, 323–24 fraud  76–77, 82, 84, 165, 182, 305–10 free development of personality  89, 217, 281, 286, 289–90, 293, 326, 511 freedom of assembly  218, 406 of commerce  372, 383 of contract  23, 438 deprivation of  290, 594–96 economic  511 of belief  49, 218 guaranteed  48, 314, 622 of opinion  279, 299, 309, 315 press  317, 322, 329–31 of speech  22, 47, 278, 283, 334 free exercise of the will  265, 290 free expression see freedom, of expression free speech  12–13, 19–20, 23, 280, 283–84, 336 French law  17, 30, 38, 49, 128, 134, 317, 321, 536–37

functional approach  432–33 functions judicial  416, 438 official  325, 368, 488 fundamental rights  20, 189, 280, 283, 292–93, 297, 371, 405, 409 funeral expenses  30, 161, 172, 199, 214, 230 GDR see German Democratic Republic general clauses  16, 20, 24, 72, 176, 255, 273, 277, 280 general interest  66, 73, 107, 368, 433 general personality rights see personality rights general principles  76, 78, 80, 85–86, 88, 90, 294–95, 338–39, 592–93 general provisions  16, 29, 78–79, 106, 291 general risks  231, 261, 359, 364, 451, 509, 511–12, 572 genetic advice  251–52, 254–55, 257 genetic damage  245–46 genetic defects  242–43 German courts  3–5, 32–33, 47–48, 98, 130, 171–72, 184–85, 258–59, 553–54 organisation in civil matters  1–6 German Democratic Republic (GDR)  267, 271, 407 German judges  9–12, 21, 54, 96, 136, 149, 179, 193, 258 German lawyers  52, 89, 93, 99, 101, 103–4, 107, 120–21, 125 German tort law  12, 25, 40, 52, 198, 333, 350, 411, 624 good faith  8, 82–83, 338, 343, 385–86, 394, 416, 421, 431–32, 441–42 good morals  79, 80–82, 88–89, 277, 385–86 goods, carriage of  101–4, 158, 435 Good Samaritans  60 gross negligence  53–54, 127, 132–33, 161, 176–77, 183, 205, 207, 214–15 gross treatment errors  145–46, 210 Grundrechte see constitutional rights guardians  370, 541, 543, 603, 605 guests  323, 455–56, 458–59 gute Sitten see good morals handicapped children  239–41, 243, 246–47, 250–51, 601–2 handicaps, physical  244–45, 251 harm  29, 31, 32, 49, 73–74, 90, 94, 130–31, 149–50, 153–54, 167, 172–73, 174, 181, 184, 187–88, 189, 194, 198, 199, 210, 224–28, 252–54, 256–57, 463–67, 474–78, 508–12, 573–79, 583–84 bodily  297, 491 economic  90, 95, 130, 184, 253, 348, 411 see also economic loss

632  Index emotional  221, 230 financial see harm, economic immaterial/non-material  194, 198, 231, 254, 256, 337, 456, 458 intentional  72, 78–79, 81, 83, 85 material  226, 251, 256, 461, 464, 478, 591, 594 psychological  181, 257 unintentional  70, 95, 118, 235 health  31–32, 181–83, 209–15, 224–30, 233–35, 539–41, 544–46, 569–72, 598–99 see also body and health injury to  31–32, 225–26, 229–30, 234–35 right of  228–29 helpers  118–19, 524 highways, public  56, 566, 586–87 highway users  183, 585, 587–89 history of German Law  10–11, 14–15, 91–93, 150 of product liability  107 horizontal effect  279, 281 horses  62, 154, 167, 323, 499–500 hospitals  119, 130, 245, 346–49, 351–53, 491, 520, 537–38, 541–44 housework  347, 349, 352 human dignity  23, 44, 255–56, 277, 282, 289–90, 293–94, 334, 336 human personality  8, 40, 43–44, 48, 278–79, 289, 511, 544 human rights  22–23, 185, 190, 279–82, 309 see also rights, fundamental illness  50, 220, 225, 228–30, 352, 542–45, 594, 599–600, 607 mental  234–35, 594 images  38, 303, 305, 318, 325, 331–32, 526 immaterial damage  194, 198, 231, 248–49, 254, 256, 289–91, 316, 334, 337, 343, 456, 458 immaterial harm see immaterial damage immaterial losses see immaterial damage immovable objects  167, 222 immunity  41, 131, 160, 162, 172, 438 impairment see damage physical  229–30 psychological  228, 230, 232 inadmissible interference  216, 398–99 inadvertent negligence  53–54 incorrect information  354–56, 422 incorrect statements  285, 339, 354 indemnification  152, 198, 201, 212, 342, 436–37, 518, 619 indemnities  126, 131–32, 176, 227, 470, 524, 620–21 independent contractors  120–21 indeterminate liability  89, 94–95 indirect damage see damage, indirect

indirect interference see interference, indirect indirect victims  226, 236, 349 individual interests see interests individual rights see rights industrial accidents  158, 160–61, 560–63 industrial property rights  266, 389 infection  31, 238–39, 243, 352–53, 458 risk of  352–53 information agencies  485, 487 confidential  85, 624 freedom of  293, 295–300, 318–21, 328–32 incorrect  35, 82–83, 89, 354–56, 413–16, 422, 485–87 personal  86, 309–16 private  45, 335, 623–24 provision/supply  310, 416, 418–19, 423, 545, 602 injunctions  45, 292, 297–99, 301–4, 307–8, 310, 312–14, 316, 322–23 injunctive relief  191, 301–2, 306 injury to health  31–32, 225–26, 229–30, 234–35 personal  107, 112, 150, 154, 158, 161, 191–95, 197–98, 478 physical  31–34, 97–98, 105, 232, 236, 254, 359–61, 369, 503–4 pre-natal  32–33 psychiatric  32, 230–32 risk of  344, 359–62 insolvency  184, 232, 376, 379, 384, 577 instructions, defective  171–72, 284–85, 287, 380, 422–23, 494–97, 499–500, 509–10, 528–29 Instruktionsfehler see instructions, defective insurance  10, 117, 121, 133–34, 144, 157, 162–65, 170, 338–40 accident  149, 159–61, 165, 256, 563–64 companies  164–65, 402, 404, 524 compulsory  122, 159, 164–65, 339, 569 liability  163–64, 254, 257, 337–40, 342, 345, 435, 438, 619–21 motor vehicle  157, 569 policies  152, 164, 340 statutory  159–60, 162, 165, 181 insurers  103, 126, 131, 161–62, 164–66, 193, 195, 197, 619–20 liability  251, 272, 568, 620 social security  193, 196 integrity bodily  88, 300, 570–71, 623 personal  32, 189, 242–43, 248, 540 physical  254–55, 351, 614 intent, conditional  82, 386 intentional acts  88, 340, 391, 487

Index  633 intentional harm  78–85 intentional interferences  291, 406 intentional torts  78, 84, 552 intentions  51, 53, 64, 73, 78–90, 127, 133, 160, 161, 176–77, 183, 194, 211, 214, 291, 340, 386–87, 391, 406, 408–09, 420, 423, 430–31, 459, 487, 492, 506, 524, 527, 552, 560, 563, 615–16 interests commercial  23, 309, 622 economic  40, 73, 87–91, 93, 106, 117, 181, 283, 378–79 financial  41, 238 legal see legal interests legitimate  41, 106, 300, 312 proprietary  103, 261 protected see protected interests public see public interest of third parties  92, 585 weighing of  51, 270 interference culpable  35, 389–90, 400 direct  51–52, 268–69, 273, 351, 388–90, 392 inadmissible  216, 398–99 indirect  52, 390–91 intentional  291, 406 legal  36, 390 negligent  391, 411 physical  36, 493 unlawful  29, 72, 188, 269, 275, 310, 404 intermediaries  106, 500 internet  48, 106, 135, 306, 308, 313, 315, 525, 528–29 access  525, 528 connections  528–29 portals  297–98, 311–13, 315, 525–26 search engines see search engines users  308, 315, 526 interpretation  17, 73–74, 252–56, 329, 331–33, 409–10, 414, 462–63, 473–74 narrow  154–55, 199, 399 permissible  153, 558 teleological  231, 409 investigations diagnostic  538–39, 541 medical  538, 540–41 physical  539–40 routine child care  549–50 investigatory proceedings  589–92, 595 investors  81, 377–80, 589 potential/prospective  83, 414–15 joint debtors  214, 466, 563 joint debts  563–65 joint liability  344, 509, 578–79

joint tortfeasors  407–8, 412, 577 judicial review  186, 584 juries  33, 191, 346 justice  2–5, 21, 170, 180, 282, 289, 462–63, 618, 622 anthropomorphic conception  54, 346 justifiable interests  211, 320 justification  186–87, 264, 268, 307–8, 398, 403, 505–6, 515, 517 justified interests  295, 318–19, 321, 324, 328, 331–32 juveniles  357, 359–60 keepers  151–53, 164–68, 212–13, 220–21, 223, 536, 569, 572, 580 kind, restitution in  206, 614 knowledge  82–84, 205, 264–65, 314–15, 344, 408, 419–20, 465–67, 599–600 common  224, 264 and consent  220, 335 technical  114, 461–62 labour  3, 15, 117, 119, 125, 160, 240, 266, 381 contracts  15, 132 law  15, 53, 126, 131 land  17–18, 213, 216, 346–47, 366, 390–92, 417–18, 477–79, 609 private  365, 566, 568 Länder  1, 4, 178–79, 186, 393 landlords  3, 57, 394, 402, 518–19 landowners  59, 188, 536 Lawfulness, see unlawfulness lawful possession  405–7, 410, 412 law of damages see damages law of obligations see obligations legal basis  49, 108, 189, 565, 569, 574–76 legal cause  8, 31, 61–62, 64, 93, 201, 346, 364 legal costs  307, 591, 606 legal duties  71, 137, 227, 343, 359 legal education  10–11, 92 legal entities  118, 122, 126–27, 160, 162, 375, 378, 486, 495 legal error  354, 361, 416, 514, 550, 581, 588, 590, 592–93 legal interests see protected interests legal interference  36, 390 legality  19, 246, 592 legal liability  246, 443, 568, 574 legal persons  242–43, 321, 383, 466 legal relationships  135, 393–95, 443, 486, 491, 513, 602 legal systems, foreign  13, 240, 615 legislation  74–75, 77, 87–88, 106, 108, 148, 150, 366, 509–10 legislative protective norms, breach of  72–86

634  Index legislator  11–13, 15–16, 21–22, 24–25, 31, 43, 44, 46, 50, 66, 72–77, 81, 98, 106–07, 108, 112, 114, 118, 134, 147, 148–50, 153–54, 156, 158, 159–73, 183, 185, 193, 200, 205–23, 224, 227, 229–30, 241, 253, 290–91, 331, 345, 366, 370–72, 375, 378, 383, 394, 424, 434, 443, 462–3, 482, 504–10, 516, 558–59, 562, 574, 612–14 legislature see legislator legitimate interests  41, 106, 300, 312 Leistungsstörungsrecht  24 lessees  37, 57, 401–2, 501–2 liability for breach of legislative protective norms  72–86 civil see civil liability conditions of  38, 132–33, 232, 444, 572 contractual  65, 246–47, 252–53, 256, 468, 472, 480, 515, 517 of court experts  183–84 for defective instructions, see instructions direct  98, 178, 369, 442, 491 for economic loss see economic loss employee  112, 131–32, 508–10 employer  117–28, 135, 504, 506–7 environmental  173 fault-based  16, 57, 70, 73, 107, 111, 113 general  57, 75, 366, 403, 515, 536 insurers  251, 272, 568, 620 joint  344, 509, 578–79 limitation of  427–28, 509, 562 manufacturers  112–13, 443–44, 476 medical  87, 136–46, 253, 537, 553–54 no-fault  147–90 official  586, 591–93, 598, 603 for others see vicarious liability personal  122, 127, 131, 134, 176–78, 184, 378, 380 precontractual  82, 89 product see product liability of public authorities  174–90, 369, 535–37, 583 risk-based  55, 102, 173, 362, 423, 443, 505, 508, 510, 529, 572 state  71, 178–80, 184, 186, 188 strict  16, 110–11, 148–59, 161–63, 165–69, 173, 481–82, 557–58, 573–74 third-party  240 unlimited  150, 157, 511 for untrue statements see misstatements vicarious see vicarious liability liberal-democratic order  283, 293–94 liberty  88, 182, 200, 215, 217, 219, 290, 292, 389 deprivation of  215, 290 limitation periods  94, 215, 222, 427–28, 465–67, 469–70, 472, 479–80, 509, 515, 523, 562

local authority  59, 66, 77, 175, 188, 368, 395, 479, 541 logical consequences  65, 248, 356 lorries  75, 125, 133, 167–68, 392, 490, 555–59, 565, 567 loss consequential  63, 194, 201, 203, 396, 402, 436 of earnings  68–69, 88, 165, 171, 194, 196, 227, 233, 347, 349, 351–52, 520, 594, 601 economic see economic loss financial see economic loss and loss, pecuniary immaterial  249, 290, 339 material  193, 347, 460–61 non-pecuniary  171, 194, 198, 203–4, 221, 290, 337, 613–20, 623–24 pecuniary  101, 104, 151, 194–95, 197–99, 204, 207, 229, 233, 236, 244, 246, 250, 256, 274, 288–89, 367, 435 of profits  188, 201, 203, 207, 411 pure economic  11–12, 36–37, 87–89, 91–95, 97–98, 105, 429–30, 432–33, 479–80 of services  200, 215, 233, 574 of support  172, 199–200, 228 third party  104, 427–28, 435–36 total  133, 508, 579 transferred  103–5, 396, 410, 439 loyalty  81, 86, 218 lump sums  197, 221, 347, 350, 620 machinery  66, 112, 132, 390, 394, 405–7, 410, 412, 464 maintenance building 57, 178, 213 child  246, 248–50, 250–54, 256–59, 602 highway  124, 586, 587 managers  81, 83, 349, 458–59, 469, 485, 487, 495–96, 499–501 managing directors  311, 379–80, 382, 384, 425, 591 manipulations  307, 520, 592 manufacturers  52, 109–16, 127–28, 441–45, 447–55, 469–70, 474, 476, 482–84 manufacturing  52, 171, 265, 263–65, 441, 443, 445, 446–47, 449, 455, 445, 472, 476, 482, 484 defects  112–15, 171–72, 451, 462, 470 material damage  201, 226, 261, 396, 538 material harm  226, 251, 256, 461, 464, 478, 591, 594 materiality threshold  261, 263 material loss  193, 347, 460–61 measure of damages see damages media  293, 295–96, 299, 301–2, 325–28, 330, 335 medical advisers  239, 243, 542–43, 545–47 medical assistance  255–56, 546 medical care  138, 233, 542 medical conduct  140, 145, 543

Index  635 medical duty  247, 540, 548, 550 medical error  246–47, 452, 538 medical expenses  88, 152, 165, 194–95, 197 medical experts  491, 494, 545, 547, 595–97 medical investigations  538, 540–41 medical liability  87, 136–46, 253, 537, 553–54 content of disclosure duty  142–43 disclosure in practice  144 disclosure of alternative available treatments  144 doctrinal basis  137–38 extra-judicial alternatives  146 fully controllable risks  145 gross treatment errors  145–46 negligence  136–37, 140–42, 144 normative assessment of medical behaviour  139–40 objective standard  140–41 patient consent  50, 138, 142, 334, 492–93, 539, 546 procedural indulgences  145–46 risk disclosure  143–44 treatment malpractice  138–41, 210 types of claim  138–45 medical officers  494, 594–96, 608 medical practice  139–40, 144–46, 553 medical practitioners  63, 138, 142, 145–46, 225, 238–39, 542–45 medical science  139, 229, 520, 547–48, 553 medical treatment  195, 241–42, 350, 357, 537–38, 542–43, 550, 553, 555 medicines  137, 255, 441, 445, 553 meetings, pictures of  217, 324 mental handicap  598–601 mental illness  234–35, 594 minors  50, 133–34, 526, 528, 531, 553 misstatements, negligent  82, 91–92, 94, 128, 432–33, 435 mitigation  67–68, 203, 207, 618 monetary compensation  44, 48–49, 151, 157, 195–96, 200–201, 334, 337, 621–23 money annuities  199–200, 214–15 morality  80, 275, 286 and see good morals motorcycles  62–63, 344, 488, 573, 575 motor vehicle insurance  157, 569 motor vehicles  153, 163–64, 166–68, 220–21, 223, 234–35, 555–59, 566–69, 572–73 municipalities  178–79, 587 negligence  51, 52–55, 57–58, 82–83, 91, 137–38, 206–7, 339–41, 386–87, 411–12, 459, 504–6, 553 advertent  53 contributory  58, 67, 194, 200, 232, 341–42, 346, 413–14, 486–87 defendants  240, 259, 346, 351, 416, 580

employees  126, 128 gross  53–54, 127, 132–33, 161, 176–77, 183, 205, 207, 214–15 medical  136–37, 140–42, 144 normal  53, 133, 508 negligent advice  376, 415 negligent conduct  103, 133, 146, 194, 197 negligent performance  96, 98, 436 negligent statements  82, 91–92, 94, 97, 128, 413, 429, 432–33, 435 negotiations  83, 129, 417, 426, 446, 513, 515, 517 contractual  101, 208, 419 neighbours  18, 134, 365, 369, 536 nervous shock  9, 32–33, 67, 71, 200, 224, 228, 230–33, 235–36, 541, 547 New Zealand  92, 438 no-fault liability  147–90 see also strict liability German approaches  147–57 non-delegable duties  121, 523 non-liability rule  60, 90–91 non-material harm  194, 198, 254, 256 non-pecuniary damage  238, 611, 614–18, 620–21 non-pecuniary losses  171, 194, 198, 203–4, 221, 290, 337, 613–20, 623–24 normal negligence  53, 133, 508 normative theories of causation see causation, normative theories of notaries  96, 177, 413–14 nuisance  17–18, 70, 73, 80, 411, 536 nurses  132, 134, 353, 521 objective attribution  33, 62, 360, 364, 453 objective interests  100, 434 objektive Zurechnung see objective attribution obligation to compensate  16–17, 148, 192, 201, 403 contractual  15, 38, 76, 109, 129, 395, 400, 444 law of  10, 17–18, 24, 27, 30, 65, 97, 118, 192 observer, optimal  65, 355–56 odd unit defence  171 official duty, breach of  175–80, 368–69, 583–87, 590–92, 594, 597–98, 601, 603–7, 609–10 official liability  586, 591–93, 598, 603 officials liability see official duty, breach of public  16, 175, 177, 178, 184, 186, 369, 535, 585–86, 598, 607, 609–10 omissions  53, 55, 61–62, 207, 285, 287, 310–11, 399, 598 wrongful  61–62 onus of proof see burden of proof operating business  39–42, 49, 51, 93, 261, 263, 268–70, 273–74, 393, 405, 411, 412 operational processes  235, 566–67

636  Index opinion academic  198, 288 dominant  8, 43, 242 public  67, 242, 285–86, 302, 336 optimal observer  65, 355–56 oral vaccination  550–51 organisational fault  128, 445–46 outpatient treatment  130, 245, 347, 519, 548 overtaking causes  63–64, 68 ownership  18, 35–37, 45–46, 261–63, 410, 412, 472, 475, 477 infringement of  261–63, 412 public  182, 534 pain and suffering, compensation for  130, 157, 251, 253, 337, 622 parental care  328, 550 parental duty of supervision  525, 527, 529 parents  134–35, 237–39, 243–46, 248–51, 254–60, 327–28, 531–33, 537, 550–52 natural  598–99 partners civil  200, 215 passengers  61–62, 155–56, 159, 220–21, 521–22, 555, 560–62, 569–72, 574 patents  38, 40, 266, 389 patients  50, 61, 136–46, 209–10, 348–49, 491–94, 519–21, 539–48, 551–54 consent  50, 138, 142, 334, 492–93, 539, 546 pavements  9, 59, 233, 496, 501–2, 573 pecuniary damages  164, 238, 240–41, 289, 291, 307, 613–14, 617, 619 pecuniary losses  151, 194–95, 197–99, 204, 207, 229, 233, 236, 288–89 penalties  164, 238–39, 290–91, 367, 370, 380, 383, 614 performance  101, 109, 206–8, 435, 510, 513, 518–22, 612, 618 agents for  518–19 defective  254, 256–57, 403, 435, 473 faulty  247, 430 negligent  96, 98, 436 periodic payments  161, 221–22, 233, 501, 620 personal claims  226, 232, 378, 437 personal data  310, 313–15 personal duties  18, 133 personal injury  107, 112, 150, 154, 158, 161, 166, 172, 478 non-pecuniary losses  198–99 pecuniary losses  194–97 personal integrity  32, 189, 242–43, 248, 540 personality free development of  89, 217, 281, 286, 289–90, 293, 326, 511 human  8, 40, 43–44, 48, 278–79, 289, 511, 544 protection of  46, 285–86, 294–95

rights  38, 45–48, 285–86, 292–93, 295–96, 298–306, 308–11, 315–16, 318–9, 335–36, 621–23 general  43–49, 286, 290–91, 301–2, 304, 322, 324–26, 328–29, 331–32 infringements  44, 48, 191, 309, 311, 316, 336, 623 personal liability  122, 127, 131, 134, 176–78, 184, 378, 380 personal sphere  293, 295–96, 299 Persönlichkeitsrechte see personality rights pharmaceutical products  35, 112, 115–16, 150, 170, 173 photographs  44, 46, 288, 316–17, 320–25, 328, 333, 525 publication  293, 317, 322, 328, 330 physical damage  29, 31, 92, 100, 183, 201, 203, 367, 429 physical handicaps  244–45, 251 physical impairments  229–30 physical injury  31–34, 97–98, 105, 232, 236, 254, 359–61, 369, 503–4 physical interference  36, 493 physical treatment  492–93, 544–47 pictures  14, 38, 45–6, 217, 289–90, 293, 295–96, 317–26, 328, 330–32, 525–26 of meetings  217, 324 of people  217, 318, 324, 331 planning permission  186–88 pleadings  230, 240, 418–19, 471, 481, 495, 539, 570 pledges  38, 385 police  33, 35, 182, 184, 188–90, 568–71, 583–86, 590, 595–96 officers  33, 182, 189, 352, 357–61, 569, 571, 583–86 policy reasons  10, 111, 156, 236 pollution  481–82, 484 portals, internet  297–98, 311–13, 315, 525–26 portrayal  303–4, 327, 329, 332 positive acts  52, 61, 154, 187, 403, 473 positive breach of contract  420, 444, 429, 444, 473 positive law  105, 266, 523, 616, 619 positive Vertragsverletzung see positive breach of contract possession  35, 37–38, 42, 45, 50, 213, 215–16, 401–2, 406, 412, 446, 472 lawful  405–7, 410, 412 potential danger  56, 172, 462, 524, 540 potential liability  60, 95, 97, 130–31, 429 pragmatism  100, 430 pre-accident earnings  160–61 precontractual liability  82, 89 predispositions  31, 67–69 pregnancy  19, 34, 237–38, 240, 244–45, 247, 251, 253–54, 259

Index  637 pre-natal injuries  32–33 preparatory works, code  9–10, 12 prescriptions  61, 459, 471, 505 press  43, 46, 48, 293, 295, 328–32, 588, 591, 622–23 freedom  317, 322, 329–31 pressure psychological  229–30, 361, 571 presumptions of fault  51, 58, 123, 128, 145, 171, 442, 446 of innocence  299–301 prima facie evidence  55, 57, 59, 62, 152, 341, 426, 448, 452 primary victims  33, 226–28, 232–33, 235, 349 privacy  20, 22–23, 39, 43–44, 47, 304, 316, 318–20, 333–34, 336 see also personality invasions of  45, 335 of posts and telecommunications  219 protection of  47, 85 private information  45, 335, 623–24 private law  19–21, 23–24, 177–78, 186, 275–81, 329, 333–34, 377–78, 614 constitutionalisation, of  19–25 private life  293, 299, 317–18, 321, 332, 335, 621 see also personality private medical treatment  347, 350 private sphere  255, 293, 295–96, 300, 318–20, 322, 324–27, 332–33 privity see contracts for third parties procedural indulgences  145–46 producers  172, 441–44, 446–48, 457–59, 462–63, 465, 469, 471–72, 482 liability for defective instructions  115–16 liability for defects in manufacture  113–15 product liability  106–16, 127–28, 170–73, 439–70 contractual or quasi-contractual solutions  108–10 development  107–8, 127–28, 170–71, 468 move from contract to delict  111–13 products damage to  471–80 dangerous  112, 443, 469 defective  107, 113, 128, 147, 462 finished  11, 114–15, 128, 172, 446 statutory liability  170–73 professional associations  267, 559–60, 562–64 professional guidelines  139 professions  8, 54, 92, 178, 212, 218–19, 254, 287, 370–71 profits disgorgement  47–48, 623–24 future  48–49, 188 lost  43, 188, 201, 203, 207, 233, 396, 411

proof  124–26, 128–29, 337–38, 444–49, 452–59, 461–64, 468–69, 506–7, 535–36 burden of  108–9, 124, 128–29, 145–46, 445–49, 452–59, 490, 506–7, 535–36 exculpatory  113, 123–27, 131, 166, 521 exonerating  128, 446–47, 499–501, 527–28, 533, 535 of fault  157, 459, 506 property  17–18, 35–36, 90–94, 185–86, 201–3, 397, 399, 410, 472, 474–76, 478–80 damage  94, 97, 105, 112, 150, 152, 158, 164, 166 law  18, 24, 36 physical damage to  31, 201, 429 rights  18, 21, 187, 189, 260–63, 265 prosecution  179, 182, 264–65, 296, 366, 585 prospective contractors  129–30, 414–6, 421, 513–14 protected interests, breach of  29–71, 72, 224–352, 528 protection of personality see personality protective ambit  39, 75, 100, 155, 394, 421, 437 protective effects  97–99, 104–5, 242–43, 418–20, 430–32, 436–37, 439, 442, 515–17 protective enactments  29, 43, 60, 72–77, 82, 153–56, 181–83, 365–6, 370, 373–74, 377–79, 381–83, 393, 409, 434, 445, 459, 569, 572 protective law see protective enactment protective norms see protective enactment protective purpose of law  65, 70, 181, 229, 245, 249, 254, 330, 595–96 psychiatric injury  32, 225, 230–32, 545 psychological harm  181, 257 psychological impairments  228, 230, 232 psychological pressures  229–30, 361, 571 publication of photographs/pictures  45, 293, 294–6, 316–34 of novel  301–07 unauthorised  45, 47, 286, 288, 290, 292 public administration see public bodies public bodies  59, 175, 177–79, 185–87, 189, 219, 280, 282, 293, 296, 369, 371–72, 486, 488, 535–37, 609, 615 liability  174–90, 369, 536–37, 583 German and English law compared  184–85 public domain  45, 47 public duties  176, 179, 182, 214, 321 general  182 public employees  160, 586–87, 598 see also civil servant public figures  45–46, 321, 336 public highways  56, 566, 586–87 public interest  47, 277, 280, 293, 296, 318–19, 330–32, 369–72, 590 public law  19, 23, 126, 135, 179, 184, 277, 279–80, 535

638  Index public officials  16, 175, 176, 178, 184, 186, 369, 534, 535, 598 public order  182, 368, 585 public ownership  182, 534 public policy  40, 80, 156 public purposes  367–68, 617 public transport  159, 371–72, 383 purchase  57, 129, 323, 376–77, 426, 513–16 contracts  419–20, 425–26 prices  377, 422, 425–26, 485, 487 purchasers  419, 423, 425–26, 431–32, 434, 472, 476, 479, 485 prospective  129–30, 513–14 pure economic loss  11–12, 36–37, 87–89, 91–95, 105, 410–11, 429–30, 432–33, 479–80 quality control  457, 459, 461, 468 quantum of damages see amount of damages quasi-contractual relations  92, 443–44, 446 quasi-expropriatory encroachment  185–89 railways  77, 147, 153, 155, 157–58, 234–35, 372, 504–7, 565 reasonable care see negligence reasonableness  135, 195, 310–11, 534 Rechtsgüter see protected interests recklessness  53–54, 81–82, 207, 581 recourse  67, 127–28, 151, 157, 176–78, 185, 219, 403–4, 563–64 reflex effects  234, 294, 296–97 reforms of German law  10, 13, 15, 22, 24–25, 138, 157, 160, 162, 192, 420, 429–30, 432, 444, 468, 473, 480, 554 reimbursement  165, 197, 562, 564–65 reinstatement  196, 268 relations contractual  401, 416, 458, 514, 523, 580 quasi-contractual  92, 443–44, 446 relationships special  96, 132, 180–81, 394, 488, 492, 610 relatives  33, 38, 177, 196, 217, 324, 351, 541, 543 close  32, 229–30, 348–49, 351 reliance  95, 100–101, 105, 109–11, 431–32, 467, 486, 505, 595 remedies contractual  57, 104, 109, 129, 428, 435 delictual  108, 522 remoteness  56, 66, 71, 88, 235 of damage  64, 70 remuneration  119, 133, 220, 349, 404 repairs  201–3, 240, 401, 419–20, 470, 473, 479, 497, 519 reparation  44, 132, 174, 188, 195, 203, 207, 240

replacement  203, 337, 401, 474–75, 477–78, 536 representation  4, 292, 294–95, 380 legal  3–4, 127 representatives  126–27, 158, 394, 486–87, 583 reproductions  285, 294 reputation  12, 23, 43, 49, 271, 274, 283, 596, 606 business  106, 306 responsibility fiduciary  385, 387 special  397, 498 restitution  206, 391, 435, 614, 624 in kind  206, 614 restoration  195–96, 201, 203, 285, 334, 396 retention  116, 282, 309, 314–16, 391 reunification. German  1–2, 271–72, 404–5, 407 review constitutional  186–87, 259, 278, 283 judicial  186, 584 ricochet damage  172, 191, 199 victims  199, 233 rights absolute  181–82, 273, 392 constitutional  20–21, 279, 280, 281, 409 contractual  392, 427 exclusive  266, 288–89 fundamental under Basic Law  20, 189, 280, 283, 292–93, 297, 371, 405, 409 human under ECHR  22–23, 185, 190, 279–82, 299, 309 individual  174, 183, 185 ownership  261–63 personal  248, 316 personality see personality, rights possessory  261–63 protected  19–20, 52, 124, 183, 191 special  38, 266 speech  23, 46–47, 281 risk-based liability  55, 173, 572 risks  143–45, 149–52, 358–60, 449–51, 453–54, 522–24, 550–52, 554, 570–72 general, of life  189, 231, 261, 357, 359, 364, 451, 509, 511–12, 572 of injury  344, 359–62 special  154, 338 road traffic  73, 87, 134, 147, 152, 228, 272, 342, 344–45, 372, 555, 568, 571, 578, 587 accidents  87–88, 151–52, 162–63, 167, 169, 272–73, 344–46, 504, 506–7 road users  75, 163, 344, 587 Roman law  14, 16–17, 118, 147, 178 sacrificial encroachment  185, 187, 189 safety  56–57, 346–47, 368–69, 388, 393, 453–55, 495, 514, 586–87

Index  639 sales  94, 128–29, 417–18, 441–42, 465, 467, 472–73, 513, 515–17 Saxony  1, 14, 43, 404 schools  181, 311–14, 316, 525, 527, 529, 531, 536, 607–10 search engines  106, 306–11, 313 search terms  306–9 secondary victims  232–33, 235–36 security, giving  81, 214, 219, 222, 376, 379, 384, 413, 578–79 selection by employer  57, 87, 125–26, 499–502 negligent  109, 112 self-defence  205, 555 self-determination  90, 141, 143, 232, 255, 257, 543, 549, 553–54 self-employed persons  159, 349 self-help  37, 50, 191, 206 sellers  101–4, 421, 426, 444, 465, 468, 473–74, 513, 516–17 separation of powers  22, 184–85, 252 service providers  309, 438 services  117, 199–200, 233, 267–70, 371–72, 457, 511–13, 561–62, 605–6 loss of  200, 215, 233, 574 regular  76, 369–70 servitudes  38 settlement  4, 113, 146, 602–3 sexuality  300–301, 326 shareholders  81, 83, 96, 373, 375, 379–80, 382, 434 potential  433–34 shares  76, 96, 110, 239, 376, 384–85, 422, 425–26 shock  32–33, 225, 234–35, 386, 569 damage  227–28 distant  33, 231 nervous  9, 32–33, 67, 71, 200, 224, 228, 230–33, 235–36 psychic  225 treatment  491–93, 541–43, 545–47 shops  56–57, 98, 129, 323, 516 signatories, authorised  465, 467 skill  154, 340, 356 social exclusion  301 social security  159–60, 162, 165, 170, 193, 197, 260, 269, 491 insurers  193, 196 legislation  149, 158, 165 systems  70, 161, 164–65, 196–97 software  48, 172, 310–11 sovereign acts  175, 177–78, 598 special circumstances  209–10, 232–33, 291, 294, 309–10, 360, 362, 392, 398 special damages  259, 347 special dangers  181, 361, 482, 498, 587 specialist courts  252–53, 255

special relationships  96, 132, 180–81, 394, 488, 492, 610 speech  22–23, 35, 41, 47–48, 278, 280, 283, 334, 336 freedom of  22, 47, 278, 283, 334 sport  267–69, 271–73, 337–40 spouses  30, 39, 199–200, 215, 241 death  227, 352, 517 see also husbands; wives standards of care  54–55, 58, 67, 114, 135, 139–41, 178, 340, 346, 388, 393, 501, 505, 596 state liability  71, 178–80, 184, 186, 188 statements see also misstatements incorrect  285, 339, 354 negligent  92, 94, 97, 413, 429 untrue  87, 105–6, 287, 604 state prosecutors  585, 589–93 stationary vehicles  153, 556–58 statutory duties  67, 73, 75, 88, 180, 212, 256, 383–84 statutory insurance  159–60, 162, 165, 181 statutory liability  73, 563, 576 for products  170–73 sterilisation  238, 247, 251, 254–57, 447 strict liability  16, 110–11, 148–59, 161–63, 165–69, 173, 481–82, 557–58, 573–74 accidents at work  159–62 general characteristics shared by instruments  150–57 German approach  149–50 for operating engines  168, 567 Road Traffic Act 1952  162–70 statutory liability for products  170–73 sub-contractors  98–99, 403–4, 428 subordinate employees  459, 500 subsidiary duties  437, 446, 516 supervision  118, 133–35, 212–14, 498–502, 504, 522–23, 527–28, 531, 533–36 adequate  133, 160, 536 degree of  125, 531 duty of  133, 135, 212, 214, 382, 502, 522, 525, 527–36 fault in  522, 536 general  160, 502 parental duty of  525, 527 supervisors  133–35, 181, 380–82, 489, 534, 607, 609 suppliers  114, 172, 184, 388, 418, 422, 441, 495–96 support loss of  172, 199–200, 228 Supreme Court, style, form and content of argument  6–13 surety  417–19, 485 surviving dependants  226, 561, 563 Switzerland  163, 166, 197, 258, 397

640  Index teachers  120, 135, 181, 312–13, 534–35 teaching, freedom of  218 technical knowledge  114, 461–62 teleological interpretation  231, 409 tenants  3, 57, 394, 401–2, 518–19, 531 theft  122, 166, 583–84 therapy  141, 143, 209–10, 492–94 third parties contract with  8, 12, 30, 83, 91, 92, 97–105, 109–10, 130, 242, 276, 394–97, 419–22, 427–36, 437–42, 516–17, 522–23 exoneration as  161–62, 168, 223, 227, 323–33, 483–84 loss  104, 427–28, 435–36 obligation towards  38, 48, 57, 83, 94, 95, 97, 111, 114, 120, 126, 127, 131–32, 133, 174, 176, 179–83, 199–201, 207–09, 212–16, 220–21, 226, 229–30, 240, 272, 288–90, 304, 349–51, 401, 407, 422–24, 442–52, 482, 527, 528, 533–34, 562, 574, 584–85, 590, 600 third-party liability insurance  152, 163, 169 threats  35, 211, 263, 265, 290–91, 316, 588 tort and contract  54, 97, 137, 192, 248, 395, 427, 439, 458 economic  79, 82, 84, 386–87 intentional  78, 84, 552 tortfeasors, joint  407–8, 412, 577 trade names  172, 443 traffic  341–42, 344, 370, 488–90, 504–6, 557–59, 562, 566–68, 586–89 traffic accidents see road traffic accidents traffic rules  490, 504, 506, 570 traffic safety  56–59, 345, 489, 571, 587–88 transferred loss see Drittschadungsliquidation transport  155–56, 220, 222, 261–63, 399, 449–51, 521–22, 561, 566–68 public  159, 371–72, 383 treatment  138–39, 141–46, 209–10, 237–38, 246–47, 452, 491–94, 538, 541–49 contracts  15, 25, 136–38, 140, 144–45, 209 defective  548–49 electro-shock see shock, treatment errors  138–39, 145–46, 209–10 malpractice  138–41, 210 medical  195, 241–42, 350, 357, 537–38, 542–43, 550, 553, 555 see also medical liability outpatient  245, 519, 548 physical  492–93, 544–47 preferential  336, 507 providers  143, 209–10 shock  491–93, 541–43, 545–47

Trennungsprinzip  134, 339–40 trespass  17, 142, 340, 552 Treu und Glauben see good faith trusts  84, 102, 179, 385, 387, 421, 424–25, 589, 591 ultimate consumers  109–11, 468, 471 unauthorised employees  395, 397 unauthorised publication  45, 286, 288, 290, 292 unavoidable events  151, 159, 168, 223, 573 unconscionable conduct  83, 379 unerlaubte Handlungen see unlawful acts unfair competition  7, 79–80, 106, 266 unintentional harm  70, 95, 118, 235 United Kingdom  6, 279–80 see also England United States  2, 19, 42–43, 95–96, 107–8, 230–31, 258, 260, 283 unjustified enrichment  15, 83, 289, 405 unlawful acts  15, 109, 118, 138, 140–41, 185, 187–89, 212, 214, 504, 527, 576 unlawful damage  123–25, 504–5 unlawful ends  84–85 unlawful infringement  301, 311, 405–6, 408 unlawful injuries  265, 505, 507 unlawful interferences  72, 188, 269, 275, 310, 404 unlawfulness  16–17, 41–42, 55–56, 79, 123–24, 186, 314, 407, 504–6 element of  41, 49–52, 79, 123–24, 274 and fault  49–55 objective  49, 505 unlimited liability  150, 157, 511 untrue statements  87, 105–6, 287, 604 use  10–12, 35–37, 113–15, 187–88, 202–4, 218–21, 261–63, 412, 528–29 intended  115, 261–63, 288, 484 loss of  94, 203–4, 397, 405, 410 users internet  308, 315, 526 road  75, 163, 344, 587 ultimate  441–43 vaccination  549–52 vaccines  440–42, 444–45, 447 defective  76, 110 valuation  61, 64, 286, 355, 418, 420, 431 expert  416–18, 421 value  12–13, 187–88, 202, 242, 347, 417–20, 425–26, 474–75, 509–11 commercial  417–18 economic  204, 624 fundamental  280, 290 judgements  42, 54, 64, 67, 106, 167, 248–50, 256, 279

Index  641 vendors  85, 419, 421, 485 Verfassungsbeschwerde  20, 259, 277–78 vicarious liability  16, 109, 112, 117–22, 122–24, 126, 131, 133, 134, 137, 174, 177, 522, 523–24 victims  67–70, 151–52, 159–67, 184–87, 196–200, 226–30, 348–52, 577–79, 614–21 direct  226, 348, 351 indirect  226, 236, 349 primary  33, 226–28, 232–33, 235, 349 ricochet  199, 233 secondary  232–33, 235–36 violence  295, 406, 449 visitors  57, 59, 348–49, 369, 514 wages  132–33, 161, 393, 397 warranties  170, 402, 443, 470, 473, 475–76 waste  121, 479–85 industrial  482, 485 oil  481, 483–84

water  150, 154–55, 186, 353–54, 357, 367, 481–82, 484, 495–96 authorities  394–95, 485 websites  7, 307, 309, 311–14, 525–26 weighing of interests  51, 270 Weimar Constitution  22, 178, 186, 278 Weiterfressermangel  12, 36, 94, 172, 480 welfare  239, 442, 599, 604 work  69, 267–70, 349, 393–95, 401–6, 495–97, 507–12, 517–20, 560–62 accidents at  159–62 dangerous  132, 508 non-dangerous  508 workers  119, 122, 131, 383, 440, 478, 497, 500, 561–63 wrongful birth  9, 19, 237, 241, 258–59 wrongful conduct  61, 66, 78, 205, 216, 274 wrongful life  34, 71, 241, 258–59 wrongful omissions  61–62

642