Germany is often seen as the land of poets and thinkers, but also as a country of quarrelsome people. Statistics do indeed show that the concentration of judges in Germany is among the highest in all Europe; according to a report published in 2012 by the European Commission for the Efficiency of Justice, Germany has 24.3 professional judges per 100,000 inhabitants, whereas the UK has 3.6, France has 10.7 and Spain has 10.2.

In the event of a dispute, businesses still tend to prefer having the matter decided by the state courts. All too often they are unaware of alternative dispute resolution methods which better suit the particular case concerned. The steps taken first by European lawmakers and now by Germany are having the effect of shifting the balance away from litigious disputes and towards alternative procedures. This reflects a need which is being felt increasingly strongly, especially by members of the business community.

 Why mediation is becoming more important in Germany

There are good reasons for trusting the German legal system when faced with a dispute. It is regarded as effective, and the judiciary as being independent and efficient. Nevertheless, changes in the law, state budget cutbacks and tougher economic conditions have resulted in changes that will trigger a rethink when it comes to choosing a dispute resolution mechanism. Such changes are outlined below.

 Delegation to third-parties in suitable cases

The delegation of dispute resolution to a third party is based on a conviction that this party is objective and has the capacity to penetrate the details of the case. Whereas there is no doubt as to the state courts’ objectivity, there are major differences in the capacity of the 20,000 judges potentially responsible for deciding the conflict.

Jan-Mar 2014 issue

White & Case