A recent amendment to Germany’s Implementing Act to the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (“Hague Evidence Convention”) may change Germany’s long standing practice of rejecting pre-trial discovery requests, if certain prerequisites are met.
The Hague Evidence Convention of 1972 is a multilateral treaty creating a system of mutual legal assistance for the provision of evidence between the Contracting States, in particular between those of civil law and common law. It allows transmission of letters of request (rogatory letters) from one Contracting State (where the evidence is sought) to another Contracting State (where the evidence is located) without recourse to consular and diplomatic channels. To date, there are 64 States signatories to the convention, including most of European states, the US, the UK and China.
In its Article 23, the Hague Evidence Convention gives the Contracting States the option to “declare that it will not execute Letters of Request issued for the purpose of obtaining pre-trial discovery of documents as known in Common Law countries” (Article 23 of the Hague Evidence Convention) due to concerns about invasive requests. The procedure of "pre-trial discovery of documents" is a form of evidence gathering provided for in common law, which enables each party to the proceedings to have a comprehensive insight into documents in the possession of the other party to the proceedings and, under certain circumstances, even into documents of third parties not involved in the proceedings.
When it adopted the convention in 1977, Germany made use of this possibility, opting for a general, non-particularised reservation and, in its Implementing Act of 15 November 1965 (1965 Implementing Act), provided that exceptions to this general reservation should be possible as long as they did not conflict with neither "fundamental principles of German procedural law" nor "interests of the persons concerned that are worthy of protection" (§14 (2) of the 1965 Implementing Act). The associated requirements and the procedure were to be regulated separately, whereby the consent of the German Federal Council (Bundesrat) was necessary. However, German’s federated states (Bundesländer) blocked the enactment of this legal ordinance, essentially preventing any requests for pre-trial discovery from being executed in Germany.
Germany’s recent amendment to its Implementing Act to the Hague Evidence Convention was submitted by Federal Ministry of Justice on 19 January 2022, passed by the Bundestag and the Bundesrat and has entered into force on 1 July 2022 (Law Decree, Gesetzesbeschluss). In its new Section 14, the previous general reservation under Article 23 of the Hague Evidence Convention has been converted into a specific one. It now provides that requests for mutual legal assistance on pre-trial discovery of documents shall be executed if:
A similar version of the new Section 14 had already been considered by Germany in 2017, but the bill was withdrawn by the Judicial Affairs Committee, under the argument that the benefit of the proposed rule is doubtful as the taking of evidence in which documents were in one’s possession was inadmissible. However, whereas in 2017 the legislator had justified its draft law, among other things, by stating that the amendment was intended to prevent US courts from applying their national civil procedure law extraterritorially to German parties in corresponding cross-border evidence proceedings, this is no longer the case. Now the legislature invokes the fact that the general exclusion of such requests for mutual legal assistance in certain cases leads to an unjustifiable unequal treatment of domestic and foreign requests for production of documents.
In German domestic proceedings, document production is regulated under Section 142 of the German Code of Civil Procedure (“CCP”), which provides that a party (or third party) may be ordered by the court to produce documents which it has in its possession and to which it or the opponent has referred, irrespective of who must discharge the burden of proof. Exceptions are foreseen for cases in which a party would be allowed to refuse to testify in general (Sections 383-385 CCP).
With the new regulation, Germany is still taking a cautious approach towards pre-trial discovery, while balancing the treatment of domestic and foreign document requests. On the one hand, the narrow requirements are intended to counteract undue discovery and the so-called fishing expeditions, whereby one party merely seeks to find out what documents may generally be in the possession of the other party to the proceeding. On the other hand, the essential principles of German law are safeguarded and the protection of personal data is ensured.
Germany’s approach with its narrow requirements is however not entirely novel. The first three requirements introduced with the new Section 14 of the Implementing Act resemble those set in the IBA Rules on the Taking of Evidence in International Arbitration (the “IBA Rules”). The IBA Rules is one of the most widely used soft law instruments in international arbitration practice and is frequently adopted as the evidentiary standard for document production, since it is designed to reflect and harmonise procedures in use in many different legal systems. It is particularly useful when Parties and counsel come from different legal traditions, as civil and common law jurisdictions. Document production under the IBA Rules is differentiated from discovery practices found in common law jurisdictions in several ways, containing provisions especially designed to prevent any “fishing expeditions”, while enabling the Parties to request documents that may be identified with a reasonable specificity.
Under Article 3.3(a)(ii) of the IBA Rules, similarly to the first requirement in the new Section 14 of the Implementing Act, documents are required to be described ‘in sufficient detail (including subject matter) of a narrow and specific requested category of Documents’. In addition, Article 3.3(c) of the IBA Rules, similarly to the third requirement in the new Section 14 of the Implementing Act, asks for a declaration that the requested Documents are not in the possession, custody or control of the requesting Party, but of the other Party. Finally, the second requirement in the new Section 14 of the Implementing Act also bears similarity to the substantive objection to document production set under Article 9.2(a) of the IBA Rules, according to which for ‘lack of sufficient relevance to the case or materiality to its outcome’ a document shall be excluded from evidence.
The admission of the "pre-trial discovery of documents", as it has already been recommended several times by special commissions of the Hague Conference on the Hague Convention, does not lead to a situation where companies or persons resident in Germany have to fear being investigated by means of this procedure for the discovery of evidence, due to the narrow requirements. Should the new regulation actually lead to an increased application of the Hague Evidence Convention by foreign courts in document issuance proceedings, this should in principle have positive effects for domestic parties. This recent amendment will at least enable German courts to execute pre-trial discovery requests from foreign courts. This type of evidence taking is utilised by countries such as Australia, India, Singapore, South Africa, the UK and the US, which are all Contracting States to the Hague Evidence Convention. Whether Germany’s new approach will substantially impact future transnational litigation is yet to be observed.
Vanessa Zimmermann de Meireles, LL.M. (Geneva MIDS)
+49 40 18067 10759