A lot of investors are entitled to claim damages after an investment has gone wrong. It is possible to suspend the statute of limitations for these claims by properly submitting applications for conciliation.
GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: Many an investor can tell you a thing or two about stakes in ship funds, real estate funds or other kinds of investments that did not meet their expectations, incurring financial losses instead of a reasonable rate of return. It often turns out that the investors are entitled to claims damages, for instance due to erroneous investment advice. However, it is possible for these claims to become time-barred.
There are two different limitation periods that one needs to take notice of here. In the case of the limitation period that does not take into account knowledge of the relevant circumstances, claims become time-barred ten years to the day from when they arise. In the case of the three-year limitation period based on awareness of the relevant circumstances, claims need to be asserted no later than the end of the third year after the respective claim has been discovered. The claims of many investors could therefore become time-barred as of December 31, 2015. In principle, it is possible to suspend the prescription of damages claims by taking appropriate legal measures. These also include submitting applications for conciliation, but these can only be effective if they fulfil certain conditions.
The Bundesgerichtshof (BGH) [German Federal Court of Justice] laid down various criteria in June 2015 which an application for conciliation has to satisfy in order for it to be able to suspend the statute of limitations (Az.: III ZR 189/14, 191/14, 198/14 and 227/14). According to these, the application needs to precisely define the investment, specify the subscription amount as well as the approximate consultation period, and at least roughly outline the progress of the consultation. Furthermore, it must be apparent from the application which claim is being asserted. If an application for conciliation fails to satisfy these requirements, the statute of limitations will not be suspended for the claims. In summary, applications for conciliation have to be sufficiently individualised. Model applications featuring generalised justifications will not stand up to legal scrutiny.
Investors can turn to lawyers who are competent in the fields of banking and capital markets law to ensure that their applications for conciliation do not give rise to any nasty surprises. They can assess whether any claims for damages do in fact exist and prepare the application in such a way that the statute of limitations is effectively suspended for the claims.
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