News and Press - Lawyers Attorneys Tax Advisors GRP Rainer Germany - Cologne Berlin Bonn Düsseldorf Frankfurt Hamburg Munich Stuttgart London UK https://www.grprainer.com/en/ <img src="typo3conf/ext/typo3sz_assets/Resources/Default/Public/Images/grp-logo.png" alt="GRP Rainer - Lawyers Tax Advisors" title="GRP Rainer - Lawyers Tax Advisors" /> News and Press releases of Lawyers Attorneys Tax Advisors GRP Rainer Germany Cologne Berlin Bonn Düsseldorf Frankfurt Hamburg Munich Stuttgart London UK en GRP-Rainer Sat, 24 Feb 2018 13:12:05 +0100 Sat, 24 Feb 2018 13:12:05 +0100 TYPO3 news-3112 Tue, 20 Feb 2018 08:04:40 +0100 Employer’s right to give instructions regarding business trips abroad https://www.grprainer.com/en/news-and-press/detail/news/employers-right-to-give-instructions-regarding-business-trips-abroad.html An employer’s executive prerogative entails being able to order business trips abroad if the employee commits himself to undertake this kind of service in his or her employment contract. That was the verdict of the Landesarbeitsgericht (LAG) Baden-Württemberg [Regional Labour Court of Baden-Württemberg].

In many industries, business trips come with the territory for a lot of employees. In the wake of globalization, business trips no longer mean simply travelling within Germany or to neighbouring countries but also further afield to countries such as China. We at the law firm GRP Rainer Rechtsanwälte note that according to a ruling of the LAG Baden-Württemberg from September 6, 2017 (Az.: 4 Sa 3/17)), an employer is able to order these kinds of business trips by virtue of its executive prerogative if the “versprochene Dienste”, i.e. the promised services, set out in the employment contract pursuant to sec. 611 para. 1 of the Bürgerliches Gesetzbuch (BGB) [Germany’s Civil Code] can naturally be associated with occasional foreign assignments.

The case before the LAG concerned an engineer who had been employed for about 30 years at a machine manufacturer and was rarely sent on business trips, and on those rare occasions only to countries nearby. However, he was then made to travel to China. From the employee’s point of view, the hotel, service and location of the accommodation left much to be desired. He viewed the trip as a form of victimization by his employer and brought a legal action to prevent his employer from being allowed to send him on business trips abroad, at least not to distant countries.

The LAG dismissed the claim, stating that although an employee need not accept intolerable accommodation while abroad, he can be sent on business trips. Moreover, the employer can set out in more detail the working hours, places of work and what the work entails as it reasonably sees fit as long as no contractual or collectively agreed provisions preclude this. The Court held that in this case the employer’s right to issue instructions in relation to the place of work was not limited by the employment contract due to the lack of a clear provision on this issue. The fact that the work owed by the engineer was not limited to a single location was said to be evident from a provision in the employment contract concerning compensation for travel expenses. The LAG went on to say that this kind of arrangement made no sense in the absence of an obligation to go on business trips, and gave leave to appeal.

When it comes to matters pertaining to the workplace or drafting employment contracts, lawyers who are experienced in the field of employment law can offer advice.

For more informations:

https://www.grprainer.com/en/legal-advice/employment-law.html

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news-3108 Thu, 15 Feb 2018 08:35:11 +0100 Managers‘ risk of liability and D&O insurance https://www.grprainer.com/en/news-and-press/detail/news/managers-risk-of-liability-and-do-insurance.html Mistakes made by managers can prove costly both for the company as well as the managers themselves. For this reason, many companies take out D&O insurance policies for their executive personnel.

The executives in a company not only bear considerable responsibility, they can also be held accountable for the mistakes they make and held liable with their private assets. An increasing number of businesses have therefore begun taking out D&O insurance or management liability insurance for their governing entities. The business can benefit from this as well if it personally asserts claims against its executive personnel and the D&O insurance needs to kick in.

The Volkswagen emissions scandal made and still continues to make headlines. Yet matters pertaining to managerial liability are not always sensational cases plastered across all of the media. In insolvency cases, for instance, the company in question or its governing entities may be faced with claims brought by the insolvency administrator. Here, it normally pays off to have concluded a D&O insurance policy, which is why liability insurance for managers has long since ceased to be an issue that only concerns large corporations and is now of interest to a lot medium-sized companies.

There are, of course, also instances where a claim arises but the insurer does not wish to step in. We at the commercial law firm GRP Rainer Rechtsanwälte note, therefore, that one needs to closely examine which circumstances are covered by the insurance when taking out the policy. That is why the individual risk potential ought to be analysed carefully and the policy tailored to specific needs.

Obviously, it is absolutely crucial to consider the insured sum under the policy. It is equally important that claims arising both from internal liability, i.e. claims brought by the company against its executive personnel, and external liability in cases involving claims brought by third parties be covered.

Other essential aspects include retroactive coverage as well as coverage for follow-up liability. In the case of retroactive coverage, the insurer also commits to stand good for circumstances that took place prior to the conclusion of the policy but that were not discovered until later on. With respect to follow-up liability, insurance coverage will also be provided in the event that a claim arises during the term of the policy that is not discovered until afterwards.

All in all, there are a lot of details that one needs to be mindful of when taking out D&O insurance. Lawyers who are experienced in the field of company law can advise businesses and their managers.

For more informations:

https://www.grprainer.com/en/legal-advice/company-law/do-insurance.html

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news-3101 Fri, 09 Feb 2018 07:59:06 +0100 No registration of “Bester Papa” as EU trade mark due to lack of distinctiveness https://www.grprainer.com/en/news-and-press/detail/news/no-registration-of-bester-papa-as-eu-trade-mark-due-to-lack-of-distinctiveness.html Bester Papa” (“Best dad(dy)/papa”) lacks this... ]]> In order for a trade mark to be capable of being registered as a European Union trade mark it needs to be highly distinctive. The slogan “Bester Papa” (“Best dad(dy)/papa”) lacks this distinctive character.

The protection afforded by a trade mark is vitally important to businesses. Among consumers, trade marks give rise to a high level of brand recognition. Registering a trade mark also affords protection from competitors who would otherwise be able to benefit from its success. That being said, not every mark can be registered as a trade mark. We at the commercial law firm GRP Rainer Rechtsanwälte note that registration requires a highly distinctive character. That is why, for instance, the General Court of the European Union rejected the registration of the mark “Bester Papa” as an EU trade mark in its judgment of September 15, 2017 (Az.: T-451/16).

Cups, t-shirts etc. with the inscription “Bester Papa” or “Beste Oma” (“Best grandma/granny”) are very popular as gifts or tokens of recognition. For this reason, one company wanted to register the word mark “Bester Papa” as an EU trade mark. However, the European Union Intellectual Property Office (EUIPO) completely rejected its registration. In justifying its decision, it stated that the mark lacked the necessary distinctive character, and that consumers would consider the two words commonplace and merely a promotional message. It went on to say that no part of the mark was capable of being interpreted by consumers as an indication of the goods’ commercial origin.

The company was unsuccessful in bringing a legal challenge against this decision. The General Court shared the view of the EUIPO. The mark was said to be a classic slogan expressing praise and personal affection. The Court held that this combination of words is a commonplace expression that is familiar to consumers in a number of contexts. It ruled that there is no need for several associated logical steps in order to understand the mark as an expression of personal affection. The Court noted that the goods are, after all, suitable as gifts, and that this combination of words is perceived by the relevant public as nothing more than a promotional slogan. The General Court concluded that there was a lack of distinctiveness distinguishing the goods from products of other producers. Due to this lack of distinctive character, it was not possible to register the mark as an EU trade mark.

Lawyers who are experienced in the field of intellectual property law can advise businesses on registering trade marks as well as enforcing claims in the event of trade mark violations.

For more informations:

https://www.grprainer.com/en/legal-advice/intellectual-property-law-and-trademark-law/trademark-law.html

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news-3094 Thu, 01 Feb 2018 08:44:48 +0100 BGH: A square shape can also be protected as a trademark https://www.grprainer.com/en/news-and-press/detail/news/bgh-a-square-shape-can-also-be-protected-as-a-trademark.html Three-dimensional symbols that represent the shape of a product can be protected as a trademark. That was the verdict of the Bundesgerichtshof (BGH), Germany’s Federal Supreme Court, in two rulings from October 18, 2017 (Az.: I ZB 3/17 and I ZB 4/17).

We at the commercial law firm GRP Rainer Rechtsanwälte note that the three-dimensional shape of a product is capable of being protected as a trademark pursuant to trademark law if the shape is not required exclusively for the purposes of producing a technical effect.

A chocolate manufacturer and a dextrose manufacturer had their three-dimensional symbols registered as trademarks. Competitors of theirs did not want to leave it at that and instead filed an application for cancellation of the trademarks. The dispute ultimately came before the Bundesgerichtshof.

Prior to this, the Bundespatentgericht, Germany’s Federal Patent Court, had ordered that both trademarks be cancelled, it having recognized only technical functions in all of the essential characteristics of the shapes of the products shown in the trademarks. However, the BGH overturned the rulings and referred the cases back to the Bundespatentgericht. It was said that the only symbols that should be excluded from trademark protection are those which consist solely of a shape that is required for the purposes of producing a technical effect. According to the 1st Civil Panel of the BGH, competent to hear cases pertaining to trademark law, among other things, this was neither the case in relation to the chocolate nor the dextrose.

In the case of the dextrose, the Panel held that the specially shaped rough edges of the tablets do not have a technical function but are instead meant to make consumption more pleasant for consumers. This was said to have a sensory effect. The Court went on to say that in the case of the chocolate there was also no essential functional characteristic associated with its square shape. It is possible for even three-dimensional symbols, including the shape of a product, to be admitted as trademarks if they are capable of distinguishing goods and services from one company from the products of another company.

The Bundespatentgericht will now have to rule on whether there are other grounds excluding trademark protection for both of the products.

Trademarks are an asset of significant value to businesses that ought to be protected. However, for this to happen it needs to be assessed whether the conditions for registering a symbol as a trademark are fulfilled. Moreover, rights pertaining to existing trademarks cannot be infringed. Lawyers who are experienced in the field of intellectual property law can advise on all issues relating to registering a trademark and trademark protection.

For more informations:

https://www.grprainer.com/en/legal-advice/intellectual-property-law-and-trademark-law/trademark-law.html

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news-3092 Wed, 31 Jan 2018 08:19:55 +0100 Truck cartel – Damages claims against Scania now also a possibility https://www.grprainer.com/en/news-and-press/detail/news/truck-cartel-damages-claims-against-scania-now-also-a-possibility.html Last summer, the European Commission imposed heavy fines on five truck manufacturers for violations of antirust law. The Swedish truck manufacturer Scania is now being asked to pay up as well.

The so-called “truck cartel” made headlines last summer. The European Commission had imposed fines totaling just under 2.9 million euros against the manufacturers MAN, Daimler, DAF, Iveco and Volvo/Renault for entering into illegal arrangements. Scania did not participate in the settlement and disputed the antirust accusations. Consequently, the European Commission continued its investigations in relation to Scania. The result: The Commission announced on September 27, 2017 that the truck manufacturer must now pay a fine of around 880 million euros for violating EU antitrust rules.

The cartel members had entered into illegal arrangements between 1997 and 2011. The Commission has since concluded that Scania was also involved in these arrangements over a period of 14 years. These concerned, in particular, agreements pertaining to the gross list price for medium and heavy-duty trucks, concerning the timetable for the introduction of technologies designed to lower emissions as well as passing on these costs to customers. The cartel covered the entirety of the European Economic Area (EEA).

Now that the Commission’s investigations have come to an end, all those who were harmed by the cartel, private individuals and businesses alike, are now able to assert damages claims against the cartel members. We at the commercial law firm GRP Rainer Rechtsanwälte note that the aggrieved parties are expected to have paid inflated prices between 1997 and 2011 for trucks that were approximately 10 to 20 per cent higher in price than they ought to have been, irrespective of whether they were purchased or leased. The advantage of this is that it is no longer necessary to prove unlawful conduct on the part of the cartel members, and this paves the way for damages claims. It is worth noting here that the extent of any harm caused may substantially exceed the fines. Those concerned can turn to lawyers who are experienced in the field of antitrust law to enforce and protect their interests.

Many businesses have suffered considerable harm resulting from these illegal cartel arrangements. It is now possible to obtain compensation for this financial loss and in so doing potentially preserve businesses’ competitiveness.

For more informations:

https://www.grprainer.com/en/legal-advice/antitrust-law.html

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news-3089 Mon, 29 Jan 2018 08:30:39 +0100 Wallpaper cartel – Heavy fines for illegal price fixing https://www.grprainer.com/en/news-and-press/detail/news/wallpaper-cartel-heavy-fines-for-illegal-price-fixing.html In its ruling of October 12, 2017, the Oberlandesgericht (OLG) Düsseldorf [Higher Regional Court of Düsseldorf] imposed fines totalling more than 19 million euros against members of the so-called Tapeten-Kartell, or “wallpaper cartel” (Az.: V-2 Kart 1-3/17).

The 2nd Cartel Division of the OLG Düsseldorf came to the conclusions after 20 days of the trail that the cartel members had entered into illegal price-fixing agreements. According to the Court, the cartelists had agreed to a price increase for wallpaper in Germany to the tune of between 5 and 6 per cent in 2005. The 2nd Division noted that one of the carpet manufacturers as the market leader played a prominent role in this. A further anti-competitive arrangement in 2008 was said to have led to another price increase of about 5 per cent in the German market.

By imposing fines of around 19 million euros in total, the OLG Düsseldorf has in part gone substantially beyond the fines imposed by the Bundeskartellamt, Germany’s Federal Cartel Office. Key to this was the 2nd Division taking the global turnover of the companies in question as its basis. The Bundeskartellamt had already imposed fines in 2014 in the amount of approximately 17 million euros for illegal price-fixing arrangements. Two of the carpet manufacturers then lodged an appeal against this decision at the OLG Düsseldorf, but to no avail. Having said that, the OLG Düsseldorf’s ruling is not yet final.

We at the law firm GRP Rainer Rechtsanwälte note that the carpet manufacturers concerned are not yet able to put the matter to rest, as they might still be faced with damages claims brought by large clients who were harmed by the illegal price-fixing agreements. Lawyers who are experienced in the field of antitrust law can assess whether damages claims are justified and enforceable.

Anti-competitive price-fixing arrangements are a clear violation of antitrust law. That being said, it is possible for violations to occur quite unwittingly and despite this be harshly punished. Even minor details in contractual clauses, for instance, can give rise to violations of antitrust law. For this reason, it is advisable to have agreements reviewed by experienced lawyers with a view to concerns from the perspective of antitrust law.

For more informations:

https://www.grprainer.com/en/legal-advice/antitrust-law.html

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news-3086 Wed, 24 Jan 2018 08:36:07 +0100 GRP Rainer Rechtsanwälte – Experience with D&O insurance https://www.grprainer.com/en/news-and-press/detail/news/grp-rainer-rechtsanwaelte-experience-with-do-insurance.html Taking out a D&O insurance policy is supposed to reduce executives’ risk of liability. Experience shows that it is crucial to pay attention to details when taking out a policy.

Mistakes made by a company’s executive bodies can have serious consequences for the entire business. Managers bear an extremely high level of responsibility for the company they work for and its staff. In addition to this responsibility, executive bodies are also subject to a high risk of personal liability. A lot of companies take out a D&O insurance policy for their executive staff as a way of reducing this risk. If an event covered by the insurance policy occurs, it is nonetheless possible for a dispute with the insurer to emerge if it does not wish to stand good for the loss. Experience shows that the policy ought to be tailored to the individual liability risks faced by a given manager. We at the commercial law firm GRP Rainer Rechtsanwälte note that this is the best way to prevent a legal dispute with the D&O insurance company.

The executive organs attend to different tasks within a company. The more varied these tasks are, the more nuanced the D&O insurance policy should be drafted to ensure optimal coverage of the various liability risks.

Even careless mistakes can give rise to substantial consequences for managers and trigger internal as well as external personal liability. Accordingly, a D&O insurance policy should always cover the risk of both internal and external liability. The coverage agreed, i.e. the insured amount, is, of course, also a matter of vital important.

It is equally important to consider aspects pertaining to coverage of retroactive and follow-up liability alike. In the case of retroactive coverage, the insurer commits to step in even in liability cases that have arisen before the D&O insurance policy was concluded but only came to light afterwards. By contrast, the insurer assumes follow-up liability in liability cases that arose during the term of the policy but were only discovered later on.

Even if the D&O insurance policy covers the key liability risks, it is still always possible in an emergency that the insurer will not want to assume liability in the event of a claim. Lawyers who are experienced in the field of company law can advise companies when taking out a D&O insurance policy and enforce claims against the insurance company.

For more informations:

https://www.grprainer.com/en/legal-advice/company-law/do-insurance.html

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news-3084 Tue, 23 Jan 2018 08:34:04 +0100 GRP Rainer Rechtsanwälte – Report on GmbH managing director’s obligation to contribute to social security https://www.grprainer.com/en/news-and-press/detail/news/grp-rainer-rechtsanwaelte-report-on-gmbh-managing-directors-obligation-to-contribute-to-social-sec.html Whether the managing director of a GmbH, a type of German private limited liability company, is obligated to make contributions to social security is frequently a point of contention. Various different factors need to be considered when weighing things up.

According to a report by the commercial law firm GRP Rainer Rechtsanwälte, a lack of awareness regarding a managing director’s obligation to contribute to social security is particularly liable to give rise to problems when a GmbH is being established. If the managing director is obliged to make contributions to social security but no contributions are made, we at GRP Rainer Rechtsanwälte note that there is then the possibility of having to make large back payments which have the potential to threaten a young company’s existence.

The obligation to contribute to social security encompasses contributions to unemployment, pension, health and nursing care insurance as well as accident insurance. Whether a managing director is obliged to make contributions depends on whether he is employed or self-employed.

Externally hired managing directors are employees in most cases. The usual criteria for a dependent employment relationship is that the individual in question be integrated into the external company and that the employer have the authority to give instructions in relation to the place of work, working hours and the type of work to be performed.

It is more difficult to make a distinction in cases involving managing directors who are also shareholders. In these instances, it needs to be examined whether the managing director is in fact carrying out his work independently. Key factors in determining whether this is the case is whether a personal business risk has been entered into and the share in the company’s capital. In cases where the share in the business is greater than 50 per cent, the managing director has substantial influence over the fate of the company, meaning that it can be assumed that he or she is self-employed and thus subject to the obligation to make contributions to social security. This can also be true of minority shareholdings if the managing director has a comprehensive blocking minority or has free reign in relation to his or her workforce as well as place of work and working hours.

Having said all of that, when it comes to classifying an occupation as an employed or self-employed role it is not only the contractual framework but also the actual content and drafting that are decisive, as these may in practice deviate from the contractual arrangements.

The first step should therefore always be to establish whether there is an obligation to contribute to social security. Contractual arrangements that are designed only to circumvent this obligation can have expensive repercussions in the form of back payments if the actual circumstances give rise to an obligation to make contributions to social security. If, on the other hand, these circumstances allow for an exemption from said obligation, the contracts can be prepared accordingly.

Lawyers who are experienced in the field of company law can advise shareholders and managing directors.

For more informations:

https://www.grprainer.com/en/legal-advice/company-law.html

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news-3079 Wed, 17 Jan 2018 08:52:49 +0100 LAG Rheinland-Pfalz: Dismissal with immediate effect for damage to property effective https://www.grprainer.com/en/news-and-press/detail/news/lag-rheinland-pfalz-dismissal-with-immediate-effect-for-damage-to-property-effective.html Serious breaches of duty by an employee may justify dismissal with immediate effect. Damage to property can constitute good cause justifying exceptional notice of dismissal with immediate effect.

An employer is able to issue exceptional notice of dismissal with immediate effect if it has good cause for doing so and the individual circumstances of the respective case have been sufficiently accounted for. In order for notice of dismissal to be issued effectively, the grounds need to be sufficiently serious such that it would no longer be reasonable to expect the employer to continue the employment relationship. One good cause that may justify dismissal with immediate effect is property damage committed by the employee, as shown by a ruling of the Landesarbeitsgericht (LAG) Rheinland-Pfalz [Regional Labour Court of Rhineland Palatinate] from December 19, 2016 (Az.: 3 Sa 356/16).

In the case in question, an employee had been issued with exceptional notice of dismissal with immediate effect after having struck a touchscreen monitor out of frustration and thereby shattered the glass of the screen. The employee had previously been informed he would only be receiving a small personal profit-sharing bonus. He had already received a formal written warning for similar reasons several months prior to this.

The dismissed worker raised an action for wrongful dismissal but was unsuccessful. The LAG Rheinland-Pfalz held that by damaging the monitor the employee had committed a serious breach of duty pursuant to his employment contract, and that the employer had incurred a financial loss as a result of this. Moreover, the damage was said to have given rise to a potential hazard because the incident had occurred in a potentially explosive environment. The Court stated that equipment in these kinds of potentially dangerous environments cannot be altered or manipulated as this would impinge on the safety measures in place and safety could no longer be guaranteed. In addition, the Court also noted that the plaintiff had already been issued with a formal warning for a similar breach of duty.

The LAG concluded after weighing up the parties’ mutual interests and considering all of the facts and circumstances of the case that it was no longer reasonable to expect the employer to continue the employment relationship. By damaging the monitor, the employee was said to have not only acted contrary to the employer’s interests but also severely undermined the trust placed in him. The Court went on to point out that not even the formal warning had caused the employee to refrain from his unsafe behavior.

Whether notice of dismissal with immediate effect has been issued effectively is always a case-by-case decision. Employers should therefore carefully prepare before issuing notice of dismissal. Lawyers who are experienced in the field of employment law can advise on all issues pertaining to the workplace.

For more informations:

https://www.grprainer.com/en/legal-advice/employment-law.html

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news-3074 Thu, 11 Jan 2018 07:53:31 +0100 GRP Rainer Rechtsanwälte: Assessing the grounds for dismissal with immediate effect https://www.grprainer.com/en/news-and-press/detail/news/grp-rainer-rechtsanwaelte-assessing-the-grounds-for-dismissal-with-immediate-effect.html Exceptional notice of dismissal with immediate effect needs to be well prepared if it is to be issued effectively. To this end, it needs to be assessed whether sufficient grounds for dismissal exist.

Employers can only issue exceptional notice of dismissal with immediate effect if there is good cause for doing so. We at the commercial law firm GRP Rainer Rechtsanwälte note that the grounds need to be sufficiently serious such that it would no longer be reasonable for the employer to be expected to continue the employment relationship, even until the next possible due termination date. That is why assessing the grounds for dismissal ought to have priority prior to issuing notice of dismissal.

In order for notice of dismissal with immediate effect to be issued effectively various conditions need to be met: The employee must have severely breached his obligations pursuant to his employment contract. The violation needs to have significant enough that it is no longer reasonable to expect the employer to continue the employment relationship. Moreover, the violation has to have been intentionally or at least negligently committed. It also needs to be examined whether a less severe measure, e.g. ordinary notice of dismissal or a written warning, would be sufficient to prevent further breaches of duty on the part of the employee. Furthermore, notice of dismissal must be issued within two weeks of the employer becoming aware of the grounds for dismissal. Ultimately, the interests of the contractual parties in immediately terminating or continuing the employment relationship need to be weighed up. The employer must be able to make the case why its interest in terminating the employment relationship with immediate effect should take precedence. Exceptional notice of dismissal with immediate effect therefore needs to be properly justified.

Good cause for issuing exceptional notice of dismissal may exist, for instance, if the employee fails to carry out the duties he owes pursuant to his employment contract or is guilty of serious misconduct vis-à-vis his superiors or colleagues, e.g. in the form of insults or even physical assault. These kinds of breaches of duty may result in it no longer being reasonable to expect the employer to continue the employment relationship. That being said, it is ultimately decided on a case-by-case basis whether notice of dismissal with immediate effect has been issued effectively.

Lawyers who are experienced in the field of employment law can advise employers on issues pertaining to the workplace should legal disputes arise.

For more informations:

https://www.grprainer.com/en/legal-advice/employment-law.html

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news-3071 Tue, 09 Jan 2018 08:21:39 +0100 Berliner Testament – Final heir able to reclaim gifts https://www.grprainer.com/en/news-and-press/detail/news/berliner-testament-final-heir-able-to-reclaim-gifts.html A joint spousal will has a strong binding effect and can potentially affect gifts made by the surviving spouse, as demonstrated by a ruling of the Oberlandesgericht (OLG) Hamm [Higher Regional Court of Hamm].

A type of will known as a “Berliner Testament” (“Berlin will” in English) is popular among married couples. Spouses can use this to mutually appoint each other as sole heirs and typically their children as final heirs. The snag when it comes to a joint spousal will is its strong binding effect. We at the commercial law firm GRP Rainer Rechtsanwälte note that the surviving partner is bound by the joint provisions, even after the death of the first spouse, and can no longer unilaterally alter these if no provisions allowing for this were agreed.

This strong binding effect can also affect gifts made by the surviving spouse. It may be possible for the final heir as defined in the joint spousal will to reclaim these gifts, as shown by a judgment of the Oberlandesgericht Hamm from September 12, 2017 (Az.: 10 U 75/16).

In the instant case, a married couple had appointed their son as final heir in their joint spousal will. Several years after the death of his wife, the husband moved in together with another woman. At the behest of his father, the son agreed with said woman to a lifelong right of residence in relation to the father’s house on condition that she care for the father and not avail herself of any claims to own the house. Additionally, the father also assigned the woman various items of property amounting to a total value in the region of 250,000 euros. Following the death of his father, the son in his capacity as final heir sued for the surrender of these assets and justified this by contending that the donations as part of his inheritance were detrimental gifts which needed to be reversed.

The OLG granted the claim, ruling that the testator in gifting the assets in question to the woman had compromised his son’s expected inheritance. The Court held, however, that the father had been obliged to be mindful of his son’s appointment as final heir in the will, and that the former was bound by the relevant joint provisions. It went on to say that the testator had no reasonable interest in the gifts made during his lifetime, particularly as the woman had enjoyed free board and lodging living with him anyway.

It is always possible for disputes to arise, even if there is a will. Lawyers who are experienced in the field of succession law can advise on matters pertaining to wills and contracts of inheritance.

For more informations:

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession/last-will-and-testament.html

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news-3067 Thu, 04 Jan 2018 08:11:29 +0100 Amendments to will valid despite lack of a signature https://www.grprainer.com/en/news-and-press/detail/news/amendments-to-will-valid-despite-lack-of-a-signature.html In exceptional circumstances, retrospective amendments to a will may be valid even in the absence of a signature. That was the verdict of the Kammergericht (KG) Berlin [Berlin Court of Appeal] in its ruling of March 28, 2017 (Az.: 6 W 97/16).

It is not uncommon for a number of years to have gone by between the date the will was prepared and the death of the testator. It is therefore very much possible for the testator’s wishes to change over this period of time for various reasons. Moreover, he or she is not bound by their testamentary dispositions from before. That being said, we at the commercial law firm GRP Rainer Rechtsanwälte note that amendments or additions to a will normally need to be accompanied by a handwritten signature for them to be effective.

However, a judgment of the Kammergericht Berlin demonstrates that there are exceptions to this rule. According to the ruling, handwritten amendments can be valid even if they are not each accompanied by a signature but instead the beginning of the will features a signed general annotation regarding the amendments.

The case in question concerned the will of an unmarried and childless testatrix. She added the comment “mit Änderungen und Streichungen von mir” (with amendments and parts removed by me) to the beginning of the will where the date was specified and included her signature. She then failed to add her signature to the individual changes she had made. Following the death of the testatrix, a dispute emerged concerning the validity of the amendments to the her will.

The KG Berlin confirmed the validity of the will. The Court came to the conclusion that all of the amendments had been made by the testatrix herself. She drew attention to these and added her signature at the beginning of the will. The typeface of the amendments was said to match the testatrix’s handwriting. The KG also noted that the amendments were internally consistent and distributed the testatrix’s estate without any contradictions or gaps left over. The Court held that it is not necessary for the signature to be the last act in preparing the will. It went on to say that retrospective amendments need not be signed as long as they merely appear to be covered by the existing signature.

Having said all of that, it is generally safer to sign each of the amendments to a will to ensure that the testamentary dispositions are in fact implemented and no dispute emerges among the heirs. Lawyers who are experienced in the field of succession law can advise on issues pertaining to estates.

For more informations:

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession/last-will-and-testament.html

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news-3064 Tue, 02 Jan 2018 09:04:23 +0100 Automatic exchange of financial information has begun – Voluntary disclosure for tax evasion https://www.grprainer.com/en/news-and-press/detail/news/automatic-exchange-of-financial-information-has-begun-voluntary-disclosure-for-tax-evasion.html The wagons are circling around tax evaders. The automatic exchange of financial information began on September 30, 2017. An initial 49 countries are participating in addition to Germany.

The start of the automatic exchange of financial information in the field of taxation also spells the end of banking secrecy in many of the participating countries. Former tax havens are set to be squeezed further. For tax dodgers who still wish to conceal untaxed income from capital abroad from the German exchequer, the wagons are circling ever closer and the risk of being discovered continues to increase.

Since the end of September, the participating countries have been exchanging information on accounts with the respective home countries of account holders. This initially concerns account movements from 2016 onwards. More countries will be participating in the automatic exchange of information in a year’s time, including, for instance, Switzerland. In total, more than 100 countries will be involved in the automatic exchange of information as a means of further expediting the fight against international tax evasion.

We at the commercial law firm GRP Rainer Rechtsanwälte believe that all tax evaders with untaxed illicit earnings in foreign accounts need to take action urgently, as the risk of tax evasion being detected continues to go up. Having said that, it remains possible to submit a voluntary declaration that leads to immunity. This should not, however, be kicked into the long grass any longer, because a voluntary declaration can only lead to immunity if it is submitted on time, i.e. before the offence is discovered by the authorities. The voluntary declaration also needs to be complete and error free.

For a layperson, it is almost impossible to keep track of the exacting requirements for a voluntary declaration to lead to immunity, let alone fulfil them. That is why it is crucial not to forgo obtaining expert assistance from lawyers who are experienced in the field of tax law. Those who nevertheless wish to go it alone or make use of standard templates found online are running a considerable risk of making mistakes and thus voluntary disclosure failing. Each case needs to be assessed individually; there are no ready-made solutions if a voluntary declaration is to lead to immunity.

Lawyers who are experienced in the field of tax law can examine each individual case in detail and produce a tailored voluntary declaration that is actually capable of leading to immunity.

For more informations:

https://www.grprainer.com/en/legal-advice/tax-law/voluntary-disclosure.html

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news-3062 Fri, 29 Dec 2017 08:12:50 +0100 Planned closure justifies compulsory redundancy https://www.grprainer.com/en/news-and-press/detail/news/planned-closure-justifies-compulsory-redundancy.html If an employer seriously intends to close an establishment then it can issue notices of dismissal due to operational circumstances, i.e. notices of compulsory or forced redundancy. That was the verdict of the Landesarbeitsgericht (LAG) Rheinland-Pfalz [Regional Labour Court of Rhineland-Palatinate] (Az.: 5 Sa 51/16).

We at the commercial law firm GRP Rainer Rechtsanwälte note that an employer is not obligated to put off issuing notices of compulsory redundancy until after an establishment has been shut down. According to a ruling of the LAG Rheinland-Pfalz from January 12, 2017, it is sufficient for there to be a serious intention to close the premises. Having said that, it is necessary for the employer to have genuinely taken a final decision on whether to permanently shut the establishment down at the time of the notice’s receipt.

This condition had been met in the instant case. The 72-yeard-old sole manager as well as sole shareholder of a workshop had decided in April of 2014 to give up the business. The decisive factor behind this decision was the workshop’s poor economic situation, it having failed to generate any profit for years combined with the ongoing poor order situation. Attempts to sell the firm were unsuccessful and there was also no successor to the 72-year-old managing director in sight. To prevent insolvency, the manger decided to shut the premises down. Operational activities were discontinued as of April 30, 2014, with only legacy orders and warranty cases being processed. After filing a mass redundancy notice with the relevant employment agency, the (approx. 60) workers received ordinary and timely notice of dismissal.

One employee lodged an action for wrongful dismissal. He took the view that the employer was supposed to have informed him of the planned closure at an earlier stage so that he might have been able to find a third party to continue the business. The action failed both at first and second instance. The LAG held that the employer’s intention to shut the premises down had already taken on concrete forms as of the date of dismissal. The Court held that the reasons for terminating the business were evident and that the staff had been informed of this in a timely manner. It went on to say that the fact that the workers continued to be employed until the end of the notice period for the purposes of processing legacy orders did not preclude a serious intention to close the business. The Court ruled that for a serious intention to close a business it is sufficient if no further activities are performed by the end of the notice periods. What is not required is that the employer works inefficiently up until that point in time or refrains from carrying out potential transactions.

Lawyers who are experienced in the field of employment law can advise employers on matters pertaining to dismissal as well as in relation to other employment issues.

For more informations:

https://www.grprainer.com/en/legal-advice/employment-law.html

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news-3058 Fri, 22 Dec 2017 08:27:58 +0100 Company reintegration management program necessary in cases of dismissal due to illness https://www.grprainer.com/en/news-and-press/detail/news/company-reintegration-management-program-necessary-in-cases-of-dismissal-due-to-illness.html Before issuing notice of dismissal on account of illness, an employer ought to assess whether the relevant employee’s inability to work can be overcome with the help of a company reintegration management program.

The employer ought to explore whether the employee’s incapacity to work can be overcome by means of what is referred to in German as a “betriebliches Eingliederungsmanagement”, or “bEM” for short; i.e. a company reintegration management program. We at the commercial law firm GRP Rainer Rechtsanwälte note that this option needs to be considered if the employee has been continuously sick or repeatedly unable to work for longer than six weeks within a period of one year. If the employer deems what is ultimately a mandatory bEM to be pointless then it has to be able to explain why this is the case, as demonstrated by a judgment of the Landesarbeitsgericht (LAG) Rheinland-Pfalz [Regional Labour Court of Rhineland-Palatinate] from January 10, 2017 (Az.: 8 Sa 359/16). According to the ruling, the pointlessness of a bEM is not established solely by the fact that the employee himself considers his illness(es) to be fateful.

In the instant case, the employee had fallen ill to the point where he was unable to work again and again for extended periods of time over several years. Finally, a discussion with the employer took place as part of the bEM, during which the employee stated that his periods of illness had been fateful. The employee subsequently fell ill again for a prolonged period of time, following which his employer issued him with notice of dismissal due to illness. There was no continuation of the company reintegration management program. The employer viewed a bEM as pointless in light of the employee’s statement that his periods of illness had been fateful.

The employee’s action for wrongful dismissal was successful. The LAG held that given the fact that the bEM had not been implemented, notice of dismissal was disproportionate and therefore not socially justified. The Court ruled that while implementing a company reintegration management program is not a formal condition for notice of dismissal to be effective it puts the principle of proportionality in concrete terms, since the bEM could have led to a less severe measure than notice of dismissal being identified and pursued. The LAG went on to say that only if a bEM had not yielded any positive results would it have been possible to forgo implementation. To this end, the employer would have to provide a comprehensive and detailed explanation concerning the bEM’s pointlessness. The Court concluded that the employer had failed to do so here and the notice of dismissal was thus ineffective.

Lawyers who are experienced in the field of employment law can serve as a competent point of reference for all legal issues pertaining to the workplace.

For more informations:

https://www.grprainer.com/en/legal-advice/employment-law.html

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news-3054 Tue, 19 Dec 2017 08:20:38 +0100 Successful loan withdrawal due to unclear information regarding conclusion of building insurance https://www.grprainer.com/en/news-and-press/detail/news/successful-loan-withdrawal-due-to-unclear-information-regarding-conclusion-of-building-insurance.html Missing or incorrect mandatory information in relation to real estate mortgages that have been taken out since June 11, 2010 means that loan withdrawal is still a possibility.

Real estate mortgages that were concluded after June 10, 2010 are not affected by the so-called the “ewiges Widerrufsrecht”, aka perpetual right of withdrawal. We at the commercial law firm GRP Rainer Rechtsanwälte note that it remains possible to play the withdrawal get-out-of-jail-free card here if the relevant bank made use of flawed guidance pertaining to the right of withdrawal or made a mistake in relation to the mandatory information. A judgment of the Oberlandesgericht (OLG) Düsseldorf [Higher Regional Court of Dusseldorf] makes it clear, for instance, that if taking out building insurance is a prerequisite for a loan being issued then this needs to be clear from the contractual documentation (Az.: I-17 U 144/16).

In the instant case, a borrower had taken out a loan in August of 2010. According to the loan’s general terms and conditions, the borrower had in doing so undertaken to conclude a building insurance policy. However, the guidance on the right of withdrawal did not include a sufficiently clear reference to this undertaking, it merely stating that costs to be paid to third parties may arise such as notary and land registry expenses as well as costs pertaining to the building insurance (“sich an Dritte zu zahlende Kosten wie Notar- und Grundbuchkosten sowie Kosten für die Gebäudeversicherung ergeben können”). In 2015, the consumers in question declared that they were withdrawing from the loan agreement.

The OLG Düsseldorf held that the withdrawal had been effective, ruling that the contractual deed did not feature a clear reference to the undertaking to take out building insurance and that this was misleading for borrowers. As a result of the flawed guidance on the right of withdrawal, the withdrawal period never commenced, and it therefore remained possible to withdraw from the loan despite years having gone by since its conclusion.

Banks have repeatedly made mistakes when it comes to mandatory information and thus paved the way for loan withdrawal. In the present case, it was the flawed information concerning the duration of the loan. Because this mandatory information is linked to the beginning of the withdrawal period, mistakes mean that the withdrawal period has yet to commence. This affords consumers the opportunity to benefit from the ongoing low rates of interest if they successfully withdraw from the loan. Lawyers who are experienced in the field of banking law can assess whether the preconditions for loan withdrawal have been met.

For more informations:

https://www.grprainer.com/en/legal-advice/banking-law.html

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news-3050 Thu, 14 Dec 2017 08:52:15 +0100 M&A transactions: Amendment to the Außenwirtschaftsverordnung means more rigorous auditing https://www.grprainer.com/en/news-and-press/detail/news/ma-transactions-amendment-to-the-aussenwirtschaftsverordnung-means-more-rigorous-auditing.html M&A transactions were heading for a record high in Germany last year. German firms were a popular target among foreign investors interested in corporate takeovers.

Probably due in no small part to the rising number of company takeovers from investors based outside of the EU area, Germany’s federal government wants to take a closer look at these kinds of transactions, with the ninth regulation amending the Außenwirtschaftsverordnung, Germany’s Foreign Trade and Payments Ordinance, even granting the government a right of veto.

We at the commercial law firm GRP Rainer Rechtsanwälte note that it was already the case that instances of investors from outside of the European Union or EFTA acquiring at least a 25 per cent share in a German company could be investigated by the Bundeswirtschaftsministerium, Germany’s Federal Ministry for Economic Affairs. However, the amendment to the Außenwirtschaftsverordnung means that the auditing periods have now largely been extended from two to four months and even so-called indirect acquisitions will be accounted for in the audit. It therefore also concerns transactions in relation to which the investor initially established a company within the EU and this then acquires a share in a German company or wishes to take it over.

According to the Bundeswirtschaftsministerium, the more rigorous auditing criteria are supposed to be a response to the increasing number and complexity of corporate takeovers and sales.

These audits essentially concern takeovers in areas that are particularly relevant from a security perspective and affect the federal government’s security interests. This relates, for instance, to the armament industry, but also civilian security-relevant technologies. Special attention ought to be paid here to businesses in the fields of information technology, telecommunications, cloud computing, energy and water, health, transport as well as finance and insurance.

The Regulation also introduces a reporting obligation for acquisitions of German companies planned by investors from outside of the EU in civilian economic sectors that are particularly relevant from a security perspective.

The amendment to the Außenwirtschaftsverordnung might make it more difficult for foreign investors to acquire a German company and also take more time. That being said, there need to be substantial grounds to prevent a corporate transaction from taking place.

Investors and entrepreneurs who are interested in a purchase or sale can consult lawyers who are experienced in the field of M&A.

For more informations:

https://www.grprainer.com/en/legal-advice/ma.html

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news-3044 Thu, 07 Dec 2017 08:28:39 +0100 Dismissal on grounds of conduct requires proper justification https://www.grprainer.com/en/news-and-press/detail/news/dismissal-on-grounds-of-conduct-requires-proper-justification.html If an employee violates obligations set forth in his employment contract, he may then be issued with notice of dismissal on grounds of conduct. That being said, the notice needs to well prepared if it is to be effective.

If an employee is covered by the Kündigungsschutzgesetz, Germany’s employment protection legislation, his employer must justify ordinary notice of dismissal for it to be issued effectively. We at the commercial law firm GRP Rainer Rechtsanwälte note that the relevant grounds may concern the employee in question personally or relate to his conduct, but operational reasons can, of course, also justify dismissal.

It is possible to issue notice of dismissal on grounds of conduct if the employee substantially breaches the obligations laid out in his employment contract and the employer has no less severe measures, such as a formal warning, at its disposal to change the employee’s behaviour. Breaches of duty of this kind may include failure to perform on the part of the employee as well as insufficient performance if the employee does not fulfil said obligations while observing the expected quality or quantity. Having said that, the employer has to be able to demonstrate conclusively that the employee’s performance has been considerably below average. As is clear from a ruling of the Arbeitsgericht Siegburg (Labour Court of Siegburg) from August 25, 2017, failure to do so might result in the notice of dismissal being ineffective (Az.: 3 Ca 1305/17).

In the instant case, a car mechanic had been dismissed on grounds of conduct due to his poor work performance. In justifying the dismissal, the employer stated that the mechanic had only identified four out of six mistakes in a workshop test and failed to perform outstanding service work. Because the employee had already been issued with a formal warning on three occasions, the employer took the view that there was no longer any chance of the former changing his behaviour.

However, the employee’s action for wrongful dismissal was successful. The Arbeitsgericht Siegburg held that the employer had not presented a representative period of the mechanic’s performance and had also failed to compare the latter’s error ratio with the performance of other mechanics employed at the company. The Court went on to say that it was therefore impossible to determine whether the mechanic had culpably violated the obligations set forth in his employment contract. It is still possible for an appeal to be lodged against the decision.

Even though the ruling is not yet final, it shows that ordinary and not simply exceptional notice of dismissal needs to be properly justified. Lawyers who are experienced in the field of employment law can advise employers.

For more informations:

https://www.grprainer.com/en/legal-advice/employment-law.html

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news-3042 Wed, 06 Dec 2017 08:32:45 +0100 OLG Köln: Contesting acceptance of an inheritance on account of an error https://www.grprainer.com/en/news-and-press/detail/news/16469e3701d59260113b211865cc01aa.html If an inheritance is not rejected within a period of six weeks then it is deemed to have been accepted. Notwithstanding this, it may still be possible to contest the acceptance of the inheritance.

As a matter of principle, an heir is not obligated to accept an inheritance. He or she has a period of six weeks after learning of their status as heir in which to reject the inheritance. Failure to reject the inheritance on time means that it will automatically be considered to have been accepted. Should the heir then decide he does not in fact wish to accept the inheritance, the only remaining option is to contest the acceptance. We at the commercial law firm GRP Rainer Rechtsanwälte note that it is possible in exceptional circumstances to contest an inheritance on account of an error, as demonstrated by a ruling of the Oberlandesgericht (OLG) Köln [Higher Regional Court of Cologne] from May 15, 2017 (Az.: 2 Wx 109/17).

In the instant case, the testatrix had passed away at the age of 47. Because she had left no will or contract of inheritance behind, her husband as well as both of her siblings became heirs in accordance with the rules of intestate succession. The sister rejected the inheritance immediately, whereas the brother did not. After the six-week period expired, the inheritance was thus regarded as having been accepted.

Shortly thereafter, the brother declared he was contesting the acceptance of the inheritance. In justifying this course of action he stated that he had not known the estate was overindebted. On the other hand, he had been aware that his sister had received a financial settlement in the amount of 100,000 euros roughly one year before her death and that her account had shown a balance of 60,000 euros a few months prior to her passing, which is why he assumed it was possible to recover some value from the estate. He claimed to have tried to obtain information from his sister’s husband regarding the whereabouts of the financial settlement, but to no avail.

The OLG held that the action brought contesting the acceptance of the inheritance on account of an error concerning the estate’s overindebtedness was justified, ruling that the brother had laboured under misconceptions relating to the makeup of the estate and was thus mistaken regarding an essential characteristic of the estate.

Having said of all that, contesting the acceptance of an inheritance is only possible in individual cases and not every error justifies bringing a challenge. It is not possible, for instance, if the heir has merely incorrectly valued articles belonging to the estate. Lawyers who are experienced in the field of succession law can advise on all matters pertaining to estates.

For more informations:

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession.html

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news-3037 Thu, 30 Nov 2017 08:47:50 +0100 GRP Rainer Rechtsanwälte – Experience in business succession https://www.grprainer.com/en/news-and-press/detail/news/grp-rainer-rechtsanwaelte-experience-in-business-succession.html A large number of small and medium-sized businesses are going to have to make arrangements for business succession in the near future. There are various possible approaches to organizing succession.

According to a study conducted by KfW Research, approximately one in every six small and medium-sized businesses will be planning for business succession by the year 2018. The study states that around 620,000 businesses will be searching for a suitable successor. For a lot of businesses, a change at the management level represents a considerable challenge. We at the commercial law firm GRP Rainer Rechtsanwälte have the experience required for weighing up the various options and finding a suitable solution to a business’ transition.

Generational change is something many family-run businesses are set to be faced with in the coming years. Often the desired solution is for the business to remain family-owned and the next generation to carry on the business. Having said that, this is not automatically the ideal solution, as the children, for instance, might not have any interest in the company or be suited to continue the business. In these cases, other options such as the sale or partial sale of the company need to be considered. In doing so, it is also important to take taxation and family aspects into account in addition to economic factors.

Selling a business requires intensive preparation, which is why business succession ought not to be kicked into the long grass. The order situation, balance sheets and existing employment contracts play an important role. Another key aspect is, of course, the valuation of the business to ascertain an appropriate selling price. Depending on the corporate form, it might also be a good idea to sell one’s company shares to one of the other shareholders.

It is equally important to consider inheritance claims. The rules of intestate succession kick in in the absence of appropriate arrangements, and this can give rise to problems. For this reason, it Is advisable to prepare what is referred to in German as an “Unternehmertestament” (entrepreneur’s will). With this kind of will, the testator can prevent a community of heirs from pursuing different interests and thus avoid the business’ continuity being put at risk. It is possible to make arrangements in an entrepreneur’s will that already apply during the testator’s lifetime. Another possible option may be to set up a foundation.

Business succession should be planned in advance with due regard to all legal aspects as well as factors pertaining to taxation. Lawyers who are experienced in the field of company law can ensure that the handover of the business runs smoothly.

For more informations:

https://www.grprainer.com/en/legal-advice/company-law/business-succession.html

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news-3035 Wed, 29 Nov 2017 08:51:43 +0100 GRP Rainer Rechtsanwälte: Valuation of commercial agents right to compensation https://www.grprainer.com/en/news-and-press/detail/news/grp-rainer-rechtsanwaelte-valuation-of-commercial-agents-right-to-compensation.html After a commercial agency agreement has been terminated, the commercial agent is normally entitled to compensation. The assessment of the extent of this right to compensation frequently gives rise to disputes.

During their period of service to a company, commercial agents maintain existing contacts and establish new ones. If the commercial agency agreement is terminated, we at the commercial law firm GRP Rainer Rechtsanwälte note that the commercial agent is entitled to compensation if the company continues to maintain business relations with the newly acquired clients and profit from these. Even if the collaboration between the commercial agent and the company was successful and harmonious over a period of years, the extent of the right to compensation is often a matter of contention between the parties. Here at GRP Rainer Rechtsanwälte, we assess the value of this entitlement to compensation having regard to the extent to which the company will still be profiting in the future from the business contacts acquired through the commercial agent.

The second sticking point that commonly emerges when evaluating the commercial agent’s right to compensation is the classification of new clients. The central question here is whether it is possible for an existing client to be classified as a new client if commercial relations were expanded by the commercial agent and extended to additional products.

In April 2016, the Court of Justice of the European Union (CJEU) held that an existing business contact can be classified as a new client in this type of case, ruling that the expression “new client” ought not to be interpreted too narrowly. The Court stated that if the commercial agent succeeds in extending business relations with an existing client to new products, then said client can absolutely be considered a new client. It went on to say that the decisive factor here is which products the commercial agent introduced to the client. If an existing client is classified as a new client, this will affect the extent of the commercial agent’s entitlement to compensation. The CJEU noted, however, that if commercial relations with the client in question were already in place, this can be accounted for in the calculation.

Lawyers who are experienced in the field of commercial law can assist both commercial agents and businesses in drafting commercial agency agreements, calculating the value of claims as well as terminating contractual relationships.

For more informations:

https://www.grprainer.com/en/legal-advice/commercial-law/commercial-agency-law.html

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news-3030 Thu, 23 Nov 2017 08:30:48 +0100 Strict test for testamentary capacity if serious delusions suspected https://www.grprainer.com/en/news-and-press/detail/news/strict-test-for-testamentary-capacity-if-serious-delusions-suspected.html The testator must have testamentary capacity as a prerequisite for a valid will. Chronic delusions can give rise to a lack of testamentary capacity, as demonstrated by a ruling of the Oberlandesgericht (OLG) Frankfurt [Higher Regional Court of Frankfurt].

In principle, a person who is of legal age is deemed to have the capacity to prepare a will. Notwithstanding this, the following preconditions needs to be satisfied: the testator needs to be able to appreciate the significance of his testamentary dispositions as well as their impact and have arranged his dispositions of his own volition. The issues of whether the testator has testamentary capacity can take centre stage, for instance, in cases involving dementia. We at the law firm GRP Rainer Rechtsanwälte note, however, that it is not enough to simply call into question whether the testator has the capacity to prepare a will. It needs to be proven.

One case that came before the Oberlandesgericht Frankfurt was not concerned with the testatrix’s dementia but rather whether she potentially lacked the capacity to draft a will because of her chronic delusions. According to German law, if someone is not in a position to understand the significance of a declaration of intent he made and act pursuant to this understanding on account of a mental disturbance, weakness of the mind or impaired consciousness, then he cannot draw up a will.

The testatrix suffered continuously from fears of being robbed. For this reason, she hired detectives who fitted her house, among other places, with cameras. The childless and widowed testatrix eventually appointed the detectives as heirs in her will. Distant relatives who were eligible to become legal heirs appealed against this. They took the view that the testatrix suffered from pathological paranoia at the time of drafting the will and did not have the capacity to prepare it.

After obtaining an expert opinion, the probate court was not able to conclude that there was a lack of testamentary capacity, reasoning that it is possible the testatrix drew up her will in a “lichten Moment”, a “moment of clarity”. The OLG Frankfurt overturned this ruling and referred the case back to the probate court for further clarification (Az.: 20 W 188/16). It was held that in the absence of further clarification it could not be proven whether the testatrix acted in a “moment of clarity”. The Court went on to say that there is certainly a lack of testamentary capacity if the motives for preparing the will themselves are based on a lack of freedom attributable to an illness. The OLG stated that it needs to be assessed whether the freedom to make voluntary decisions has been nullified by pathological disorders affecting decision-making processes.

Lawyers who are versed in the field of succession law can advise on issues relating to estates.

For more informations:

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession/last-will-and-testament.html

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news-3025 Fri, 17 Nov 2017 08:29:26 +0100 GRP Rainer Rechtsanwälte – Experience in establishing companies https://www.grprainer.com/en/news-and-press/detail/news/grp-rainer-rechtsanwaelte-experience-in-establishing-companies.html Choosing the right corporate form when establishing a company can contribute a great deal to the economic success of the business.

We at the commercial law firm GRP Rainer Rechtsanwälte advise numerous businesses on company formation and takeovers as well as in the event of a change of partners or shareholders. In our experience, the partners or shareholders frequently neglect one critical point amidst all the euphoria: choosing the right corporate form for the business. The importance of the company’s form is often underestimated, yet our experience tells us that this can represent a key foundation of the business’ success.

The various types of company entail different rights and obligations. Aspects relating to the required registered capital, and the taxation and liability of the partners or shareholders can play a crucial role here. That is why it is critical to carefully weigh up the advantages and disadvantages of the respective corporate forms and then choose the type of company best suited to the business’ aims and opportunities.

A comprehensive understanding of both national and international company law is essential to being able to reach a decision. Thanks to the freedom of establishment for businesses it is also possible to opt for foreign corporate forms. This is equally an important factor if the intention is to set up companies or branches abroad or, conversely, foreign investor wish to operate in Germany.

Among the most popular corporate forms is the so-called “Gesellschaft mit beschränkter Haftung”, or GmbH for short, a type of German limited liability company. Experience has shown that this is because of the extensive creative freedom that a GmbH offers on the one hand and the limited risk of liability for shareholders on the other. Their liability risk is limited to their investment, with the registered capital having to amount to at least 25,000 euros.

Notwithstanding this, it is often overlooked when it comes to the issue of liability that shareholders may be liable to pay compensation that goes beyond the value of their investment if they deliberately cause improper damage to the company. Even the managing director of a GmbH can be held liable if he breaches his obligations.

All in all, a range of economic, legal and tax issues need to be considered when establishing a company, which is why it makes sense to obtain comprehensive legal advice from a single source. Lawyers who are versed in the field of company law can address these matters and find the optimal solution together with the client.

For more informations:

https://www.grprainer.com/en/legal-advice/company-law.html

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news-3023 Thu, 16 Nov 2017 08:30:39 +0100 OLG Köln: Will written with non-dominant hand valid https://www.grprainer.com/en/news-and-press/detail/news/olg-koeln-will-written-with-non-dominant-hand-valid.html It is possible for a will to be valid even if it was written with the hand one does not normally write with. That was the verdict of the Oberlandesgericht (OLG) Köln [Higher Regional Court of Cologne] in its ruling of August 3, 2017 (Az.: 2 Wx 149/17).

In addition to preparing a notarized will, a testamentary disposition can also be handwritten. To this end, the will needs to be written from top to bottom as well as signed by the testator. Moreover, the place and date ought not to be omitted in case any legal disputes arise. We at the commercial law firm GRP Rainer Rechtsanwälte note that this kind of handwritten will can easily be attributed to the testator in most cases. The situation is more difficult, however, if the testator writes the will with the “wrong” hand, i.e. the hand he does not normally write with.

This is exactly what one testator did. Due to his illness his right arm began to show signs of paralysis, with the result that he drafted a will with his left hand in which he appointed his neighbours as his heirs. Notwithstanding this, a second will came to light. According to this, the testator’s siblings were to become his heirs. The OLG Köln had to decide which will was valid.

After extensively gathering evidence through the testimony of witnesses and obtaining an expert graphological assessment, the OLG Köln ruled that the will written with the testator’s left hand was valid and the neighbours received the certificate of inheritance. While the expert witness was not able to confirm with certainty that this will was from the testator because there were no comparable documents written with the latter’s left hand, one witness was able to give credible assurances that he was present when the testator drew up the will. The siblings were unsuccessful in establishing their line of reasoning that a will written with one’s non-dominant hand would have been substantially more irregular in appearance; it was held that it is possible to produce a regular typeface even with one’s untrained hand.

The Court took the view that the other will was not from the testator. It was sent anonymously to the probate court and prepared at a later stage according to its featured date. It was clear from the typeface alone that it was not from the testator, as at this point in time he was only able to write with his left hand.

When it comes to issues pertaining to an estate, lawyers who are versed in the field of succession law can offer advice.

For more informations:

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession/last-will-and-testament.html

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news-3019 Mon, 13 Nov 2017 08:19:09 +0100 OLG Köln on incorporating the execution of a will into the certificate of inheritance https://www.grprainer.com/en/news-and-press/detail/news/olg-koeln-on-incorporating-the-execution-of-a-will-into-the-certificate-of-inheritance.html Heirs might be able to do as they wish with an estate even if an execution of a will has been ordered if its function is supervisory in nature. That was the verdict of the Oberlandesgericht (OLG) Köln [Higher Regional Court of Cologne].

We at the commercial law firm GRP Rainer Rechtsanwälte note that if a testator orders execution of a will, this may limit the heirs’ control in relation to the estate. The execution of the will is then recorded in the certificate of inheritance. However, this step does not need to take place if the testator intended that the execution of the will be merely supervisory in nature and the executor’s brief is not supposed to involve administering the estate. That was the verdict of the Oberlandesgericht Köln in its ruling April 3, 2017 (Az.: 2 Wx 72/17).

In the instant case, the 85-year-old testator had five children. He appointed them in his will as preliminary heirs and his grandchildren as revisionary heirs. He also ordered execution of the will. In doing so, he mandated that the executor’s role was to supervise his testamentary disposition and not the ongoing management of the estate. Moreover, he ordered an additional executorship for his disabled daughter; her share in the inheritance was to be administered by way of a permanent executorship.

The point of contention was whether the supervisory execution of the will needed to be incorporated into the certificate of inheritance. The OLG Köln took the view that there was no cause for doing so. It interpreted the testator’s will to mean that he, with the exception of the disabled daughter, did not wish to limit the four other children’s right of disposal in relation to their share in the inheritance. The executor was only to supervise the implementation of his testamentary dispositions.

Accordingly, because these four children were able to do as they pleased with their portion of the estate, the OLG Köln held that a memorandum stating that the execution of the will had been ordered need not be included in the certificate of inheritance. The Court went on to say that this would only be necessary if the execution of the will was supposed to limit the heirs’ control.

The testator should always take care to ensure that their wishes have been stated as clearly as possible so that their testamentary dispositions are actually implemented in accordance with their wishes. Lawyers who are versed in the field of succession can advise on all matters pertaining to estates, wills and contracts of inheritance.

For more informations:

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession.html

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news-3017 Fri, 10 Nov 2017 08:23:40 +0100 OLG Köln: Only serious misconduct justifies withdrawal from contract of inheritance https://www.grprainer.com/en/news-and-press/detail/news/olg-koeln-only-serious-misconduct-justifies-withdrawal-from-contract-of-inheritance.html Apart from a will, it is also possible to prepare a contract of inheritance as a way of organizing one’s estate. It should be noted, however, that a contract of inheritance has a significantly stronger binding effect.

In the absence of a will or contract of inheritance, the rules of intestate succession apply automatically following the death of the testator. If these run contrary to the testator’s wishes, a testamentary disposition ought to be drafted. In doing so, one needs to carefully weigh up whether a will or contract of inheritance is the most appropriate form. A will provides the testator with greater freedom when it comes to drawing up the agreement, whereas a contract of inheritance binds both parties to the contract. Having said that, a contract of inheritance cannot be subsequently altered or rescinded. If no appropriate provisions are set out in the contract of inheritance, we at the commercial law firm GRP Rainer Rechtsanwälte note that withdrawal is only possible if misconduct on the part of the other contractual party that would justify divestment of the compulsory portion can be proven.

In its judgment of July 3, 2017, the Oberlandesgericht (OLG) Köln [Higher Regional Court of Cologne] ruled that a testator had not effectively withdrawn from the contract of inheritance with his wife (Az.: 2 Wx 147/17). The married couple had concluded a notarized contract of inheritance 53 years prior to the death of the husband in which they had designated each other as sole heirs. Several months before his death, the husband announced his withdrawal from the contract of inheritance and appointed his children as heirs. A dispute emerged between the wife and the children concerning who had become the heir(s). The OLG Köln held that the wife had become the sole heir.

The parties had not agreed to a reservation of the right to withdraw in the contract of inheritance, which meant that withdrawal was only possible if the relevant contractual partner had been guilty of serious misconduct. The Court clarified that this misconduct needed to be sufficiently serious that it would have justified divestment of the compulsory portion. This would only be the case if the legal heir was guilty of committing a crime or wilfully committing a serious offence against the testator. In the case in question, while the wife had withdrawn around 19,000 euros from the testator’s account and set up a monthly standing order to her benefit in the amount of 2,000 euros, the OLG concluded that this alone did not amount to an offence involving property.

Lawyers who are experienced in the field of succession law can advise on all issues pertaining to wills and contracts of inheritance.

For more informations:

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession/last-will-and-testament.html

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news-3015 Thu, 09 Nov 2017 08:50:18 +0100 Pharmacies not allowed to offer promotional gifts in the case of fixed-price pharmaceuticals https://www.grprainer.com/en/news-and-press/detail/news/pharmacies-not-allowed-to-offer-promotional-gifts-in-the-case-of-fixed-price-pharmaceuticals.html Pharmacies are not allowed to offer their customers promotional gifts when the latter are purchasing prescription medicinal products. That was the verdict of the Oberverwaltungsgericht (OVG) NRW, North Rhine-Westphalia’s Higher Administrative Court, in two rulings from September 8, 2017.

Consumers in Germany are accustomed to prescription pharmaceuticals being the same price in every pharmacy. We at the commercial law firm GRP Rainer Rechtsanwälte note that German pharmacies are not allowed to deviate from this pharmaceutical pricing regulation and therefore cannot grant price reductions or discounts in the case of prescription or other fixed-price medicinal products or promote these products on this basis. Moreover, the uniform selling price cannot be circumvented by having the customers receive vouchers or other material assets when purchasing medications. That was he verdict of the Oberverwaltungsgericht NRW in two judgments from September 8, 2017 (Az.: 13 A 2979/15 and 13 A 3027/15).

Both rulings stem from the following set of facts: Two pharmacists had promoted vouchers that could be redeemed by submitting a prescription. After presenting the voucher, the customers would receive a pair of cosy socks or wrapping paper. The competent pharmaceutical society viewed this as a violation of the pricing controls for prescription medicinal products and prohibited these types of vouchers from being issued. The legal action brought by the pharmacists against this decision was unsuccessful.

The OVG held that the promised non-cash benefits such as the cosy socks and wrapping paper gave consumers the impression that the medication was cheaper in these pharmacies than in others. This was a violation of the pharmaceutical pricing regulation, as customers were receiving everyday goods for redeeming the voucher. The Court went on to say that the fact that these were material assets of little value was insignificant, because no de minimis limit applies to the price controls.

The OVG also noted that a ruling of the Court of Justice of the European Union finding that these price-fixing regulations do not apply to foreign mail-order pharmacies does not affect the price controls. The Court clarified that this competitive advantage that foreign mail-order pharmacies have has yet to seriously impact domestic pharmacies negatively.

There is often a fine line that needs to be tread when it comes to advertising for pharmacies as well as other health organisations. Violations of competition law can be met with severe penalties. Lawyers who are experienced in the field of industrial property can offer advice and take appropriate legal measures in the event of violations.

For more informations:

https://www.grprainer.com/en/legal-advice/intellectual-property-law-and-trademark-law/advertising.html

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news-3013 Wed, 08 Nov 2017 09:10:00 +0100 Commercial agent’s claim for compensation following voluntary termination https://www.grprainer.com/en/news-and-press/detail/news/commercial-agents-claim-for-compensation-following-voluntary-termination.html A commercial agent may even be entitled to compensation if he or she voluntarily issues notice of termination. However, the company’s conduct needs to give rise to legitimate grounds for termination for this to happen.

When a commercial agency agreement is brought to an end, the commercial agent often has a right to compensation. This is because the company in a lot of cases continues to profit from the client contacts that the commercial agent secured. There may be a right to compensation if the commercial agent terminates the agreement himself, but only if certain conditions are met; the company’s conduct must give rise to legitimates grounds for terminating the agreement. We at the commercial law firm GRP Rainer Rechtsanwälte note that a ruling of the Oberlandesgericht (OLG) München [Higher Regional Court of Munich] from February 2, 2017 has clarified that this is not the case if the company has merely omitted of its own accord to offer the commercial agent a reduction in rent to enable the commercial agent to obtain sufficient profits (Az.: 23 U 2749/16).

In the instant case, a filling station tenant had himself terminated the commercial agency agreement due to poor profits and demanded compensation in his capacity as a commercial agent. However, the OLG München ruled that the tenant was not entitled to this claim, stating that a commercial agent cannot unilaterally shift his or her entrepreneurial risk onto the company.

The OLG went on to say that the requirements pertaining to “legitimate grounds” are less stringent than those in relation to good cause for termination, meaning that for these purposes no-fault or even lawful conduct on the part of the company may be enough. The Court held that it is necessary as well as sufficient for the company’s conduct to create a bona fide unacceptable situation for the commercial agent.

This was not the case here, it being irrelevant that the company had opened another filling station approx. 1.4 kilometres away. The Court ruled that this had not demonstrably led to profit losses, especially since both parties had agreed to a reduction in the rent. The company could also not be accused of having rejected an application brought by the tenant to take over another filling station, as the latter in his capacity as a commercial agent was subject to a legal prohibition on competition for the duration of the contractual period.

Before issuing notice of termination, commercial agents ought to carefully assess whether they are risking their right to compensation by doing so. Lawyers who are experienced in the field of commercial law can offer advice.

For more informations:

https://www.grprainer.com/en/legal-advice/commercial-law/commercial-agency-law.html

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news-3010 Mon, 06 Nov 2017 08:47:31 +0100 OLG Frankfurt: Contesting the renunciation of an inheritance on account of an error https://www.grprainer.com/en/news-and-press/detail/news/olg-frankfurt-contesting-the-renunciation-of-an-inheritance-on-account-of-an-error.html As a matter of principle, an heir has the option of renouncing his or her inheritance. Under certain circumstances, the heir can also challenge and revoke this renunciation.

Heirs are not obligated to accept an inheritance and can instead reject it. The inheritance needs to be formally renounced within a period of sex weeks after the accrual of the inheritance comes to light. Once the inheritance has been renounced, it is then very difficult to undo this at a later stage. We at the commercial law firm GRP Rainer Rechtsanwälte note, however, that it is possible under certain circumstances, as demonstrated by a judgment of the Oberlandesgericht (OLG) Frankfurt [Higher Regional Court of Frankfurt] from May 4, 2017 (Az.: 20 W 197/16).

According to this, renouncing an inheritance is possible if the renouncing heir mistakenly assumes that by renouncing his or her share in the inheritance this share will then only go to his fellow appointed co-heir pursuant to the rules of intestate succession, as this means that the former is labouring under a misapprehension regarding a direct legal consequence of the renunciation, with this amounting to substantial error justifying a challenge.

This is exactly what happened in the inheritance case that came before the OLG Frankfurt. The testator had left behind a wife and a son. The son renounced the inheritance in the belief that his share would then automatically go to his mother and she would thus become the sole heir. However, the testator also had a brother who would have become a co-heir following the son’s renunciation of his share in the inheritance. The latter therefore contested the renunciation. The OLG Frankfurt ruled in his favour, stating that the son had not realized that in renouncing the inheritance a major consequence of doing so involved his share in the inheritance going to the person who would have become heir under the rules of intestate succession if he, the son, had not been alive at the time of the testator’s death, i.e. the testator’s brother in this case. The OLG held that this constituted a substantial error of law that justified the challenge.

A legal heir ought to thoroughly inform himself about the legal consequences of renouncing an inheritance before doing so, because contesting a renunciation is often extremely difficult. Those who do not wish to rely on the rules of intestate succession can prepare a will or contract of inheritance as a way of organizing the estate in accordance with their wishes. Lawyers who are experienced in the field of succession law can offer advice.

For more informations:

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession.html

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news-3007 Tue, 31 Oct 2017 07:31:55 +0100 Inheritance – Waiving compulsory portion among siblings may prove more expensive https://www.grprainer.com/en/news-and-press/detail/news/inheritance-waiving-compulsory-portion-among-siblings-may-prove-more-expensive.html Legal heirs who waive their compulsory portion and receive a form of compensation for doing so need to keep an eye on the tax burden. Following a judgment of the Bundesfinanzhof (BFH), Germany’s Federal Fiscal Court, this may turn out to be higher than was previously the case.

Even if legal heirs are excluded from inheriting by way of a will, they are still entitled to their share in the compulsory portion. Should those entitled to the compulsory portion waive this to the benefit of their siblings and receive compensation in return, this may prove to be considerably costlier than was hitherto the case following a ruling of the Bundesfinanzhof from May 10, 2017. According to this, a distinction needs to be made depending on whether the waiver was issued during the testator’s lifetime or after his or her death (Az.: II R 25/15). We at the commercial law firm GRP Rainer Rechtsanwälte note that the tax implications can be significant.

In the instant case, a brother had waived his entitlement to the compulsory portion during the lifetime of the testatrix in favour of his three siblings in case he was excluded from the inheritance by his mother. In return, he received a payment from each of his siblings in the amount of 150,000 euros. Several years prior to this, he had already received gifts from his mother amounting to around one million euros.

The tax office issued separate gift tax assessment notices for his siblings’ donations and in the process added the value of the of the mother’s gifts to the payment of 150,000 euros from each sibling, and then deducted the applicable tax allowance at the time of 205,000 euros. In doing so, it applied the first tax bracket to the case and thus a tax rate of 19 per cent. In the end, this resulted in a tax levy of 28,405 euros. The relevant assessment notice was adjusted following a legal action. This reduced the gift tax burden to 10,810 euros; the gifts from the mother ought not to have been taken into account for the purposes of the calculation.

Nonetheless, the fiscal court also applied the first tax class to the case. Wrongly so, according to the BFH. It held that because the donation was among siblings and not between parents and children, the considerably less favourable second tax bracket ought to have been applied to the case. The tax allowance here was then only 10,300 euros (20,000 euros today). This meant the gift tax rose again to approx.. 23,600 euros. The BFH has thus substantially amended its case law. Lawyers who are experienced in the field of succession law can offer advice.

For more informations:

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession.html

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