Concept and significance of the declaration of settlement
Die Declaration of settlement is a central concept in German procedural law, particularly in civil proceedings. It refers to the procedural statement by one or both parties that the original subject matter of the dispute has been settled due to a subsequent event. The declaration of settlement can play a decisive role in legal actions or proceedings for interim relief, enabling an economically efficient conclusion of proceedings when the interest in legal protection has ceased.
Declaration of settlement in the context of civil litigation
Unilateral and mutual declaration of settlement
Unilateral declaration of settlement
Die unilateral declaration of settlement is usually made by the claimant if the legal outcome originally sought by filing the claim has been fully achieved due to a later event. A prerequisite is generally that, after the occurrence of the settling event, there is no longer any interest in a decision on the original claim. The declaration is typically worded as follows: “The main matter has been settled.”
Mutual declaration of settlement
If both parties issue a declaration of settlement in agreement, the proceedings generally end by a cost decision according to § 91a ZPO (Code of Civil Procedure). In this case, the court no longer has to decide on the original facts and legal situation, but only on which party has to bear the costs.
Time and prerequisites
A declaration of settlement can generally be made at any time after the occurrence of a settling event, as long as the proceedings have not been finally concluded. The settling event must have occurred after the dispute became pending in court. Otherwise, a declaration of settlement is not procedurally relevant and would be treated as an ordinary withdrawal of the action.
Procedural effect
With the submission of the declaration of settlement, the proceedings are continued in the so-called dispute on settlement continued. The subject of the dispute is then no longer the original claim, but the determination of which party has to bear the costs of the proceedings. Here, the court examines under § 91a ZPO how the case would have been decided without the settling event.
Distinction from withdrawal of claim
The declaration of settlement must be distinguished from withdrawal of claim. While withdrawal of claim involves the complete withdrawal of the claim and the conclusion of the proceedings, the declaration of settlement aims to bring the supposedly concluded proceedings before the court for a costs decision. Withdrawal of claim generally has the consequence that the claimant must bear the costs of the proceedings.
Practical areas of application for the declaration of settlement
Facts and examples
Typical cases for a declaration of settlement include:
- Claims for payment when the defendant pays in full after the commencement of litigation.
- Injunction proceedings, when the defendant submits a declaration to cease and desist after commencement of litigation.
- Proceedings for interim relief, when the main matter has been finally decided in the meantime.
Importance for practice
The declaration of settlement serves to accelerate proceedings and minimize costs. It prevents the continuation of proceedings on a settled subject matter and aims to achieve a fair cost allocation through judicial review.
Legal basis
The declaration of settlement is not expressly regulated by law, but in practice it is based primarily on the procedural reimbursement regulation of § 91a ZPO. According to this provision, the court decides at its discretion about the costs of the proceedings when the main matter has been declared settled.
Judicial decision after declaration of settlement
Standard of review
After the declaration of settlement, the court examines how it would have decided in the main matter if the settling event had not occurred (so-called hypothetical judgment). The burden of costs is imposed on the party that would have lost in a contentious decision.
Burden of proof
The responsibility for pleading and proving the requirements for the claim as well as for the settling event generally lies with the claimant. If the opposing party claims further facts that extinguish the claim, they bear the responsibility for pleading and proving those.
Declaration of settlement in interim relief
A declaration of settlement can also be made in proceedings for interim relief. Here, too, the judicial decision is made by order (§ 91a ZPO). The particularity is that, as a rule, a summary review takes place and matters requiring urgency are often involved.
Legal remedies
An immediate complaint (§ 567 ZPO) is generally admissible against cost decisions following a declaration of settlement, provided the value in dispute exceeds 200 euros.
Literature and case law
Numerous court decisions, especially by the Federal Court of Justice and the Higher Regional Courts, have clarified the principles regarding the declaration of settlement. Central sources on this topic can be found in commentaries on civil procedure law and in relevant court ruling databases.
Summary:
The declaration of settlement is an important instrument for the economically efficient conclusion of judicial proceedings in which the original objective of legal protection has ceased to exist due to an event occurring after the claim was brought. It enables an optimized allocation of the costs of proceedings without the need for a substantive decision on the original claim. The court’s decision is based on a hypothetical consideration of the original subject matter in dispute and is made at its equitable discretion.
Frequently asked questions
What are the procedural effects of a declaration of settlement in civil proceedings?
By submitting a declaration of settlement, the parties in a civil proceeding inform the court that the originally filed claim has become moot due to a subsequent event. If a declaration of settlement is submitted—in practice, often referred to as a “settlement of the main matter”—this has specific procedural effects: the legal dispute is not simply concluded; rather, the original subject of the dispute is transformed. The dispute now concerns whether the claim was admissible and justified at the time of the settling event. Thus, a so-called “determination of settlement” becomes the new subject matter in dispute. The court no longer decides on the original claim, but only on costs. If only one party believes the claim is moot (unilateral declaration of settlement), the court examines the prospects of success of the original claim as part of a cost decision under § 91a ZPO. However, both parties may also declare the settlement in agreement, in which case the proceedings are usually considered settled, and the court—unless there are further issues—only rules on costs.
What formal requirements must be observed for a declaration of settlement?
The declaration of settlement is not subject to any special form. It can be made in writing or orally recorded before the court. Generally, it is made during the oral hearing, but it can also be submitted in written form. It is important that the declaration clearly and unequivocally expresses that the party considers the original dispute to be resolved. In the case of a unilateral declaration of settlement, the party must also expressly state that it considers the dispute to be settled. The wording should therefore be clear, for example: “I declare the legal dispute in the main matter to be settled.” For optimum procedural effect, a documented and verifiable submission of the declaration of settlement is advisable.
What happens if the opposing party objects to the declaration of settlement?
In the case of a unilateral declaration of settlement, the proceedings are not automatically concluded. The opposing party may object to the declaration of settlement, and then the court must determine, by way of a summary review, whether the claim was admissible and justified up to the time of the settling event. The outcome of this review is relevant for the cost decision. If the court considers the claim to have been justified up to the occurrence of the settling event, the claimant is wholly or partially burdened with the costs. If not, the costs are imposed on the defendant. By objecting, the opposing party makes it clear that there is still disagreement between the parties about the legitimacy of the original claim.
Is a declaration of settlement also possible in appellate proceedings?
Yes, a declaration of settlement can also be made in appellate and even in revision proceedings. The procedural effects and further actions fundamentally correspond to those of the first instance: the respective court decides whether the claim would have been admissible and justified at the time of the settling event and then issues a cost decision. In appellate or revision proceedings, it should be noted that the subject matter of the dispute shifts to the issue of costs as a result of the declaration of settlement. Depending on the stage at which the declaration is made, this may affect the duration and cost structure of the proceedings.
Can only parts of a claim be declared settled?
The declaration of settlement may also refer solely to individual contested issues or requests, provided that only part of the subject matter has been settled by a subsequent event. In such cases, the declaration must be suitably differentiated. The cost portion relating to the settled part will also be assessed separately. Concerning the settled part, the court makes a decision on costs under § 91a ZPO; concerning the remainder, it issues a substantive decision. Such a differentiated approach is particularly important in more complex disputes involving multiple issues or requests.
What are the consequences for costs if a declaration of settlement is made without justification?
If, in the context of the cost decision under § 91a ZPO, the court finds that there was no event settling the claim, a cost decision will be made according to the hypothetical outcome of the proceedings. It will be considered how the legal dispute would have been decided without the alleged settling event. Specifically: if the claimant wrongly declared settlement when their claim would otherwise have failed, the claimant pays the costs. Had the claim succeeded, the defendant would be ordered to pay the costs. This differentiated procedural review ensures a fair balance of interests between the parties.
Is the declaration of settlement a legal remedy against a court decision?
The declaration of settlement is not intended as a means of directly challenging a court decision. It is not a legal remedy within the meaning of the Code of Civil Procedure (such as appeal or revision), but a procedural instrument by which a party responds to changed circumstances. It exclusively affects the continuation and subject matter of the proceedings and generally impacts the procedural costs. The law concerning legal remedies is not affected. However, in individual cases, a declaration of settlement may become relevant for enforcement or for specific actions opposing enforcement after a decision has already been issued, but it does not replace regular legal remedies.
