Vexatious litigation

A professional plaintiff ( partly predatory shareholder or multiple plaintiffs called ) is someone who is professionally represents the interests of shareholders or even small shareholder is and appears at general meetings of joint stock companies with the aim of own or third party interests - in case of doubt the court - to enforce.

Background

The profession of " professional plaintiff " is not strictly defined yet clearly defined. Is empirical evidence that since the beginning of the 21st century increasingly recurring legal challenges by individuals or groups of individuals occur that often ended up in court or out of court settlements. Thus there were in 1981 only a shareholder lawsuit against the resolutions of a general meeting in Germany, where it then already 45 in 1999. While the term " professional plaintiff " has a negative connotation in the public debate usually necessary to distinguish between "good" and "bad" professional plaintiffs depending on the target direction of the actors involved.

" Evil " professional plaintiffs

In the extreme negative are called " professional plaintiffs " individuals whose primary aim is the effecting of a legal challenge by unsuccessful opposition. This legal challenge then is a good negotiating position, which is aimed at the highest possible compensation for withdrawal of the complaint. Since important decisions such as mergers of companies, squeeze- outs or eg Capital be made ​​only upon entry in the commercial register, but this requires that the decisions were not challenged, the decisions a company can own shareholders with one share by legal challenges lasting block in the implementation.

According to this action try the professional plaintiff, or the behind the plaintiffs shareholders to maximize their own profit. Since this is often done by blockade of corporate decisions that are supported by the majority of the other shareholders, this practice should be evaluated neither in the interests of the Company nor the majority of the shareholders and thus negative.

Even if the payments for comparisons at first glance only as reimbursements for incurred legal fees look like this often turn out to be but as above average. Although this often can not be detected as yet is often to the assumption that the plaintiff receive a significant part of the cash paid themselves.

" Good " professional plaintiffs

Positive side, Job applicants can also be persons who simply represent the interests of shareholders and who bring to this the knowledge necessary to assess the legality of the interests and of the process of joint stock companies. In this case, the "objective legal control" and not the action itself is in the foreground. Job applicants can in addition to the Supervisory Board and the auditors the Company are as quasi referred to as an extended arm of shareholders controlled and promotes lawful act.

Legal developments

In its leading case " Kochs Adler " in 1989 verdict of the Second Civil Division of the Federal Court that a legal challenge 242 BGB can be met with the objection of the legal abuse pursuant to §. Requirement is that the plaintiff a legal challenge arises with the aim to induce the sued company in grossly selfish way to a benefit to which he was not entitled and cheaper, also can not rise, where he wants to be guided generally by the idea who sued company will provide the service, because they hope that the entry contesting handicaps and damages avoided or could be kept low, at least.

Back in 2005, the federal government has with the "Act on Corporate Integrity and Modernization of the Right of Avoidance ( Umag ) " tries to limit the abuse of the rights of action. This was, however, only very limited success and limited the abuse is not clearly a.

To the abuse of rights restrict action by small shareholders was issued from a Federal initiative in 2008 with the Act Implementing the Shareholder Rights Directive, by which the complaint process was accelerated by now less necessary instances. Thus, it is possible to block small shareholders still through lawsuits against individual decisions to implement the decisions at first, but the resulting solely from the foreseeable duration of the procedure threat potential of the applicants has become significantly smaller.

Literature on the subject

• Theodor Baums / Astrid Keinath / Daniel Gajek (07 /2007): Progress in lawsuits against shareholders' resolutions? - An Empirical Study (PDF, 1.1 MB)