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The Düsseldorf Higher Regional Court (OLG Düsseldorf, Urteil v. 30.11.2015, Az. I-16 U 263/14) has, on appeal by an issuing house of closed-end property funds, overturned a judgement of the Düsseldorf Regional Court and prohibited unlawful client advertising by an association of what it described as ‘leading capital market law firms’.
The law firms had claimed on an Internet platform set up specifically for this purpose that there was a suspicion of a fraud scheme or pyramid scheme in relation to the issuing house – similar to the S & K Group. The urgently required legal advice could be obtained from them.
In its judgement, the Düsseldorf Higher Regional Court agreed with the plaintiff that this allegation was not only untrue, but that there was not even the beginnings of a factual basis for it. It explicitly stated that the statements constituted a criminal offence of defamation pursuant to Section 186 StGB and accordingly ordered the law firms to cease and desist. In addition, it held the managing directors of the law firms personally liable in accordance with the principles of ‘Stoererhaftung’ (Breach of Duty of Care).
In the event of non-compliance, a fine of up to € 250,000 or up to six months’ imprisonment may be imposed. The amount in dispute for the injunctive relief was set at EUR 150,000. The Senate has not authorised an appeal. However, there is the possibility of a non-admission appeal to the BGH.
In addition to the claim for injunctive relief, there are claims for damages which, in view of the total investment volume of more than EUR 1 billion, are likely to be in the seven-figure range and which the issuing house will assert in separate proceedings.
Disclosure: Our law firm represented the plaintiff and appellant.
Lawyer Arno Lampmann from the law firm LHR:
‘The liberalisation of advertising law for the liberal professions has led many lawyers in recent years to advertise not only more freely, but also more aggressively and – as the present case shows – unfortunately also simply with false claims with a view to quick fee turnover. In the name of consumer protection, there is of course nothing wrong with factually justified criticism, especially in the sensitive area of financial investments, even if negative reporting can have serious consequences for the companies. However, this is precisely why false claims must be stopped at all costs. After all, unlawful advertising in the financial sector can cause considerable damage, which can easily threaten the existence of the perpetrator and, in particular, is not covered by the lawyer’s financial liability insurance.’
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