German LegalTech: Specific Challenges in Legal Practice/Theory?

By Tom Braegelmann

Considering the boom in LegalTech research and startups, I was wondering whether there are specific challenges facing German LegalTech, among them (and this list is by no means complete or even comprehensive) in contrast to an Anglo-American approach to LegalTech:

  • German legal practicioners (lawyers and judges alike) rely a lot on legal literature as a legal source (Rechtsquelle), which is mostly not available online for free (but kept in the pricey vaults of C.H. Beck, Juris, and others) – how would any LegalTech startup/entrepreneur be able to come up with a convincing solution for more complex legal issues as long as these sources are walled-off (and there are valid reasons for keeping them in private databases, copyright law etc.)?
  • While in practice there is a kind of German case law approach, precedents of the highest courts are usually not “the law” and not legally binding precedent, but rather only authoritative / convincing guidance – legally speaking, there is thus no “case law” (Richterrecht) in German legal theory, only in legal practice, but in a much weaker form than under the Anglo-American case law approach;
  • Most case law from the initial courts is not coherently / comprehensively published online for free, hence, it is difficult to compile an overview of the “case law” at the entrance level of the German court system;
  • German case law is mostly published in an “anonymized” way, meaning that party information, information on the deciding judge(s) and certain facts are left out, stripping the case of some of its factual underpinnings, making it potentially less useful for use in LegalTech, namely machine learning.
  • Historically, German law has proven to be extremely flexible and thus, arguably and in contrast to Anglo-American case law, it has not been very predictable and stable (or, polemically, German law has a history of being ready to serve the Zeitgeist at anytime, though it has stabilized lately due to the benign influence of the German Constitutional Court). The German Civil Code (Bürgerliches Gesetzbuch – BGB) is a case in point, whose text has served since January 1, 1900, in its core structural approach unchanged, as basis for court decisions under many different German Governments: (i) Beginning with the German Empire in peace time, (ii) throughout the controlled German economy during World War One, (iii) during the Weimar Republic, (iv) during the rule of Nazi Germany and World War Two, (v) in occupied post-war Germany in all four occupied zones (French, British, American and Soviet), (vi) in East Germany until 1965/1976, (vii) in West Germany until 1990, (vii) in unified Germany, and since the founding of the EC/EU, European law is influencing the BGB more and more as well, but not replacing it. How does this lack in predictability limit the efficacy of German LegalTech?

This article was originally published on LinkedIn by Tom Braegelmann and is re-published here with the permission of the author. More about the author here.