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Monthly Dose of Germany: July 2023
We would like to share some interesting insights into the German Legal market and recent developments as well as interesting events and publications with you. This edition of our "Monthly Dose of Germany" is presented by our Dutch Desk, headed by Dr. Fleur Johanna Prop.
The Introduction of a Legal Front Door - and the Works Council
Works council participation rights in the context of the introduction of a Legal Front Door with and without AI?
The centralized recording of inquiries to the in-house legal department by means of a portal site as a "Legal Front Door" promises many advantages both for those seeking advice and for the lawyers working in the legal department, as already explained in our series of articles “The Legal Front Door: An introduction to digital legal matter intake“. From an employment law perspective, it should be noted that the introduction of a Legal Front Door is almost always subject to co-determination. In addition, the works council has further participation rights.
(Sound) Compensation @ Remuneration reports 2023
BaFin's general ruling(s) regarding the remuneration reports of institutions due to the revised EBA guidelines
BaFin has issued on 31 March 2023 a general ruling regarding the remuneration notifications of institutions as of the reporting date of 31 December 2022, in view of the fundamentally revised EBA guidelines for CRR credit institutions issued by the European Banking Authority (EBA). In this Client Alert, we summarize the key findings of the general ruling.
In the revised EBA Guidelines (1) for the comparison of remuneration practices, the gender pay gap and the approved higher maximum ratios under Directive 2013/36/EU (as amended by Directive 2019/878/EU, CRD V) (EBA/GL/2022/06), (2) for the comparison of remuneration practices and the gender pay gap under Directive (EU) 2019/2034 (IFD) (EBA/GL/2022/07), and (3) for data collection with regard to high earners under CRD V and the IFD (EBA/GL/2022/08, both dated 30.06.2022), supervisory authorities are required to collect the information referred to in these guidelines in the specified form and scope from CRR credit institutions and securities institutions and to provide it to them in the format required by the EBA (by 31.10.2023 in the case of CRR credit institutions). The revised EBA Guidelines are to be applied in each case from 31.12.2022.
A guide to pre-insolvency and insolvency proceedings across Europe 2023
Different restructuring and insolvency regimes in the 27 EU member states create legal uncertainty and place high demands on stakeholders in terms of obtaining information, but also in terms of conducting or participating in restructuring and/or insolvency proceedings. The fragmentation of restructuring and insolvency law in Europe is also an important consideration for investors or lenders when determining the level of risk premium they expect on an investment: the lower the efficiency of the restructuring or insolvency regime in question, then all other things being equal, the higher investors will set the risk premium and, in the case of a particularly high risk, discourage investors from lending altogether. This in turn limits the choice of financing options available to corporates and, more generally, limits their ability to raise affordable finance to expand their businesses.
Learn more about the (pre-)insolvency legal framework in 23 European jurisdictions.
BaFin-FAQ 1.0 on the Remuneration Ordinance for Institutions
Draft dated 21 June 2023
On 21 June 2023, BaFin has opened the consultation procedure on its draft "Questions and Answers on the Remuneration Ordinance for Institutions" ("FAQ IVV") published on the same day at BaFin’s website. In this Client Alert, we summarize the key facts from the draft and evaluate the facts in the context of previous legal practice.
The FAQ IVV includes the first official announcement of BaFin on the new version of the Remuneration Ordinance for Institutions (Institutsvergütungsverordnung, IVV) dated 20.09.2021 (IVV 4.0) as well as on the EBA Guidelines on Sound Remuneration Policies dated 02.07.2021 (EBA/GL/2021/04, "EBA-GSR 2.0"). The interpretative guidance on the IVV published by BaFin on 16 February 2018 ("BaFin Interpretative Guidance") still referred to the then applicable IVV (IVV 3.0). Therefore, practitioners had already expected BaFin to issue (new) pronouncements on the guiding principle of gender-neutral remuneration determined for the first time in IVV 4.0 (Section 5 (1) no. 6 IVV, see also our Client Alert, on the implementation of ESG criteria in the remuneration systems, as well as on the implementation of the extended requirements of Section 27 IVV 4.0 to the group-wide remuneration systems. The draft of the FAQ IVV has (only) partially fulfilled these expectations.
Generative AI: A guide for corporate legal departments
What does the future hold for Generative AI and legal services?
The potential of Generative AI in legal has captured the imagination of many, and with the emergence of large language models, the legal industry has almost certainly reached its long-awaited tipping point toward transformative change.
The potential of Generative AI in legal has captured the imagination in ways unmatched in other professional services. Given its heavy reliance on precedent and legislation, and the prevalence of text generation and review as its core tasks, legal work is particularly susceptible to AI application.
Your Contact for Germany: Dr. Till Contzen and Klaus Gresbrand
Global Contact: Bruce Braude and Isabel Parker
Read full article and download the Generative AI Guide here.
"Monthly Dose" Employment Law: July 2023
Current case law in employment law
The July 2023 edition of our "Monthly Dose" Employment Law on current case law explains the judgments of the German Federal Labour Court (Bundesarbeitsgericht, BAG) dated (1) 9 February 2023 (7 AZR 266/22) on the fiction of an unlimited employment due to granting of remaining vacation entitlements after the expiration of a fixed term employment, (2) 20 December 2022 (9 AZR 266/20) on the statute of limitations on vacation entitlements, (3) 8 December 2022 (6 AZR 31/22) to consider the proximity to pension in the social selection at dismissals due to operational reasons, (4) 29 March 2023 (5 AZR 255/22) to the readjustment of employee’s will to perform his/her job activity in case of default of acceptance wages dismissal lawsuits as well as (4) of European Court of Justice (ECJ) dated 27 April 2023 (case C 192/22) on the forfeiture of vacation entitlements in the event of incapacity to work during partial retirement.
Article by Dr. Lars Hinrichs, Klaus Heeke, Dr. Charlotte Sander and Elisa Ultsch
Read full article here.
People News
Renowned finance lawyer Dr Simon Grieser joins Deloitte Legal in Frankfurt
Deloitte Legal is strengthening its cross-location Banking & Finance advisory team in the important banking location of Frankfurt/Main. Dr Simon Grieser (50) will be joining Deloitte Legal as a partner on 1 September 2023.
Deloitte Legal Tech Fair
The legal market is evolving rapidly in terms of technology, legal operations and what the legal department of the future will look like. At the first Deloitte Legal Tech Fair on 12 September 2023 in Düsseldorf, we would like to share new and exciting insights on this topic with you.
The event will not only give you the opportunity to learn about the latest trends and developments in legal technology and legal operations, but also invite you to exchange and discuss with interested parties and users from legal practice and industry.
From 16:00 to 19:00 you will have the opportunity to learn more about innovative technologies and solutions at various stands. Legal tech experts will be on hand to answer your questions and provide insights into the exciting world of legal technology, its application areas and individual legal tech modules. Presentations by legal tech experts on current topics will complete the event programme.
Register now!
Tuesday, 12 September 2023 | 16.00 CEST
Read more and register here
