Insurance Predictions 2018: Dieselgate, Kill Or Cure For German D&O?

Author:Dr. Henning Schaloske
Profession:Clyde & Co

2018 will be a pivotal year for the German D&O market

"Dieselgate" not only changed the game for consumers and car companies, it's set to have a deep and lasting impact on the German and Continental European litigation environment. In 2018, the new German government intends to bring in collective redress mechanisms that will create new exposures for insurers and fresh opportunities for the litigation funders and US plaintiff law firms now setting up shop in Germany. Could this sound the death-knell of the languishing German D&O market, or is it the trigger for hardening rates which is so badly needed?

Traditionally, legislators in Europe, and particularly Germany, have been reluctant to introduce anything akin to US-style class actions. But the Volkswagen case exposed a protection gap for consumers which was promptly filled by the platform which filed a consolidated action on behalf of 15,000 plaintiffs in early November, forcing a legislative/governmental response.

In July 2017, the government published a discussion draft of its Model Declaratory Action. In line with new EU recommendations, this would enable consumer groups or their plaintiffs to bring an action for a 'declaratory judgement' which should, in principle, have...

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