Confidentiality First: Paradigm shift in information protection in German courts

The Act to Strengthen the Location of Justice revolutionizes the handling of sensitive company data in civil law disputes.

Systemic weaknesses in traditional confidentiality protection

The German legal landscape is undergoing a fundamental transformation with the introduction of extended protection provisions for corporate information. While the Trade Secrets Act of 2019 already laid important foundations, a critical regulatory gap remained: Civil proceedings without a direct trade secret connection did not receive adequate confidentiality protection. This protection gap manifested itself particularly problematically in contractual disputes, corporate law conflicts and claims for damages, where sensitive information merely arose as an incidental circumstance. Companies were faced with the dilemma of either waiving legitimate legal claims or disclosing business-critical data.

Shortcomings of existing protection instruments

The mechanisms available under sections 172 and 173 of the Judicature Act proved to be inadequate for modern business realities. These provisions were limited to oral hearings only and granted courts only discretionary powers without legal rights of the parties. Written evidence, expert opinions and procedural documents remained completely unprotected, which led to considerable risks for companies. The lack of predictability of court protection increased the reluctance to enforce justified claims and weakened Germany as a location for justice.

New regulation extends confidentiality standards

The judicial reform of April 2025 gave German civil courts extended powers to protect information. For the first time, the new regulation enables the systematic classification of data relevant to the dispute as confidential, regardless of the primary subject matter of the proceedings. The scope of application covers all civil court proceedings, from commercial disputes to complex corporate conflicts. This universal applicability closes the previous protection gap and creates uniform standards for the handling of confidential information.

Requirements and procedure

The activation of extended protection requires a formal request from the party concerned. The relevant information must meet the legal criteria for trade secrets: lack of public accessibility, economic value through confidentiality and appropriate protective measures by the owner. It is not necessary to provide complete evidence; instead, a credible demonstration of the need for protection is sufficient. This low threshold enables preventive protection at an early stage of the proceedings and prevents unintentional disclosures during the examination of the application. The court decides on the application for protection after hearing all parties involved. This discretionary decision requires a careful balancing of interests between the need for confidentiality and the transparency of the proceedings.

Practical implementation and legal consequences

In the event of a positive decision, comprehensive confidentiality obligations apply to all parties involved in the proceedings. Parties, lawyers, experts and witnesses are subject to strict confidentiality obligations that continue beyond the end of the proceedings. The sanction mechanisms include fines of up to 100,000 euros and potential imprisonment in the event of violations. In addition, courts can restrict access to files for third parties or make particularly sensitive information accessible only to a trusted group of people. These measures create a robust protective framework that establishes internationally competitive standards for confidentiality in German court proceedings.

Strategic implications for corporate practice

The new regulation changes fundamental risk calculations in civil law disputes. In future, companies will be able to enforce legal claims without having to disclose business-critical information. This development lowers the inhibition threshold for justified lawsuits and strengthens the enforcement of contractual rights. Legal departments must adapt their procedural strategies accordingly and submit confidentiality requests at an early stage, ideally together with the statement of claim. Careful documentation of the protective measures and economic significance of the information proves to be critical to success.

International competitiveness of the justice system

The reform positions Germany internationally as an attractive court location for complex commercial disputes. Companies from other jurisdictions can now benefit from robust confidentiality standards that compete with leading business locations. Especially for cross-border proceedings and international arbitration proceedings, the extended confidentiality represents a considerable locational advantage. The legal certainty and predictability of the protection reduce procedural risks and promote the acceptance of German courts.

Future prospects for the modernization of the justice system

The new regulation marks a paradigm shift towards a digitalized jurisdiction that is appropriate for the business sector. It reflects the increasing importance of intangible assets and information assets in the modern economy. In the long term, this development could catalyze further reforms in the structuring of proceedings, particularly with regard to digital file management and the electronic taking of evidence. The balance between transparency and confidentiality will remain a key design element. The successful implementation of these standards could serve as a model for other legal systems and establish Germany as a pioneer in the modernization of procedural rights.