Decisions of the Federal Court of Justice (Bundesgerichtshof)

Bundesgerichtshof (Tenth Civil Senate) 26 September 2000 - X ZR 94/98


During 1994-1995, the plaintiffs invested varying amounts of money in a capital investment scheme which offered the investors a share in private law societies (Gesellschaften bürgerlichen Rechts). The object of these societies was indicated as capital investment in the US financial futures trade. This investment scheme was operated by a limited liability company (GmbH), which underlined in the advertising material that the entire money paid into the society would go directly to brokers who were responsible for the investment. This was to be accomplished by a particular system of investment protection: the contributions were to be paid into a fiduciary account with a Rechtsanwalt (legal practitioner) as trustee, who was to transfer the money directly to the brokers. A well-known independent accountant was to verify, on a semi-annual basis, the payments made by investors, their use in accordance with the contract, the distribution of profit, and the state of the contributions. The limited liability company instructed the defendant, who, from April 1990 onwards, confirmed in audit reports that payments were effectuated in accordance with the contract, as well as the orderly inflow and utilization of money.

In contrast to the representations made in the investment prospectus, the monies paid by investors were transferred to the account of a Rechtsanwalt who acted as a trustee of a company registered on the Cayman Islands. This Rechtsanwalt transferred the payments to various accounts as the company would indicate to him in each case. It is not known what happened to the money subsequently. In 1995, the entire capital investment scheme collapsed.

The plaintiffs claim from the defendant compensation and repayment of the money they have invested, minus any return paid out to them. They argue that the defendant is liable as a responsible party under [statutory] prospectus liability, and also under a works contract, because he negligently violated his duty to conduct a complete audit, and because he produced incorrect attestations which were used by the company in order to attract customers.

The Landgericht dismissed the action. The Appeal Court allowed most of it. The defendantís appeal lead to the reversal of the attacked judgment, and the case is referred back [to the Appeal Court].

In accordance with the previous instances, the Bundesgerichtshof held that the defendant is not liable in compensation under prospectus liability rules. On the other hand, an in accordance with the finding of the Appeal Court, the Bundesgerichtshof held that there was a works contract between the plaintiffs and the defendant, and that the defendant, by producing incorrect attestations, had provided defective performance. Nevertheless, the plaintiffs could not base their claim on this works contract because they had been unable to prove that the defendantís breach of duties caused them to render contributions which were effectuated before the audit instructions were given.

On the other hand, the Bundesgerichtshof held that the defendant could be liable for compensation under the principles of culpa in contrahendo, provided it could be established that the person who operated the investment schemes had used incorrect attestations of the defendant in advertising before the plaintiffs subscribed to the contributions, and if the defendant was or ought to have been aware of this. It is recognized in the jurisdiction that the professional position of a party can be relevant in the question whether this party can be liable towards third parties, to which this party is not connected in a direct contractual relationship, in accordance with the principles of contractual or quasi-contractual liability. This jurisdiction is based on a rather general legal principle, namely that a person is responsible for the accuracy and completeness of statements introduced to the public provided that he draws on the reliance which others then actually place in him and thus exerts influence on the will of this third party as manifested in its decision. This principle also applies to accountants who allow themselves to be made a control organ within a capital investment scheme, and thus, through the confidence which the public generally have in their competence in economic matters, exert influence on investment decisions taken by interested parties. In this situation, the accountantís activity generates the impression of a particularly reliable system. An accountant, who undertakes to regularly audit the payments made by investors, and the use to which these payments are put within a capital investment scheme, who then does not carry out this control to the extent promised to the investors, and who nevertheless confirms in his attestations that the inflow and the use of the payments was orderly, is liable to the investors in compensation under culpa in contrahendo, provided that these investments were made in reliance on the accuracy of the attestations. In this situation, it is no argument for the accountant that the organizer of the capital investment system had instructed him to do no more than to control the bank accounts. If he notices deficiencies in the way the business of the operator of the capital investment is conducted, and that the information provided in the investment prospectus differs from the instructions given to him, he has to undertake suitable measures to remove the situation of reliance which his conduct had helped to create.

Translation by and © 2001 Gerhard Dannemann. The contents of this page may be downloaded and printed out in single copies for individual use only. Making multiple copies without permission is prohibited.