A new type of legal counsel has emerged: the so-called victim lawyer. One such lawyer, Michael Witti from Munich, is currently fighting on several fronts – always over multi-million euro claims and often on behalf of hundreds of plaintiffs.
Witti is currently representing the damages claims of families of passengers who died when two planes collided above Lake Constance in southern Germany last year. He also targeted German pharmaceuticals group Bayer after it was forced to take its Lipobay cholesterol drug (Baycol in the United States) off the market.
Three weeks ago, a left-leaning civil rights campaigner from Germany’s market-oriented Free Democratic Party sent out a personal press release. Released one day ahead of financial services provider AWD’s financial press conference, the document, “Former Federal Interior Minister Gerhart R. Baum plans to file suit against AWD in 200 cases,“ was supposed to put additional pressure on the listed company’s share price – an approach that had already been applied in the Bayer case.
Lawyers specializing in investment lawsuits are now firing shots against banks and listed companies, from Neuer Markt fraudsters to Dax blue-chip giant Deutsche Telekom. The usual accusation: misleading information in issuing prospectuses and poor investment advice.
These specialized law firms have repeatedly been criticized by the financial industry and its legal experts, who complain that they encourage exaggerated hopes and lure their customers with professional media campaigns, only to then fleece their victims a second time by making them throw good money into hopeless legal cases.
At the same time, it has become obvious that German courts rarely side with small shareholders. Investors still have little chance of obtaining damages under German law. And the judiciary does not want to serve as a repair workshop for failed stock market speculation. Investors’ lawyers thus like to claim that German laws run counter to European legislation. Or they simply forward the legal complaints of German citizens against German companies to U.S. courts, where, incidentally, damages payments tend to be much more expensive.