Federal Court of Justice on Reversal of Burden of Proof

Reversal of Burden of Proof Extended in Consumer Goods Sales

The Federal Court of Justice (BGH) in a ruling dated October 12, 2016, Ref. VIII ZR 103/15, has significantly tightened the seller’s liability for defects that appear within the first 6 months after the transfer of risk.

The basis for the reversal of burden of proof is § 476 BGB (German Civil Code). According to this, it is presumed in favor of the consumer that a defect which appears within the first 6 months after the transfer of risk (usually the time of delivery of the goods to the consumer) is an initial defect. The consequence is then warranty claims.

The scope of this reversal of burden of proof has now been significantly expanded.

Previously, the rule was: The consumer must prove that a defect in the goods appeared within 6 months after the transfer of risk (as stated, for example, in the BGH rulings of November 23, 2005 VIII ZR 43/05 [Turboladerschaden], of July 18, 2007 – VIII ZR 259/06 [defekte Zylinderkopfdichtung]). Doubts about whether the fault was due to a defect or improper use were to the detriment of the consumer. So if several causes were conceivable for the acute defect, of which only one constituted a non-conformity with the contract, while the other did not, this uncertainty was to the detriment of the consumer (as most recently stated by the BGH in its judgment of January 15, 2014 – VIII ZR 70/13). Only if all possible causes would constitute a non-conformity with the contract, it would be assumed that the defect in question already existed at the time of the transfer of risk.

Due to a decision by the ECJ on June 4, 2015 (C-497/13 – Faber), the BGH now sees itself prompted to change its case law. The European Court of Justice has significantly lowered the requirements for the consumer’s burden of presentation and proof regarding the occurrence of a non-conformity within six months of delivery, which is necessary for the presumption of Art. 5 Para. 3 of the Consumer Goods Sales Directive, on which the provision of § 476 BGB is based. Art. 5 Para. 3 of the Consumer Goods Sales Directive provides for a presumption in cases where the non-conformity becomes apparent within six months of delivery of the goods, that the non-conformity already existed at the time of delivery (ECJ, judgment of June 4, 2015 – C-497/13, para. 53, 67 f. – Faber). The ECJ does require the consumer to state and prove that the sold goods are not in conformity with the contract, for example because they do not have the characteristics agreed in the sales contract or are not suitable for the use normally expected of such goods. However, the ECJ only requires the buyer to prove a non-conformity. Unlike the BGH’s previous interpretation of § 476 BGB, the buyer does not have to prove either the reason for the non-conformity or the fact that it is attributable to the seller. The occurrence of the non-conformity within the short period of six months “allows”, in the Court’s view, the presumption that it “at least in its inception” already existed at the time of delivery, even if it only became apparent after the delivery of the goods (ECJ, judgment of June 4, 2015 – C-497/13, para. 72 – Faber).

According to the BGH, an interpretation of § 476 BGB in conformity with the directive is therefore required in such a way that the presumption regulated therein also applies if it remains unclear whether the defective condition that has occurred is based on a cause attributable to the seller or on another reason. Therefore, when an acute defective condition occurs, it must be presumed that this condition already existed in an earlier stage of development at the time of the transfer of risk.

In the future, whenever a defect appears within 6 months after the transfer of risk, the seller must always provide proof that an incipient material defect did not already exist at the time of the transfer of risk. Thus, the seller must demonstrate and prove that a material defect did not yet exist at the time of the transfer of risk because the defect originated in an action or omission after this time and the defect is therefore not attributable to the seller.

For the seller, usually the retailer, this means a significant tightening of liability.