The beginning of the year marks the transition from accounting for the past to planning for the future in corporate management. While the physical inventory is usually complete, another form of inventory often remains incomplete: the evaluation of open legal disputes and disputed claims from the previous year. In business practice, these “legal legacies” are often accepted as an unavoidable litigation risk. However, a strategic reassessment in the first months of the year offers the opportunity to free up tied-up capital and significantly strengthen the ability to act in the new fiscal year.
Why the beginning of the year is the strategic window of opportunity
The first few weeks of the year are ideal for reviewing legal dossiers. On the one hand, the closing accounts for the 2025 financial year require a realistic assessment of provisions. Every unresolved dispute ties up liquidity, which is recorded as a liability item in the balance sheet and weighs on the equity ratio.
On the other hand, the turn of the year brings new limitation periods into focus. Many claims from 2022 would become time-barred at the end of 2025 without timely suspension, unless measures have already been taken. However, even for more recent claims from 2025, the sooner structured proceedings are initiated, the lower the risk of lengthy appeals that tie up resources for years.
Cost comparison: The fiscal advantage of the conciliation procedure
A classic court proceeding follows rigid fee schedules in accordance with the Court Costs Act and the Lawyers’ Fees Act. In cases involving high amounts in dispute, considerable cost risks arise as soon as the lawsuit is filed. In contrast, proceedings before a state-approved conciliation body are a highly efficient instrument for commercial conflict resolution.
The economic benefits are measurable:
- Lower fixed costs: While court costs are often incurred in full in advance, conciliation bodies frequently work with more transparent fee structures that are based on the actual costs incurred.
- Avoiding expert witness costs: In court disputes, orders to take evidence often lead to expensive and lengthy expert opinions. In conciliation proceedings, the parties can draw on technical expertise more flexibly or find amicable solutions without external expertise.
- Saving opportunity costs: The duration of an average civil lawsuit before German regional courts has risen steadily in recent years. Conciliation proceedings can often be concluded within a few weeks, freeing up management capacity for core business activities more quickly.
Legal force and discretion: a decisive advantage
One aspect that is often underestimated is the quality of the outcome. A settlement recorded before a state-approved conciliation body is an enforceable title (Section 794 (1) No. 1 of the German Code of Civil Procedure (ZPO)). This means that the outcome is in no way inferior to a legally binding judgment in terms of its legal enforceability.
However, the decisive strategic advantage lies in the exclusion of the public. While court hearings are usually public—which can lead to reputational risks, especially in construction projects, shareholder disputes, or differences with the public sector—conciliation proceedings remain absolutely confidential. This confidentiality is often a necessary condition for reaching an economically reasonable agreement without losing face in front of market participants or the public.
The suspension of the statute of limitations as a safety net
For the “inventory” at the beginning of the year, knowledge of the suspension of the statute of limitations (Section 204 (1) No. 4 BGB) is essential: the submission of a conciliation request to a state-recognized conciliation body suspends the statute of limitations just as reliably as the filing of a lawsuit. This enables companies to maintain legal peace and continue negotiations under professional mediation without the time pressure of an impending loss of claims.
The strategic advantage in the first quarter
The inventory of legal disputes in the first few weeks of the new year should not be a formal act, but rather an active management of corporate liquidity. By shifting from a confrontational approach in the courtroom to a structured out-of-court settlement, provisions can be released and planning security regained.
