Contingency Planning: Family, Business

In the middle of an active, busy (working) life, many families and business owners are reluctant to even consider the possibility of an accident or illness. As a result, contingency planning tends to be neglected. When something does happen, it often turns out there is no general power of attorney or enduring power of attorney for care or healthcare in place, and nobody thought of a living will or final will.

Proactive contingency planning helps to ensure that your family or family-owned business has legal capacity at all times. Our Private Clients experts help you draw up an emergency planning checklist that covers all the key legal and financial aspects.

If a partner or shareholder is incapacitated for an extended period, it could paralyse the entire company, depending on the provisions in the articles of association. Accordingly, (managing) partners or shareholders should draw up a contingency plan that addresses the following questions, in addition to their personal affairs.

Contingency Planning with proxies

In Germany, proxies are used for contingency planning, especially general proxies (Generalvollmachten) and precautionary proxies (Vorsorgevollmachten).

The general proxy entitles the authorised representative to take decisions for the principal in a large number of cases. The precautionary proxy focuses on decisions which have to be taken if the principal is no longer able to take care of his financial or personal matters, e.g. due to an illness.

6 surprising things forbidden in Germany 

It’s no secret that Germans love rules. But some surprising things can get you into trouble here. Don’t worry – Rachel is here to keep you on the right side of the law!

YouTube comments:

“An important German law that most countries don’t have is Unterlassene Hilfeleistung or duty to rescue. If you see someone in trouble who needs help, you must, by law, try to help them. Example: If you see an accident on the roadside where someone is injured. You must stop, call an ambulance and apply first aid till help arrives. Just driving by is an offence.”

“That’s really true about the insults. A friend of mine had a rather aggressive elderly neighbor who lived below him. My buddy was only allowed to move around the apartment as quietly as possible or he would receive a hail of complaints. One day his parents were visiting and the neighbor rang the doorbell and complained about “noise”, yelled abusive words and made insulting gestures. His father filed a complaint (there were enough witnesses) and the neighbor ended up in court – as it turned out later, not for the first time. He had to pay €900. Since then, the neighbor never yelled again against him.”

“Most of these laws are actually quite useful even if they sound petty. Anyone who has tried calling the police in the UK complaining about noise and has been told you will have to contact the council will agree. There is a little known minor breach of the law (Ordungswidrigkeit) in Germany titled “Unnützes Hin- und Herfahren” (unnecessary driving around). You can be fined up to €100 if you are caught driving around for no apparent reason in a built-up area if this is disturbing people. It sounds ridiculous but it stops all those eejits who drive up and down the road with music blasting out of their cars.”

Repeals

There have been many famous repeals or court decisions in American history. In 1954 the Supreme Court ruled that separate but equal (the American slogan for segregation of white and black Americans) was no longer constitutional, an act that negated their earlier ruling in 1896.

The first case in the U.S. in which the court system determined that a law was unconstitutional and should be repealed occurred in 1803. It was the case of Marbury v Madison, when the Supreme Court decided that the Judiciary Act of 1789 was conflicted with the Constitution and was therefore null and void.

The case of Betts v Brady ruled that the 6th and 14th Amendments of the constitution guaranteeing a right to legal counsel does not mean that the government has to provide counsel for someone who cannot afford it. Later, the case Gideon v Wainwright overruled this decision, and anyone accused of a crime is entitled to free counsel if he/she can’t afford an attorney.

Speedy Trial

Again, the Sixth Amendment to the U.S. Constitution states clearly what Americans expect: „In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial“

Various U.S. state and federal laws guaranty a more specific right to a speedy trial. In New York, for example, the prosecution (accuser) must be ready for trial within six months or the charges are dismissed. The Speedy Trial Act of 1974 established time limits for completing the various stages of a federal criminal case.

Americans anticipate that there team leads not only hold a first hearing promptly. They want the conflict resolution process to come to a conclusion, to a judgement, promptly as well. A manager who is slow to decide – to make the „judgement call“ – is seen as someone who has weak resolve. To have resolve means to deal with something.

Americans believe that maintaining forward movement is critical to the success of every team.

Eyewitness testimony

Eyewitness testimony is the account a bystander gives in the courtroom, describing what that person observed that occurred during the specific incident under investigation. This recollection is used as evidence to show what happened from a witness’ point of view. 

Memory recall has been considered a credible source in the past, but has recently come under attack as forensics can now support psychologists in their claim that memories and individual perceptions are unreliable; being easily manipulated, altered, and biased. 

Many U.S. states are now attempting to make changes in how eyewitness testimony is presented in court. Eyewitness testimony is a specialized focus within cognitive psychology.

In dubio pro reo

In German conflict situations, such as criminal law, the general rule “in dubio pro reo” (when in doubt, for the accused) applies. During the examination of a conflict and in reconstruction of the facts, it is requird that the judiciary be extremely accurate. 

This means among other things, that subjective evidence, such as taking testimonies on the basis of assumptions (even though they might be accurate), are not sufficient indications of the facts. This protects the German defendants from unlawful decisions. 

However, this also means that even if the subjective evidence is convincing, the prosecutor does not have the right to use it, unless and until objective evidence (e.g. reviewed testimonies, video- or tape recordings, images) verifies it. 

If the prosecutor is not able to find such evidence and tries to support his argument by using subjective testimony, he still carries the burden of proof. 

Let’s take the example of a prosecutor whose house was graffitied. The prosecutor does not know with certainty that the graffiti was actually done by the defendant, but he has a strong subjective presumption since the defendant is a well-known graffiti artist in the neighborhood. 

The prosecutor carries the burden of proof. Relying only on subjective reasoning will lead to the lawsuit being rejected due to lack of conclusiveness.

Conciliation

Conciliationis is an additional step proposed in the dispute resolution process.

The conciliator meets with the parties separately at a so-called pre-caucus. The purpose is to help each party release their pent up concerns enough to enable them to gain a broader perspective on the dispute. 

The parties then meet together at a joint session, where they discuss directly with each other instead of through a mediator. 

The conciliator is there to help the parties take responsibility for managing their own conflict, rather than to judge between the merits of the position of one party or the other.

Sworn Testimony

During a hearing, called by their boss, Americans are careful, factual, cooperative. Most importantly they are discreet. Anger, impatience, any lack of self control is considered to be unprofessional.

The boss listens carefully to what each party to the conflict claims. In a formal hearing, within the legal system, parties providing testimony first swear that they will provide „the truth, the whole truth, nothing but the truth.“

The consequences for lying – perjury – are serious: a felony which can lead to a prison sentence for up to five years.

Perjury: the voluntary violation of an oath or vow either by swearing to what is untrue or by omission to do what has been promised under oath; false swearing.

American managers take very seriously their obligation, duty, responsibility to resolve conflicts within their organizations. Any attempt by a conflict party to manipulate that process is punished quickly and severely.

Due Process

In the U.S. Constitution only one command is stated twice: in the 5th and 14th Amendments: „… or be deprived of life, liberty, or property, without due process of law ….“

This is known as the Due Process Clause, which guarantees that all levels of government in the U.S. must operate within the law and provide fair procedures.

The right of due process is deeply embedded in American thinking, and therefore in the thinking of Americans at the workplace. It is the promise, the guaranty that a conflict will not be resolved without a process which is fair, transparent and protects the rights of those involved in the conflict. It is a question of fairness, of how Americans define what is a fair process.