In principle, the plaintiff in a case has to present and prove all circumstances that give rise to a claim. The Federal Supreme Court (BGH) has now accommodated the injured parties of so-called pyramid schemes and decided to ease the burden of proof in its judgement of 04.02.2021, ref.: III ZR 7/20. You can read the judgement in its entirety here.

The term “pyramid scheme” refers to the satisfaction of old creditors with the money of new creditors; in this respect, the scheme does not generate any profit of its own, but finances itself through over-indebtedness. So far, the creditor had to be able to sufficiently demonstrate the existence of such a system in his statement of claim. Now the Federal Supreme Court eases the burden of proof on the creditors and states in its operative part: “The aggrieved party regularly already satisfies its burden of proof by presenting circumstances that make the (further) operation of such a pyramid scheme appear obvious. The defendant is then obliged to comment on the assertions of the party obliged to provide evidence within the framework of the duty to explain incumbent upon it under section 138 (2) of the Code of Civil Procedure.

The BGH further ruled that the existence of a pyramid scheme regularly simultaneously fulfils the requirements of intentional immoral damage according to §826 BGB as well as those of fraud in the commission of a crime according to §823 para. 2 BGB in connection with §263 StGB. The operators of a pyramid scheme regularly expected to be able to constantly attract further investors to the scheme, although this could not be controlled and sometimes depended on the current market situation. In this respect, the damaging intention of the operator was so tangible that the violation of morality could already be derived from the plant itself.

In the disputed case, a man from Bavaria used a system from Switzerland known as “Cashselect” for his life insurance. Investors should have their building savings contracts and other capital investments terminated in order to then profitably invest the surrender values in companies, predominantly from the renewable energy sector. However, the Swiss Financial Market Supervisory Authority prohibited the Swiss company from operating and the attempt to keep the company running via a German GmbH also failed. Attempts by the plaintiff to assert his claim in the amount of approximately € 60,000, first before the Regional Court of Schweinfurt and subsequently before the Higher Regional Court of Bamberg, failed due to the burden of proof. However, according to the BGH’s ruling, the plaintiff’s arguments were very conclusive and indicated a business model designed to deceive and harm customers. Further submissions on the part of the plaintiff were not appropriate here; rather, the defendant would have had to present his opposing view in a substantiated manner. A general denial that such a business model had been operated was not sufficient. The Bamberg Higher Regional Court must therefore now hear and decide the case again.
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