According to the constitution it is clear that the administration of justice represents an independent state power, which stands alongside legislature and executive authority. The principle of the division of powers derived from Article 20 paragraph 2 of the Basic Law serves to diversify political power and thus moderate State control.
According to Article 92 of the Basic Law, judges are invested with judicial powers exercised by the Federal Constitutional Court, the Federal Courts envisaged in the constitution or Basic Law and the courts of the federal states (Länder). In accordance with Article 95 paragraph 1 of the Basic Law, the Federal Government established as the highest courts in the country the Federal Court of Justice in Karlsruhe, the Federal Administrative Court in Leipzig, the Federal Finance Court in Munich, the Federal Labour Court in Erfurt and Federal Social Court in Kassel.
This corresponds to the five independent branches of the law:
Financial and social courts can be regarded as special administrative courts: Like the (general) administrative courts, they decide on public law disputes of a non-constitutional nature. This typically concerns lawsuits in which citizens try to assert their entitlement to social assistance or oppose official rulings.
The Federal Constitutional Court was established in 1951 in Karlsruhe and occupies a special position being tasked with ensuring that the constitution is complied with. The Federal Constitutional Court cannot be appealed to as an additional appellte court. It checks court judgements - within the context of a constitutional complaint - to determine whether the court’s decision, possibly also the legal norms it is based on, conflict with the constitution and whether the individual‘s constitutional rights have thus been violated.
The European Court of Justice established in 1952 is domiciled in Luxembourg and as the European Union’s judicial organ is responsible for the interpretation of the laws of the European Union, and ensures uniformity across member states. In addition, the Court of Justice can rule on legal disputes between national governments and EU institutions. Private persons, companies or organisation can also turn to the Court of Justice with a legal matter if they feel that a European Union organ has violated their rights.
Included in the courts of the European Union are also the Court of the European Union (Court of the First Instance) formed in 1989 and the Court for Public Services created in 2005.
In order to prevent individual member states interpreting European legal provisions differently, the concept of "preliminary reference" was introduced. Should a national court have doubts about the interpretation or validity of a legal provision of the European Union, as the decision-making court of last resort it can - and must - consult the Court of Justice. This advice is issued in the form of a "preliminary reference".
Based on the European Human Rights Convention, the European Court of Justice for Human Rights was established in 1959 with domicile in Strasbourg. It reviews judicial, legislative and executive acts in signature states relating to violations of the civil and political rights laid down in the Convention.
The 47 members of the European Council have ratified the European Convention on Human Rights. Every citizen has the right of appeal to the Court of Justice if one of their rights under the Convention has been violated.
The Social Court Act dated 3 September 1953 (Federal Law Gazette part I, page 1239) came into force on 1 January 1954. The inauguration of the Federal Social Court took place on 23 March 1955 when the first public session was held.
Before legislation establishing the Social Court Act, there were no independent courts with jurisdiction for the legal areas that today are allocated to social legislation. The German Reich’s Board of Social Insurance (Reichsversicherungsamt), founded in 1848 as the highest instance for social security matters is often regarded as the forerunner of the Federal Social Court. During its existence until 1945, the Board not only dealt with administrative matters, but was also and specifically given a judicial function. The highest instance for the important area of supporting victims of war in those days was the Reich’s welfare courts formed at the German Reich’s Board of Social Insurance.
Even in the post-war period, legal disputes in the field of social security were still dealt with by administrative authorities for several years, in particular, by the upper insurance agencies. It was only the Social Court Act that ensured uniform application and development of the law through independent courts with judges only bound by the rule of law. Since then the preconditions required by today’s interpretation of the constitution have been met and ensure that citizens receive the full legal protection constitutionally enshrined in Article 19 paragraph 4 of the Basic Law.
After German reunification on 3 October 1990, independent courts with social jurisdiction (Social Courts, Higher Social Courts) were established in all new Länder, while the Federal Social Court is the highest instance for the whole of Germany.
The competence of social jurisdiction and the Federal Social Court is precisely regulated by law. They are especially responsible for the following areas jointly also called "social security matters":
The factual jurisdiction of the social courts thus covers essential areas of the statutory social security system in the Federal Republic of Germany.
The courts are independent and separate especially from the administrative authorities. Social jurisdiction is - like administrative jurisdiction but unlike financial jurisdiction - organised into three instances. Courts with social jurisdiction in the Länder are Social Courts and Higher Social Courts. The highest court of justice with social jurisdiction in Germany is the Federal Social Court.
In principle, Social Courts rule in the first instance. The Social Court is a court of substance and examines the disputed matter in terms of law and facts. Accordingly, it also conducts investigations itself, in particular, by calling witnesses and obtaining medical expert reports. This investigation must be conducted officially and without submissions or suggestions from the participants in the case.
When a judgement pronounced by a social court is appealed, the Higher Social Court makes the ruling. The appeal court is also a court of facts like the court of the first instance.
Aside from its competence as the first instance for certain disputes that exist in exceptional cases, the Federal Social Court rules as the final resort on appeals against judgements pronounced by a higher social court. Under certain circumstances, Social Court judgements can be appealed directly in the Federal Social Court (so-called "leap-frog appeals"). As a matter of principle, the Federal Social Court only decides on points of law, so contrary to the Social and Higher Social Courts, the Federal Social Court does not grant temporary legal protection. The Federal Social Court also has no competence in proceedings of temporary legal protection.
Many years of experience have shown that about 10% of all disputes referred to a particular instance on appeal proceed to the next higher instance of social jurisdiction.
In all three instances of social jurisdiction and thus also in the Federal Social Court lay judges contribute to passing the judgement.
Judgements passed by Social Courts are usually pronounced by a chamber with one professional and two lay judges, while those in Higher Social Courts and the Federal Social Court by a panel including three professional and two lay judges.
In cases heard by Social and Higher Social Courts, participants do not have to be represented by an attorney. They can lead their own defence but are free to instruct an attorney.
When appearing before the Federal Social Court, the participants must be represented by an attorney ("mandatory representation"). Here all attorneys admitted to the bar of a German court as well as law lecturers at a state or state accredited university in a member country can be considered. In addition, trade union representatives, employer associations and legal representation associations also qualify. Their statutory task must consist mainly of representing the interests of society as well as consulting and representing the beneficiaries in line with the social and disabled compensation code. These organisations must act through people with the qualification for judicial office.
Exempted from this mandatory representation are, among others, public authorities and legal persons under public law who may act through employees qualified to take judicial office.
Proceedings before the courts with social jurisdiction of all instances and thus also the Federal Social Court are free of legal costs for citizens filing a suit (or being sued) as insured parties, recipients of other benefits or disabled persons; excluded from this are disputes that lead to excessively long court proceedings. Other complainants and respondents, however, must pay flat-rate legal fees (for proceedings Social Courts: 150 Euro, Higher Social Courts: 225 Euro, Federal Social Court: 300 Euro). This also applies if the ruling is in their favour. Legal fees charged according to the value of disputes, also common in other judicial branches, apply to proceedings where no insured or similar entity is involved (such as legal disputes between service providers or matters concerning panel doctors).
Out-of-court cost, on the other hand, that accrue especially when appointing an attorney must generally be borne by the losing party; the winner’s out-of-court costs are usually imposed on the losing party. This is different with regard to public authorities, whose expenses are never reimbursed.
A needy party that cannot bear the costs of a lawsuit will receive legal aid on request if the proceedings are not frivolous and there is a good chance of winning the case. The costs of the attorney of record are then either borne completely by the state treasury or the party is granted instalment payments depending on their income situation.