Gleiss in government negligence case

Advice for a previous German federal state government comes back to haunt Gleiss

Suits against law firms are rare in Germany, so onlookers have taken a keen interest in the plight of Stuttgart independent Gleiss Lutz.

As if falling out with long-time alliance partner Herbert Smith was not enough, Gleiss has been embroiled in a negligence dispute with one of Germany’s largest federal state governments over an energy deal it advised on in 2010.

The Federal State of Baden-Württemberg bought a 45 per cent stake in Energie Baden-Württemberg from EDF Energy for €4.7bn (£3.9bn) in December 2010. The state constitutional court ruled the deal unconstitutional in October 2011 because it was not put to the state government for a vote. Gleiss’s corporate and public law teams advised the government.

A new state government controlled by the Greens and the Social Democrats was elected in March, which has alleged that Gleiss gave its Christian Democrat predecessors bad advice.

The result is a multimillion-euro claim against the firm, with German legal magazine Juve describing the case as a threat to its existence. Gleiss is not an LLP, meaning partners are personally liable for matters they were involved in.

Gleiss denies negligence and is looking for outside advice, according to Juve. The state government spoke to German firms CMS Hasche Sigle and Hengeler Mueller and US firm White & Case, as well as another global firm. It appeared to have ended its search for an adviser when it landed on Heuking Kühn Lüer Wojtek, but a conflict meant it had to return to the drawing board.