What will become of Germany’s hospitals, who will pay for care in the long term, and who will compensate for the losses of the statutory health insurance companies? Federal Health Minister Karl Lauterbach has to solve many major problems. Since Friday afternoon, 12 noon, another one has been added: Does the federal government have to retroactively pay billions for corona protective masks that Lauterbach’s predecessor Jens Spahn (CDU) ordered at the beginning of the pandemic, but which the ministry then did not accept or pay for?
The case 6 U 112/23 at the Higher Regional Court (OLG) in Cologne, which has now been decided, concerns a legal dispute that could have far-reaching consequences. In the case of the Federal Republic of Germany against the trading company GDM Trading GmbH, the Ministry of Health suffered a severe defeat. The company won the central dispute.
The problem for the federal government: A total of around 100 similar cases are still pending in court in which companies supplying corona masks are seeking to sue for 2.3 billion euros. The Ministry of Health announced this in response to a request from SZ, NDR and WDR. The Cologne decision comes at an inopportune time for the federal government, given its tight budget.
Spahn promised 4.50 euros for each mask
The billion-dollar risk goes back to the beginning of the pandemic. At the end of March 2020, Lauterbach’s predecessor Spahn started the so-called open house procedure. Masks that protected against the virus were in short supply. It was a matter of life and death. Spahn guaranteed companies that could deliver quickly 4.50 euros for each FFP2 mask.
The Ministry of Health was then so inundated with offers that Spahn stopped the open house process after a short time. But more than 700 suppliers had already announced that they would procure masks. The federal government’s condition, however, was that the goods had to be there by April 30, 2020. If not, the entire deal would be invalid and the deliveries would not have to be paid for.
The Cologne Higher Regional Court declared this clause invalid in its current ruling. The clause would have “disproportionately disadvantaged” the suppliers, explained Judge Daniel Lübcke, spokesman for the court, when asked. According to this, if the companies had delivered late or the quality of the masks had been inadequate, the ministry would have had to set the suppliers a grace period.
In both cases, the Ministry of Health did not do that at the time. Instead, in numerous cases the ministry simply did not pay the bills for the corona masks, refused to accept late deliveries, or in a few cases even demanded repayment due to poor quality. The fact that the Higher Regional Court considers the disputed clause in the ministry’s open house contracts to be invalid could have a major impact on the other proceedings, says Judge Lübcke. Even if other senates, which are also hearing legal disputes, are free to make their decisions. If there are rulings to the contrary, the Federal Court of Justice would ultimately have to decide.
Last year, the value in dispute in the 73 court cases pending at the time was 988 million euros. Lauterbach’s ministry reported this to the Bundestag in October 2023. According to the ministry, there are now around 100 cases in court with a total value in dispute of around 2.3 billion euros. The million-euro risk has now become a billion-euro risk, especially after the Cologne ruling.
Minister Lauterbach refuses to back down
From the perspective of companies suing for payment, interest, legal and court costs are also added. “We estimate the total costs to be around 3.5 billion euros,” says businessman Joachim Lutz from Offenburg, who is also in dispute with the ministry as a mask supplier. “Karl Lauterbach can already see where he can collect the money.”
Lauterbach, however, does not want to give in, but will continue to fight in the justice system, in the spirit of his predecessor Spahn. When asked, the Ministry of Health stated that it was “expressly sticking” to its own legal opinion and would “examine the legal remedies available”. But it will not be easy. The Cologne Higher Regional Court has not allowed an appeal against its ruling. In other words, it has ruled out going to the next instance, the Federal Court of Justice. An appeal against non-admission is possible, but the chances of success are uncertain.
The ministry only won a partial victory at the Cologne Higher Regional Court, which does not diminish the chances of success of other lawsuits. The trading company must return a little more than a million euros to the federal government because it had paid too much. Otherwise, the federal government did not prevail with its view that it should not have accepted the masks and should not have paid for them.
In four weeks, the Cologne Higher Regional Court will decide on another case. It concerns the company ILTS, which is suing the federal government for 85 million euros. According to company lawyer Till Veltmann, the Cologne Higher Regional Court took the same view in the oral hearing as in the current ruling. The ministry should have granted the companies a deadline for a later delivery of the masks; the clause to the contrary is invalid. The ILTS company is now demanding 118 million euros from the federal government, including interest.