§ 110 ZPO: Security for Costs in Germany (2026), Requirements, Exceptions & Strategies for Foreign Plaintiffs

Audience: In-house counsel, international claimants and litigation counsel (acting for defendants) evaluating the cost risk of suing or defending in Germany. Purpose: a statute-led practical guide to § 110 ZPO, when German courts order security, how amounts are set, which forms of security are accepted, the available exceptions and the defence strategies that work.

This article was prepared under the oversight of a Franco-German commercial litigator experienced in coordinating cross-border disputes for foreign claimants in Germany. The practical observations reflect procedural patterns seen since the introduction of specialised commercial courts and chambers under the Justizstandort-Stärkungsgesetz (in force from 1 April 2025). It is general information and not legal advice.

Why security for costs germany matters for foreign claimants in 2026

Security for costs germany is one of the first procedural hurdles a foreign claimant encounters when it sues in a German court, and with the recent strengthening of Germany as a litigation venue it has become a markedly more tactical consideration for defendants. Under § 110 of the German Code of Civil Procedure (Zivilprozessordnung, or ZPO), a defendant can compel a claimant who is based outside the EU and the EEA to deposit funds, often substantial, to cover the defendant’s anticipated recoverable costs before the case can proceed on the merits. For international in-house counsel, the result is an immediate cashflow and credit question that must be answered before a claim is even filed.

This guide explains the legal test, who is caught by it, how courts quantify the amount, what forms of security are accepted, and how to avoid, reduce or resist an order.

What you will learn:

• The precise statutory trigger for an order under § 110 ZPO and the policy behind it.
• Which claimants can be ordered to provide security, and the special position of non-EU companies.
• How German courts calculate the amount, illustrated with two worked examples.
• The accepted forms of security, with a side-by-side comparison.
• Exceptions, procedural defences and a practical checklist for foreign claimants.

What § 110 ZPO means, legal test and effect

The operative rule is short and should be read in its exact terms before any strategic assessment is made.

§ 110 ZPO text (statutory wording)

“Plaintiffs who do not have their habitual place of residence in a Member State of the European Union or a Contracting State of the Agreement on the European Economic Area must, on the defendant’s application, provide security for the costs of the proceedings.” (§ 110(1) ZPO, Gesetze im Internet.)

Section 110(2) ZPO then sets out the circumstances in which this obligation does not apply, for example where an international treaty excludes it, where a decision on the reimbursement of the defendant’s costs would be enforced on the basis of EU law or international treaties, where the claimant holds sufficient real property or secured claims in Germany to cover the costs, and in certain counterclaim matters. The critical connecting factor is the claimant’s habitual residence (for individuals) or, for companies, the location from which the entity operates outside the EU/EEA, not nationality as such.

Purpose and policy behind security for costs

The rationale is straightforward: if a claimant loses, German law obliges it to pay the prevailing defendant’s recoverable legal costs under the ZPO’s loser-pays regime (§ 91 ZPO). Where the claimant sits outside the EU/EEA, the defendant may face serious practical difficulty enforcing a costs award abroad, because reciprocal enforcement of costs orders cannot be taken for granted beyond the European framework. Security for costs germany bridges that enforcement gap by requiring the claimant to put the money up front. It is a protective mechanism for defendants, not a merits test, the court does not, at this stage, assess whether the claim is good or bad.

The legal effect of an order is significant. The court sets a deadline by which security must be provided (§ 113 ZPO). If the claimant fails to lodge the security in time, the defendant can apply, under § 113 ZPO, to have the claim declared inadmissible. The order therefore operates as a procedural gate: nothing substantive happens until the money, guarantee or equivalent instrument is in place. This is why the question of security for costs germany has to be budgeted for and solved at the outset, not treated as an afterthought.

Who can be ordered to provide security, foreign and domestic plaintiffs

The dividing line drawn by § 110 ZPO is geographic and tied to the EU/EEA, which makes classification the first analytical step in any cross-border matter.

Foreign natural persons versus companies

For an individual claimant, the test is habitual residence. A claimant who habitually resides within the EU or the EEA is outside the scope of § 110(1) ZPO and cannot be compelled to provide security on residence grounds alone. A claimant habitually resident in a third state, the United States, the United Kingdom, China, the Gulf states, or elsewhere outside the EU/EEA, is within scope and must, on the defendant’s application, provide security unless an exception applies.

For companies and other legal entities, the equivalent connecting factor is assessed by reference to where the entity is based. A company incorporated and operating within the EU/EEA is generally not caught; a company located in a third country is. Group structures require care: the relevant entity is the named claimant on the record. A non-EU parent cannot escape § 110 ZPO merely because it has an EU subsidiary, and conversely an EU-seated subsidiary bringing the claim in its own name may fall outside the provision even where its ultimate parent is in a third state. Structuring the claimant entity is therefore a legitimate and important pre-filing consideration.

Special rules for plaintiffs with no assets in Germany

The absence of assets in Germany does not itself create the obligation, residence outside the EU/EEA does. However, the presence of assets matters in the opposite direction: under § 110(2) ZPO, a claimant who holds sufficient immovable property in Germany, or secured claims on such property, to cover the anticipated costs can resist an order because the defendant’s enforcement concern is already addressed. Non-EU claimants with no German footprint face the greatest exposure, because they combine the residence trigger with an obvious enforcement risk, and defendants in cross-border commercial disputes are increasingly alert to this. In short, a non-EU company suing in Germany should assume that a security for costs germany application is likely and plan accordingly.

How courts calculate the amount of security for costs

The amount is not arbitrary. German courts set security at the level of the defendant’s probable recoverable costs for the instance in question, calculated by reference to the statutory cost framework rather than the defendant’s actual commercial fee arrangements.

Factors courts consider

Recoverable costs in Germany are, in the main, computed from the value in dispute (Streitwert) under the statutory scales for court fees (Gerichtskostengesetz, GKG) and lawyers’ fees (Rechtsanwaltsvergütungsgesetz, RVG). The court will typically estimate:

• Statutory lawyers’ fees recoverable by the defendant, derived from the value in dispute.
• Court fees attributable to the defendant’s position where relevant.
• An allowance for the likelihood of the matter proceeding to a full hearing, and for reasonable disbursements.
• In some cases, an uplift to reflect the realistic prospect of an appeal, because security covers the costs the defendant may need to recover across the instance and, where justified, beyond.

Because the calculation is anchored to statutory scales keyed to the value in dispute, the amount is broadly predictable once the Streitwert is fixed. The defendant bears the burden of substantiating the figure it requests, typically by setting out the value in dispute, the applicable fee calculations and any anticipated additional cost heads. The claimant can and should scrutinise that calculation; inflated or unsupported figures are a legitimate target.

Worked example, a €50,000 commercial claim (illustrative)

Consider a non-EU company suing a German counterparty for €50,000 in unpaid invoices. The value in dispute is €50,000. The defendant’s recoverable statutory lawyers’ fees for a first-instance matter at this value, together with recoverable court-related costs, are estimated from the statutory scales under the RVG and GKG. For a claim of this size, the defendant’s probable recoverable costs for the instance commonly fall in the region of a few thousand euros. The court would then fix security at an amount designed to cover that exposure. The figure is modest in absolute terms, but it still has to be lodged before the case advances, and it is the claimant’s own money or guarantee that is tied up.

Worked example, a €2 million commercial claim (illustrative)

Now take a larger dispute: a non-EU claimant pursuing a €2 million contractual damages claim. The value in dispute of €2 million drives the statutory fee calculation to a materially higher level, because the scales rise with value. The defendant’s recoverable statutory lawyers’ fees for the first instance, plus any recoverable court-related costs, can run well into the tens of thousands of euros, and the court may factor in the realistic prospect of an appeal where the sum and complexity justify it. Security for costs germany in a case of this magnitude can therefore amount to a significant five-figure sum that must be found before the merits are reached.

For a claimant managing working capital, that is precisely why the instrument is tactically valuable to defendants, it front-loads a cost that would otherwise crystallise only at the end.

Both examples are illustrative only; the precise figures depend on the fixed value in dispute, the applicable statutory scales and the court’s assessment of cost heads in the individual case.

Forms of security accepted by German courts

Security does not have to be cash. Under § 108 ZPO, the court has discretion as to the form of security, and in the absence of an agreement or court direction it is generally provided by depositing money or securities, or by furnishing a suretyship from a suitable credit institution. Choosing the right instrument can neutralise much of the cashflow impact while still satisfying the court.

Bank guarantee (Bürgschaft) mechanics

A commonly used instrument for corporate claimants is a bank guarantee, an unconditional suretyship (Bürgschaft) issued by a creditworthy bank. The court looks for a guarantee that is unconditional and readily callable so that the defendant can realise it without litigation if costs are ultimately awarded. In cross-border matters the bank’s standing and the precise wording are scrutinised; some courts prefer, or in practice expect, a guarantee from a bank authorised to operate in Germany or one framed in a locally accepted form. The advantage is obvious: the claimant avoids a cash outflow and pays only the bank’s fee. The disadvantage is that the bank will require its own security or margin, and the drafting must be right first time.

Insurance and surety bonds

Surety bonds issued by insurers or specialist sureties may be a further option, particularly for very large sums where arranging a bank guarantee would be capital-intensive. The attraction is that they can avoid tying up cash and may be cost-effective. The limitations are that underwriting takes time, acceptance is a matter for the court’s discretion under § 108 ZPO and is not automatic, and the court will scrutinise the wording closely to confirm it is enforceable on the same unconditional basis as a bank guarantee.

Cash deposits and escrow accounts

A deposit of money or securities offers the highest certainty and often the fastest route to acceptance, because there is little for the court to scrutinise. The cost is pure liquidity: the funds are tied up for the duration, with potential currency and exchange exposure for a foreign claimant. Other controlled arrangements may be workable for smaller or interim situations, but acceptance depends on the court being satisfied with the controlling arrangement.

Exceptions, defences and strategies to avoid or reduce security for costs germany

An order under § 110 ZPO is far from automatic in every cross-border case, and there are both statutory exceptions and tactical defences that a well-advised claimant can deploy.

Statutory exceptions

Section 110(2) ZPO lists the principal escape routes. The obligation does not arise where:

• An international treaty excludes the requirement to provide security, relevant where the claimant’s home state has a reciprocal arrangement with Germany.
• A decision on the reimbursement of the defendant’s costs would be enforced on the basis of international treaties, removing the enforcement rationale.
• The claimant holds sufficient immovable property in Germany, or claims secured on such property, to cover the costs.
• The matter falls within the specific categories carved out by the provision, including certain counterclaims and proceedings arising from public notices.

Establishing one of these exceptions is the cleanest way to defeat an application, and the EU/EEA residence threshold itself remains the most important filter: an EU/EEA-resident claimant is outside § 110(1) altogether.

Procedural motions and timing to oppose § 110 applications

A defendant must raise the request before entering into argument on the merits; under § 111 ZPO security may still be demanded later only in limited circumstances, for example where the grounds for security first arise during the proceedings. For the claimant, this creates an opportunity: monitor the defendant’s conduct and be ready to argue that the application is out of time or has been forfeited by the defendant’s substantive engagement. Where an order is made, the claimant should scrutinise the quantum, challenge any unsupported cost heads, and where appropriate seek a reduction or a realistic deadline to arrange a guarantee rather than a cash deposit.

Offering alternative security instruments

Rather than contesting the principle, a pragmatic response is often to accept that some security is due but to control its form. Proposing an unconditional bank guarantee instead of a cash deposit preserves liquidity while giving the defendant equivalent protection, and courts generally accept such instruments provided the wording is robust. Group claimants can sometimes offer a parent-company guarantee, though the court will test the guarantor’s creditworthiness and the enforceability of the guarantee.

Jurisdictional and merits-based resistance

In some cases the better course is to resolve a threshold jurisdictional question before the security question bites. If the German court’s jurisdiction is genuinely in doubt, litigating that point first can be decisive, a successful jurisdictional challenge removes the entire proceeding, and with it the security application. This is a sequencing judgment: it should only be pursued where the jurisdictional argument is strong, because an unsuccessful challenge wastes time and leaves the security issue still to be addressed.

Procedure to apply for or to oppose security for costs

Understanding the procedural choreography allows both sides to plan evidence and timing precisely.

Typical court schedule and deadlines

The sequence usually runs as follows: the defendant files an application for security, setting out the claimant’s non-EU/EEA status and the calculation of the amount sought; the court gives the claimant an opportunity to respond; the court then rules, and if it orders security it fixes a deadline for the security to be lodged (§ 112 ZPO). If the claimant fails to comply within the deadline, the defendant can move under § 113 ZPO to have the claim treated as inadmissible. Interlocutory decisions on security may be challenged by the appropriate route (typically immediate appeal, sofortige Beschwerde, where available), so neither the making nor the refusal of an order is necessarily the last word within the instance.

Evidentiary burden for defendant versus plaintiff

The defendant must establish the claimant’s status outside the EU/EEA and justify the amount it seeks, typically by reference to the value in dispute and the statutory fee calculation. The claimant, in turn, carries the burden of proving any exception on which it relies, for example, the existence of sufficient German real property, or a treaty basis that excludes the obligation. Where the claimant proposes alternative security, it should be ready to put forward the guarantee wording and evidence of the guarantor’s standing.

Costs consequences and recovery if the plaintiff wins

Security is not a penalty and it is not forfeited. It exists solely to secure the defendant’s recoverable costs. If the claimant ultimately prevails, the defendant has no costs award against it, and the security is released back to the claimant; a cash deposit is returned and a guarantee is discharged. If the claimant loses, the security is available to satisfy the costs the claimant is ordered to pay. In other words, a claimant who wins recovers its security in full, the instrument affects cashflow and timing, not the final economic outcome of a successful claim.

Strategy checklist for foreign plaintiffs and in-house counsel

Preparation is the single biggest determinant of how painful a security for costs germany order turns out to be. The following checklist captures the key moves.

Pre-filing risk audit

• Confirm the claimant entity’s location or habitual residence and assess whether it falls inside or outside the EU/EEA.
• Consider whether an EU/EEA-based group entity could legitimately bring the claim as named claimant.
• Check for any treaty basis that would exclude the obligation.
• Identify any German real property or secured claims that could support a § 110(2) exception.
• Fix the likely value in dispute and estimate the probable security amount from the statutory scales before filing.

If served with a motion, immediate steps

• Verify that the defendant has not already engaged on the merits in a way that forecloses its application.
• Scrutinise and, where justified, challenge the quantum and the cost heads claimed.
• Line up an unconditional bank guarantee as a substitute for a cash deposit, and confirm acceptable wording with local counsel early.
• Build third-party funding or insurance arrangements with the § 110 risk expressly in mind, because the security obligation is additional to, not covered by, the costs of running the claim.
• Diarise the court’s deadline carefully, missing it can be fatal to the claim.

Practical examples and recent trends

Notable judicial tendencies

Practitioners note that the strengthening of Germany as a litigation venue, including the specialised commercial courts and chambers introduced by the Justizstandort-Stärkungsgesetz (in force from 1 April 2025), together with a rising volume of cross-border filings, has kept § 110 ZPO applications firmly in view as a tactical tool. Defendants may use the mechanism not merely to protect their cost position but to impose an early liquidity burden on a foreign opponent. At the same time, the practical message from the courtroom is that courts remain willing to accept well-drafted, unconditional bank guarantees in place of cash, provided the wording gives the defendant genuine, readily realisable protection.

Claimants who come prepared with a compliant guarantee tend to face far less disruption than those who treat the issue reactively.

Short anonymised case vignette

In one illustrative cross-border matter, a non-EU claimant pursuing a substantial commercial claim was met with a § 110 application that, if met in cash, would have tied up a significant six-figure sum for the duration of the litigation. Rather than contest the principle, which was clearly engaged by the claimant’s third-country location, counsel proposed an unconditional guarantee from a bank authorised in Germany, framed in terms the court and the defendant could accept. The substitution satisfied the security requirement, preserved the claimant’s working capital, and allowed the case to proceed to the merits without a liquidity shock. The lesson is that the form of security, handled early, is usually where the real value lies.

Conclusion

For any third-country claimant, security for costs germany is a procedural reality to be planned for, not feared. The statutory trigger is clear, the amount is calculable from the value in dispute, and the available instruments, above all the unconditional bank guarantee, give a well-prepared claimant real control over the cashflow impact. The tactical use of § 110 ZPO applications makes early planning more important than ever: assess the claimant entity’s status, check for exceptions, estimate the likely amount before filing, and have a compliant guarantee ready. Handled proactively, a security for costs germany order is a manageable step on the way to the merits rather than a barrier to justice; handled reactively, it can stall an otherwise strong claim.

The single most valuable move is to engage local counsel early and treat the security question as a first-order strategic issue.

This article provides general information and does not constitute legal advice. Specific matters should be referred to qualified German counsel.

For further reading, see the Germany, Commercial Litigation practice area and the GLE lawyer directory of Germany commercial litigation specialists.

Sources

1. Zivilprozessordnung (ZPO) § 110, Gesetze im Internet
2. Zivilprozessordnung (ZPO) § 108, Gesetze im Internet
3. Bundesgerichtshof (BGH)
4. Bundesgesetzblatt (Federal Law Gazette)
5. Deutscher Anwaltverein (DAV)
6. European e-Justice Portal
7. Max Planck Institute for Comparative and International Private Law