Order of 21 November 2023

Table of contents

1. 1

   A. Facts of the case

2. 51

   B. Admissibility     

3. 64

   C. Decision on the merits
   

   1. 65

      I. Content of § 15(2) second sentence of the Contergan Foundation Act

   2. 74

      II. Compatibility with Art. 14(1) of the Basic Law

      1. 75

         1. Scope of protection

         1. 76

            a) Applicable constitutional standards

            1. 76

               aa) General standard of review

            2. 78

               bb) Positions under public law

            3. 79

               cc) Positions under social law

            4. 80

               dd) Scope of protection for cases of mixed redesign

         2. 81

            b) Application of these standards to the present case

            1. 82

               aa) Property-constituting elements of the pension entitlement

               1. 83

                  (1) Allocation for private benefit

               2. 84

                  (2) Basis in significant input by recipients

               3. 91

                  (3) Purpose of covering basic needs

            2. 92

               bb) No limitation to minimum protection

            3. 93

               cc) Coincidence of enactment of § 15(2) second sentence of the
               Contergan Foundation Act and increase in pension entitlement
               in the Third Amendment Act

      2. 96

         2. Expropriation

      3. 101

         3. Interference through determination of the content and limits of property

      4. 104

         4. Justification

         1. 105

            a) Requirements for a constitutional determination of the contents and
            limits of property

         2. 108

            b) Formal requirements

         3. 113

            c) Proportionality

            1. 114

               aa) Legitimate purpose

               1. 115

                  (1) Standard           

               2. 116

                  (2) Application of the standard to the present case

                  1. 117

                     (a) Prevention of overlapping payments

                  2. 119

                     (b) Equal treatment of recipients

                  3. 122

                     (c) Strengthening financial viability of solidarity within society

                  4. 123

                     (d) Savings for public finances

            2. 124

               bb) Suitability
               

               1. 125

                  (1) Standard

               2. 126

                  (2) Application of the standard to the present case

                  1. 127

                     (a) Prevention of overlapping payments

                  2. 135

                     (b) Equal treatment of recipients

                  3. 141

                     (c) Strengthening financial viability of solidarity within society and frugal use of public resources

            3. 142

               cc) Necessity

            4. 145

               dd) Appropriateness

               1. 146

                  (1) Standard

               2. 147

                  (2) Application of the standard to the present case

                  1. 148

                     (a) Protection afforded to Contergan pensions

                  2. 155

                     (b) Weight of interference

                  3. 162

                     (c) Protection of legitimate expectations

                  4. 163

                     (d) Public interests

                  5. 167

                     (e) Overall balancing

   3. 173

      III. Compatibility with Art. 3(1) of the Basic Law

REASONS:

A.

1

The specific judicial review proceeding concerns § 15(2) second sentence of the Act on the Contergan Foundation for People with Disabilities (Contergan Foundation Act, Conterganstiftungsgesetz – ConStifG) in the versions of the Third Act Amending the Contergan Foundation Act of 26 June 2013 (Federal Law Gazette, Bundesgesetzblatt – BGBl I p. 1847) and of the Fourth Act Amending the Contergan Foundation Act of 21 February 2017 (BGBl I p. 263). According to the provision in question, which entered into force on 1 August 2013, payments by third parties, particularly by foreign states, made to persons affected by the use of drugs containing thalidomide (marketed as Contergan in Germany) as compensation for their impairments are deducted from the one-off payment and Contergan pension provided by the foundation. The referral essentially raises the question of whether the provision is compatible with Art. 14(1) and Art. 3(1) of the Basic Law (Grundgesetz – GG).

I.

2

1. a) From 1958 to 1962, about 10,000 children worldwide – about 50% of them in Germany – were born with severe malformation of the limbs and other deformities after their mothers had used a sedative and sleeping pill containing thalidomide (marketed as Contergan in Germany) manufactured by the pharmaceutical company Chemie Grünenthal GmbH (hereinafter: Grünenthal) during pregnancy. The parents of the children affected by the use of Contergan brought claims against Grünenthal.

3

b) On 10 April 1970, Grünenthal reached an agreement (hereinafter: settlement agreement) with the lawyer who represented children affected by Contergan use as joint plaintiffs (Nebenkläger) in the criminal proceedings against Grünenthal managers. Grünenthal agreed to pay DM 100 million to children affected by Contergan use in a settlement, provided that they and their parents waived ‘any claims’ against Grünenthal for the children’s malformations. The funds were to be distributed to the eligible children by a committee of trustees based on the findings of an authorisation committee and an approval committee in accordance with the judicial standards for calculating compensation for pain and suffering, provided that the children and their parents waived all further claims (§ 7 of the settlement agreement). § 11 of the settlement agreement granted Grünenthal the right to suspend payments or to reclaim them if it was not ensured that Grünenthal would also be released from all transferred claims that the social care insurers and social welfare providers could assert against it. Although most of the children affected by Contergan use and their parents joined the settlement by submitting a waiver, the settlement was not implemented.

4

c) In view of the potential difficulties and uncertainties in relation to an implementation of the settlement (cf. Bundestag document, Bundestagsdrucksache – BTDrucks VI/926, p. 6), the Act on the Creation of a Foundation ‘Relief Organisation for Disabled Children’ (Foundation Act, Stiftungsgesetz – StHG) of 17 December 1971 (BGBl I p. 2018) was adopted. It entered into force on 31 October 1972 (BGBl I p. 2045). The purpose of this Act was to provide a sound financial basis for supporting Contergan survivors in Germany and abroad. All children affected by Contergan use, including those who were not involved in the settlement, were to share in the funds provided for the entire community of Contergan survivors (cf. Decisions of the Federal Constitutional Court, Entscheidungen des Bundesverfassungsgerichts – BVerfGE 42, 263 <303 f.>). The Foundation Act provided for the creation of a foundation under public law (hereinafter: Contergan Foundation) with the purpose of providing payments to children affected by Contergan use (§ 2 no. 1 of the Foundation Act) and, more generally, of providing support to people with disabilities, especially to those under the age of 21 (§ 2 no. 2 of the Foundation Act). The Foundation received DM 100 million from federal funds (§ 4(1) no. 1 of the Foundation Act), DM 50 million of which were earmarked for payments to Contergan survivors (§ 12 of the Foundation Act). Moreover, the Foundation received the funds pledged by Grünenthal – DM 100 million plus interest (§ 4(1) no. 2 of the Foundation Act). The funds from Grünenthal were exclusively earmarked for Contergan survivors (§ 10(1) of the Foundation Act). Thus, the funds for supporting Contergan survivors amounted to DM 150 million in total, two-thirds of which were provided by Grünenthal, while one-third were tax revenues.

5

The Act provided for payments to persons whose malformations were attributable to the use by their pregnant mothers of drugs containing thalidomide manufactured by Grünenthal – but not to drugs manufactured and sold by licensees or third parties under their own responsibility (cf. BTDrucks VI/926, p. 8; § 13 of the Foundation Act). These payments were independent of whether the affected persons took part in the settlement agreement (para. 3). The amounts paid depended on the severity of the physical impairments and the resulting dysfunctions; they included a one-off payment of a minimum of DM 1,000 and a maximum of DM 25,000 and a monthly Contergan pension of at least DM 100 and a maximum of DM 450 (§ 14(2) first and second sentence of the Foundation Act). In minor cases, support was limited to a one-off payment (§ 14(2) third sentence of the Foundation Act).

6

With regard to the effects of this solution on the civil law claims of Contergan survivors, the Act distinguished between persons residing in other countries (§ 18 of the Act) and persons residing in Germany (§ 23 of the Act). The relevant provisions read as follows:

§ 18 Special rules for persons residing in other countries

(1) If the beneficiary or their legal representatives have their place of residence or habitual residence outside the scope of application of this Act, they will only receive payments in accordance with the provisions of this Act if they declare in writing that they irrevocably waive any claims against Chemie Grünenthal GmbH, its shareholders, managing directors and employees related to drugs containing thalidomide.

(2) Payments made by other potentially responsible parties as compensation in relation to drugs containing thalidomide are deducted from the payments made in accordance with this Act.

§ 23 Exclusion of claims

(1) ¹Any potential claims of the persons named in § 13 against Chemie Grünenthal GmbH, its shareholders, managing directors and employees due to injuries covered by this part of the Act expire. ²This also applies insofar as any potential claims have been transferred to another party by law, by transfer or by legal transaction. ³Where claims have been transferred to natural persons or legal persons under private law, § 14(5) first sentence does not apply with regard to the one-off payment.

(2) Claims based on the agreement named in § 4(1) no. 2 are invalid.

7

Payments made under the Foundation Act to beneficiaries who have their place of residence or habitual residence in other countries were made contingent upon the waiving of any claims in advance, because the legislator was uncertain as to whether the exclusion of claims provided for in § 23 of the Act for persons residing in Germany would also apply to beneficiaries outside the scope of the Act (cf. BTDrucks VI/926, p. 9).

8

d) By judgment of 8 July 1976, the Federal Constitutional Court decided three cases concerning the constitutionality of the Foundation Act. Two of the cases were judicial review proceedings that concerned the question of whether the Act was compatible with Art. 82(2) of the Basic Law; the third case was a constitutional complaint directed against the law replacing the original settlement claims.

9

In its judgment of 8 July 1976, the Federal Constitutional Court declared the provision on the entry into force (§ 29 of the Foundation Act) to be compatible with the Basic Law and rejected the constitutional complaint (cf. BVerfGE 42, 263 ff.). On the basis of Art. 14(1) of the Basic Law, the Court reviewed the transformation of the settlement claims under private law into statutory claims through the transfer of the settlement payment to the Foundation’s assets (cf. BVerfGE 42, 263 <293>). It held that the guarantee of private property, as a protective and a defensive right, applies especially to claims under the law of obligations that serve to compensate for deficits in quality of life. According to the Court, such claims are of exceptional – and possibly of existential – significance for the lives of affected persons. Individual claims that have arisen, and are enforceable, are protected by the constitutional guarantee in terms of their assignment and their existence. This protection is afforded to the core of the claim, even if it does not necessarily cover all details and modalities. At the very least, the claims are not subject to unlimited legislative discretion (cf. BVerfGE 42, 263 <293>).

10

[…]

11

e) The legislator subsequently amended the law several times. The First Amendment Act of 22 July 1976 (BGBl I p. 1876) increased the funds provided by the Federation by DM 50 million, the Second Amendment Act of 31 January 1980 (BGBl I p. 111) increased them by a further DM 170 million. Since 1997, Contergan pensions have been fully financed by federal funds (cf. BTDrucks 17/12678, p. 4). Contergan pensions have been increased by a total of nine Acts Amending the Foundation Act.

12

2. The Foundation Act was replaced by the Act on the Contergan Foundation for People with Disabilities (Contergan Foundation Act, Conterganstiftungsgesetz – ConStifG) of 13 October 2005 (BGBl I p. 2967). This Act was amended four times in the period before the Higher Administrative Court for the Land North Rhine-Westphalia (Oberverwaltungsgericht für das Land Nordrhein-Westfalen) – the last court deciding on points of fact and law in the proceedings in question – rendered its judgment of 2 July 2019. The amendments were the First Act Amending the Contergan Foundation Act of 26 June 2008 (BGBl I p. 1078 – hereinafter: First Amendment Act), the Second Act Amending the Contergan Foundation Act of 25 June 2009 (BGBl I p. 1542 – hereinafter: Second Amendment Act), the Third Act Amending the Contergan Foundation Act of 26 June 2013 (BGBl I p. 1847 – hereinafter: Third Amendment Act) and the Fourth Act Amending the Contergan Foundation Act of 21 February 2017 (BGBl I p. 263 – hereinafter: Fourth Amendment Act).

13

3. The entitlements of the approximately 2,700 beneficiaries (cf. BTDrucks 17/12678, p. 4) in accordance with the Contergan Foundation Act for the relevant period – the time between the issuing of the notice of the Contergan Foundation of 29 July 2013 and the judgment of the Higher Administrative Court for the Land North Rhine-Westphalia of 2 July 2019 – were as follows:

14

a) Pursuant to § 13(1) first sentence of the Contergan Foundation Act, the persons listed in § 12 of the Act were entitled to the following payments: a one-off payment, a lifelong Contergan pension, annual payments covering specific needs and an annual special payment (the latter was paid from 2009 to 2022). The amounts paid under § 13(1) of the Contergan Foundation Act depend on the severity of the physical impairments and the resulting dysfunctions (§ 13(2) first sentence of the Contergan Foundation Act). § 13(2) second sentence of the Contergan Foundation Act in the version of the Third Amendment Act (hereinafter: Contergan Foundation Act 2013) and § 13(2) first sentence nos. 1 to 3 of the Contergan Foundation Act as amended by the Fourth Amendment Act (hereinafter: Contergan Foundation Act 2017) set out the minimum and maximum amounts to be paid in this regard. The decision on whether a case constitutes injury and the assessment of the injury is made by a commission established by the Foundation’s governing board (§ 16(2) of the Contergan Foundation Act). Based on the decision and assessment of the commission, the Foundation’s governing board determines the payments in accordance with the guidelines adopted by the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth (cf. § 16(6) in conjunction with § 13(6) of the Contergan Foundation Act). […]

15

b) During the period in question here, the aforementioned payments were as follows:

16

aa) Pursuant to § 13(2) second sentence, second alternative of the Contergan Foundation Act 2013, monthly Contergan pensions from 1 January 2013 were at least EUR 612 and no more than EUR 6,912. The pension amounts paid under the Third Amendment Act had been increased to more than six times the previous amounts; under the Second Amendment Act, Contergan pensions had been between EUR 242 and EUR 1,090. The increase in pensions implemented recommendations made by the Institute of Gerontology of Heidelberg University in the framework of a research project commissioned by the Bundestag on 22 January 2009 (cf. BTDrucks 16/11223) in its final report […] (hereinafter: Heidelberg study) with a view to the ageing of affected persons (cf. BTDrucks 17/12678, p. 1). Large parts of the additional needs identified in this study were to be covered by the raised Contergan pensions (cf. BTDrucks 17/12678, p. 4). The increase in the Contergan pensions resulted in additional costs for the Federation in the amount of EUR 90 million annually (cf. BTDrucks 17/12678, p. 2). […]

17

Under the Fourth Amendment Act (cf. § 13(2) no. 2 of the Contergan Foundation Act 2017), the minimum monthly Contergan pension paid is EUR 662, the maximum is EUR 7,480. […]

18

bb) The entitlement to an annual special payment pursuant to § 13(1) first sentence, fourth alternative of the Contergan Foundation Act 2013 and § 13(1) first sentence no. 4 of the Contergan Foundation Act 2017 was introduced by the Second Amendment Act. It is subject to the availability of foundation funds (§ 13(1) second sentence of the Contergan Foundation Act). This additional payment was granted in response to the fact that the lives of Contergan survivors were increasingly affected by the very painful effects of their disability and by aftereffects and complications (cf. BTDrucks 16/12413, p. 7). In 2008, Grünenthal therefore undertook to pay EUR 50 million into the Contergan Foundation on a voluntary basis. With the Second Amendment Act, the legislator decided to use a further EUR 50 million from the Foundation’s core assets for this purpose. These additional funds of EUR 100 million plus returns were to be distributed to the beneficiaries as long-term annual special payments in addition to the existing payments (cf. BTDrucks 16/12413, p. 7). The annual special payment per claim score […] amounted to between EUR 460 and EUR 3,680 in the relevant period.

19

cc) The Third Amendment Act additionally provided for an entitlement to payments covering specific needs under § 13(1) first sentence, second alternative of the Contergan Foundation Act 2013 and § 13(1) first sentence no. 3 of the Contergan Foundation Act 2017, which is likewise subject to the availability of foundation funds (§ 13(1) second sentence of the Contergan Foundation Act). In response to the Heidelberg study, these payments were to provide individual support to survivors in addition to the Contergan pension, in particular for rehabilitation services, for the provision of therapeutic remedies and aids and for dental care and oral surgery (cf. BTDrucks 17/12678, p. 4 f.). The Fourth Amendment Act changed this payment to a flat-rate annual payment composed of a base rate of EUR 4,800 and a variable rate. The flat-rate annual payment made to all beneficiaries according to the severity of their impairments was designed to simplify administrative processes and bring about far-reaching equal treatment of affected persons, and thus achieve a fairer distribution of the funds (cf. BTDrucks 18/10378, p. 16).

20

4. The provision under review here, § 15(2) second sentence of the Contergan Foundation Act, was introduced by the Third Amendment Act. § 15 of the Contergan Foundation Act 2013 read as follows:

§ 15 Special rules for persons residing in other countries

(1) If the beneficiary or their legal representatives have their place of residence or habitual residence outside the scope of application of this Act, they will only receive benefits in accordance with the provisions of this Act if they declare in writing that they irrevocably waive any claims against Grünenthal GmbH, its shareholders, managing directors and employees related to drugs containing thalidomide.

(2) ¹Payments made by other potentially responsible parties as compensation in relation to drugs containing thalidomide are deducted from the payments made in accordance with this Act. ²Payments by third parties, particularly by foreign states, made to persons affected by the use of drugs containing thalidomide are deducted from the one-off payment and Contergan pension paid under this Act.

21

According to the statements made in the legislative process, the deductions provided for in § 15(2) second sentence of the Contergan Foundation Act were designed to respond to overlapping state payments to Contergan survivors, which had been found to exist by the ‘International Study on Payments to and Claims by Contergan Survivors in 21 Countries’ of 31 January 2012 (hereinafter: comparative study), drawn up on behalf of the Contergan Foundation by an international law firm (BTDrucks 17/12678, p. 5):

Of the approximately 2,700 beneficiaries, about 10% currently live abroad. Currently, payments received by foreign beneficiaries living abroad or in Germany as compensation for their impairments in relation to thalidomide use are only deducted from payments under the Contergan Foundation Act if the payments were made by ‘other potentially responsible parties’ – i.e. by pharmaceutical companies in particular (§ 15(2)). A comparative study of 31 January 2012 conducted on behalf of the Contergan Foundation for People with Disabilities and examining all payments made to thalidomide survivors in 21 countries has shown that at least ten other countries, in addition to the Federal Republic of Germany, have provided, are providing or are going to provide state payments of varying amounts. These overlapping payments by states mean that foreign survivors living in the countries in question or in Germany are in a better financial position than German survivors and survivors in other countries that do not provide state payments.

22

The comparative study was not limited to payments made by states. It was based on the Contergan Foundation’s request to determine ‘the total amount of all payments made to thalidomide survivors in the individual case for the past, present and, if foreseeable, for the future’ in 21 specified countries ([…]). The results of the comparative study were that monthly payments by the state are provided in Brazil, Ireland and Italy. The study found that annual payments by the state existed in Great Britain and Northern Ireland, yet the drugs containing thalidomide in these countries had not been manufactured by Grünenthal, but by a licensee, which meant that persons who had impairments resulting from these drugs did not receive payments from the German Contergan Foundation (see also para. 3). The study did not examine payments made by third parties.

23

[…]

II.

24

1. In the initial proceedings that resulted in the referral from the Federal Administrative Court (Bundesverwaltungsgericht), the plaintiff, an Irish thalidomide survivor born in 1962 and residing in Ireland, challenges the reduction in his monthly Contergan pension by the Contergan Foundation – the defendant – on the basis of § 15(2) second sentence of the Contergan Foundation Act. The plaintiff, who participated in the original settlement agreement with Grünenthal, is recognised as having impairments relating to thalidomide use […]. On the basis of an application submitted together with a waiver under § 18(1) of the Foundation Act, he has received payments under the Foundation Act since October 1972. Following the entry into force of the Third Amendment Act, the plaintiff was entitled to a monthly Contergan pension of EUR 3,686. In addition, he received a monthly payment of EUR 1,109 under the Irish Thalidomide Compensation Scheme. Under this compensation scheme, the Irish state provides monthly payments to affected Irish citizens (Irish Thalidomide Survivor’s Care Benefit). These payments, adopted by the Irish Government in May 1973, serve to significantly enlarge the compensation under the German Foundation Act (cf. Compensation for thalidomide survivors, Report prepared for the Minister for Health and Children by the State Claims Agency, April 2010, p. 6). With a notice issued on 29 July 2013, the Contergan Foundation (the defendant) declared that it would deduct the monthly payment of EUR 1,109 made by the Irish state from the monthly Contergan pension in accordance with § 15(2) second sentence of the Contergan Foundation Act. It set the monthly Contergan pension at EUR 2,577 from 1 September 2013. The defendant dismissed the plaintiff’s objection to the notice. The plaintiff challenged the notice with the aim of receiving the full Contergan pensions without deductions; his challenge was unsuccessful before the Cologne Administrative Court and the Higher Administrative Court for the Land North Rhine-Westphalia. The plaintiff then appealed against the judgment of the Higher Administrative Court of 2 July 2019. According to the plaintiff’s authorised representative, similar proceedings brought by Irish Contergan survivors are pending before the Cologne Administrative Court.

25

2. The Federal Administrative Court suspended the proceedings pursuant to Art. 100(1) first sentence of the Basic Law and § 13 no. 11, § 80(1) of the Federal Constitutional Court Act (Bundesverfassungsgerichtsgesetz – BVerfGG) and referred to the Federal Constitutional Court the question of whether § 15(2) second sentence of the Contergan Foundation Act in the version of the Third and Fourth Amendment Acts is compatible with Art. 3(1) and Art. 14(1) of the Basic Law.

26-42

[…]

III.

43

The parties to the initial proceedings, the Bund Contergangeschädigter und Grünenthalopfer e.V., the Contergannetzwerk Deutschland e.V. and the Grünenthal Foundation for the Support of Thalidomide-affected People submitted statements in the present proceedings.

44

Prior to this, a comprehensive list of questions was sent to those who were given the opportunity to submit statements, with the exception of the Grünenthal Foundation for the Support of Thalidomide-affected People. The questions raised included the number of beneficiaries in Germany and other countries, the type, scope and evolution of the payments provided since the entry into force of the Foundation Act, the handling of the provision on deductions (§ 15(2) second sentence of the Contergan Foundation Act) and general social and other benefits for persons affected by thalidomide use. The Grünenthal Foundation for the Support of Thalidomide-affected People was asked to submit a statement on the type, scope and rationale of payments and other benefits provided to affected persons.

45-50

[…]

B.

51

The referral from the Federal Administrative Court is admissible.

I.

52-55

[…]

II.

56-59

[…]

III.

60

The preliminary ruling procedure under Art. 267 of the Treaty on the Functioning of the European Union (TFEU) does not take precedence; it does not render inadmissible the present specific judicial review proceedings (cf. in this regard BVerfGE 116, 203 <214>; 160, 1 <16 para. 44>). If the implications of both constitutional and EU law are disputed, there is no set order of precedence between the two types of proceedings. It is then for the referring court to decide how to proceed (cf. BVerfGE 116, 202 <214 f.>; 129, 186 <203>; 160, 1 <16 para. 44 f.>).

61

This notwithstanding, it is not ascertainable that the present case raises a question of EU law that must be determined [by the Court of Justice of the European Union]. The prohibitions on discrimination in EU law under Art. 18(1) TFEU and Art. 21(2) of the Charter of Fundamental Rights of the EU – the only EU law provisions that might be considered – are not applicable here.

62

Art. 18(1) TFEU cannot be applied – as correctly submitted by the Federal Administrative Court ([…]) – since the Contergan Foundation Act does not fall within the scope of application of the Treaties. There is neither an EU law provision with regard to the present case, nor is the case covered by one of the fundamental freedoms enshrined in the Treaty on the Functioning of the European Union. Under Art. 18(1) TFEU, any discrimination on grounds of nationality is prohibited within the scope of application of the Treaties and without prejudice to any of their specific provisions. The prohibition on discrimination on grounds of nationality under EU law is not comprehensive in scope, but only applies within the scope of application of the Treaties, in accordance with the principle of conferral (cf. BVerfGE 113, 273 <298>). According to the established case-law of the Court of Justice of the European Union, Art. 18(1) TFEU only applies to situations governed by EU law or falling within the scope of a fundamental freedom laid down by the Treaty on the Functioning of the European Union (cf. CJEU, Judgment of 18 July 2017, C‑566/15, Erzberger, EU:C:2017:562, para. 25; Judgment of 11 June 2020, TÜV Rheinland LGA Products and Allianz IARD, C-581/18, EU:C:2020:453, paras. 36 and 45 ff.). There is no scope for applying the prohibition on discrimination on grounds of nationality to constellations not governed by secondary EU law ([…]). This prohibition need not be applied insofar as the European Union has not made use of the competences conferred upon it and the realisation of a right or principle guaranteed by EU law is not at issue.

63

According to the persuasive arguments of the Federal Administrative Court ([…]), the present case also does not fall within the scope of application of Art. 21(2) of the Charter. Under Art. 51(1) first sentence of the Charter of Fundamental Rights of the European Union, the Charter applies only when EU law is implemented. If the provisions of EU law in the subject area concerned impose no obligation on Member States with regard to the situation at issue in the proceedings, EU fundamental rights cannot be applied in relation to national legislation (cf. CJEU, Order of 7 September 2017, Demarchi Gino, C-177/17 and C-178/17, EU:C:2017:656, para. 21). This is the case here.

C.

64

§ 15(2) second sentence of the Contergan Foundation Act is compatible with the Constitution. Its contents (see I. below) are compatible with the fundamental right to property (Art. 14(1) of the Basic Law) of the recipients of Contergan pensions affected by the deductions (see II. below); the provision is also compatible with the general guarantee of the right to equality (Art. 3(1) of the Basic Law; see III. below).

I.

65

The scope of application of § 15(2) second sentence of the Contergan Foundation Act is not limited to payments made by foreign states.

66

1. The Federal Constitutional Court is not bound by the interpretation of the referred provision of ordinary law adopted by the referring court. Rather, it must make its own assessment of the contents of the provision under review (cf. BVerfGE 98, 145 <154> with further references; 110, 412 <438>; established case-law).

67

2. The scope of application of § 15(2) second sentence of the Contergan Foundation Act is not limited to payments made by foreign states. Such a narrow interpretation cannot be derived from the wording of the provision (see a) below), nor is it reflected in its official title (see b) below), the legislative materials (see c) below), the systematic context (see d) below) or the provision’s spirit and purpose (see e) below).

68

a) Not only does the wording not suggest a limitation of the provision to payments made by foreign states, it clearly refutes such an interpretation, because payments made by ‘others’ are made subject to deduction without any restrictions. This finding is reinforced by the fact that payments made by foreign states are used as an example (‘particularly’); this shows that there must be other constellations of payments made by others that are not specifically listed in the provision, but are covered by § 15(2) second sentence of the Contergan Foundation Act.

69

b) Nor can the official title given to § 15 of the Contergan Foundation Act by the Third Amendment Act 2013 (‘Special rules for persons residing in other countries’) give rise to the conclusion that the provision’s application is limited to foreign payments. The explanatory memorandum to the Third Amendment Act (cf. BTDrucks 17/12678) does not in any way suggest that keeping the title, which had existed since the entry into force of the Contergan Foundation Act in 2015, for the insertion of § 15(2) second sentence through the Third Amendment Act was based on a deliberate decision by the legislator that could guide the interpretation of the provision. Rather, the change of the official title of § 15 by the Fourth Amendment Act in 2017 (‘Waiver, deduction of payments made by third parties’) argues against a restriction to payments made by foreign states, given that the legislator expressly pointed out that the changed title was to ‘make clear’ that § 15 ‘does not just apply to international cases’ (cf. BTDrucks 18/10378, p. 16). It is implausible that this clarification did not relate to § 15(2) second sentence of the Contergan Foundation Act, but (only) to § 15(1) and (2) first sentence of the Contergan Foundation Act, given that, when adopting the Fourth Amendment Act, the legislator drew on more than 40 years of experience applying the latter provisions, as well as the earlier provisions to the same effect of § 18(1) and (2) of the Foundation Act, which entered into force in 1972. Rather, it must be concluded that the legislator’s need to clarify had been triggered by § 15(2) second sentence of the Contergan Foundation Act, which had only been inserted into the Act four years previously, and that the legislator wanted to counteract a situation in which the provision on deductions was narrowly applied to international cases only.

70

c) The fact that the explanatory memorandum to the Third Amendment Act only names the preferential treatment, brought about by ‘overlapping state payments’, of affected persons living abroad as a problem (cf. BTDrucks 17/12678, p. 5) also does not suggest a restriction of the scope of application of § 15(2) second sentence of the Contergan Foundation Act. The list of questions provided by the Contergan Foundation that was the basis of the comparative study (cf. comparative study, p. 2) reflects the fact that, prior to the legislation being enacted, the problem of overlapping payments was not considered to be limited to payments made by states, but also included payments made by responsible parties and by third parties. However, given that only relevant payments by states were found to exist in the comparative study (para. 22), no restriction of § 15(2) second sentence of the Contergan Foundation Act can be derived from the concentration on these cases in the explanatory memorandum due to these previous findings.

71

d) Nor can a restriction to payments made by foreign states be derived from the systematic context of the provision.

72

The referring court assumes that a requirement to grant undiminished payments exists. However, no restriction of § 15(2) second sentence of the Contergan Foundation Act to payments made by foreign states can be derived therefrom since Contergan pensions are reduced not just when payments made by third parties are deducted, but also when payments made by foreign states are deducted. A general requirement to grant undiminished payments that would direct the interpretation of § 15(2) second sentence of the Contergan Foundation Act cannot be derived from § 18(2) of the Contergan Foundation Act. The latter provision governs the overlap between general claims under social and maintenance law on the one hand and those arising from the special law of the Contergan Foundation Act on the other. In this respect, payments under this Act do not replace payments provided for in other legislation, but complement them (cf. regarding § 2 of the Foundation Act: BTDrucks VI/926, p. 7). However, this assessment cannot be applied to § 15(2) of the Contergan Foundation Act, since it does not set out the relationship of payments under the Contergan Foundation Act to general benefits, but to other payments granted specifically ‘due to the use of drugs containing thalidomide’. § 18 and § 15(2) of the Contergan Foundation Act are based on different rationales: While § 18 of the Contergan Foundation Act serves to increase the general social benefits, which are deemed inadequate, § 15(2) of the Contergan Foundation Act serves to limit the payments under this Act to what is necessary. In this constellation, the deduction of payments made by other potentially responsible parties due to the use of drugs containing thalidomide set out in § 15(2) first sentence of the Contergan Foundation Act – based on the previous provision of § 18(2) of the Foundation Act – demonstrates that no requirement to grant undiminished payments applies when a beneficiary receives payments from different sources specifically due to impairments resulting from thalidomide use. § 15(2) second sentence of the Contergan Foundation Act, which ‘in addition to the previous framework’ provides for the deduction of payments made by others due to the use of drugs containing thalidomide, builds on this legislative foundation (cf. BTDrucks 17/12678, p. 5).

73

e) Finally, the provision’s spirit and purpose do not suggest a restriction to payments made by foreign states. This is because the aims of § 15(2) second sentence of the Contergan Foundation Act – avoiding overlapping payments, preventing preferential treatment of individual Contergan survivors, ensuring that solidarity within society remains financially viable and using public funds frugally (cf. in detail para. 116 ff.) – are furthered precisely by comprehensive deductions of payments made due to impairments resulting from thalidomide use that are not restricted to payments made by states.

II.

74

The Contergan pension as set out in the Third and Fourth Amendment Act falls within the scope of the guarantee of private property under Art. 14(1) of the Basic Law (see 1. below). § 15(2) second sentence of the Contergan Foundation Act does not result in expropriation (see 2. below), but constitutes a determination of the content and limits of property and interferes with the property rights of recipients of Contergan pensions (see 3. below). The interference is justified (see 4. below).

75

1. The Contergan pension falls within the scope of the guarantee of private property under Art. 14(1) of the Basic Law. Based on the applicable constitutional standards (see a) below), the entitlement to receive a Contergan pension as set out in the Third and Fourth Amendment Act falls within the scope of the guarantee of private property (see b) below). The guarantee of private property also protects beneficiaries from any deductions pursuant to § 15(2) second sentence of the Contergan Foundation Act (see c) below).

76

a) aa) Property is an essential fundamental right, and its protection is of particular importance for a social state governed by the rule of law (cf. BVerfGE 14, 263 <277>; 134, 242 <290 para. 167>; 143, 246 <323 para. 216>; 149, 86 <112 para. 70>). Within the framework of the fundamental rights, the guarantee of private property is designed to ensure that fundamental rights holders are afforded freedom in the economic sphere. Private property protected by the Constitution is characterised by its purpose of being for private benefit, and by the owner’s general power of disposal over their property (cf. BVerfGE 100, 226 <241>; 102, 1 <15>; 143, 246 <323 para. 216>; 149, 86 <112 para. 70>; established case-law). It is to be used as a basis for private initiative and to serve someone’s autonomous private interests (cf. BVerfGE 100, 226 <241>; 149, 86 <112 para. 70>).

77

Art. 14(1) of the Basic Law not only protects tangible property under civil law, but all rights constituting assets (vermögenswerte Rechte) that the legal order assigns to the rights holders in such a way that they may exercise the associated powers at their own choice for their private benefit (cf. BVerfGE 112, 93 <107>; 123, 186 <258>; Federal Constitutional Court, Order of the Second Senate of 24 November 2022 - 2 BvR 1424/15 -, para. 107).

78

bb) Rights constituting assets under public law enjoy the protection afforded by the guarantee of private property if they give rise to a legal position that is akin to that of private property rights and that is so strong that depriving the owner thereof without compensation would run counter to the rule-of-law guarantees of the Basic Law (cf. BVerfGE 40, 65 <83>; 143, 246 <328 f. para. 231>; Federal Constitutional Court, Order of the Second Senate of 24 November 2022 - 2 BvR 1424/15 -, 115). To determine whether this is the case, it must be examined to what extent the legal position is equivalent to input by the rights holder. In addition, the legal position must be dedicated to use for private benefit and the owner must have at least limited powers of disposal (cf. BVerfGE 14, 288 <294>; 72, 175 <193>; 143, 246 <329 para. 231>; Federal Constitutional Court, Order of the Second Senate of 24 November 2022 - 2 BvR 1424/15 -, para. 116). This link to the rights holder’s own input is recognised as a special ground for protection with regard to legal positions arising from public law (cf. BVerfGE 69, 272 <301>; 100, 1 <33>; 149, 86 <113 para. 72>). The higher the own input underlying an entitlement under public law, the stronger the emphasis on the link of the entitlement to one’s person, which is essential under constitutional law, and the stronger the foundations for the protection of private property (cf. BVerfGE 53, 257 <292>; 76, 220 <237>; 100, 1 <37 f.>; Federal Constitutional Court, Order of the Second Senate of 24 November 2022 - 2 BvR 1424/15 -, para. 116).

79

cc) Claims under social law only enjoy the constitutional protection of private property if they constitute legal positions of financial value that are allocated exclusively to the rights holder for private benefit, are based on significant input by the rights holder and serve to cover their basic needs (cf. BVerfGE 69, 272 <300>; 92, 365 <405>; 100, 1 <32 f.>; 128, 90 <101>). Yet the requirements following from these criteria may not be excessive. Meeting the criterion of significant input is not precluded by a legal position being also or primarily based on the award of benefits by the state; this does not from the outset have the effect of excluding the protection of private property, just as it does not have this effect for assets acquired with the help of subsidies or tax breaks (cf. BVerfGE 69, 272 <301>). Contributions made by third parties to social care insurers for beneficiaries also generally constitute input of the beneficiary relevant to the guarantee of private property (cf. BVerfGE 69, 272 <302>). The scale of the input is primarily decisive for the further question of the extent to which the legislator can determine the content and limits of a position falling under the guarantee of private property (cf. BVerfGE 58, 81 <112>; 69, 272 <301>). Entitlements to social benefits that exclusively result from the state having granted them by law in discharging its duty of care do not enjoy the protection under Art. 14 of the Basic Law (cf. BVerfGE 53, 257 <292>; 69, 272 <301 f.>). Whether an entitlement under social law is based on significant input cannot be subject to differing assessments depending on the time when it is due; rather, an overall assessment is required (cf. BVerfGE 69, 272 <302>). When it comes to the coverage of basic needs, this is not determined by the degree to which a fundamental rights holder is reliant on the benefit under social law in view of their personal finances. Rather, this concerns the objective finding of whether the aim of a benefit under public law is to cover the beneficiary’s basic needs. What is decisive is not the need of the individual, but the fact that a position serves to cover the basic needs of a large majority of citizens (cf. BVerfGE 53, 257 <290>; 69, 272 <304>; Chamber Decisions of the Federal Constitutional Court, Kammerentscheidungen des Bundesverfassungsgerichts – BVerfGK 14, 287 <290 f.>).

80

dd) The specific scope of protection of the guarantee of private property only follows from the determination of the content and limits of property, which falls to the legislator under Art. 14(1) second sentence of the Basic Law (BVerfGE 143, 246 <324 para. 218>). If a legislative measure both extends and restricts a legal position protected by Art.14(1) of the Basic Law (mixed redesign), the scope of the guarantee of private property is determined by the relationship between the granting of said legal position and the restriction thereof (cf. regarding the replacement of entitlements under private law by entitlements under public law pursuant to the Foundation Act: BVerfGE 42, 263 <300>). It is decisive whether the granting measure creates an expanded legal position protected by Art.14(1) of the Basic Law and the restriction interferes with this legal position, or whether a uniform determination of the content and limits of property is made, with the granting of the legal position being limited from the outset by the restriction. The relationship between the extension and restriction cannot be determined based on the legislative technique used (cf. BVerfGE 49, 382 <393>; 58, 300 <336>), but must be based on the overall legislative concept (cf. BVerfGE 42, 263 <299 f.>; 71, 230 <250>). This follows from the nature of Art. 14 of the Basic Law as a fundamental right that is reliant on ordinary law to give it specific shape, mandating that the legislator determine the content and limits of property. A mixed redesign constitutes a uniform determination of the content and limits of property if the extension and the restriction are inseparably linked under the legislative concept (cf. regarding the replacement of entitlements under private law by entitlements under public law pursuant to the Foundation Act: BVerfGE 42, 263 <300>), that is, if the extension would be impossible without the restriction or vice versa.

81

b) Based on the foregoing, the Contergan pension pursuant to § 13 of the Contergan Foundation Act constitutes a legal position under social law (cf. BVerfGE 42, 263 <291>), which is guaranteed by law, and, as such, falls within the scope of the guarantee of private property under Art. 14(1) of the Basic Law. The pension entitlement fits the elements that positions under social law must meet to constitute property (see aa) below). The protection of the Contergan pension entitlement by the guarantee of private property is not limited to a constitutionally required minimum or core protection (see bb) below). The property protection that is afforded to the pension entitlement also protects it from any deductions pursuant to § 15(2) second sentence of the Contergan Foundation Act (see cc) below).

82

aa) The Federal Constitutional Court already held that the pension entitlement that arose from the transformation of the constitutionally protected settlement claims into statutory claims pursuant to § 14(1) second alternative of the Foundation Act was protected by Art. 14(1) of the Basic Law in view of the reason for which the pension entitlement was created (cf. BVerfGE 42, 263 <303>; Federal Constitutional Court, Order of the Second Chamber of the First Senate of 26 February 2010 - 1 BvR 1541/09 inter alia -, para. 28). This protection of private property is additionally rooted in the fact that the pension entitlement is also based on the claims in tort of affected persons who were not involved in the settlement (cf. § 18(1), § 23(1) of the Foundation Act), which were likewise protected by Art. 14(1) of the Basic Law (regarding the transformation of claims in tort of forced labourers: BVerfGE 112, 93 <107>; regarding the Contergan Foundation: Decisions of the Federal Administrative Court, Entscheidungen des Bundesverwaltungsgerichts – BVerwGE 169, 54 <62 para. 22>). In view of the standards developed since then regarding the protection of legal positions under social law by the guarantee of private property, this assessment also applies to the pension entitlement under § 13(1) first sentence of the Contergan Foundation Act, which grants a significantly higher level of benefits, in particular following the Third Amendment Act. This pension entitlement also fits the elements that positions under social law must meet to constitute property: the entitlement is allocated to the recipients for private benefit and the recipients in principle have powers of disposal over it (see (1) below), it is based on significant input by the recipients (see (2) below) and serves to cover their basic needs (see (3) below).

83

(1) The Contergan pension pursuant to § 13(1) first sentence of the Contergan Foundation Act is allocated for private benefit. This is reflected in the fact that the beneficiaries, who receive the pension as compensation for injuries suffered by them, have a specific entitlement to the pension; under certain conditions, they also have an entitlement to have their Contergan pension capitalised (§ 13(3) of the Contergan Foundation Act). The beneficiaries also in principle have powers of disposal with regard to the Contergan pension. It is true that the entitlements arising from § 13(1) of the Contergan Foundation Act are not at the unlimited disposal of the beneficiaries because they cannot be transferred, pledged or attached (§ 13(5) first sentence of the Contergan Foundation Act). Apart from these restrictions, however, beneficiaries can freely use the amount paid to them.

84

(2) The pension entitlement is also based on significant input by the recipients.

85

(a) The transfer of the civil law claims to the Foundation and the Foundation’s appropriation of the DM 100 million payment to settle these claims constitute input by the Contergan survivors. This is because the Foundation Act, which entitled Contergan survivors to receive Contergan pensions, led to the expiry of any injury-related claims against Grünenthal (§ 23 of the Foundation Act) and made the entry into force of the Act contingent on payment of DM 100 million by Grünenthal to the Foundation, as set out in the agreement, in order to settle these claims (§ 4(1) no. 2 in conjunction with § 29 of the Foundation Act). Provided that they submitted a waiver (§ 18(1) of the Foundation Act), the claims of Contergan survivors in other countries were also transferred. The expiry of the claims and the state’s appropriation of the settlement payment led to a legal restructuring, both at the expense of the survivors and in their favour (cf. BVerfGE 42, 263 <299>) – namely with the emergence of the social law position of § 14 of the Foundation Act, which continues to exist as a social law position with a different scope under § 13 of the Contergan Foundation Act.

86

The transferred claims can be qualified as the recipients’ own input even though the DM 100 million were not raised by Contergan survivors themselves, but by Grünenthal. Contributions made by third parties to social care insurers for beneficiaries constitute input of the beneficiaries relevant to the guarantee of private property (cf. BVerfGE 69, 272 <302>). The present constellation is comparable to this scenario, because Grünenthal’s payment replaced the compensation for claims arising from the settlement and for potential claims in tort of Contergan survivors not involved in the settlement, and the payment was made to the Foundation for Contergan survivors.

87

(b) The input by Contergan survivors is also significant for the pension entitlement under § 13(1) first sentence of the Contergan Foundation Act. In particular, the fact that the relationship between Contergan survivors’ own input and the award of benefits by the state has shifted significantly since the entry into force of the Foundation Act does not result in the input becoming insignificant.

88

(aa) Based on the standards set out above (para. 79), Contergan survivors’ own input was significant for the creation of the Contergan pension entitlement pursuant to § 14 of the Foundation Act, given that when the Foundation Act entered into force, the Contergan pension was predominantly based on Contergan survivors’ own input. This follows from the fact that the DM 100 million paid by Grünenthal to settle claims under private law formed the financial basis for the entitlements guaranteed in the Act (cf. BVerfGE 42, 263 <286>); without this payment, the Foundation Act could not have entered into force (cf. § 29 of the Foundation Act). It also follows from the fact that two-thirds of the payments made to Contergan survivors were financed from these funds, while only one-third was financed by tax revenues (cf. § 12 of the Foundation Act).

89

(bb) The input of Contergan survivors has not been rendered insignificant for the pension entitlement, which continues under § 13(1) first sentence of the Contergan Foundation Act, by the fact that the relationship between input by the recipients and the award of benefits by the state has continually shifted since the entry into force of the initial Foundation Act, because relevant changes occurred in several respects. With regard to input by the recipients, Contergan pensions have been fully financed from the federal budget since the funds originally provided by Grünenthal were used up in 1997 (cf. BTDrucks 17/12678, p. 4; cf. also § 4(1) no. 1 of the Contergan Foundation Act). This applies irrespective of the further payment of EUR 50 million made by Grünenthal on 15 July 2009 (cf. § 4(1) no. 3 of the Contergan Foundation Act), because these funds are earmarked for the annual special payments pursuant to § 11 first sentence no. 1(a) of the Contergan Foundation Act, which precludes their use for financing Contergan pensions. With regard to the award of benefits by the state, the relevant changes arise from the fact that Contergan pensions were increased by a factor of 30 between 1972 and 2013; as such, their increase far exceeded adjustments for inflation.

90

Despite the changed relationship between Contergan survivors’ own input and the award of benefits by the state, the Contergan pension pursuant to § 13(1) first sentence of the Contergan Foundation Act as set out in the Third and Fourth Amendment Act is based on significant input by Contergan survivors. Under the required overall assessment – which does not differentiate according to the specific time when entitlements are due (para. 79) –, Contergan pensions have not lost their personal link to Contergan survivors created by the payment of the claims into the Foundation, neither on the grounds that they are now funded by tax revenues nor on the grounds that pensions have increased considerably. The Federal Constitutional Court’s case-law regarding the protection of positions under social law by the guarantee of private property does not contain any principle according to which a personal link – created by the transfer of claims under civil law into the sphere of the state – of a uniform entitlement to property could cease to exist due to additional payments by the state. The notion of assumed responsibility, set out by the Federal Constitutional Court, argues against such a principle: once the state has undertaken the task of providing support to Contergan survivors, it must ensure that the payments made by the Foundation live up to the assumed responsibility in the future, in the form of pension increases or otherwise (cf. BVerfGE 42, 263 <312>). It follows that the transfer of the claims under social law of Contergan survivors to the Foundation has not just resulted in survivors acquiring a pension entitlement in the original amount, but has also given rise to a responsibility of the state to compensate for deficits in Contergan survivors’ quality of life, which also applies to the future. Therefore, the increased pensions, which reflect this responsibility (regarding the Second Amendment Act cf. BTDrucks 16/12413, p. 11), are based on Contergan survivors’ input.

91

(3) Contergan pensions also serve to cover recipients’ basic needs. They are of such significance for recipients that discontinuing or restricting them would significantly affect the guarantee of private property in its function of safeguarding freedom (cf. BVerfGE 69, 272 <304>). The Federal Constitutional Court previously held that the entitlements of Contergan survivors serve to compensate for deficits in quality of life and that they are of paramount – and possibly even existential – significance for the lives of affected persons (cf. BVerfGE 42, 263 <293>). Given that the legislator increased Contergan pensions in response to an ‘urgent need to act so as to ensure proper and forward-looking support for ageing recipients’ (cf. BTDrucks 17/12678, p. 4), the same also applies to increased Contergan pensions.

92

bb) Contergan pensions as guaranteed by the law are protected by the guarantee of private property. There is no constitutional principle according to which the guarantee of private property is limited to minimum or core protection of the Contergan pension entitlements. There is no need to decide here whether the Federal Constitutional Court set out such a principle when it held in its judgment of 8 July 1976 that the ‘core of the original entitlement arising from the settlement agreement is protected by the guarantee of private property, although this guarantee does not necessarily cover all details and modalities’ (cf. BVerfGE 42, 263 <293>). In any case, this finding was made at a time when it was not yet recognised in constitutional law that positions under social law are protected by the guarantee of private property. No such limitation of the scope of protection can be derived from the standards that have been developed in the meantime regarding the protection of positions under social law by the guarantee of private property (cf. BVerfGE 53, 257; 69, 272 ff.).

93

cc) The property protection that is afforded to the pension entitlement also protects it from any deductions pursuant to § 15(2) second sentence of the Contergan Foundation Act. A different assessment is not merited by the fact that the provision on deductions was introduced with the Third Amendment Act, at the same time as the substantial increase in the pension entitlement.

94

In light of the standard regarding the protection afforded in cases of mixed redesign (para. 80), the pension increase guaranteed by § 13(1) first sentence of the Contergan Foundation Act and the provision governing deductions – § 15(2) second sentence of the Contergan Foundation Act – which was adopted at the same time do not constitute a uniform determination of the content and limits of property. This is because the increase in pensions and the provision on deductions are not dependent on one another in such a way that the overall solution pursued by the legislator would be impossible from a legal and technical perspective with just one of the two elements. There are no indications that the two measures are inseparably linked in view of the overall solution pursued by the legislator. This view is supported by the fact that under § 15(2) second sentence of the Contergan Foundation Act, deductions do not just apply to the amount by which pensions were increased, but to the full pensions. This means that the legislator did not design the provision on deductions as a limitation relating to the pension increase, which would limit the pension increase to the amount remaining after deductions. Rather, § 15(2) second sentence of the Contergan Foundation Act sets out an element that is independent of the increase and which leads to a reduction of pension entitlements based on its own rationale – avoiding overlapping payments.

95

[…]

96

2. § 15(2) second sentence of the Contergan Foundation Act does not result in expropriation of those affected by deductions.

97

a) For a measure to constitute expropriation under Art. 14(3) of the Basic Law, a deprivation of property through a change in the assignment of ownership and an acquisition of goods must occur (cf. BVerfGE 143, 246 <332 para. 243> – Thirteenth Act Amending the Atomic Energy Act 2011). Expropriation is directed at the complete or partial deprivation of specific and individual property interests guaranteed by Art. 14(1) first sentence of the Basic Law for the purpose of performing certain public tasks (cf. BVerfGE 134, 242 <289 para. 161>; 143, 246 <333 para. 245>; established case-law). For a measure to constitute expropriation within the meaning of Art. 14(3) of the Basic Law, for which compensation is mandatory, rather than a determination of the content and limits of property within the meaning of Art. 14(1) second sentence of the Basic Law, which is generally not compensated, the criterion of the complete or partial deprivation of property positions and the resulting loss of rights and assets must be met (cf. BVerfGE 83, 201 <211>; 143, 246 <333 para. 245>). Expropriation within the meaning of Art. 14(3) of the Basic Law further requires that the seizure of a property right by public authority must at the same time constitute an acquisition of goods for the benefit of the public authorities or another beneficiary of the expropriation (BVerfGE 143, 246 <333 f. para. 246>). The limitation of expropriation to cases concerning the acquisition of goods also excludes cases from the scope of expropriation – subject to compensation – in which the state merely deprives someone of specific property positions (cf. BVerfGE 143, 246 <339 para. 261>).

98

b) § 15(2) second sentence of the Contergan Foundation Act does not result in expropriation. While the deductions lead to the deprivation of specific legal positions (see aa) below), the positions are not transferred to the state or third parties for the acquisition of goods (see bb) below).

99

aa) The deductions imposed by § 15(2) second sentence of the Contergan Foundation Act lead to a partial deprivation of the property positions of those eligible for Contergan pensions. Regarding the legal effects of the concept of deduction, which is common in social law in particular, a distinction is generally made between the basic entitlement and the entitlement to payment. While the basic entitlement under social law is unaffected by rules on deductions, the entitlement to payment is reduced by the deduction and is cancelled in the amount to be deducted ([…]). The rights holder is thereby deprived of their property position in the amount of the deduction.

100

bb) The constellation at issue lacks the element of acquisition of goods that is necessary for a measure to constitute expropriation. Deductions do not result in the entitlements under § 13(1) first sentence of the Contergan Foundation Act, which are protected by the guarantee of private property, being transferred to the state or third parties; rather, the entitlements expire in the amount of the deductions. […] No different assessment is merited by the fact that the provision on deductions eases the financial burdens of the Contergan Foundation. It does make a difference whether someone is deprived of a property position to counteract social injustices or because public authority wants to transfer said property to itself or third parties in order to use it to perform its tasks (cf. BVerfGE 143, 246 <337 para. 256>). The case at hand amounts to a deprivation of a legal position to counteract social injustices, given that § 15(2) second sentence of the Contergan Foundation Act does not transfer property positions [to the state or third parties], but merely leads to their expiry in the amount to be deducted, so as to prevent a situation where individual Contergan survivors are accorded preferential treatment in financial terms (cf. BTDrucks 17/12678, p. 5).

101

3. § 15(2) second sentence of the Contergan Foundation Act leads to the expiry of the entitlement to payment of the pension pursuant to § 13(1) first sentence of the Contergan Foundation Act in the amount to be deducted; it thus constitutes a determination of the content and limits of property that interferes with the guarantee of private property protected by Art. 14(1) of the Basic Law of the recipients of Contergan pensions. The interference is not offset by the increase in Contergan pensions enacted at the same time as the provision on deductions.

102

a) There is no conclusive determination in the Federal Constitutional Court’s case-law regarding the question if and under what conditions an interference with a legal position protected by Art. 14(1) of the Basic Law can be offset by improvements to the legal position granted at the same time. In any case, an interference with Art. 14(1) of the Basic Law can be offset by a framework that completely cancels out – not only in arithmetic terms – the adverse changes resulting from the interference (cf. Federal Constitutional Court, Order of the Second Senate of 6 December 2022 - 2 BvL 29/14 -, paras. 119, 124, 145).

103

b) In the present case, it is not possible to cancel out the interference by offsetting it based on the aforementioned standards. The question of whether a granting measure offsets the restriction of property positions is the other side of the question, discussed above in relation to the scope of protection, of whether the restriction limits the granting of a property position (cf. in this regard para. 93 ff.). Therefore, the cancelling out of the interference can only be considered if the granting measure and the restriction are inseparably linked under the legislative concept. Given that the increase in the Contergan pension entitlement must be considered separately from the provision on deductions (para. 93 ff.), the positive effects of the pension increase cannot be used to offset the interference resulting from the provision on deductions, which was adopted at the same time as the pension increase.

104

4. § 15(2) second sentence of the Contergan Foundation Act satisfies the constitutional requirements (see a) below) for a provision determining the content and limits of property under Art. 14(1) second sentence of the Basic Law. The provision is not unconstitutional on the grounds of it violating formal requirements for drafting and adopting legislation (see b) below). The design of the content and limits of property is proportionate (see c) below).

105

a) In determining the content and limits of property as legal positions protected by fundamental rights, the legislator must take due account of both the constitutional recognition of private property in Art. 14(1) first sentence of the Basic Law and the social obligations property entails (Art. 14(2) of the Basic Law). The legislator must be guided by the public interest, which provides not only the reason, but also the limits for restricting the rights of property holders (cf. BVerfGE 50, 290 <340 f.>; 100, 226 <241>; 143, 246 <341 para. 268>). The legislator must reconcile the protected interests of property holders and public interests in a fair and balanced manner (cf. BVerfGE 100, 226 <240>), and in doing so, must adhere to all other constitutional provisions. In particular, any determination of the content and limits of property must comply with the principle of proportionality (cf. BVerfGE 75, 78 <97 f.>; 110, 1 <28>; 126, 331 <360>; 143, 246 <341 para. 268>).

106

Nevertheless, the limits of the legislator’s leeway are not the same for all matters. The extent to which the legislator may determine the content and limits of a position protected by the guarantee of private property cannot be considered independently of the reasons for which the property holder has acquired such a position, nor of the question whether the position is personal or social in nature (cf. BVerfGE 53, 257 <292>; 58, 81 <112>; 102, 1 <17>; 112, 93 <109>; established case-law). Insofar as the property in question safeguards the personal freedom of the individual in the economic sphere, it enjoys particularly strong protection due to this personal link (cf. BVerfGE 53, 257 <292>; 143, 246 <341 para. 268> with further references). In the balancing of interests, it must therefore be taken into account that the guarantee of private property is to ensure that the fundamental rights holder retains freedom in the economic sphere, thus allowing the individual to develop and to autonomously shape their life (cf. BVerfGE 68, 193 <222>; 104, 1 <8>; Federal Constitutional Court, Order of the Third Chamber of the First Senate of 18 July 2019 - 1 BvL 1/18 inter alia -, para. 70). The guarantee of private property in its dimension as a protective and defensive right must apply especially to claims under the law of obligations that serve to compensate for deficits in quality of life (cf. BVerfGE 42, 263 <293>; 112, 93 <107>). At the same time, according to Art. 14(2) of the Basic Law, property is to be used in a way that serves the public good (cf. BVerfGE 134, 242 <290 f. para. 167 f.>; 143, 246 <323 para. 216>). Therefore, the legislator’s powers to determine the content and limits of property are broader the more the possession in question has a social dimension and a social function (cf. BVerfGE 70, 191 <201>; 102, 1 <16 f.>; 143, 246 <341 para. 268>; Federal Constitutional Court, Order of the Third Chamber of the First Senate of 18 July 2019 - 1 BvL 1/18 inter alia -, para. 71). The legislative leeway is shaped in particular by the respective economic and social circumstances (cf. BVerfGE 70, 191 <201>; 112, 93 <110>; 126, 331 <360>; 143, 246 <341 para. 268>).

107

In relation to the constitutional guarantee of private property, due account must also be taken of the principle of the protection of legitimate expectations under the rule of law, a principle which is given specific shape with regard to financial assets in Art. 14(1) of the Basic Law (cf. BVerfGE 101, 239 <257>; 117, 272 <294>; 122, 374 <391>; 143, 246 <341 para. 268>). The guarantee of private property does not require that, once legal positions have been established, their contents must remain forever unchanged (cf. BVerfGE 31, 275 <284 ff., 289 f.>; 36, 281 <293>; 42, 263 <4th headnote and p. 294>; 58, 300 <351>; 143, 246 <342 para. 269>). Even the complete abolition of legal interests that formerly existed and were protected by the guarantee of private property, without any transitional framework or replacement, can be permissible under certain circumstances (cf. BVerfGE 78, 58 <75>; 83, 201 <213>; with reference to this BVerfGE 102, 1 <16>; 143, 246 <342 para. 269>). However, the legislator is subject to particular constitutional limits in this respect (cf. BVerfGE 83, 201 <212>; 102, 1 <16>). Interferences with rights created under previous law are only justified if they serve public interests and adhere to the principle of proportionality (cf. BVerfGE 31, 275 <290>; 70, 191 <201 f.>; 143, 246 <342 para. 269> with further references). The public interest in favour of such an interference must be so serious that it takes priority over citizens’ legitimate expectation that their right, which is safeguarded by the protection of the status quo inherent in Art. 14(1) first sentence of the Basic Law, will not change (cf. BVerfGE 42, 263 <294 f.>; 58, 300 <351>; 143, 246 <342 para. 269>). The permissible scope of the interference also depends on the weight of the underlying public interest (cf. BVerfGE 83, 201 <212>; 143, 246 <342 para. 269>).

108

b) The argument that the legislator – in collecting comprehensive information on (social) benefits granted to affected persons in other countries, but not making a comprehensive overall comparison with the general level of benefits granted in Germany – might have violated some alleged standard of legislative rationality does not demonstrate that the provision on deductions is unconstitutional.

109

aa) There is no violation of any independent obligation to investigate the facts. Contrary to what the referring court postulates, the Basic Law does not give rise to any general obligation to investigate the facts that is independent from the substantive constitutionality requirements of legislation. It is only in particular constellations that the Federal Constitutional Court has presumed an independent obligation to investigate the facts on the part of the legislator. Beyond these constellations, the design of the legislative process falls to the legislative organs, which must legislate in accordance with the rules set out in the Constitution. Moreover, the transparency of the parliamentary process ‒ with its inherently public function and the essentially public nature of the deliberations ‒ ensures that decisions are also discussed in the broader public, thereby creating the conditions by which citizens are able to scrutinise the legislative process. For this reason, decisions of considerable significance must therefore generally be preceded by a process that allows the public to form and express opinions, including by way of media reporting, and that requires Parliament to hold a public debate on the necessity and scope of the envisaged measures. The Basic Law trusts that transparency and public debate in the parliamentary process sufficiently guarantee that legislative decisions are based on sufficient facts, without subjecting the legislator to an independent obligation to investigate the facts. This is because the lack of an independent obligation to investigate the facts in the legislative process does not release the legislator from the need to decide in accordance with the constitutional requirements, in particular fundamental rights, and to base its decisions on sufficiently sound foundations and causal relationships, not least in view of proportionality requirements (cf. BVerfGE 143, 246 <343 ff. para. 273 ff.> with further references; 157, 30 <161 f. para. 240>). It is sufficient that these foundations and causal relationships can support the legislative decision based on an objective assessment.

110

In the present case, there are no particular constellations that could constitutionally require independent obligations to investigate the facts in the legislative process. The legislator’s situation when adopting the Third Amendment Act does not differ, in structural terms, from other regular legislative initiatives that set out a legal framework for complex aspects of life based on assessments and a balancing of interests.

111

bb) Nor does the present case involve any violation of a constitutional obligation to provide reasons for legislation, as no such obligation exists.

112

According to the established case-law of the First Senate of the Federal Constitutional Court, the Constitution does not specify any matters for which reasons must be given in the legislative process, nor in what manner and at what time this must be done; rather, it leaves room for negotiations and political compromise (cf. BVerfGE 137, 34 <73 f. para. 77>; 143, 246 <345 para. 279>; 157, 30 <162 f. para. 241>). In principle, the requirements regarding the constitutionality of legislation arising from the Basic Law do not concern the reasons given for the legislation, but the outcome of the legislative process (cf. BVerfGE 139, 148 <180 para. 61>; 143, 246 <345 para. 279>; 157, 30 <162 f. para. 241> with further references). It is not necessary that tenable reasons have been given for the law, but that such reasons can be given (cf. BVerfGE 137, 34 <73 para. 77>; 157, 30 <163 para. 241>). It is only if there are no constitutionally recognised purposes whatsoever that a provision is declared unconstitutional (cf. BVerfGE 48, 227 <237>; 75, 246 <268>; 130, 131 <144>; 163, 107 <139 para. 87>). This is clearly not the case here.

113

c) § 15(2) second sentence of the Contergan Foundation Act also satisfies the constitutional requirements for a provision determining the content and limits of property under Art. 14(1) second sentence of the Basic Law. The provision pursues legitimate purposes (see aa) below) and is suitable (see bb) below) and necessary (see cc) below) for achieving these purposes. It satisfies the requirements arising from the principle of proportionality in the strict sense, including the requirements that must be met with regard to the protection of legitimate expectations (see dd) below).

114

aa) The deductions imposed by § 15(2) second sentence of the Contergan Foundation Act pursue constitutionally legitimate purposes.

115

(1) Where statutory provisions result in interference with fundamental rights, such interference may only be justified if the legislator is pursuing constitutionally legitimate purposes. Whether this is the case is subject to review by the Federal Constitutional Court. In this respect, the Court is not limited to considering only the purposes expressly named by the legislator itself (cf. BVerfGE 159, 223 <298 para. 169> with further references; 161, 163 <269 para. 291>; 163, 107 <138 para. 86>). Statutory purpose is typically derived from the objective intent of the legislator (cf. BVerfGE 150, 244 <276 para. 74>; 157, 223 <263 para. 106>; 161, 63 <93 para. 57>). Objective intent is to be determined by recognised methods of legal interpretation, i.e. based on the wording, the legislative materials and legislative history, the systematic approach and the spirit and purpose. These methods are not mutually exclusive, but instead complement one another (cf. BVerfGE 144, 20 <212 f. para. 555>; 157, 223 <263 para. 106>; 161, 63 <93 para. 57>). Based thereon, purposes that must be taken into account in constitutional review are in particular – but not exclusively – those that are plausible based on the legislator’s intent or that have been named by the organs involved in the legislative process during the proceedings before the Federal Constitutional Court (cf. BVerfGE 112, 226 <244>; 120, 82 <115>; 140, 65 <79 f. para. 33>; 163, 107 <138 para. 87>). By contrast, unnamed purposes or purposes that only came into play after the law was adopted cannot be taken into account where such purposes would fail to meet or would distort essential aspects of the clear legislative objective.

116

(2) The deductions imposed by § 15(2) second sentence of the Contergan Foundation Act serve legitimate purposes.

117

(a) According to the explanatory memorandum to the draft act, the provision serves to avoid overlapping payments, in particular those resulting from payments made by foreign states (cf. BTDrucks 17/12678, p. 5). In addition, there is the obvious purpose – not mentioned by the legislator – to limit payments made due to impairments resulting from thalidomide use to the amounts set out in § 13(2) of the Contergan Foundation Act.

118

In its case-law, the Federal Constitutional Court has recognised the aim of avoiding overlapping benefits under social law as a legitimate purpose, provided that the different benefits are mutually exclusive in view of their function (cf. BVerfGE 31, 185 <190>) or if they serve the same purpose (cf. BVerfGE 79, 87 <98>; 110, 412 <441>; regarding the civil service pension scheme cf. BVerfGE 76, 256 <357>; 145, 249 <288 para. 82>). It is in the general interest to avoid the provision of multiple benefits that, under certain conditions, can lead to extra burdens on public finances which cannot be justified and to remove an overprovision of benefits perceived as unreasonable. It is also permissible for a legal provision to ensure that German payments are not granted on top of comparable foreign payments (regarding child allowances for German cross-border commuters to Switzerland cf. BVerfGE 110, 412 <440>). Contrary to the view of the Federal Administrative Court, no constitutional principle exists according to which the benefits that are considered to be overlapping payments would have to be comparable in terms of legal doctrine (regarding the classification of pension entitlements for employees and pension entitlements for civil servants as overlapping payments cf. BVerfGE 76, 256 <357>). In relation to foreign benefits, too – which are inherently difficult to classify in terms of legal doctrine – it is sufficient that both types of benefits are in fact comparable as regards their function (cf. BVerfGE 110, 412 <441>).

119

(b) According to the explanatory memorandum to the draft act, § 15(2) second sentence of the Contergan Foundation Act is also designed to prevent a situation where non-Germans affected by thalidomide use are in a better position than affected Germans or affected persons in other states that do not provide payments (cf. BTDrucks 17/12678, p. 5).

120

The equal treatment sought by the legislator only relates to benefits granted due to impairments resulting from thalidomide use. The Federal Administrative Court’s view, according to which § 15(2) second sentence of the Contergan Foundation Act serves to bring about the equal treatment of Contergan survivors with regard to their general social protection, does not hold up. According to its clear wording, § 15(2) second sentence of the Contergan Foundation Act merely applies to constellations where Contergan pensions are paid in addition to other benefits also granted due to impairments resulting from thalidomide use. The provision’s constituent elements provide no scope for taking into account the general social protection of those affected by the deductions. A systematic interpretation also demonstrates that § 15(2) second sentence of the Contergan Foundation Act does not serve to bring about equal treatment with regard to general social protection. This is because in systematic terms, the provision on deductions is designed to limit the pension entitlement under § 13 of the Contergan Foundation Act, the amount of which depends only on the severity of the physical impairments and the resulting dysfunctions (§ 13(2) first sentence of the Contergan Foundation Act) and does not take into consideration criteria that are unrelated to the level of impairment, namely the social protection granted in other respects to affected persons. Given that the general social protection of affected persons is irrelevant for the payments made under the Contergan Foundation Act, there is no reason to suggest that this criterion could be relevant to the provision on deductions that limits the payments. The draft act does not support the purpose presumed to exist by the Federal Administrative Court either; rather, it clearly refutes such an interpretation. The Federal Administrative Court assumes that, based on normal language use, addressing the preferential treatment of recipients of double payments through the provision on deductions (cf. BTDrucks 17/12678, p. 5) requires an overall comparison of all relevant benefits. This assumption is not persuasive. While the term ‘preferential treatment’ does require a comparison, it does not specify the aspects to be compared. An argument against including the general level of social benefits in the comparison sought by the legislator is the statement in the explanatory memorandum that the overlapping state payments put affected non-Germans in a better position than affected Germans or affected persons in other states that do not provide payments (cf. BTDrucks 17/12678, p. 5). The legislator presumes that the overlapping payments place even affected Germans – who have very good social protection by international standards – in a less favourable position; this suggests that the legislator intended to limit comparisons to payments made as compensation for impairments resulting from thalidomide use, which means that the legislative purpose of avoiding preferential treatment does not correspond to the purpose presumed by the Federal Administrative Court.

121

In light of all of the foregoing, § 15(2) second sentence of the Contergan Foundation Act serves to ensure the equal treatment of all Contergan survivors in terms of the payments made due to impairments resulting from thalidomide use. In view of the values enshrined in Art. 3(1) of the Basic Law, which applies to both unequal burdens and unequal benefits (cf. BVerfGE 110, 412 <431>; 148, 147 <183 para. 94>; 161, 163 <252 para. 239>), this purpose is constitutionally legitimate.

122

(c) Based on the aforementioned purposes, it is plausible that the legislator also pursued the legitimate aim of ensuring that solidarity within society remains financially viable (cf. in this regard BVerfGE 44, 70 <90>; 109, 96 <111>; 123, 186 <263>) and that social spending is used to provide in the best possible way for all those who face deficits in their quality of life. This aim does not lose its legitimacy on the grounds that the amounts saved through deductions are only approximately EUR 1 million per year according to estimates made in the explanatory memorandum (cf. in this regard BTDrucks 17/12678, p. 6)

123

(d) In addition, it is evident that deductions also serve to achieve savings for public finances in the aforementioned amount (cf. BTDrucks 17/12678, p. 6). Contrary to the view of the referring court, such a legislative purpose is not precluded by the fact that the Third Amendment Act significantly increased the payments made under the Contergan Foundation Act. It is clearly conceivable, and also plausible in this case, that the legislator wanted to save the funds used for undesired overlapping payments, while at the same time providing additional resources for the pension increase it deemed necessary. The legislator is not precluded from doing so under constitutional law. Using public funds frugally and economically is a legitimate aim under constitutional law (cf. BVerfGE 79, 127 <153>; 91, 228 <240>; BVerfGK 12, 308 <325>).

124

bb) § 15(2) second sentence of the Contergan Foundation Act is suitable for pursuing the aforementioned aims of the common good.

125

(1) The suitability requirement under constitutional law is satisfied if there is a possibility of achieving the legislative purpose with the statutory provision. A provision can only be found to be unsuitable if it cannot in any way further the legislative purpose pursued or if it counteracts this purpose (cf.BVerfGE 158, 282 <336 para. 131> with further references; 161, 63 <114 para. 110>). When assessing whether a provision is suitable, the legislator has a certain leeway in terms of evaluating the factual situation, making any necessary prognoses and choosing the means by which the legislative aims are to be achieved. The extent of this leeway is not always the same. Rather, its scope depends on factors relevant to the individual case such as the nature of the subject matter in question, the possibilities to draw sufficiently reliable conclusions and the significance of the affected legal interests (cf. BVerfGE 159, 223 <305 f. para. 185>; 161, 63 <114 para. 110>).

126

(2) Based on this standard, § 15(2) second sentence of the Contergan Foundation Act is suitable for achieving the legislative purposes pursued. There are overlapping payments that can be avoided (see (a) below), and the legislator’s assumption that overlapping payments adversely affect the equal treatment of recipients is based on sufficiently reliable foundations (see (b) below). Deductions are also suitable for promoting the financial viability of solidarity within society and the frugal use of public resources (see (c) below).

127

(a) The provision is aimed at overlapping payments that can be avoided. According to § 15(2) second sentence of the Contergan Foundation Act, the legislator has made payments subject to deductions if affected persons receive multiple payments ‘due to thalidomide use’. These payments constitute overlapping payments; avoiding them is a legitimate purpose in accordance with the standards set out above (para. 118). The legislative concept ties deductions to the economic purpose and the function of the payments in question, which specifically and exclusively provide compensation for impairments caused by drugs containing thalidomide. It is not objectionable under constitutional law to identify overlapping payments based on these criteria only, regardless of their categorisation in terms of legal doctrine (cf. BVerfGE 76, 256 <357>; 110, 412 <441>).

128

The specific reason for creating the pension entitlements in the present case does not merit a different assessment in deviation from these principles. Contrary to the view of the Federal Administrative Court, the ‘connection with liability law’ of the pension entitlement does not preclude German and foreign entitlements from being classified as serving a comparable function where they are made ‘solely out of care considerations or, in a broader sense, out of motives relating to the social state, and therefore voluntarily’. The comparability of German and foreign entitlements is not precluded by any constitutional prohibition on deducting claims with a compensatory function from general social benefits (see (aa) below), nor are they subject to any prohibition on compensating a benefit following from the fact that the claims are rooted in liability law (see (bb) below).

129

(aa) The decision of the Federal Constitutional Court of 11 July 2006 concerning the Asylum Seekers’ Benefits Act (BVerfGE 116, 229), which the Federal Administrative Court cited in its order of referral, does not lead to the conclusion that deducting foreign payments from the Contergan pension is impermissible.

130

That decision does not give rise to a general constitutional prohibition on taking into account entitlements connected to liability law when granting state benefits or vice versa – as might be considered in the present constellation. The constellation underlying the aforementioned Federal Constitutional Court decision cannot be applied accordingly to the question under review here, because it concerned payments serving different purposes, namely benefits for livelihood support under the Asylum Seekers’ Benefits Act and compensation for pain and suffering caused by bodily and mental injuries pursuant to § 253(2) of the Civil Code (Bürgerliches Gesetzbuch – BGB). However, the present case does not concern the deduction of compensation payments for pain and suffering from general social benefits – or vice versa. The subject of the deductions from Contergan pensions are not general social benefits granted by a foreign state, but payments also paid specifically as compensation for the harm suffered. For this reason, no conclusions can be drawn from the aforementioned Federal Constitutional Court decision (para. 129) regarding the constitutionality of § 15(2) second sentence of the Contergan Foundation Act even if it were considered to go beyond compensation claims for pain and suffering to also include entitlements under social law connected to liability law.

131

(bb) The comparability of the payments is also not precluded by any prohibition on compensating a benefit that would rule out the deductions.

132

It is doubtful whether the principle recognised in civil law, according to which the burden of an entity responsible for injuries may not be alleviated by payments made by third parties, and deductions compensating a benefit are therefore impermissible (cf. Decisions of the Federal Court of Justice in Civil Matters, Entscheidungen des Bundesgerichtshofes in Zivilsachen – BGHZ 144, 151 <159> with further references), is even rooted in constitutional law. Yet this need not be decided here. In any case, this principle is not applicable here because the pension entitlement is not a claim for compensation and is also not equal to such a claim. Contrary to the referring court’s view, the connection to liability law of the Contergan pension entitlement does not make the entitlement a claim under tort law, which would require that it be considered as equal to claims for compensation ([…]). Rather, the pension entitlement is of mixed nature and involves both aspects under liability law and aspects of the principle of the social state ([…]).

133-134

[…]

135

(b) The legislator’s assumption that overlapping payments adversely affect the equal treatment of recipients is based on sufficiently reliable foundations.

136

Based on the legislative concept regarding deductions, which solely considers payments made due to the use of drugs containing thalidomide, there are no doubts as to the fact that recipients of such overlapping payments receive preferential treatment compared to other Contergan survivors (see (aa) below). Disregarding the social security system which the recipients are subject to is not objectionable under constitutional law (see (bb) below).

137

(aa) It follows from § 15(2) second sentence of the Contergan Foundation Act that the legislator considered payments to be overlapping payments if they are made specifically due to impairments resulting from thalidomide use. In view of the legislative concept, which limits comparisons to these specific payments only, there can be no doubt that the recipients of such overlapping payments receive higher payments overall than persons who merely receive a German Contergan pension. As demonstrated above (para. 120), § 15(2) second sentence of the Contergan Foundation Act does not serve the purpose of bringing about the equal treatment of Contergan survivors with regard to their general social protection.

138

(bb) Within its margin of appreciation, the legislator was entitled to assume that there were overlapping payments when recipients received different payments due to impairments resulting from thalidomide use and to disregard the social security systems to which the recipients are otherwise subject. There is no constitutional requirement that would oblige the legislator, when identifying overlapping social benefits, to take into account the general level of all state benefits and all other benefits in an overall assessment and appraisal.

139

(α) Contrary to the view of the Federal Administrative Court, such a constitutional requirement does not follow from the judgment of the Federal Constitutional Court of 8 July 1976 regarding Contergan Foundation law. In this judgment, the Federal Constitutional Court held that an overall assessment, which is required in light of the facts of the case, did not provide any indication that the statutory payments would be lower than the payments arising out of the settlement agreement (cf. BVerfGE 42, 263 <302 f.>). The Federal Constitutional Court clearly stated that the question of preserving the substance of the claims under the settlement was not to be considered in isolation for the individual complainant, but that the support provided to all survivors within the Contergan community through the establishment of the foundation had to be considered. Nothing can be derived from these considerations regarding the question under review here – whether the legislative purpose of avoiding preferential treatment of individual Contergan survivors requires a transnational comparison encompassing all payments.

140

(β) Nor can any constitutional obligation to make a transnational comparison encompassing all payments be otherwise ascertained. The legislator is largely free to decide how to avoid undesired overlapping payments (cf. BVerfGE 31, 185 <192>; 79, 87 <98>). It has been recognised that payments are not rendered dissimilar by the fact that not all details of the modalities for calculating the payments are identical and the specific amounts of the entitlements therefore differ. Nor is it required by constitutional law to always grant the highest payment without restriction (cf. BVerfGE 79, 87 <98>). Foreign payments can provide comparable support even if they fall significantly short of the payments made by the German state (cf. BVerfGE 110, 412 <441>). The German and the foreign entitlements must be similar in terms of their function, but do not have to be equivalent. Given that overlapping payments can exist even if the payments concerned are not equivalent, there is no scope for a constitutional requirement to compare the social security systems in the framework of which the payments concerned are made.

141

(c) § 15(2) second sentence of the Contergan Foundation Act is suitable for promoting the financial viability of solidarity within society. At the same time, the application of deductions to overlapping payments can avoid domestic distribution conflicts that may arise when individual recipients receive preferential treatment given the scarcity of resources available in the social state. Moreover, § 15(2) second sentence of the Contergan Foundation Act furthers the aim of reducing the burden on public finances.

142

cc) The deductions imposed by § 15(2) second sentence of the Contergan Foundation Act are also necessary to achieve the purposes pursued.

143

(1) A statutory provision meets the element of necessity if no other equally effective means are available that restrict fundamental rights to a lesser extent. It must be clearly established that the alternative measure is equally effective for achieving the purpose pursued in every respect. When appraising the necessity of a measure, the legislator is afforded a margin of assessment and prognosis (cf. BVerfGE 155, 238 <280 para. 105>; 161, 299 <378 para. 187>; 163, 107 <150 para. 115>; established case-law).

144

(2) Based on this standard, there are no doubts as to the necessity of the provision on deductions. It is not ascertainable that there are less intrusive measures that would be equally effective in achieving the purposes of § 15(2) second sentence of the Contergan Foundation Act – preventing overlapping payments, avoiding preferential treatment of individual Contergan survivors, ensuring the financial viability of solidarity within society and using public resources frugally. In particular, while it would be theoretically possible to impose an obligation on recipients of German Contergan pensions to waive all entitlements to other benefits granted due to their impairments resulting from thalidomide use, this would not be less intrusive for affected persons, given that it would not increase the payments made overall. It is also doubtful whether such a waiver would even be feasible under foreign legal orders. This would also shift the risk to affected persons, as they would have to waive their claims against another state in the – legitimate – expectation that they would receive payments by the Contergan Foundation. Moreover, this measure could not achieve the aim of strengthening the financial viability of solidarity within society and of reducing burdens on public finances because it would not result in any savings.

145

dd) The interference with the fundamental right to property of the pension recipients resulting from § 15(2) second sentence of the Contergan Foundation Act is also appropriate.

146

(1) For a measure to be appropriate, and thus proportionate in the strict sense, the purpose pursued by the measure, and its likelihood of achieving that purpose, may not be disproportionate to the severity of the interference (cf. BVerfGE 155, 119 <178 para. 128>; established case-law). A legal provision is appropriate, and thus proportionate in the strict sense, when, in an overall balancing of the severity of the interference on the one hand, and the weight and urgency of the reasons invoked to justify it on the other hand, the limits of what is reasonable are observed (cf. BVerfGE 141, 82 <100 f. para. 53> with further references; 163, 107 <151 f. para. 119>). In this respect, an appropriate balance must be struck between the weight of the interference resulting from the provision and the legislative aim pursued, as well as the extent to which the aim is expected to be achieved (cf. BVerfGE 148, 40 <57 f. para. 49>; 163, 107 <151 para. 119>; established case-law).

147

(2) Based on this standard, § 15(2) second sentence of the Contergan Foundation Act does not place inappropriate burdens on the recipients of Contergan pensions. While Contergan pensions do merit special protection, this protection is not unlimited (see (a) below). The weight of interference resulting from the provision on deductions is moderate (see (b) below). The expectation that no provision on deductions will be enacted is not subject to special protection (see (c) below), which means that, in an overall balancing against the public interests in favour of deductions (see (d) below), the provision is proportionate in the strict sense (see (e) below).

148

(a) Contergan pensions merit special protection, but this protection is limited by their social dimension. Based on the standards set out above (para. 106), the legislator’s powers to determine the content and limits of property are expanded by the social dimension of property, but they are limited by the link to one’s person, which safeguards the personal freedom of the individual in the economic sphere. Under what conditions the interference can be justified must be determined in consideration of the extent to which the legal position is based on the award of benefits by the state (cf. BVerfGE 69, 272 <301>). Contergan pensions serve to safeguard freedom (see (aa) below) and also have a social dimension (see (bb) below). It follows that the pension entitlement merits special protection, which is nevertheless not unlimited (see (cc) below).

149

(aa) With regard to Contergan pensions, private property merits a great degree of protection as a fundamental freedom of the individual. When determining the function of safeguarding freedom, it must first be considered, in accordance with general principles, to what extent the guarantee of private property is based on significant input by the rights holder (cf. BVerfGE 69, 272 <301>). Despite the changed relationship between Contergan survivors’ own input and the award of benefits by the state, Contergan pensions are still based on significant input by Contergan survivors, as set out above (para. 87): This input is the transfer of the civil law claims to the Foundation and the Foundation’s appropriation of the DM 100 million payment to settle these claims. It is true that Contergan pensions under § 13 of the Contergan Foundation Act – which are now exclusively funded by tax revenues – are not solely rooted in the responsibility assumed for Contergan survivors by the German state when the private law claims were transferred to the foundation, but are additionally based on the award of benefits by the state ([…]). However, this mixed nature does not rule out that Contergan pensions also serve to safeguard freedom, as this function primarily follows from the fact that they serve to compensate for deficits in quality of life (cf. BVerfGE 42, 263 <293>; 112, 93 <107>).

150

(bb) At the same time, Contergan pensions also have an important social dimension. In its judgment regarding pension sharing, the Federal Constitutional Court held that positions under social law have a social dimension when they are part of an overall context based on the notion of solidarity and a pact between the generations, and when they are co-financed by public resources (cf. BVerfGE 53, 257 <292>). In light of this, Contergan pensions have an important social dimension. Contergan pensions are financed by public resources. Indeed, since the resources provided by Grünenthal were used up in 1997, they have been exclusively financed by public resources (para. 89).

151

The Federal Constitutional Court laid down in its judgment of 8 July 1976 concerning Contergan foundation law (BVerfGE 42, 263 ff.) that Contergan pensions are part of an overall context relating to the community of Contergan survivors – without applying the relevant standards, which were only developed later. It held that the individual’s integration into the community of Contergan survivors, which is typical in cases where entitlements arise from a settlement agreement, accords this legal position its special character. According to the judgment, the individual cannot be expected to be treated as if their legal position had arisen and taken shape individually, given that the entitlement could only be realised because the individual was part of the Contergan community. As claimants vis-à-vis the entity responsible for injuries, they remain members of the Contergan community and cannot invoke the independence of their entitlement. They are under a – limited – obligation to accept reforms to the entitlement that are aimed at strengthening the overall legal position of the beneficiaries under the Contergan Foundation Act (cf. BVerfGE 42, 263 <301 f.>).

152

The consideration that the legal position of Contergan survivors is accorded its special character by the fact that the individual is part of the relatively large community of Contergan survivors also applies to the transformed claims under public law (cf. Federal Constitutional Court, Order of the Second Chamber of the First Senate of 26 February 2010 - 1 BvR 1541/09 inter alia -, para. 39; regarding the community of forced labourers cf. BVerfGE 112, 93 <115>). This notion is also reflected in the annual payments covering specific needs (§ 13(1) first sentence no. 3 of the Contergan Foundation Act) and the annual special payments (§ 13(1) first sentence no. 4 of the Contergan Foundation Act), which are subject to the availability of foundation funds (§ 13(1) second sentence of the Contergan Foundation Act). Affected individuals do not therefore claim these entitlements in isolation. Rather, the realisation of their claims is dependent on the conflicting entitlements of other affected persons. Although the Contergan pensions at issue here are not subject to the availability of resources, this concept highlights that the legislator sees the beneficiaries under the Contergan Foundation Act as one community.

153

[…]

154

(cc) In light of the foregoing, Contergan pensions serve to safeguard freedom while also having a social dimension relating to the community of Contergan survivors. It follows that while Contergan pensions merit special protection, this protection is limited by the social dimension. Contergan pensions are not beyond the reach of legislative change. The legislative leeway in determining the content and limits of Contergan pensions is broader, the more the provisions in question strengthen the overall legal position of Contergan survivors.

155

(b) The weight of interference resulting from the provision on deductions is moderate. While the deductions of payments made due to impairments resulting from thalidomide use amount to considerable interference with the guarantee of private property (see (aa) below), aspects that mitigate the weight of interference must also be taken into account (see (bb) below).

156

(aa) The provision on deductions results in the deducted amount of Contergan pensions not being paid to recipients. The entitlement to payment, which is protected by the guarantee of private property, is forfeited in this amount, which means that affected persons receive less overall than they would in the absence of a provision on deductions. The amount in question is considerable; in the initial proceedings, the amount deducted from the plaintiff’s monthly pension entitlement of EUR 3,686 was EUR 1,109.

157

(bb) Yet the interference resulting from deductions is mitigated by the fact that the Third and Fourth Amendment Acts substantially strengthened the legal position of Contergan survivors.

158

(α) Firstly, the Third Amendment Act increased Contergan pensions significantly, which generally mitigates the disadvantages arising from deductions. Even the plaintiff in the initial proceedings submits that, when looking at the amount he receives from his Contergan pension and the payments by the Irish state in combination, he has received 9.28% more since the entry into force of the Third Amendment Act.

159

This preferential treatment does not have the same effects for all affected persons because monthly Contergan pensions have not increased equally, but depending on the severity of the impairments. While the Third Amendment Act increased the maximum Contergan pension, which is paid to survivors with a high claim score, to more than six times the previous amount – to EUR 6,912 –, and the Fourth Amendment Act further increased it to EUR 7,480, the minimum pension, paid to affected persons with a low claim score, increased to only 2.5 times the previous amount – to EUR 612 – in the Third Amendment Act and to EUR 662 in the Fourth Amendment Act (para. 16). It thus cannot be ruled out that there may be cases in which the pension increase is lower than the deduction, and the interference is not therefore mitigated. However, according to the Contergan Foundation, the average Contergan pension in the period from 2013 to 2019 was between EUR 3,797.37 and EUR 4,266.31, which means that cases in which affected persons receive the minimum pension – the only constellation in which the interference may not be mitigated – do not reflect typical circumstances and are not very common.

160

(β) Secondly, the Third Amendment Act introduced an entitlement to an annual payment covering specific needs pursuant to § 13(1) first sentence, second alternative of the Contergan Foundation Act 2013, in respect of which § 15(2) second sentence of the Contergan Foundation Act – the provision on deductions – is not applicable. This payment mitigates the financial effects of the deduction because it serves the same purpose as the Contergan pension. Like the pension, this payment can be used by affected persons as they see fit and is to enable them, in line with the results of the Heidelberg study (cf. BTDrucks 17/12678, p. 4), to preserve or regain their independence, self-determination and participation in society based on their individual needs (cf. BTDrucks 18/10378, p. 16). It is difficult to quantify the financial value of the payment, which is initially to be granted upon application, for the period covered by the Third Amendment Act. Since the entry into force of the Fourth Amendment Act, the annual payment amounts to between EUR 5,676 and EUR 14,700, depending on the severity of the impairments (cf. § 13(2) first sentence no. 3 of the Contergan Foundation Act 2017).

161

Therefore, the fact that the payments under the Contergan Foundation Act were increased by the Third and Fourth Amendment Acts generally leads to the mitigation of any loss of income resulting from the deductions.

162

(c) Contergan pensions do not enjoy greater protection from deductions on the basis of the protection of legitimate expectations. It is true that affected persons in Germany and abroad could legitimately expect that they would continue to be entitled to pension payments, a fact that was recognised by the legislator (cf. BTDrucks 19/19498, p. 7). Yet the continued validity of the pension entitlements acquired is not at issue, given that the provision on deductions does not lower the basic entitlement, but only the entitlement to payment. There are no indications that affected persons could legitimately expect that payments made by others due to impairments resulting from thalidomide use would not be deducted. This applies in particular given that the possibility of deductions of other payments made due to impairments resulting from thalidomide use had been part of the solution involving payments by a foundation from as early as 1972, when the Foundation Act entered into force, as it followed from § 18(2) of the Foundation Act and § 15(2) first sentence of the Contergan Foundation Act.

163

(d) The legitimate aims pursued by § 15(2) second sentence of the Contergan Foundation Act serve significant public interests.

164

(aa) In offsetting overlapping payments and thereby bringing about equality among all recipients of Contergan pensions, the legislator pursues the significant aim of ensuring that all survivors within the Contergan community receive equal support. This is backed by the public interest in equitable distribution within the community of recipients. It is guided by the fundamental decision in the Contergan Foundation Act to exclusively base the amounts payable on the severity of the physical impairments and the resulting dysfunctions (cf. § 13(2) first sentence of the Contergan Foundation Act) and to disregard other criteria, such as the connection of affected persons to Germany (nationality, place of birth), their need and the cost of living. This aim of equitable distribution pursued by the Contergan Foundation Act is adversely affected by the fact that some survivors receive additional payments due to their impairments based on criteria not taken into account by the Act. This becomes especially clear with regard to foreign payments that are only granted to survivors who have a sufficient connection to the foreign state in question, as the entitlements granted are based on a concept differing from the one underlying the Contergan Foundation Act, whether this concerns nationality – as is the case for the Irish Thalidomide Compensation Scheme – or the place of birth or residence. Payments made on this basis mean that someone has an advantage based on their connection to the foreign state, while a connection to the German state, which indiscriminately makes payments to all those affected by impairments relating to Grünenthal, offers no advantages. In view of the rationale underlying the Contergan Foundation Act – equal payments for people with equal impairments – there is a plausible public interest in compensating differences arising from the fact that some survivors receive additional payments due to their impairments resulting from thalidomide use.

165

(bb) The state interest in limiting the overall Contergan pension entitlement to the chosen level, which is reflected by the offsetting of overlapping payments, is significant. There is an understandable interest in ensuring that limited public resources are used in the best possible way to address different social needs in a coherent system. The legislator set out the desired level of payments when determining the pension entitlement; it is also free to ensure that this level is not exceeded. This cannot be countered by the argument that foreign recipients are part of a foreign social security system, which by its nature is not aligned with the German system. The interest in the best possible use of public resources is also affected when the need that the domestic social benefit is designed to cover is already covered by a comparable foreign payment. Insofar as the foreign payment is intended to accord preferential treatment to selected survivors, the German state is not constitutionally obliged to support this aim.

166

(cc) Moreover, there is a clear public interest in only making use of tax revenues to the extent that is necessary to provide the level of support set out in the Contergan Foundation Act. The decision, reflected in § 15(2) second sentence of the Contergan Foundation Act, to use tax revenues frugally can also help ensure societal acceptance of the system of support created through the Contergan Foundation in the long run.

167

(e) In an overall assessment taking into account the public interests furthered by the challenged provision, the interference with the guarantee of private property is proportionate.

168

(aa) The public interests – ensuring equitable distribution within the community and the frugal and targeted use of public resources – outweigh the interest of pension recipients in receiving substantially higher Contergan pensions without any deductions. The financial burden on affected persons resulting from deductions is moderate in view of the mitigating effects of the pension increases and the payments to cover specific needs. Even if no such mitigating effects existed in individual cases, this would not merit a different assessment. In this respect, the legislator could base its decision on an overall assessment taking into consideration the community and could weigh disadvantages arising in the individual case against the overall advantages achieved (cf. BVerfGE 42, 263 <302>; 112, 93 <115>). The outcome of the legislator’s balancing, which accords greater weight to the public interests of the community of Contergan survivors than to the interest in avoiding any possibility of individuals being placed in a worse financial position, is not objectionable under constitutional law.

169

Even considering the fact that Contergan pensions merit protection as they serve to compensate for deficits in quality of life, the interference with the guarantee of private property resulting from the deductions is not inappropriate. While Contergan pensions merit significant protection, this protection is limited due to the important social dimension (see para. 155 ff. above). Moreover, the paramount or even existential significance of Contergan pensions for the lives of affected persons, which informs the protection, decreases insofar as affected persons receive further payments that likewise serve the purpose of providing compensation for the impairments resulting from thalidomide use. The provision on deductions also does not mean that the Foundation no longer lives up to the responsibility it has assumed (regarding this requirement cf. BVerfGE 42, 263 <312>). It has not been submitted that the provision on deductions leads to an intolerable decrease in the level of benefits so that they fall short of the minimum standard required by constitutional law, which would suggest the need to provide for exceptions for cases of extreme hardship, nor is this otherwise ascertainable in view of the substantial increase in payments. This applies in particular given that the basic entitlement pursuant to § 13(1) first sentence of the Contergan Foundation Act, which is protected by the guarantee of private property, remains the same; as a result, the entitlement to payment is only affected so long as and to the extent that the payments from other sources are actually made. In light of this and in view of the important social dimension following from the community of Contergan survivors in the framework of which Contergan pensions are paid, the legislator was entitled to give precedence to the public interests in its balancing of interests, in particular the significant interest in not according preferential treatment to individual recipients.

170

(bb) Insofar as § 15(2) second sentence of the Contergan Foundation Act specifically subjects the payments made by foreign states to deductions, too, no different assessment is merited. In particular, deductions of foreign payments from Contergan pensions are not unreasonable when they affect recipients who are not subject to the German social security system, but to a foreign system with a different, possibly lower level of social security.

171

The deduction of foreign payments is the necessary consequence of the legislator’s decision to make the provision of support to all Contergan survivors a state matter, regardless of whether they are subject to the domestic social security system. The extension of a system of support that is also rooted in the social state to persons outside of Germany is understandable in light of the international dimension of a pharmaceutical disaster caused by a German company. That said, this creates a tension with the principle of exclusivity under international law, according to which a person should be subject to social security legislation in one state only (cf. BVerfGE 110, 412 <442>; regarding the basis in European law cf. Art. 11 of Regulation (EC) no. 883/2004 of the European Parliament and the Council of 29 April 2004 on the coordination of social security systems, OJ L 166/1 of 30 April 2004). It is therefore not objectionable under constitutional law that the extension of domestic social security benefits to persons outside of Germany is limited to the extent that the state in which beneficiaries are subject to social security makes payments that serve the same purpose. This results in reduced burdens on German public finances, which is not constitutionally objectionable in light of the mixed nature of Contergan pensions, which are connected to both liability law and the social state, provided that the pensions are exclusively financed by tax revenues, which is the case here.

172

The fact that social security benefits may be lower in other legal orders also does not mean that the Contergan Foundation, in paying the amounts remaining after deductions to foreign survivors, no longer lives up to the responsibility it has assumed (regarding this requirement cf. BVerfGE 42, 263 <312>). Under the legislative concept, the Contergan Foundation provides support to all persons affected by the drugs manufactured by Grünenthal at a global level; it reflects the fact that the community of Contergan survivors is a diverse group in terms of the social security systems to which its members are subject (cf. § 12(1) of the Contergan Foundation Act). § 18(1) of the Foundation Act provided for the possibility for persons who have their place of residence or habitual residence in another country to submit a waiver and thereby join the community of survivors supported by the Contergan Foundation; the Foundation Act did not provide for the automatic expiry of the claims under private law of these persons – unlike for German survivors (§ 23(1) of the Foundation Act). As set out above (para. 120), the solution involving payments by a foundation, to which the recipients not living in Germany agreed, pursues the aim of providing equal support to those with the same impairments resulting from Contergan use; by contrast, it does not serve to contribute to an equivalent level of general social security benefits for all members of the community. Based on the aim that is focused on alleviating the harm caused, the amounts paid depend only on the severity of the physical impairments and the resulting dysfunctions (§ 13(2) first sentence of the Contergan Foundation Act), while criteria that are unrelated to the level of impairment, such as the level of social security benefits in a given state, the purchasing power of the payments in the country of residence of recipients or their level of need, are not taken into account. The legislator designed the Contergan pension entitlements without taking into account general criteria unrelated to the level of impairment; it was thus not constitutionally required to take into account such general criteria when limiting the payment claims pursuant to § 15(2) second sentence of the Contergan Foundation Act.

III.

173

§ 15(2) second sentence of the Contergan Foundation Act also satisfies the requirements arising from the general guarantee of the right to equality (Art. 3(1) of the Basic Law).

174

1. In determining the contents of the powers and obligations associated with property rights, the legislator must also observe the principle of equality guaranteed by Art. 3(1) of the Basic Law (cf. BVerfGE 143, 246 <373 para. 348> with further references; established case-law). Where the structuring of property results in burdens, these burdens must be distributed equally if the circumstances are essentially the same, and differences in treatment must always be justified by objective reasons that are appropriate to the aim and the extent of the unequal treatment (cf. BVerfGE 126, 400 <416>; 129, 49 <69>; 132, 179 <188 para. 30>; 143, 246 <373 para. 348>). The standard of constitutional review applicable here, which derives from the principle of proportionality, is a fluid one whose contents and limits cannot be determined in the abstract, but instead must be determined by the particular subject matters and regulatory areas affected by the law at issue (cf. BVerfGE 138, 136 <180 para. 121>; 148, 147 <183 f. para. 94>; 161, 63 <134 para. 166>; established case-law).

175

2. In light of the foregoing, § 15(2) second sentence of the Contergan Foundation Act is not objectionable. Insofar as the provision on deductions results in unequal treatment at all (see a) below), this unequal treatment is justified (see b) below).

176

a) The provision does not result in unequal treatment of recipients of payments made by foreign states vis-à-vis recipients of non-state payments (see aa) below) or unequal treatment of recipients of ongoing payments vis-à-vis recipients of one-off payments (see bb) below). Yet § 15(2) second sentence of the Contergan Foundation Act does have unequal consequences for recipients whose claims to payment are subject to deductions vis-à-vis recipients who receive their full Contergan pensions (see cc) below).

177

aa) Insofar as the referring court assumes that recipients of payments made by foreign states are treated unequally in relation to (potential) recipients of non-state payments, the Federal Constitutional Court cannot concur. As set out above (para. 67 ff.), no restriction to foreign payments or payments made by states can be derived from § 15(2) second sentence of the Contergan Foundation Act. Unequal treatment also does not result from the fact that the Contergan Foundation by its own account does not conduct regular research regarding (non-state) payments that could be subject to deductions and only directs enquiries to the beneficiaries to the extent that it becomes aware of payments that can be deducted. It has not been submitted that there are any non-state payments covered by § 15(2) second sentence of the Contergan Foundation Act that are not subject to deductions, nor is this otherwise ascertainable.

178

bb) Contrary to the view of the referring court, § 15(2) second sentence of the Contergan Foundation Act does not result in unequal treatment of recipients of ongoing payments vis-à-vis recipients of one-off payments. Even after the Third Amendment Act entered into force, one-off payments continued to be covered by the provision. This is not only suggested by the wording (‘payments’), which does not distinguish between ongoing and one-off payments, but also by the legislative intent, expressed in the explanatory memorandum to the Third Amendment Act (cf. BTDrucks 17/12678, p. 5), to deduct any future payments.

179

cc) Yet § 15(2) second sentence of the Contergan Foundation Act does result in de facto unequal treatment of recipients whose claims to receive payment are reduced (para. 99) vis-à-vis recipients who receive their full Contergan pensions. For the purposes of Art. 3(1) of the Basic Law, unequal treatment may arise from the factual consequences of a law that formally provides for equal treatment; whether or not this is the case must be determined by looking at the substantive contents of the provision in question and the effects that are attributable to the design of the law (cf. BVerfGE 24, 300 <358>; 49, 148 <165>; 72, 141 <150>; 149, 50 <78 f. para. 80>). In the present case, § 15(2) second sentence of the Contergan Foundation Act results in unequal treatment of recipients affected by deductions vis-à-vis recipients whose payments are not subject to deductions and who are therefore not affected by the effects of the provision.

180

b) The unequal treatment is justified.

181

aa) It directly serves to achieve the legitimate aims set out above (para. 114 ff.) and also meets the constitutional requirement of necessity. A law is necessary if no other means are available with which the legislator can achieve or further the aim pursued with the same level of effectiveness while also resulting in less inequality and without shifting a more severe burden to third parties or the general public (cf. BVerfGE 148, 40 <57 para. 47>; 151, 101 <141 para. 103>; 158, 282 <340 para. 142>).

182

The unequal consequences for recipients of payments under the Contergan Foundation Act who receive payments subject to deductions vis-à-vis recipients whose payments are not subject to deductions are necessary. Overlapping payments and the resulting preferential treatment of recipients of such payments can only be prevented in respect of those beneficiaries who receive such overlapping payments. It is true that a provision that would take into account overlapping payments only in part would result in less inequality; however, it would be less effective in achieving the aims pursued by the legislator – avoiding inequality among survivors, ensuring that solidarity within society remains financially viable and using public funds frugally.

183

bb) The unequal treatment is also proportionate in the strict sense, which requires that the scope of unequal treatment is appropriate to both the significance of the aim pursued and the scope and extent to which unequal treatment furthers that aim (cf. BVerfGE 138, 136 <197 para. 156>; 158, 282 <374 para. 222>). The unequal treatment is not disproportionate to the significance of the aims pursued and their achievement – preventing the receipt of overlapping payments, avoiding inequality among survivors, ensuring that solidarity within society remains financially viable and using public funds frugally. This applies in particular given that § 15(2) second sentence of the Contergan Foundation Act does not affect a predetermined group of persons, but is solely tied to the factual circumstances at the time of payment, which can change at any time. Criteria resulting in deductions may arise when payments are newly granted or may cease to apply when a payment is no longer made.