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Court Cases

Opinion: The deal of a lifetime

The case against F1 head Bernie Ecclestone has been dropped in exchange for a $100-million fee. According to legal news reporter Ursula Knapp, the settlement is a blow to the credibility of the German legal system.  

Until a few hours ago, Formula 1 boss Bernie Ecclestone was on trial, accused of serious bribery and conspiracy to commit breach of trust. He was facing up to ten years behind bars. Now, he is a free man, not because the Munich court found the 83-year-old not guilty, but because there was no actual ruling on his guilt or innocence. Instead, the trial of the motorsports billionaire was terminated in exchange for a record payment of $100 million (roughly 75 million euros). In legal terms, his slate was wiped clean.

The man that Ecclestone was alleged to have bribed, meanwhile, is in jail. One year ago, the same court gave banker Gerhard Gribkowsky a prison sentence of eight and a half years.

Dr. Ursula Knapp Justizjournalistin in Karlsruhe

Ursula Knapp is a legal correspondent based in Karslruhe

The public outrage sparked by today's decision is hardly surprising.

Inherently contradictory

According to a clause in German procedural law, a trial can be terminated if the defendant "makes amends" - and provided that the gravity of wrongdoing does not stand in the way. In the Ecclestone case, it is unfathomable that the Munich court has deemed it did not. It is inherently contradictory that he will now pay approximately 75 million euros even though he no longer need fear a conviction.

Clearly, a criminal conviction is exactly what Ecclestone must have been expecting, one possibly not as harsh as it could have been, but enough to cost him his highly lucrative position as Formula 1's top dog. He can presumably do the math. The $100 million settlement is the deal of his lifetime.

No trifling matter

But the damage to the reputation of the German justice system is equally staggering. Many now believe that the wealthy can buy themselves freedom. Not so. Over 100,000 cases are dropped in return for financial penalties every year: not only the well-off can pay their way out of court. But most people who do so have committed traffic offences or shoplifted. This loophole should not be invoked when it comes to serious crime. It is one of the basic principles of the German Constitution that punishment must be proportionate to crime. A crime must be investigated and solved, and if the defendant is found innocent, so be it.

The decision to settle in the Ecclestone case is not the first blunder committed by the German courts. In 2006, proceedings were shelved against Josef Ackermann, former head of Deutsche Bank, and former Mannesmann CEO Klaus Esser in what was dubbed the Mannesmann trial, thanks to the same legal loophole. The settlement reached then was a mere 5.8 million euros. After all, the defendants were not quite as wealthy as Ecclestone.

The fact that the courts can make the same mistake twice does not make it any more palatable. On the contrary. Despite the lessons that should have been learnt in the wake of the Mannesmann trial, there was no political effort made to change the law. The way was paved for the Ecclestone case. And that is the real scandal.

Ursula Knapp is a legal journalist based in Karlsruhe.