Have You Received a Written Warning? This Is How You Should Respond

You can also watch this video to find out how to react correctly if you receive a written warning:

What Is a Written Warning?

A written warning is a letter in which the recipient is asked by rights holders, competitors, their lawyers or an association to refrain from certain behaviour by submitting a so-called “cease and desist declaration” with the threat of a penalty. The recipient is also asked to pay the costs for the written warning, i.e. the lawyer's fees. Depending on the area of law, it may also be the case that the person issuing the written warning demands compensation (e.g. in the case of a copyright infringement).

Who Is Allowed To Issue Such Legal Warnings?

Generally only the owners of the violated rights (e.g. authors or trademark owners) and their legal representatives as well as consumer centres or associations may issue a written warning. Competitors and their representatives, as well as associations or organisations for consumer protection and, in some countries, consumers themselves may also issue legal warnings in the event of violations of competition law.

International Written Warnings

A cross-border warning can be issued if, for example, a German online retailer sells its product range in Hungary and is guilty of a violation of competition law. In turn the retailer can in receive a written warning from regionally based competitors or consumer centres and consumer associations. This is one reason, for example, why there are repeated German-Austrian written warnings from competitors and consumer associations.

Written Warning By Consumer Centres

Consumer centres and competition associations can also issue written warnings. Consumer centres (consumer associations) enforce consumer protection rights. They have so-called “class action authority”, which means they can issue written warnings for violations of the terms and conditions and the competition law and take legal action against violators. Since the beginning of 2016, consumer associations have also been able to issue written warnings and file suits in the event of data protection violations, i.e. GDPR violations. The ECJ (European Court of Justice) recently confirmed this in its judgment on Meta Platform Ireland Limited (formerly Facebook Ireland). The Verbraucherzentrale Bundesverband e. V. (vzbv) filed a lawsuit against the group in this case.

Consequences Of a Written Warning: The Cease and Desist Declaration

In a written warning, the recipient is always asked to pay the warning costs (i.e. the legal fees incurred by the harmed party). In some cases, compensation for damage is also demanded, for example in the case of copyright infringement. However, these one-off costs are (often) not the end of the story. Because every written warning also contains a request to sign a so-called punitive cease and desist declaration. In this declaration the recipient is asked to confirm to the creditor (the person issuing the warning) that they will refrain from the violating behaviour in future and that they will pay a contractual penalty in the event that this obligation is violated.

The dangerous thing is that when you sign a cease and desist letter, you are acknowledging your guilt. This means that you admit that you have committed the violation of rights that you are accused of in the written warning and that you will not repeat it. If you repeat the violation, whether intentionally or unintentionally, you will have to pay a contractual penalty. In addition, opposing lawyers often take the cease and desist declaration far too broadly, which means that it ultimately covers much more than the original violation of rights. This makes them much harder to comply with and the risk of accidental re-offending is high. That is why you should never sign a cease and desist declaration lightly and without legal consultation.

Respond Correctly in the Event Of a Written Warning

If you receive a written warning, the first thing to do is: Keep calm, don’t act alone. And above all: Never just sign the attached cease and desist declaration. You are signing an admission of guilt. Always have the written warning checked by a lawyer and never negotiate with the other party yourself. This real exali damage event shows very clearly why things can quickly go wrong: Trademark Infringement: An IT Service Provider Forgets to Do his Trademark Research. If you have Professional Indemnity Insurance, report any written warning to the insurer immediately. They will check the written warning for you and fend off unjustified claims.

We have summarised how you should respond to a written warning in this video:

Professional Indemnity Insurance Insures You Against Written warnings

If you have already received a written warning before, then unfortunately our article came a little to late for you. But it can still help you with information on how to respond correctly to a written warning. Wouldn’t it also be nice if you could face written warnings more calmly in future because you know someone else is handling them? It’s possible with Professional Indemnity Insurance from exali. If you receive a written warning, the insurer will check at their own expense whether it is justified. And they will fend off unjustified claims and pay justified claims for compensation.

You can complete your Professional Indemnity Insurance application online with exali in just a few minutes and customise it for your business with our freely selectable add-ons. Any questions? Give us a call! Our customer service team will advise you personally - without queues or call centres!