{"id":71961,"date":"2026-11-02T03:49:14","date_gmt":"2026-11-02T01:49:14","guid":{"rendered":"https:\/\/www.lhr-law.de\/?p=71961"},"modified":"2026-11-02T03:47:31","modified_gmt":"2026-11-02T01:47:31","slug":"berlin-court-dental-factoring-assignment-health-data-void","status":"publish","type":"post","link":"https:\/\/www.lhr-law.de\/en\/magazine-en\/negotiation-strategy-process-tactics\/berlin-court-dental-factoring-assignment-health-data-void\/","title":{"rendered":"Factoring with patient data: Berlin Court of Appeal holds assignment void"},"content":{"rendered":"

\"Illustration:A dental laboratory sells its invoices to a factoring company, the money arrives immediately and the lab can keep working. So far, so ordinary.<\/em><\/p>\n

Except that the invoices came with order slips showing the patients\u2019 names, the jaw concerned and the shade of their teeth \u2013 and nobody had asked the patients. The Berlin Court of Appeal has therefore knocked EUR 50,000 out of the factor\u2019s hands.<\/em><\/p>\n

In a judgment of 24 September 2026 (case no. 20 U 16\/26<\/a>), the Berlin Court of Appeal (Kammergericht, KG) dismissed the action brought by a dental factoring company against a dentist. The reason was not that the lab work had been defective or already paid for. The claimant simply did not own the receivables, because, in the court\u2019s view, the assignment agreement with the laboratory was void. It provided for an unlawful processing of health data. The court of first instance was the Regional Court of Berlin II (Landgericht Berlin II, judgment of 21 January 2026, case no. 44 O 333\/22). The full text of the judgment was not available to us at the time of writing; we rely on the available reports and on the excerpts published by dejure.<\/p>\n

What the laboratory was to send to the factor<\/h2>\n

The dental laboratory had sold and assigned claims of around EUR 50,000 against a dentist to the factoring company. So that the factor could check and collect the claims, the lab was to send it the invoices together with the order slips. As is the nature of lab orders, these contained the patients\u2019 names, the upper or lower jaw concerned, the type of prosthesis, the tooth shade and other particulars of the treatment. The contract also allowed the factor to resell the claims to third parties for its own refinancing.<\/p>\n

The dentist refused to pay and argued that the assignment was invalid because his patients had not been involved in any way. That argument succeeded.<\/p>\n

Health data remain health data, even if the crown is visible<\/h2>\n

The Court of Appeal classifies the information on the lab documents, without further ado, as health data within the meaning of Art. 9(1) GDPR<\/a>. According to the reports, it makes no difference that a crown is visible to everyone and that hardly anyone is embarrassed by the shade of their dentures. Processing such data is prohibited in principle unless one of the exceptions in Art. 9(2) GDPR applies. The only one that came into question here was the patients\u2019 explicit consent, and there was none, neither for the transfer to the factor nor for any later onward assignment. An agreement between the lab and the factor cannot, of course, replace such consent, since the patients were not at the table when it was concluded.<\/p>\n

Professional secrecy offered no way out either. The court counts the dental technicians in the laboratory among the persons who assist in the dentist\u2019s professional practice (Section 203 of the German Criminal Code, StGB<\/a>). An older decision of the Higher Regional Court of Cologne (Oberlandesgericht K\u00f6ln) from 2011, which had treated laboratories differently, was outdated, because the provision at that time contained no rule on external assistants. The factoring company, by contrast, plays no part in the treatment. Nor is it privileged merely because the contract calls it a processor or binds it to confidentiality. What matters is what the factor actually does, and it buys receivables for its own account.<\/p>\n

The resale clause as a second problem<\/h2>\n

The court took a particularly critical view of the fact that the factor was allowed to resell the claims to third parties without any restriction. The patients\u2019 health data could thus have set off on a journey to an unknown destination. The court relied on case law of the German Federal Court of Justice (Bundesgerichtshof, BGH), which in a judgment of 6 February 2025 (case no. IX ZR 182\/23<\/a>) had already held an onward assignment by a billing centre to be void because it breached Section 302 of the German Social Code, Book V (SGB V). In addition, the patients had not even been told who would hold their data in future. That contravenes the principles of good faith and transparency under Art. 5(1) GDPR.<\/p>\n

The reports do not say which provision exactly renders the agreement void; the obvious route is Section 134 of the German Civil Code (BGB)<\/a>. A data protection breach as grounds for the invalidity of a contract is, incidentally, nothing new. The Higher Regional Court of Frankfurt had already declared a contract for the sale of customer addresses invalid, as we reported here (in German)<\/a>.<\/p>\n

Does the dentist now not have to pay at all?<\/h2>\n

That would be a misunderstanding, and we would like to prevent it. The Court of Appeal only decided that the factor did not acquire the claims. The claims themselves have not ceased to exist; they remain with the laboratory. Whether the underlying contract for work might be void for other reasons, as the Regional Court had considered, was left open. For the dentist, the judgment above all means that he need not accept a factor as his creditor whose rights rest on an agreement that breaches data protection law.<\/p>\n

The reports available to us do not state whether an appeal on points of law was allowed or whether the judgment is final. Nor does the judgment impose a general ban on dental factoring. The decisive factors were the transfer of identifiable health data without consent and the unrestricted power of resale.<\/p>\n

What laboratories, practices and debtors should take from this<\/h2>\n

The decision directly concerns the healthcare sector, but its logic reaches further. Anyone who sells receivables whose documents contain specially protected data of third parties runs the risk that the buyer ends up empty-handed. And anyone pursued by a factor or debt collection agency should ask not only whether the claim exists, but also whether it was validly transferred at all.<\/p>\n