Attorney and Court

When do I need an attorney?
AFor the representation in district courts with an amount in dispute above € 5.000 (there are some exceptions, e.g. at tenancy and lease) as well as in all regional courts, higher regional courts and the Supreme Court (sec. 27 Code of Civil Procedure {Zivilprozessordnung, ZPO}; sec. 49 Court Jurisdiction Act {Jurisdiktionsnorm, JN}).
How do I choose an attorney, if I once needed one?
AUnder Austrian Law, people generally have the right to choose their own lawyer. According to sec. 158k para 1 VersVG, this is also the case, if the client has a legal protection insurance. Insurance clauses which exclude the right of free choice are invalid. In general, the choice of a lawyer will depend on its expertise, its location and its fees.

Legal protection insurances often limit the free choice of a lawyer to that effect that first consultations have to be taken at the insurance’s „attorney-of-trust“ or that deductibles have to be payed in case of choosing others than the „attorney-of-trust“. In the first case a consultation may also be taken by any other attorney which offers a free first consultation. In the second case, the Supreme Court (OGH) differs according to whether the insured person is a consumer or entrepreneur: agreements with a consumer which provide for deductibles of 20% and more are invalid (OGH 7 Ob 32/02k), 10% in Ordnung (OGH 7 Ob 50/13y). Agrements with entrepreneurs are even justified with deductibles of 20% (OGH 1 Ob 30/12m), however, always depending on the individual case. In any case, authority of and contractual relationship to the attorney may be revoked at any time.

In which countries does LEGAL CHAMBERS Kainz represent its clients?
ALEGAL CHAMBERS Kainz represents its clients throughout Austria. Due to its wide spread network, LEGAL CHAMBERS Kainz may offer representations via its cooperation partners in numerous countries such as England, Germany, Italy or America.
Do I need a legal protection insurance as a private individual?
AThat depends on oneself, there is no compulsory necessity. Consideration should be given to the fact whether potential (, costly) conflicts may approach oneself and the protection of the costs incurred economically makes sense. However, this is certainly not always predictable.

The clear disadvantage of (partly high) premium payments faces the clear advantage of the general absorption in case of a dispute. However, caution should be exercised: many insured persons are often surprised, when legal protection insurances finally decline insurance coverage with the reason that the issue in dispute is not insured or the harmful event has occured already prior to the conclusion of the insurance contract or during the waiting period. It may also happen that in case of choosing your own attorney a deductible has to be paid (see above under „How do I choose an attorney, if I once needed one?“) or a legal protection insurance only pays after a judgement in first instance, so that the insured person has to pay for its attorney in advance. Moreover, legal protection insurances often provide for rigorous limitations in terms of the amount insured, so that the insured person has to bear its own (remaining) costs after a comparatively short period of time. Finally, one should look closely around at the different legal protection insurances and inform about the premium amount, scope, amount insured and the general terms and conditions.

How does the legal protection insurance work, if required?
AA legal protection insurance serves to reimburse the costs incurred in case of a legal dispute (or in advance at legal consultations). This includes court fees (flat fee and expert fee) as well as the costs of the own attorney according to the Lawyer’s Tariff Act (Rechtsanwaltstarifgesetz, RATG) and in case of a loss the opponent’s fees according to the RATG.

However, caution, there may arise certain restrictions (see above „Do I need a legal protection insurance as a private individual?“). Bring along your policy to the first consultation. We make a request for insurance coverage at your legal protection insurance.

What shall I bring along in the first consultation?
ABring along all documents in connection with the dispute, in particular contracts, letters, notes, names and addresses of witnesses, means of evidence as well as a possible legal protection insurance.
Can I limit the power of attorney?
AYes. The power of attorney may be limited at a client’s option also to single mandates and respectively actions of the attorney.
How much does it cost to lodge a claim?
ALodging a claim generally entails court fees and attorney fees. The court fees are flat fees, whose amount is staggered depending on the amount in dispute. With an amount in dispute of e.g. € 10.000, the flat fees for lodging the claim amount to € 707,00. These fees can be inceased, if e.g. more than two parties are involved. The claimant may be relieved of the costs in case of a granted legal aid. The attorney fees depend on the respective fee agreement with the attorney (see below „Why do firms charge an hourly rate? When does a flat fee apply?“)

In case of an agreement upon hourly rate the claim naturally costs the time spent timest he agreed hourly rate plus V.A.T. How much time an attorney needs to draft a claim may not be answered in general terms and depends in particular on the complexity of the issue in dispute. In case of an agreement upon RATG, the tariff lines for a claim are fixed and depend on the amount in dispute in a staggered manner. With an amount in dispute of e.g. € 10.000, the tariff for a default action amounts to € 257,80. In addition, a standard rate applies, which covers all costs in connection with the claim (correspondence, telephone calls, meetings), unless the attorney wishes to separately charge these supplementary work. The standard rate for amounts in dispute up to and including € 10.170 amounts to 60%, beyond that 50% of the tariff. In certain instances (e.g. default actions or objections to default summons) applies twice (120% resp. 100%). If the attorney represents or faces more parties (so-called linked parties), he may furthermore request a linked parties’ surcharge in the amount of 10% for every first linked party and 5% for every further, however max. 50%. The total amount is increased by a surcharge for the electronic legal communication, which amounts to € 3,60 in case of lodging a claim without documents.

A default action in the amount of € 10.000 against two people for example thus amounts to € 627,48 according to the RATG (€ 257,80 tariff + € 309,36 standard rate 120% + € 56,72 linked parties’ surcharge 10% + € 3,60 surcharge for the electronic legal communication) plus V.A.T.

How much does a law firm generally charge for a standard partnership- and participation agreement?
AAlthough it may look different to outside parties, each partnership agreement is individual and has its own specialities, which have to be analysed and for which the attorney will be liable in the future. Also for „standard partnership agreements“, the attorney thus has to take its respective time. The fees thereby vary from firm to firm. Many law firms offer flat fees for partnership agreements, which according to our experience range for simpler agreements between € 2.500 and € 5.000 (plus V.A.T.)
Why do firms charge an hourly rate? When does a flat fee apply?
AEach attorney is free to choose his fees for his services. He may charge a flat fee, an hourly rate fee or a tariff according to the RATG. Also a surcharge in case of success is possible.

A flat fee only makes sense, if the scope of the services expected is well predictable. The advantage with a flat fee is that the costs are fixed right from the beginning.

An hourly rate fee often applies, if the expected expenditure of the services is not well predictable. In particular with very high amounts in dispute, an hourly rate may be a good alternative to the tariff.
A tariff fee is based on the RATG, the Autonomous Fee Criteria (Allgemeine Honorar-Kriterien, AHK) or the Notary Tariff Act (Notariatstarifgesetz, NTG). If a payment according to the RATG has been agreed upon, the amount of the attorney fees depends on the amount in dispute, the kind of the service and the number of the people involved. The RATG also applies, if the client and the attorney have not concluded a fee agreement.

Who bears the costs of a law suit?
AIn Austria applies the so-called recovery principle („Obsiegensprinzip“). The winning party recovers its court- as well as such attorney fees which were in the court’s view necessary for the appropriate prosecution by the loosing party according to the RATG. In case of a partly win, each party may be ordered to bear proportional or its own costs. If the attorney and the client have agreed on an hourly rate fee, it may thus be possible that a winning client does not recover its entire attorney fees, if the hourly rate fee was higher than the tariff or the court regards certain services as not necessary and thus not reimbursable.
What is the risk of litigation?
AIn case of a loss, the client has to bear its attorney costs and the necessary attorney costs of the opposing party according to the RATG as well as the court fees. A legal protection insurance or a litigation funder helps to decrease this risk.
How long does the lawsuit take?
AThis may not be answered in general terms. The length of a lawsuit depends on several factors such as the complexity of the issue, the volume of the documents or the number of the witnesses. Besides, there are legal possibilities to delay the proceedings. In general one can say that the time needed for execution of the lawsuit in Austria compared to the whole EU is rather short. From experience, a not too complex lawsuit will have an average duration of approximately six to twelve months, appeal proceedings approximately twelve to eighteen months.

* The answers to these questions solely constitute a free service by LEGAL CHAMBERS Kainz. LEGAL CHAMBERS Kainz or its staff thus assume no responsibility or liability in terms of a completeness of contents or correctness of the answers whatsoever. Effective 6.10.2015

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