Reform of the Costs Regime: Substantial Increase of German Court and Legal Fees

In its last session before the summer recess on July 5, 2013, and hence the last session of this parliament ahead of the general elections in September 2013, the German lawmakers passed a host of new laws. As items 68 and 69 on the packed agenda, the Upper Chamber (Bundesrat) approved the compromise reached in the mediation committee (Vermittlungsausschuss) of the Upper and the Lower House (Bundestag) on court and legal fees.

The Act on Modernization of Cost Rules (Kostenrechtsmodernisierungsgesetz) amends both the German statutory provisions on lawyers’ fees (RechtsanwaltsvergütungsgesetzRVG) and on court fees (GerichtskostengesetzGKG). It consists of both increases of the fee tariffs and structural changes to cost rules. On average, the value-based legal fees rise in the order of 12%. Fees in criminal matters are increased above average, in the order of 19%. These increases may sound exorbitant, but the tariffs had remained unchanged for almost a decade, and some fees had not been amended for even much longer.

As part of the structural changes, a seperate fee unit for hearing evidence (Beweisgebühr) is re-introduced, albeit in a modified form, having been abolished only in 2002. The additional fee only becomes due if there are three or more court hearings were witnesses or experts are being questioned. All in all, the Act comprises some 200 changes and modifications to the existing costs regime. Court fees and notarial fees are also increased. If the Act is published in the Federal Gazette still in July, it will in the main come into force on August 1, 2013. The provisions on legal aid will become effective on January 1, 2014.

The German statutory provisions on lawyers’ fees (Rechtsanwaltsvergütungsgesetz) define the legal fees that will be have to be reimbursed by the losing party to the winning party. In addition, fees calculated in accordance with RVG are statutory minimum fees, and fees calculated on a time-spent basis may not be lower than the statutory fees (Sec. 4 para. 1 RVG). Thus, if a time-based fee his higher that the statutory fee, the losing party is liable to reimburse only the statutory fee, and the difference will have to be borne by the winning party.

For those of you who want to know it all: Anwaltsblatt devotes a special online edition to the topic.

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