German Lawyers Enjoy 10% Pay Rise!

Sounds great. In theory. In practice, statutory legal fees for lawyers have not been raised since 2013. So there was  a bit of catching up against inflation to be done – a technicality not likely to be picked up by the popular press.

Anyway, the second Chamber of the German parliament, the Bundesrat, today approved legislation (Kostenrechtsänderungsgesetz 2021) that is to increase legal fees more or less across the board by 10% as of 1 January 2021. Statutory legal fees are still widely used by lawyers in domestic German litigation to bill their clients. And even where lawyers are acting on the basis of time-spent fees or other alternative fee arrangements, the statutory fees remain relevant for two reasons:

First, they are the basis for any reimbursement of costs by the losing party to the winning party in litigation; if higher fees were agreed on a fixed fee or on a time-spent basis, the difference must be borne by the winning party. And secondly, statutory fees are minium fees, and fees calculated by a different method may not be lower. That is obviously of relevance mainly for high-value claims. Generally, fees are a fraction of the amount in dispute. But before you get too exited: The fee schedule is capped at a maximum amount in dispute of EUR 30 million.

The court fees, by the way, are also increased by 10%. German court fees tend to be on the higher side, compared to other jurisdictions. More on this hopefully in a seperate post early in the New Year.

The photo shows court fee stamp, used until 2005 to pay court fees: Federal State Nordrhein-Westfalen, Justizkostenmarke NRW 10Euro, marked as public domain, more details on Wikimedia Commons

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