Attorney remuneration

The lawyer's fee

Remuneration according to the RVG or on the basis of a remuneration agreement

The amount of the lawyer's fee is generally based on the German Lawyers' Fees Act (RVG). It is also possible for the lawyer and the client to reach a remuneration agreement and for the lawyer's fees to be based on this remuneration agreement.

The RVG contains the general fee regulations as well as the Schedule of Fees (VV) as Annex 1 and Annex 2 to the RVG.

The RVG is divided into a total of nine sections:

General regulations
Fee regulations
Matter
Object value
Out-of-court advice and representation
Legal proceedings
Criminal and fine cases
Assistant or appointed lawyer, counselling assistance
Final provisions

Annex 1 of the VV RVG regulates, for example, the fees for extrajudicial activities including representation in administrative proceedings or the fees in civil matters, proceedings in public law jurisdictions, proceedings under the Prison Act and similar proceedings or the fees relating to expenses.

If the lawyer and the client have reached an agreement on remuneration that may deviate from the fee rates of the RVG, this is generally permissible within the framework of the statutory provisions. In particular, §§ 49b BRAO and 3a ff. RVG and the immorality limits must be observed with regard to the statutory provisions.

In court proceedings, however, the statutory fees may not be undercut by a remuneration agreement. However, it is possible to agree a fee that is higher than the statutory fee.

Fees in civil and administrative proceedings

In civil and administrative disputes, the fees are calculated on the basis of the amount in dispute.

The lawyer receives 1.3 times the procedural fee (No. 3100 VV RVG) for work in court civil or administrative proceedings in the first instance, whereby this can be reduced to 0.8 times the procedural fee (No. 3101 VV RVG) in certain cases (e.g. in the event of settlement).

The 1.3-fold fee applies as soon as the lawyer

files a lawsuit or submits a procedural motion,
submits a pleading to the court that contains substantive motions, submissions or the withdrawal of the action,
attends a court hearing on behalf of the plaintiff/defendant.

Types of fees and fee levels

The RVG distinguishes between fixed and framework fees. The fixed fees can be dependent on the value of the matter (so-called fixed rate fees) or they are limited by a minimum and a maximum amount (so-called fixed amount fees). The amount of the fee can be found in the fee table in Annex 2 of the VV RVG and is based on the value in dispute. (https://dejure.org/gesetze/RVG/Anlage_2.html)

The business fee can be set by the lawyer in accordance with No. 2300 VV RVG at a value between 0.5 times and 2.5 times the fee value. Pursuant to Section 14 (1) RVG 1, the lawyer may set his fee within this range at his reasonable discretion.

The determination of this fee always depends on the specific individual case. In particular, the following criteria should be decisive in determining this fee:

Difficulty of legal work
Scope of legal services
Particular importance of the matter
Income and financial circumstances of the client
Special liability risk for the lawyer

In the event that the specific fee is disputed between the lawyer and the client, the court will obtain an expert opinion from the board of the bar association in accordance with Section 14 (2) RVG in order to determine the appropriate fee dispute value.

As soon as the proceedings are transferred to court proceedings, the business fee shall be partially offset against the procedural fee for the court proceedings.

Extrajudicial counselling

There are no fixed fees for out-of-court legal services.

Pursuant to Section 34 RVG, the lawyer should work towards a fee agreement for the provision of oral or written advice or information, for the preparation of a written expert opinion or for acting as a mediator. Without a corresponding fee agreement, the fees are based on the provisions of civil law. In the event that the client is a consumer, the fee for a consultation or for the preparation of a written expert opinion may not exceed EUR 250 plus VAT. A maximum fee of EUR 190 plus VAT may be charged for an initial consultation.

Type, form and content of the remuneration agreements

The following provisions, for example, can be made in a remuneration agreement:

the agreement on the right to charge fees,
a change to the current law on fees,
Time and lump-sum fee agreements,
the agreement of a success fee,
the waiver of the offsetting of fees.

In order to be formally effective, the remuneration agreement pursuant to Section 3a (1) RVG requires the Text form. The remuneration agreement must also be labelled as such or in a comparable manner and, if it is combined with other agreements, it must be clearly distinguishable from them. It must also not in the power of attorney and should contain a reference to the fact that the opposing party, a party to the proceedings or the state treasury will regularly not have to reimburse more than the statutory remuneration in the event of reimbursement of costs.

With regard to the content of remuneration agreements, it should be noted that there are no upper limits to the specific amount. The remuneration agreement is only invalid if it is immoral.

Pursuant to Section 49b (1) BRAO in conjunction with Section 4 (1) RVG. § Section 4 (1) RVG, a remuneration agreement below the statutory remuneration can only be made for extrajudicial matters and, under certain conditions, for judicial dunning proceedings and for part of the enforcement proceedings.

Appropriateness of the remuneration

Case law assumes an unreasonable level of remuneration if there is an irreconcilable discrepancy between the agreed remuneration and the lawyer's work, so that it is simply intolerable to hold the client to his fee promise (BGH judgement of 27 January 2005 - IX ZR 273/02).

When examining the appropriateness of the remuneration agreement, it always depends on the circumstances of the individual case. The following standards can be used for the individual case assessment:

The time of termination of the mandate is decisive for the assessment of whether a lawyer's fee is in reasonable proportion to the work performed.

Case law is generally based on the statutory maximum fees in order to assess the appropriateness of the amount of the agreed remuneration.

Exceeding the maximum fees by up to five to seven times was previously appropriate (OLG Hamm judgement of 18 June 2002 - 28 U 3/02).

The BGH assumes that inappropriateness may exist in criminal defence if the agreed fee is more than five times the statutory maximum fee.

At their 51st meeting in September 2005, the fee consultants of the bar associations decided that the following remuneration agreements should be appropriate or inappropriate:

A remuneration agreement is appropriate if it does not exceed five to six times the statutory maximum fee.
In the case of remuneration agreements that exceed five to six times the statutory maximum fees, the standard of effort-relatedness (e.g. time spent) must be applied.
The agreed time-based remuneration is reasonable if the hourly rate is appropriate and the time spent is presented in a comprehensible manner.

At the 60th meeting of the fee consultants on 24 April 2010, this decision was confirmed by current case law.

If a court determines that a remuneration agreement is unreasonable, the lawyer's remuneration can be reduced to a reasonable amount up to the amount of the statutory remuneration in accordance with Section 3a (2) RVG.

The success fee

Pursuant to section 49b (2) sentence 1 BRAO, the agreement of contingency fees is generally inadmissible, although an exception is standardised in section 4a RVG.

According to Section 4a (1) sentence 1 RVG, a contingency fee may only be agreed if

the order relates to a monetary claim of no more than 2,000 euros,
a debt collection service is provided out of court or in one of the proceedings specified in Section 79 (2) sentence 2 no. 4 ZPO or
the client would be deterred from taking legal action in the individual case on reasonable grounds without the agreement of a contingency fee.

If the requirements of Section 4a (1) RVG are met, a contingency fee can be agreed. For this purpose, the fee agreement must contain the following information in accordance with Section 4a (2) RVG:

Indication of what remuneration is to be earned under which conditions,
an indication of whether and, if so, what effect the agreement should have on any court costs, administrative costs and the costs of other parties to be reimbursed by the client,
the main reasons that determine the calculation of the success fee, and
in the case of Section 4a (1) sentence 1 no. 3 RVG, the anticipated statutory remuneration and, if applicable, the non-performance-related contractual remuneration at which the lawyer would be prepared to accept the assignment.

Remuneration regulations under immigration law

The lawyer's fees in immigration law matters are also based on the RVG or on a remuneration agreement. Pursuant to Section 30 RVG, the calculation of the fee is based on the value of the proceedings.

The value in dispute for the following proceedings is, for example

For proceedings relating to the residence permit, the object value is 5.000 per person.
For expulsion proceedings, the value in dispute is EUR 5,000 per person.
For deportation proceedings, the value in dispute is as follows 500,- EUR per person.
For passport or passport replacement procedures, the value in dispute is 5000,- EUR per person.
For naturalisation proceedings, the object value is 10.000,- EUR per person

If there are several persons, the object values are added together accordingly and the fees are then based on the sum of the object values.

The lawyer's fee can then be determined on the basis of the amount in dispute, depending on the type and scope of the action and whether the proceedings are extrajudicial or judicial.

For out-of-court proceedings, the business fee applies (0.5 to 2.5 times the fee).

In the case of court proceedings, the procedural fee is then added pro rata (usually between 0.5 and 1.3 times the fee).

For asylum disputes, there is also the special feature that no court costs are incurred for proceedings before the administrative courts (see Section 83b Asylum Act).

Remuneration regulations under tenancy law

The lawyer's fee under tenancy law is based on the civil law fees of the RVG or on a remuneration agreement.

In tenancy law proceedings, it can sometimes be difficult to determine the correct value of the subject matter of the dispute, e.g. in the case of termination or the tenant's claim for repairs.

For this reason, the following amounts in dispute have been established for certain tenancy law disputes:

Cancellation of tenancy agreement: 12 times the monthly net cold rent (excluding advance payments for operating costs).
Rent increase: 12 times the amount of the rent increase.
Operating cost statement: back payment amount or the (expected) credit balance;
Tenant's claim to repair of the flat: annual amount of an appropriate reduction quota.
Rent reduction: 42 times reasonable monthly rent reduction (BGH decision of 14 June 2016 - VIII ZR 43/15).