The remuneration for lawyers is regulated in the Lawyers’ Compensation Act (RVG). Since 1 October 2021, the law on the promotion of consumer-friendly offers in the legal services market has introduced important changes to the attorney compensation agreements. In particular, the possibility of agreeing on performance-related remuneration is expanded. We give an overview of the changes.

§ 49b paragraph 2 sentence 1 BRAO prohibits performance-related remuneration in principle. However, this only applies if the RVG does not provide otherwise. This arrangement has remained unchanged. Nevertheless, § 4a RVG now allows the success fees to a large extent. Therefore, the legal situation has drastically changed despite the lack of a change in the basic prohibition in § 49b paragraph 2 sentence 1 BRAO.

According to § 49b BRAO, the lawyer is in principle prohibited from agreeing on or demanding less fees and expenses than the Lawyer's Compensation Act provides. This includes performance-related remuneration. Success-dependent remuneration is remuneration which, in itself or in its amount, is made dependent on the outcome of the case or on the success of the legal profession or according to which the lawyer receives part of the amount awarded. A success fee, on the other hand, does not exist if the statutory fees increase without the requirement of fulfilling further conditions.

Success-based remuneration can therefore be in contradiction with the statutory minimum fee. For this reason, these performance-related remunerations are also prohibited in principle. Nevertheless, rules are required in individual cases that enable the collection of a success fee. These are regulated in § 4a (1) RVG.

Until now, a success-dependent remuneration by a lawyer was only possible in individual cases and under certain conditions. After 01.1o.2021, however, these possibilities will be significantly expanded. The new regulation of § 4a (1) RVG opens up the possibility of a success fee in three further cases.

These changes are based on so-called legal tech offerings. Companies want to facilitate enforcement for the consumer by enforcing the law. These practices work by entering your data on a homepage and then checking whether you are treated worse than you should be treated. If you are treated worse, you pass on your data to the company and assign your claims against the opponent to the company. The companies then proceed out of court against the opponents of the “client”. It is therefore in fact a debt collection company. Since these companies usually agree on success fees, they naturally threaten the activities of consumer advocates significantly. Therefore, the remuneration options for lawyers must also be changed.

First, according to § 4a (1) sentence 1 no. 3 RVG, the possibility of agreeing on a success fee remains unchanged if the customer would be prevented from prosecuting due to his economic circumstances if the customer were to be judged wisely without agreeing on a success-related remuneration. It is irrelevant for the assessment whether one can use a counselling or legal aid.

In a new case, a success fee can be agreed if the order concerns a monetary claim of less than EUR 2,000. It is irrelevant whether there are several claims. The only decisive factor is that the value remains below EUR 2,000. The reason why you hire a lawyer is also irrelevant. Therefore, he can be charged both with collecting the demand and with averting it. However, claims other than monetary claims are not taken into account by this regulation.

The performance-related remuneration is permissible according to § 4a (1) no. 2 RVG if the subject of the legal activity is an out-of-court collection activity. In addition, a success fee is admissible if the lawyer acts in a debt collection service in order for payment proceedings until it is submitted to the dispute court and in the procedure of foreclosure.

In the case of a monetary claim of a maximum of EUR 2,000 or in the case of a performance-related remuneration in individual cases according to § 4a (1) sentence 1 no. 3 RVG, one may only agree a lower remuneration than the statutory remuneration in the event of failure, if an appropriate supplement to the statutory remuneration has been agreed for the case of success. However, for the other possibilities of agreeing a performance-related remuneration, this restriction does not apply. In the case of collection activities pursuant to § 4a (1) no. 2 RVG, it is possible to conclude agreements whereby the lawyer undertakes to bear court costs, administrative costs or costs of other parties.

§ 4a paragraph 3 RVG regulates the content of the remuneration agreement. It is therefore necessary to specify which remuneration is to be paid on the occurrence of which condition. Information shall be provided as to whether and, if so, what impact the agreement will have on any court costs, administrative costs and the costs of other parties to be reimbursed by the contracting entity. Furthermore, the main reasons which are decisive for determining the success fee must be stated. Finally, one must also indicate the expected statutory remuneration and the success-related remuneration for which the lawyer would be willing to take over the assignment. The latter applies in the event that the agreement includes performance-related remuneration for the individual case.