Separation of interests

Unlike the US legal system which we know from Hollywood films, the litigation lawyer’s payment is not determined by percentages of the value “won.” Quite on the contrary the so-called “quota litis” – the dispute allotment agreement – has been prohibited in Europe since Roman law. According to the now almost two-hundred-year-old Austrian General Civil Code (and not just according to the legal professional code) a contract is futile (as it is contrary to public policy) when “a friend of the law wholly or partly detaches himself from the object of dispute which is entrusted to him or promises himself a certain part of the value, to which the party is entitled.” (§ 879 ABGB)

This prohibition is based on the fundamental reason that the interests of the representatives (at trial) must always be cleanly separated from those of the client, because, apart from the necessary closeness to the client, a sufficient distance on the part of the lawyer is always required to be able to handle the matter entrusted to him in the proper way. The representative should not fight his own battle when he is acting in service of the client, and therefore, following logically, the decoupling of the question of fees from the matter in dispute is required.

Apart from this the principle of the freedom of contract is applied to free agreements between the lawyer and client. Apart from matters contrary to public policy (see above) it is only the younger laws about the consumer protection of such arrangements which draw certain boundaries. What should never, under any circumstance, be allowed to happed is that the lawyer literally cashes in on his client’s emergency. This is comparable to the corrupt doctor who charges an extra fee for a life saving operation.

However, the rules about that which should actually be charged to the lawyer have also recently been brought under discussion – increasingly under the facet of the possible inadmissibility of competition or the antirust law. The European authorities have been watching out more closely (against the background of the constitutional freedom of trade, capital and of rendering services in the union) for the fact that the guidelines for the fees of the free trades do not hinder free competition as much as the valorisation derived from autonomy for a financial settlement between employer and employee.



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