Concept and Legal Foundations of Consultation
In a legal context, consultation is a complex process in which a person or organization seeking assistance receives information, advice, opinions, or recommendations on a specific legal question or matter. It represents a significant service within legal transactions and is anchored in numerous legal frameworks. Consultation is a central term in various areas of law, particularly in contract law, labor law, consumer law, tax law, and social law.
Definition of Consultation in the Legal Sense
In general language, consultation means the provision of advice or guidance by a knowledgeable person. Legally, it is understood as the communication of a personal or objective assessment regarding legal consequences and courses of action. What is essential here is an individual approach to the needs of the person seeking advice and the relation to a specific factual situation in life.
Consultation can be carried out within the scope of a service contract (§§ 611 et seq. BGB), as well as form part of other contractual relationships or statutory duties. In the legal profession, it is additionally regulated by specific professional and ethical rules.
Consultation Duties and Their Legal Significance
Origin and Nature of the Duty to Advise
Consultation duties can arise from contracts, statutory provisions, or special obligations. The obligation to advise usually arises within an existing contractual relationship, for example in investment transactions, purchase agreements, or service contracts.
In addition, various laws establish independent consultation duties, such as the German Civil Code (BGB), the Commercial Code (HGB), the Securities Trading Act (WpHG), the Social Code (SGB), Works Constitution Act (BetrVG), as well as consumer law.
Examples of Statutory Consultation Duties
- Section 6 (2) VVG (Insurance Contract Act): Insurer’s obligation to advise prior to conclusion of the contract.
- Section 491a BGB (Consumer Loan): Obligation of the lender to provide comprehensive explanation and advice prior to the conclusion of a loan agreement.
- Section 305 II BGB (Law on Standard Terms and Conditions): Obligation of the business operator to provide clarification and advice regarding standard terms and conditions.
- Section 675 I BGB (Service Contract): Obligations of advice and information within the framework of service contracts.
Forms of Consultation in Legal Transactions
Gratuitous vs. Remunerated Consultation
Consultation may be provided gratuitously, for example as a favor or on a voluntary basis, or for remuneration based on a contract for services. The distinction between a mere favor and a legally binding consultancy contract is often significant for liability issues.
Consultation Duties in Consumer Law
In consumer law, consultation holds a special place. Here, numerous regulations are aimed at protecting the consumer from disadvantages or a lack of information. Typical examples include consultation in the context of distance contracts, financial services, or insurance contracts. The European Union, through directives such as the Consumer Rights Directive, has set extensive minimum standards for consultation and information of consumers.
Consultation in Labor and Social Law
Important consultation duties also exist in labor and social law. For example, the employer is obligated to inform the works council about planned measures and, if necessary, to involve it (see §§ 80, 102 BetrVG). In social law, there are entitlements to advice against social insurance agencies and the Federal Employment Agency. The duty to provide comprehensive and accurate advice protects the citizen from legal disadvantages due to ignorance or incorrect advice.
Liability for Consultation Errors
Prerequisites and Scope of Liability
Liability for consultation errors is governed by the general provisions of civil law (§§ 280 et seq. BGB, consultancy contract), but may also arise from special statutory provisions. The liability standard is that of a reasonable advisor, whereby fault (negligence or intent) is generally required.
The consultant is liable for damages if incorrect, incomplete, or omitted advice results in damage. The scope generally covers only such damages that have been caused adequately and causally by the consultation error and could have been avoided by proper conduct.
Consultancy Contract and Distinction from Providing Information
In consultations, it is necessary to differentiate between comprehensive legal advice and mere information. While consultation requires individual assessment and recommendation, the duty to provide information is associated with a lower standard of care. This distinction is central for liability issues.
Confidentiality and Data Protection in Consultation
Duties of Confidentiality
Advisors are regularly subject to confidentiality and secrecy obligations. Such duties can arise from professional law, contractual commitments, or data protection laws. Observance of these duties is of essential importance for the relationship of trust between the person seeking advice and the advisor.
Consultation and Data Protection Law
The collection, processing, and use of personal data is a sensitive issue within the context of legal consultation. Consultation is subject to the requirements of the General Data Protection Regulation (GDPR) as well as national data protection regulations. Consultation processes must be safeguarded by technical and organizational measures, and the person seeking advice must be informed about the purpose and scope of data processing.
Consultation and Representation – Conceptual and Legal Distinction
In legal transactions, a distinction must be made between consultation (as the provision of assessments and recommendations) and representation (acting on behalf of a third party). While consultation is aimed at influencing the decision of the person seeking advice, representation involves acting for and in the name of the principal with immediate effect for and against them. This distinction is, among other things, crucial for the requirement of a permit, certain professional admissions, or liability.
Statutory Restrictions on Consultation – Consultation Permits
Legal Services Act (RDG)
The Legal Services Act regulates the permit requirements for providing legal services, of which consultation is a particular case. Without appropriate authorization, providing legal advice to third parties in legal matters is generally prohibited. The RDG thereby serves to protect those seeking legal advice and to safeguard the proper functioning of the justice system.
Tax Advisory Act (StBerG)
Advisory activities in tax law are also regulated. The Tax Advisory Act sets out who is authorized to provide tax advice and how the scope of this authorization is defined. Violations constitute both a breach of competition law and professional regulations.
Consultation in Companies and Organizations
In companies, consultation duties arise, for example, towards employees, customers, business partners, or supervisory bodies. Companies are obliged to disclose risks, inform about products, and provide advice and training in accordance with compliance requirements.
Summary
The legal concept of consultation is broad and multifaceted. Consultation encompasses both the duty to provide information and recommendations for the benefit of the client as well as a multitude of statutory and contractual obligations. It is significant in various fields of law, subject to specific permit requirements, encompasses extensive grounds for liability, and is shaped by data protection and confidentiality obligations. The precise legal classification, the position of consultation in the legal system, and the obligations associated with it are central both to the enforcement of rights and to the economic framework of modern societies.
Frequently Asked Questions
Who is liable for incorrect information provided in legal consultations?
Liability within the scope of a consultation is determined by the respective consultancy contract and the relevant area of law. In principle, the person or institution providing the advice is liable for damages that arise from incorrect or incomplete information, provided there is fault. For lawyers or tax advisors, liability is regulated by law, in particular the German Civil Code (BGB) and the respective professional codes. Liability may be contractually limited by so-called limitation of liability clauses, but these must comply with statutory requirements and do not apply in cases of intent or gross negligence. If faulty advice is given by employees of a firm or consultancy, the institution as contracting partner is usually liable. In addition, liability can be covered by professional liability insurance, which contributes to compensation in the event of damage.
To what extent does a duty of confidentiality exist in consultation?
Consultants are often obliged under German law to maintain confidentiality, especially when acting as lawyers, tax advisors, or other members of the legal professions. This duty is derived from the respective professional codes, such as Section 43a (2) BRAO for lawyers or Section 57 StBerG for tax advisors. The duty of confidentiality applies not only to the consultation interview itself but also to all information obtained in the course of the consultation. It is comprehensive and generally unlimited in time; that is, it remains in effect even after termination of the mandate. Breach of this duty may have both civil and professional consequences.
Is consultation legally binding even without an express contract?
An oral or implied agreement for consultation can also be legally binding. While a written contract is advisable for clarification, it is not mandatory. Under German law, a contract is already concluded through offer and acceptance, which can also apply to consultation if both parties agree on the essential elements of the consultancy service. However, the type of consultation and the complexity of the matter determine whether additional formal requirements, such as written form or special clarification duties, must be observed. If damages or obligations arise as a result of the duty to advise, a claim for damages can exist even without a written contract.
What information duties does the advising person or office have?
Advisors are obligated to provide their clients with comprehensive, accurate, and understandable information concerning all legally relevant aspects of the issue. This duty depends on the specific circumstances and is especially broad for lawyers and tax advisors. Both opportunities and risks, possible costs, and alternative courses of action must be indicated. Failure to provide information on relevant legal consequences or deadlines can result in liability, particularly if the client suffers a disadvantage as a result. The information duty also includes disclosure of any conflicts of interest and is part of the so-called professional duty of fidelity.
When can consultation errors give rise to claims for damages?
A consultation error exists when the consultation does not meet the required standard of care, for example because incorrect information is given, risks are concealed, or essential aspects are not recognized. If such errors result in financial loss or legal disadvantage to the client, the client may assert a claim for damages under §§ 280, 823 BGB. A prerequisite is that there is fault—i.e., at least negligence—and a causal link (‘causality’) between the consultation error and the damage. In cases of proven gross advisory misconduct, criminal liability may also be relevant.
What documentation duties exist in the context of legal consultation?
Complete documentation of the consultation is essential, especially for evidentiary purposes and to fulfill professional requirements. For example, lawyers are obliged under Section 50 BRAO to maintain case files and to keep them for at least a prescribed period upon request. These files must contain key consultation meetings, correspondence, documents, and agreements reached. Documentation serves to ensure traceability of the services provided and as protection in case of potential liability issues. If advisors fail to carry out proper documentation, this may lead to a reversal of the burden of proof to their detriment in the event of a dispute.
May an initial consultation be offered free of charge, and are there legal requirements for this?
A free initial consultation is legally permissible, provided it is offered voluntarily and without hidden costs. Lawyers are required under Section 34 of the Lawyers’ Compensation Act (RVG) to inform clients prior to consultation about the amount of consultation fees. For consumers, there is also a statutory upper limit for the cost of an initial consultation; pursuant to Section 34 (1) sentence 3 RVG, this may not exceed 190 euros net. If a law firm offers free initial consultations, it must be clear that there is no obligation to make use of further paid services. An essential requirement is that clients are transparently informed about the scope and any subsequent costs.
