Attorney fees: Definition, legal basis, and calculation
Term and significance of attorney fees
Attorney fees are the remuneration to which a lawyer is entitled for legal advice, representation out of court, and representation in court. They consist of various components and are important in civil law as well as criminal law, labor law, and other legal fields. Attorney fees may apply to private individuals, companies, associations, or public bodies.
Statutory basis of attorney fees
Lawyer Remuneration Act (RVG)
The statutory basis for attorney fees in Germany is the Lawyer Remuneration Act (RVG), which regulates the calculation of remuneration for legal services nationwide. The RVG contains both fixed fee frameworks and provisions regarding fee agreements. Previously, these provisions were regulated by the Federal Regulation on Lawyers’ Fees (BRAGO).
Table of Fees (VV RVG)
The Table of Fees to the RVG (VV RVG) lists the individual fee items and their values in detail. The amount of remuneration generally depends on the value of the matter, the work performed, and the scope and complexity of the case.
Fee agreement
In addition to the statutory remuneration, there is the option of concluding a separate individual fee agreement. This must be expressly and in writing agreed upon between the client and the lawyer (see § 3a RVG). In court proceedings, certain minimum fees may not be undercut.
Types of attorney fees
Statutory fees
Business fee
For out-of-court activity, a business fee is regularly charged in accordance with No. 2300 VV RVG. This is based on the value of the matter and a fee range from 0.5 to 2.5.
Proceedings and hearing fees
In court proceedings, further fees arise, in particular a proceedings fee (e.g., under No. 3100 VV RVG) for preparing and conducting the proceedings, as well as a hearing fee (e.g., under No. 3104 VV RVG) for attending court hearings.
Settlement fee
If a settlement is reached between the parties, a separate settlement fee arises in accordance with No. 1000ff. VV RVG.
Agreed fees
In addition to statutory fees, fixed fees, hourly rates, or contingency fees may also be agreed individually, provided this is permitted according to statutory regulations.
Disbursements and incidental costs
In addition to the fees, disbursements may arise, for example for postal and telecommunication services, travel expenses, copies or expert opinions. These are calculated regularly under §§ 700 et seq. RVG.
Overview of cost types
Initial consultation
For an initial consultation, a maximum charge of 190 euros (plus VAT) applies to consumers pursuant to § 34 RVG. For more extensive consultations, individual agreements can be made.
Fixed and hourly fees
Under contractual agreements, a fixed fee for a certain scope of services or an hourly fee (calculated by the hour or day) may be agreed.
Contingency fee
A contingency fee (dependent on the success of the mandate) may only be agreed in narrowly defined, legally regulated exceptional cases (§ 4a RVG).
Assessment of attorney fees
Value of the matter
The value in dispute (value of the matter) is crucial for calculating most fee items in civil law. It is determined by the client’s financial interest in the outcome of the proceedings.
Scope and complexity
Fee ranges can be increased or reduced within certain values, depending on the scope and complexity of the legal services.
Multiple matters or parties
When representing multiple parties or acting in different matters, additional costs often arise in the form of extra fees or surcharges.
Cost reimbursement and liability for costs
Reimbursement of costs in civil proceedings
In civil litigation, the attorney fees of the winning party are usually imposed on the losing party (§ 91 ZPO). However, reimbursement only covers statutory fees, not additional fees beyond this.
Reimbursement of costs in administrative proceedings
In administrative law, each party generally bears its own attorney fees (so-called cost privilege). Reimbursement of costs generally does not take place unless expressly provided for by law.
Criminal and administrative offence proceedings
In criminal proceedings, each party generally bears its own attorney fees. In the event of an acquittal, the necessary expenses, including attorney fees, may be imposed on the state (§ 467 StPO).
Special features of attorney fees
Legal aid and legal cost assistance
Persons with low income may apply for legal aid or legal cost assistance. In such cases, attorney fees are fully or partially covered by the state treasury.
Value-added tax
All attorney fees are generally subject to statutory value-added tax, currently 19 percent.
Cost determination procedure
The judicial determination of reimbursable attorney fees is carried out in the cost determination procedure (§ 103 ZPO). The judgment determines which costs are eligible for reimbursement.
Overview: Calculation example for attorney fees
In the case of out-of-court assertion of a claim of 10,000 euros, the attorney fees are calculated as follows:
- Statutory business fee (No. 2300 VV RVG): approx. €618.00
- Flat rate for postal and telecommunication services: €20.00
- plus 19% VAT: €121.22
- Total costs: €759.22
Literature and further sources
- Lawyer Remuneration Act (RVG)
- Law on the Remuneration of Female and Male Lawyers (RVG), current status
- Federal Ministry of Justice: Detailed information on attorney remuneration
- German Attorney Directory: Attorney fee calculator
Conclusion: Attorney fees are an essential part of the German legal system and are subject to clear statutory regulations. They serve as remuneration for legal services and are intended to provide those seeking legal protection with the ability to transparently and comprehensibly calculate costs. In particular, the RVG and its fee tables play a central role in the calculation. The reimbursement of attorney fees in the event of a dispute, as well as possibilities for state assistance, are important aspects for the enforcement of rights.
This overview provides extensive knowledge about the term, structure, and calculation of attorney fees, especially in German law, and sheds light on both the fundamentals and many special features of this central topic for those seeking legal recourse.
Frequently Asked Questions
How are attorney fees structured in the legal context?
In Germany, attorney fees in the legal context are generally comprised of the statutory remuneration under the Lawyer Remuneration Act (RVG) or individually agreed fees. The RVG specifies certain fee items, such as for initial consultations, out-of-court representation, court proceedings, and special activities like settlements or observing deadlines. The amount of statutory fees is usually based on the so-called value of the matter, i.e., the financial value of the dispute. In employment law, family law, criminal law, and social law, special provisions may apply. Alternatively, attorneys may enter into a fee agreement, for example based on hours or fixed amounts, but minimum fees under the RVG must be observed; particularly in consumer matters, there are restrictions and formal requirements for fee agreements.
When does an obligation to pay attorney fees arise?
An obligation to pay attorney fees generally arises upon conclusion of the mandate agreement – and thus even before the lawyer actually begins work. This also includes consultations and preparatory reviews. After termination of the mandate, a final fee invoice is issued. In court proceedings, the law generally states that the losing party must reimburse the litigation costs, including the necessary attorney fees of the opposing party if represented by counsel. Exceptions exist for certain types of proceedings, for example before the labor court at first instance, where each party generally bears its own attorney fees, regardless of the outcome.
What is a business fee and when does it arise?
The business fee is the remuneration for a lawyer’s out-of-court activities, such as providing advice, drafting letters, or conducting settlement negotiations outside of court proceedings. The business fee is regulated in No. 2300 VV RVG and is based on the value of the matter. It is due as soon as the lawyer acts out of court for the client, regardless of whether court proceedings are initiated. If, for the same matter, court proceedings subsequently become necessary, an additional proceedings fee is charged, whereby the business fee is partially credited toward the court proceedings fee.
In which cases do legal protection insurances cover attorney fees?
Legal protection insurances generally cover attorney fees if the insured legal event is within the scope of the insurance contract. This regularly includes costs for out-of-court and in-court representation in the insured fields (e.g., traffic law, labor law, tenancy law). The insured must obtain coverage confirmation from the insurer in advance, and exclusions and deductibles apply as per the insurance terms. For disputes not covered by insurance (e.g., intentional criminal acts or certain contractual disputes), no cost protection is provided.
What happens if the opposing party does not reimburse attorney fees?
As a rule, the client who prevails in court may demand reimbursement of necessary attorney fees from the losing party. If payment is not made despite the cost decision, recovery of costs must be enforced as with any other monetary claim. In out-of-court situations, a claim for cost reimbursement only exists if the debtor is in default or there is a statutory right to claim, for example in cases of unjustified refusal to comply with a claim. In practice, attorney fees may remain unpaid if the opposing party is insolvent.
What are the cost rules with legal cost or legal aid?
With legal aid (PKH), the state covers attorney fees in full or in part if the applicant meets the requirements of financial need. This includes both court and necessary attorney fees in court proceedings, and in some cases, repayment obligations may arise if the financial circumstances of the client improve. In cases of legal advice assistance – for out-of-court advice – the state pays a fixed remuneration to the lawyer; the client pays only a small personal contribution. Both forms of aid require an application and proof of financial situation.
