Malte Stübinger and Patrick Rode [1]
Introduction
The model of third party litigation financing has also found its way into Austria in recent years.
As in Germany, the market was first dominated by litigation funders closely related to big insurance companies.
More recently, the market has become more diversified and several large international litigation funders are offering their services to clients in Austria.
The general permissibility of third party funding in Austria has not seriously been questioned in courts other than in the brief period directly following its emergence.
Besides some critical discussions that primarily took place solely in academic writing at that time, there has been a stable environment in favour of it.
This applies to the use of third party funding in state court litigation as well as in commercial arbitration disputes.
Therefore, many details of what is permissible in third party funding have yet to be resolved or even discussed by Austrian courts, resulting in a rather blank canvas as to the outer limits of what a litigation funding agreement may validly regulate.
While most legal scholars had always held that it was perfectly legitimate, litigation funding in Austria only became a relevant market around 15 years ago.
Before this, there were simply no providers of funding activity in the market. As a result of the lack of information surrounding the possibility of outsourcing the risk of litigating, there also appeared to be little demand for it, despite the Austrian court system being very well suited for the funding of disputes.
The emergence of Litigation Funding in Austria
It then gained practical significance in the business-to-consumer (B2C) sector, specifically in connection with the enforcement of claims in the wake of the global financial crisis of 2007 and 2008.
Austria saw several cases of financial service providers having given unsound investment advice, which resulted in a flood of claims for damages from individuals who had lost significant parts of their retirement savings.
Often, the risk of legal costs in those cases was likely to deter small investors from asserting their claims.
In such cases, it was and is, to date, often only the option to rely on litigation funding (and, in many cases with rather small individual damages, the possibility to bundle several claims in one action) that makes legal enforcement of a claim commercially possible in the first place.
As with many other civil law jurisdictions, Austria does not have a statutory class action mechanism. To bundle a large number of claims, the mechanism of the 'Austrian-style class action' was developed by Austrian consumer protection associations.
Consumer protection associations.
In 2001, a large consumer protection group collected several claims for price reduction and damages claims against a travel tour operator and sued the company on its own behalf.
This collection of claims was based on the objective accumulation of claims provided for by Section 227 Code of Civil Procedure, which allows a plaintiff to bring several individual claims against a defendant in one joint action.
Pursuant to this law, a number of claims of a plaintiff against the same defendant may be asserted in the same action, provided the trial court has juridical rights for all claims and the same type of proceeding is permissible.
The plaintiffs used this provision to bundle a large number of claims from numerous plaintiffs into one action.
The law further states that such bundling is permissible even if the individual claims are not connected in a way that would allow them to be added up for the purpose of calculating the statutory fees (Section 55 of the Code of Civil Procedure: jurisdiction standard).
As long as the sum of all claims filed reaches the necessary thresholds, there would also not be any question regarding the jurisdiction of the district court and no problem with thresholds to support an appeal, even though the individual amounts in dispute may fall short of this.
This modern and plaintiff-friendly interpretation of the statutes, clearly reaching beyond their original historical intention, has been subject to significant scrutiny.
Subsequently, several such class actions were filed and litigated in Austrian courts. Most, if not all, were funded by a third party financier.
They were only sometimes met with immediate success.
Litigation Funding Model - Austria
There had been a number of decisions in the lower courts on the question of the permissibility of the model, with first instance courts repeatedly having questioned its viability.
However, courts of appeal have regularly reversed those decisions and affirmed the legal construction.
This development was accompanied by an extensive discussion in scholarly writing on the subject of class actions.
In 2005, Austria's highest civil court, the OGH,[2] confirmed this form of self-designed class action as being in conformity with the law. It held that the model causes no violation of procedural or substantive law, provided that, in essence, the same questions of fact or law are to be resolved, which are either the main decisive factor or at least a significant preliminary question in all bundled claims.
The OGH also resolved the issue of individual claim values in a plaintiff friendly way and held:
"[T]he claims of several plaintiffs as formal joint litigants against the same defendant can be enforced before the Court pursuant to section 227 (2) ZPO if the amount in dispute of the claims of even only one plaintiff exceeds the Court's lower limit."[3]
A relevant advantage of this class action under Austrian law is that it allows the bundling of large numbers of consumer claims with relatively small individual amounts in dispute together into one dispute.
This creates procedural efficiency by necessitating only one judge, chamber or senate, by having facts assessed by an expert, and by allowing a unified and homogenous appeal procedure.
It also makes supporting a claim commercially interesting for third party litigation funders.
The funders offer to assume the active cost to pursue the claim (primarily court fees, own attorneys' fees, experts, plus potential further expenses) to cover the adverse party cost risk and, in the event of a victory or settlement, receive a share in the profits, usually in the form of a certain percentage of the net proceeds.
This form of litigation financing against profit sharing is permissible in Austria, beyond doubt.[4]
Consumer protection associations have also been active in different disputes regarding overpaid interest with large commercial banks and investor fraud cases of the WEB scandal, and additionally organising class actions together with third party litigation funders without a cost risk for the joining consumers.
This bundling of claims is often the only realistic way for injured parties without legal protection insurance to successfully claim restitution from corporations that illegally caused them damage, be it personal injury or a purely financial damage.
Consequently, it is not surprising that parts of the business community have been outspoken in their opposition to this legal institution. If there is simply no threat of individual legal action as an alternative to a class action, then many wrongdoings will never be redressed – which is, of course, in the interest of the damaging party.
Special Purpose Vehicle (SPV)
In the Austrian-style class action, the aggrieved investors (or otherwise damaged parties) assign their claims to a special purpose vehicle (SPV), which serves as the plaintiff and then asserts the claims from different victims by way of objective accumulation of claims.[5]
In the majority of cases, this form of action uses third party funding, which enables the victims to shift the financial risk of pursuing the claim to the funder against a share of the proceeds.
The OGH had already decided in 2005 that such models are generally permissible for the bundling and collective enforcement of similar claims (see above); however, this leaves open the role that the litigation funder may legally play in such an action.
It is extremely important to note that there are certain strict requirements to be met when choosing this model regarding its construction and design, as otherwise, the assignment of the claim itself to the SPV could potentially be considered void, with massive consequences for the original claim holders.
If the assignment was void, then a plaintiff without standing to sue issued proceedings in court, and the claims were never validly made pending in court. Therefore, the limitation clock was not stopped, and after a few years of litigation, most or even all of the claims will be considered time-barred.
The rise of legal technology
In 2013, specialised legal tech service companies started joining the market, usually offering the funded enforcement of certain types of close-to-identical consumer claims, such as flight delay compensation claims or violations of rent control statutes.
Currently, several Austrian-style class actions are pending relating to the Truck cartel case [6] and the VW diesel emission scandal.[7]
More recently, third party litigation funding has become a nuisance for some attorneys in Austria as they feel that third party funders are trying to invade a business sector reserved only for attorneys who have been admitted to the bar.
This culminated in 2020, when the Austrian Lawyer's Association, which represents around 900 Austrian lawyers, brought a far-reaching competition law action against a third party funder.
They accused the third party funder inter alia of advertising in an aggressive manner, offering inadmissible assignment transactions and carrying out activities exclusively reserved for lawyers.
These accusations were rejected by the OGH on all counts and the OGH used this case to clarify a few key legal questions relating to the business model of funders who are assigned claims by customers and the relationship of the funder and the attorneys representing the funder in court.[8]
As in other jurisdictions, in Austria, the willingness of a funder to invest in a dispute will depend on a bundle of relevant criteria. These are, of course, the strength of the case on the merits, the enforcement strategy and perspective, the expected duration of a case until recovery, and a minimum amount in dispute, which is often an essential prerequisite for a litigation funder to accept the financing.
In addition, there is the further requirement that the expected proceeds of the case must be enough to allow for a satisfactory sharing of the proceeds between the claim holder and the litigation funder.
2023 - Year in review
While the 2013 Supreme Court decision had been less concerned with the general permissibility of litigation funding than with the effectiveness of the assignment of a claim to a litigation vehicle, the Supreme Court in 2021[9] clearly ruled in favour of the permissibility of litigation funding.
In the proceedings before the OGH, the bar association as plaintiff wanted to prohibit a litigation funder from financing proceedings for a contingency fee in such cases where the litigation financier attracts claimants in a book-building process and then appoints a lawyer to represent those parties in court.
This is how litigation funders typically proceed in the Austrian-style class action system.
Quota Litis Prohibition
The bar association argued that this combination of funding and active involvement in the case would result in a violation of the quota litis prohibition.[10] The courts of the first and second instances had already rejected the request of the bar association, and the Supreme Court also ruled that a litigation financier, even in this model, was not subject to the quota litis prohibition.
The bar association itself had conceded in the proceedings that a litigation funder would, in any case, not be covered by the quota litis prohibition if it did not offer comprehensive legal advice subject to the lawyers' monopoly on representation.
As long as the funder only examines the prospects of success before taking a funding decision, then assigns the case to a lawyer and subsequently does not exert any direct influence on the structure of the proceedings, the bar association agreed that there would be no violation.
In such a case, the bar association agreed that the lawyer will always give the highest priority to the client's interests and, importantly, the client will always remain in control of the proceedings.
In its ruling, the Supreme Court found that the litigation funder in the respective case concerning an Austrian-style class action had orderly limited itself to checking the completeness of certain documents of the injured parties and, in consultation with a lawyer, to checking certain formalities (such as whether a certain type of contract is still valid and when it was concluded), after which the case was forwarded to a lawyer.
Because of this, in the view of the OGH, the litigation funder was not providing legal advice to the claimants (its contractual partners), and the litigation funder would not be in a position to unduly influence the conduct of the proceedings by the lawyer.
In the view of the OGH, it was also in the nature of a profit-oriented company to actively acquire clients, so the fact that funders often 'build' the cases they fund to reach a certain cumulative claim value was also confirmed as compliant with Austrian law.
Currently, in Austria, individual associations only have the option of filing for injunctive relief in certain cases of alleged discrimination against consumers on the basis of competition law and the Consumer Protection Act.
In addition, there is also the possibility for an association model action, in which an aggrieved consumer can assign his or her claim to an association.
However, in this model, each additional injured party must assert his or her claim in separate civil proceedings.
European Directive
This will change when the new European Directive on representative actions is implemented in Austria. The deadline for this expired on 25 December 2022 and currently, Austria – like other Member States – is facing an infringement action launched by the European Commission for missing this deadline.
Generally, the high degree of abstraction of the EU legal requirements and numerous options regarding their implementation give national legislators leave for considerable room for implementation.
At the time of writing, there has yet to be a publicly available draft for the implementing law.
Finally, in 2023, the OGH used a case brought by the Austrian Lawyers' Association to clarify some key aspects relating to the business model of third party funders working under the assignment model.
The OGH – to the relief of third party funders – decided that these funders were in fact not performing services reserved for attorneys admitted to the bar, thus strengthening the position of funders operating on the Austrian market.
Legal and regulatory framework
As stated above, it was initially disputed, mostly in scholarly writing, whether litigation funding is permissible in Austria. Some authors considered it problematic that this relatively new model had yet to be regulated by special law or been made subject to any supervision, despite its steadily growing importance.
There are also no regulations on the legal form of a litigation financing company and on a minimum capitalisation, which created discussions regarding its permissibility.
Opponents of the service argued that this lack of regulation would endanger claim holders' interests. It was also argued that litigation funders should be seen as 'friends of the law',[11] similar to lawyers, notaries and tax advisers, and should, therefore, be subject to the strict professional quota litis prohibition.
A quota litis agreement consists of a fee that is calculated as a percentage of the amount won, which is one of the key elements of a typical litigation funding agreement.
This has traditionally been prohibited for attorneys. The purpose of the prohibition is to safeguard a minimum level of independence that might be in peril if the attorney had an own financial interest in the outcome of the proceedings.[12]
By 2013, the OGH had already ruled in favour of a consumer claim that was funded by a third party litigation funder. The funder was working on a contingency fee basis in a collective claim organised under the Austrian-style class action assignment model.[13]
The defendant had claimed that the litigation funder, as a friend of the law, had violated the prohibition of quota litis and had illegally agreed to participate in a share of the proceeds.
The defendant claimed that this violation also affected the validity of the assignment and, therefore, the plaintiff had claimed damages without standing to sue. In the decision, the Austrian Supreme Court sided with the plaintiff and decided that irrespective of the qualification of the litigation funder as a friend of the law, the validity of the assignment would not be impacted.
In a more recent decision from 2021, the OGH ruled with even greater clarity that the prohibition of quota litis does not apply to litigation funders, thereby greenlighting the business model, provided the following conditions are cumulatively met:
The litigation funder does not offer comprehensive legal advice or a service that is subject to lawyers' right of representation, but only examines the prospects of success of a lawsuit in advance in its own interest; and the litigation funder hands over the case to a lawyer and does not exert any further influence on the structure of the proceedings, so that the clients remain the masters of the process and their interests always take priority over those of the funder.
The fact that litigation funders actively seek and acquire clients for a (collective) case does not harm this assessment because this is in keeping with the nature of a profit-oriented enterprise.
So far, there is no regulatory framework and no guidance from case law beyond this as to any limits on what a funder may receive from the proceeds in return for financing a dispute.
It is likely that, based on the European initiative to regulate third party litigation funding, a special regime to regulate litigation funding will be implemented in Austria in the coming years, but it is too early to call in which direction this regulation will go.
Structuring the agreement
After a positive examination of the prospects of a dispute and, usually, an affirmative decision by its internal investment committee, the respective litigation funder concludes a litigation funding agreement with the claimant.
The legal qualification of the litigation funding agreement is controversially debated in Austrian legal doctrine.
Essentially, the following classifications have been discussed:
- a loan,
- a purchase of receivables or factoring,
- a contract of good fortune,
- an insurance contract,
- a partnership agreement
- a contract sui generis.
The classification under Austrian law as a civil law company and a contract sui generis with elements of a contract of good fortune are well established, and the case law on these types of contracts can help guide the interpretation of litigation funding agreements.
As in other jurisdictions, the third party litigation funder in Austria usually contractually assumes all costs of the proceedings, that is, on the plaintiff's side, the court costs, including any witness and expert expenses, as well as the lawyers' costs; and, on the defendant's side, any claims for reimbursement of costs the defendant may have against the claimant after a failed action.
In addition to the cost risk of the lawsuit, the funding offer usually also includes the expected costs for any necessary and promising compulsory enforcement mechanisms.
In return for assuming the cost risk, the litigation financier receives a share of the proceeds, that is, either a certain percentage of the amount won or a multiple of the funding capital spent on the case, or a combination of both.
Usually, the funder also receives a security from the client to protect its investment.
Typically, funding contracts in other jurisdictions such as Germany provide that the client silently (without disclosing this to the court or the opponent) assigns both the claim and the claim for reimbursement of legal costs to the financier (silent assignment) to secure the financier's claims of his or her share of the proceeds.
At the same time, the funder authorises the claimant to pursue the claim in his or her own name.
Such an assignment would, however, not be unproblematic under Austrian law because an assignment would arguably have to be disclosed under the stricter transparency standards in force in Austria.
A viable and practically used alternative that considers the Austrian standard of transparency is the pledging of the claims to the funder.
In a standard litigation funding agreement, the claimant is subject to numerous obligations.
The client promises, among other things, to conduct the proceedings in a risk-conscious and economical manner, to actively promote the proceedings and to provide comprehensive information to his or her own lawyers and the financier.
In particular, the lawyer instructed to conduct the proceedings must be released from the duty of confidentiality in favour of the third party litigation funder insofar as the information relates to the funded claim.
The claimant must also oblige his or her lawyer to keep the financier informed about the progress of the proceedings and to send the funder all relevant procedural documents.
Key decisions as to the pursuit of the claim, such as the withdrawal and waiver of a claim as well as filing or withdrawing an appeal, may usually only be made with the consent of the litigation funder.
Limitations on this may apply where consumers are involved.
In addition, typically, the funder has a consent right regarding whether to conclude a settlement with the defendant to safeguard its investment in the case.
In practice, to avoid discussions during the proceedings between the funder and the client about whether a certain settlement should be accepted, it is possible, and in many cases advisable, to agree to certain thresholds for a settlement when concluding the litigation funding agreement.
This can be designed as a sliding scale, subject to, for example, the duration of proceedings prior to settlement or the funds already spent on the claim.
If, in such a situation, the financier wants to conclude a settlement but the client does not, the financier may often terminate the contract.
The financier is then to be placed financially in the position he or she would have been in if the settlement had been concluded. Another often-used contractual options to solve such a situation can be a reciprocal right to buyout.
While clauses such as the above-mentioned are often used and are commercially accepted in business-to-business (B2B) as well as business-to-consumers (B2C) situations, some uncertainty remains as to their permissibility.
This is because, under Austrian law, the validity of certain terms of a funding agreement (e.g., the influence of a third party funder on main strategic decisions such as concluding a settlement) has not yet been decided by Austrian courts.
This will continue to create some uncertainty as to what the parties can agree to in a litigation funding agreement.
Disclosure
Court hearings in Austria are public (with some limited exceptions), and, as such, the general public has the right of attendance.
In contrast, arbitration proceedings in Austria are generally held in private, as in most other jurisdictions.
Each party must offer all evidence necessary to substantiate the statements included in its respective pleadings. In accordance with the jurisprudence of the Austrian courts, no discovery or disclosure process exists.
However, at the request of one of the parties, the court can order a party to disclose a certain document if it is in its possession.
There is an unconditional obligation to produce the document if the opponent of the person giving evidence has him or herself referred to the document, if there is an obligation to produce the document under civil law, or if the document is common to both parties.
The latter is the case if the document records mutual legal relationships or was drawn up in the interests of both parties.
In the case of an unconditional obligation to produce the document, production may not be refused under any circumstances.
In all other cases, there exists only a conditional obligation to produce the document. In this case, the opposing party may refuse to produce the document for certain reasons,[14] but is otherwise obliged to produce the document.
If the opponent does not produce the document despite the court's order, the failure to produce is subject to the free assessment of evidence and will, therefore, often be interpreted to the disadvantage of the party refusing to file the applicable document.
The involvement of a third party litigation funder is generally not disclosed, and there is no legal basis that could require a party to disclose the funding of litigation or details of the litigation funding agreement.
Attorneys' privilege is not explicitly regulated under Austrian law. Rather, it is derived from the attorney's duty of confidentiality and the corresponding provisions of procedural law providing for an attorney's right to refuse to give evidence.
It does not compare to the strong US-style privileges (attorney–client privilege or attorney work product protection). Under Austrian law, the attorney's duty of confidentiality must not be circumvented by judicial or other measures.
Consequently, the duty of confidentiality must not be circumvented by ordering the disclosure of documents or other information. The attorney's privilege also extends to the employees and assistants of the attorney, but not to third party litigation funders.
Some arbitration institutions, including the Vienna International Arbitration Center (VIAC), oblige the party supported by a third party funder to disclose the existence of a funding agreement and the identity of the funder in the statement of claim or the response to the statement of claim, or, if such agreement is made later, immediately after the funding agreement has been concluded.[15] This information is shared with the tribunal (in composition).
The purpose of this disclosure obligation is to ensure the impartiality and independence of the tribunal and to avoid any conflicts of interest. Disclosure is limited to the existence of an agreement and the identity of the third party funder.
The rules do not require the funding agreement itself to be disclosed.
Costs
i Judiciary proceedings
The procedural costs are divided into court fees, legal fees (e.g., fees of legal representation) and party expenses.
In Austria, the party that loses the case will not only bear its own costs of the proceedings, but must also reimburse the costs of its opponent that are necessary for the appropriate prosecution or legal defence (loser pays rule).[16]
Thus, litigation, especially in the case of high amounts in dispute, is often associated with a significant cost risk for the parties. In contrast to other jurisdictions, such as Germany, there is no fee cap for claim amounts beyond a certain threshold.
Under certain circumstances, procedural aid is available to parties within the litigation. [17] However, procedural aid only concerns the respective party's own costs and does not release the losing party from the obligation to reimburse the opposing party's costs of the proceedings.
Legal expenses insurance, which is meant to cover the risk of legal costs, does not provide a complete remedy.
First, the coverage is usually limited to certain amounts. Moreover, legal expenses insurance does not cover every case, if only because claims from certain areas of law (such as company law disputes) are excluded.
In contrast to legal expenses insurance, in litigation funding, no provision is made for future disputes. Rather, the litigation financier assumes the litigation cost risk of a dispute that has already arisen. It is, therefore, also possible to join proceedings that are already underway.
An insurer will also try to keep the litigation costs as limited as possible while a third party litigation funder invests in the case for the best possible outcome.
In Austria, a non-EU claimant can be required, at the request of the defendant, to provide a security for cost.[18] This is the amount the defendant will, if the case is lost, be entitled to reclaim from the unsuccessful claimant.
In Austria, this institution has been subject to massive criticism, but it remains the law to date.
This security for costs cannot be rendered against EU or EEA citizens, but for third-country nationals planning to file a case in Austria, this is a relevant cost risk to consider in the case strategy. This risk can be covered by the funder.
While Austria does follow the loser pays rule, it also limits the types of costs the losing party may owe the opponent to the usual categories of own attorneys' fees, expert fees, own expenses and court fees.
Where a party has sustained further expenses over the course of the pursuit of a claim, it bears those him or herself. Particularly, there has not been a case where the court has ordered the losing party to bear the winner's funder's fees.
ii Arbitration
Austrian domestic arbitration law grants the tribunal broad discretion on the decision on costs,[19] and only requires the tribunal to also take into account in its decision the outcome of the proceedings on the subject matter.
The tribunal is free in its decision as to what types of costs and at what amount it deems recoverable, provided those were reasonable expenses for the pursuit or defence of the claim.
The provision is not deemed mandatory, so it applies primarily in ad hoc proceedings with a seat in Austria. In institutional arbitration, the specific rules of the chosen institution prevail.
Similarly to the 2021 Austrian Code of Civil Procedure, the Vienna Arbitration Centre (VIAC) Rules[20] provide the arbitral tribunal with the broadest discretion in its cost decision on the question of allocation of the costs among the parties as well as on the issue of what costs are reimbursable: see Article 38 Section 2 of the VIAC Rules.
Interestingly, the only explicit examples the Rules mention as guidelines for what the tribunal may take into consideration in this decision are the conduct of the parties and their representatives and their contribution to fast and cost-efficient proceedings – not the outcome of the case on the merits.
This does, of course, not at all preclude the tribunal from following the loser pays principle but sets a slightly different focus.
Internationally, there is a growing trend in commercial arbitration to treat one party's costs for third party funding (i.e., the funder's success fee) as recoverable costs, following the landmark English High Court decision in Essar v. Norscot.[21]
Here, the Court upheld an ICC award that had included one party's costs for obtaining third party funding as recoverable. There are, to our knowledge, no published awards from Austria (ad hoc or VIAC) or court decisions that have dealt with this issue, but from a practical perspective, it is recommendable to consider including these costs in the requests for cost recovery.
Outlook and conclusions
Third-party litigation funding has developed from a niche product that was exclusively used for collective redress in consumer cases into a more broadly used and accepted service that is also present in the B2B world.
Funders and advising counsel must carefully draft funding agreements and will often only find little to no practical guidance as to what agreements in the contract are permissible and where the outer limits lie.
The most relevant development to look out for in 2024 will be whether Austria manages to implement the collective redress directive and how that will reshape the regulatory landscape for the funding of bundled individual claims. As at the date of writing, a draft proposal had yet to be published in Austria.
***
Footnotes
1 Malte Stübinger is general counsel Germany and Patrick Rode is senior legal counsel at Deminor.
2 OGH 31.3.2005, 3 Ob 275/04v.
3 OGH 31.3.2005, 3 Ob 275/04v.
4 OGH 11.12.1984, 4 Ob 358-365/83; Klauser, „Sammelklage“ und Prozessfinanzierung gegen Erfolgsbeteiligung auf dem Prüfstand, ecolex 2002, 805.
5 Section 227 Code of Civil Procedure (ZPO).
6 In July 2016, the European Commission found that major truck makers including Volvo/Renault, Daimler (today: Mercedes Benz Group AG), Iveco and DAF had colluded on pricing and for the implementation of environmental standards over a period of 14 years. The truck makers settled and were fined €2.93 billion. MAN escaped a fine, as it reported the cartel (leniency applicant). Swedish truck maker Scania, which opted not to settle, was fined €880 million later in 2017.
7 The Volkswagen emissions scandal began in September 2015, when the United States Environmental Protection Agency (EPA) issued a notice of violation of the Clean Air Act to German automaker Volkswagen Group. The agency had found that Volkswagen had intentionally used defeat devices in diesel engines to activate their emissions controls only during laboratory emissions testing, which caused the vehicles' NOx output to meet US standards during regulatory testing. However, the vehicles emitted up to 40 times more NOx in real-world driving. Volkswagen deployed this software in about 11 million cars worldwide, including 500,000 in the United States, in model years 2009 through 2015.
8 31.01.2023 – 4 Ob 132/22y.
9 OGH, judgment of 23 Feb 2021, 4 Ob 180/20d.
10 Section 879 Paragraph 2 of the General Civil Code (ABGB).
11 Pursuant to Section 879 Paragraph 2 No. 2 ABGB and Section 16 Paragraph 1 RAO (Lawyers' Code) profit-sharing for friends of the law (i.e., lawyers, tax advisers, auditors, notaries and accountants) is immoral and unethical.
12 As can be seen in most common law jurisdictions and, to a growing extent, also in traditional civil law countries that begin to grant their respective attorneys more commercial freedom, the fear of an overly commercialised legal profession is unfounded, or at least not inherently connected to the permissibility of such quota litis agreements.
13 OGH, 27 Feb 2013, 6 Ob 224/12b.
14 Section 305 Code of Civil Procedure (ZPO).
15 cf. Article 13a VIAC Rules 2021.
16 Section 41 Paragraph 1 Code of Civil Procedure (ZPO).
17 Section 64 Paragraph 1 Code of Civil Procedure (ZPO).
18 Section 57 Paragraph 1 Code of Civil Procedure (ZPO).
19 See Section 609 Code of Civil Procedure.
20 See https://www.viac.eu/en/arbitration/rules-of-arbitration-and-mediation.
21 Essar Oilfield Services Ltd v. Norscot Rig Management Pvt Ltd [2016] EWHC 2361 (Comm).