What requirements does the transparency requirement under Article 4(2) of the Unfair Contract Terms Directive (Directive 93/13/EEC) place on hourly fee agreements between a lawyer and a consumer?
A lawyer sued his former client for payment of the agreed fee. The fee agreement signed by the client provided for billing based on time. An hourly rate of €300.00 was agreed upon, with a billing time of 10 minutes. The lawyer informed his client that the length of the custody, contact rights, and maintenance proceedings, and thus the actual amount of time and effort, could not be estimated. Therefore, billing based on time was the fairest option. During the course of the proceedings, the client terminated his lawyer's power of attorney and refused to pay the outstanding fee of €6,455.74. He claimed that the fee agreement was not transparent and contradicted a ruling of the European Court of Justice (ECJ January 12, 2023, C-395/21). According to the ruling, a fee agreement based on time spent (without further details) did not meet the requirement of clarity and comprehensibility. Previous legal matters in which the client had consulted a lawyer were usually billed according to the Lawyers’ Tariff Act (RATG).
The core question of the legal dispute was therefore which transparency requirements the agreement on an hourly rate for legal services must meet in light of the decision of the European Court of Justice (ECJ). In this context, the professional rules for lawyers were particularly relevant. Lawyers must regularly inform their clients comprehensively, in an easily verifiable and comprehensible manner, about the services already provided.
The court of first instance found the fee agreement valid because it had been discussed in advance and upheld the claim. The court of appeal held that the agreement had not been negotiated in detail. It was therefore non-transparent within the meaning of Directive 93/13/EEC and Section 6 (3) of the Consumer Protection Act (KSchG) and thus invalid. The Supreme Court (OGH) reinstated the first instance judgment. It confirmed that a lawyer's professional duties meet the requirements of the ECJ. The defendant was sufficiently informed and could estimate the costs he would incur. The OGH also rejected the accusation of usury: There was no blatant disproportion between the service provided and the fee, and the defendant's lack of experience with legal fees or his emotional distress caused by the proceedings were not sufficient to render the contract invalid.
In conclusion, the Supreme Court's decision demonstrates that it is crucial that clients are provided with transparent and continuous information about the services and their scope, enabling them to realistically assess the financial consequences of the fee agreement. The case law emphasizes the importance of transparency in the client-client relationship and makes it clear that blanket accusations of a lack of transparency are not sufficient to overturn a fee agreement.
Supreme Court 14.01.2025, 8 Ob 92/24y
17.02.2025