AG Munich: The 1.3 business fee is to be reimbursed for traffic law services

This article analyses the established case law of the Munich Local Court on the reimbursability of the 1.3 business fee for legal service providers in traffic accident cases.

I. Introduction

As soon as an injured party uses the services of a legal service provider for professional claims settlement following a road traffic accident, he or she is occasionally confronted with a reflex-like fantasy objection: a large liability insurer in Munich attempts to restrict the injured party's claim for reimbursement of his or her pre-litigation legal costs across the board.

The intention is clear: the 1.3 standard fee to be reimbursed in road accident cases[1] according to the German Lawyers„ Fees Act (RVG) is to be capped at a rate of 0.9 according to No. 2300 Para. 2 VV RVG by downgrading the complex accident settlement to a mere “simple debt collection service".

While Munich occupies a prominent position as an international insurance centre with around 60 companies and over 33,000 industry employees, a clear and established line of case law has emerged in this very „living room of the insurance industry“. The Munich Local Court has made it unmistakably clear in a large number of proceedings that the pre-trial legal costs for instructing a traffic law service provider are to be reimbursed at the standard rate of 1.3 according to the German Lawyers' Fees Act (Rechtsanwaltsvergütungsgesetz).

II. The case law of the AG Munich

A typical argument used by insurers in an attempt to evade the injured party's claim for compensation for pre-trial legal costs is the blanket assertion that the road traffic accident was a simple case in which the injured party could have dealt with the claim himself.

The Munich District Court clearly rejects this argument and, referring to the case law of the Federal Court of Justice, states[2] It is clear that road accidents involving two or more motor vehicles are generally not a simple case.[3]

In particular, the insurer's ex-post assessment is a false conclusion if it states that the handling of the claim turns out to be less problematic after the involvement of a legal service provider. After all, it is precisely thanks to the work of the legal service provider that the injured party's claims for damages are enforced professionally and efficiently.

The AG Munich explains:

„The fact that the settlement in the specific case turned out to be problem-free after the plaintiff acted as a legal service provider is based on the prosecution by the plaintiff and does not justify the conclusion that the prosecution would have been easy for the injured party if he had taken it into his own hands.“[4]

The handling of a road accident involves complex questions regarding the liability quota, the operational risk and the scope of the reimbursable damage items.[5]

Even if the liability situation appears to be clear-cut, liability insurers regularly ensure that individual damage items (repair costs in the case of fictitious invoicing, expert costs, towing costs, hire car costs, mercantile depreciation, etc.) and the extent of their recoverability are disputed. The case law on these topics is complex and constantly evolving.[6]

If the injured party therefore logically utilises the professional help of a legal service provider, the insurer must reimburse a 1.3 business fee incurred. Finally, an average fee of 1.3 according to the RVG is generally appropriate in road accident cases.[7]

Attempts by the insurer to reduce the fee to be reimbursed to 0.9 by referring to the provision of no. 2300 para. 2 VV RVG are futile. The AG Munich clarifies that the qualified legal services in traffic accident cases are regularly particularly extensive and difficult for the above-mentioned reasons.[8]

III Alternative justification, same result

Ultimately, it does not matter which derivation is favoured when it comes to the question of the reimbursable amount of costs for legal services in traffic accident cases.

It is increasingly being argued in literature and case law that the scope of application of no. 2300 para. 2 VV RVG to the assertion of claims for damages arising from traffic accidents is already fundamentally excluded due to its history and its meaning and purpose.

No. 2300 para. 2 VV RVG was introduced by the legislator in order to protect defaulting debtors - especially consumers - from excessive collection costs in the recovery of undisputed, established principal claims (e.g. outstanding mail order or tradesmen's invoices). However, this protective purpose cannot be transferred to tortious claims for damages following a road traffic accident. The defendant is usually a professional liability insurer who, as a solvent risk carrier, does not require consumer protection.

Unlike a simple claim for compensation, the amount of damage after an accident is not fixed from the outset. It must first be determined by examining the liability situation and by assessing, calculating and substantiating the individual damage items. This damage assessment activity is qualitatively completely different from the simple collection of claims, which is the focus of the standard.

If one follows this dogmatically consistent line, No. 2300 Para. 2 VV RVG is not applicable to traffic law services at all. The general fee framework of No. 2300 Para. 1 VV RVG therefore remains directly applicable, within which the 1.3 fee forms the standard fee for average cases according to established case law.

In its established case law, the Local Court of Munich chooses a less dogmatic, more pragmatic approach. It leaves the question of the general applicability of the standard aside and instead examines the specific requirements of the offence.

According to the wording of no. 2300 para. 2 VV RVG, the fee reduction to 0.9 only applies if the work was not particularly extensive or difficult. This is precisely where the case law of the AG Munich comes in: As explained, the proper handling of a road traffic accident is regularly legally demanding due to the complex case law on liability ratios, operational risk and individual damage items. This means that the criterion of particularly difficult work within the meaning of No. 2300 Para. 2 VV RVG is usually fulfilled in the case of road accidents.

Regardless of which approach is followed, the result is the same: capping the fee at 0.9 in road traffic accident cases is not appropriate. The pre-litigation costs are to be reimbursed in the amount of the 1.3 standard fee.

IV. Conclusion

A common thread emerges from the case law of the various courts of the Munich District Court: A flat-rate reduction of the claim for reimbursement of the accident victim with regard to the remuneration of the legal service provider is out of the question. The qualified work of registered traffic law service providers is typically demanding and extensive and justifies the 1.3 standard fee.