C-289/02
ECLI:EU:C:2003:487
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AMOK
O P I N I O N OF ADVOCATE GENERAL MISCHO delivered on 18 September 2003 1
I — Introduction I I — Legal context
A — Community law
2. Article 4(1) of Council Directive 1. In these proceedings for a preliminary 77/249/EEC of 22 March 1977 to facilitate ruling, the Oberlandesgericht München the effective exercise by lawyers of freedom (Higher Regional Court, Munich) (Ger- to provide services2 (hereinafter 'the Direc- many) enquires of the Court, by an tive') provides: extremely succinct order for reference, whether, in a dispute before a German court in which the unsuccessful party has to reimburse legal costs to the party which was successful, and in which the successful party was represented by a foreign lawyer who acted in conjunction with a lawyer practising before the court hearing the matter, Articles 12 EC and 49 EC preclude 'Activities relating to the representation of a court from limiting the recoverable costs a client in legal proceedings or before of the foreign lawyer, in accordance with public authorities shall be pursued in each the practice of the German courts, to the host Member State under the conditions rates under the German scale of costs and laid down for lawyers established in that from disallowing, in accordance with the State, with the exception of any conditions same practice, recovery of the additional requiring residence, or registration with a costs of the local lawyer. professional organisation, in that State.'
1 — Original language: French. 2 —OJ 1977 L 78, p. 17.
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3. Article 5 of the Directive provides: 5. As regards the amount of the costs, they derive from a scale contained in the Bundesrechtsanwaltsgebührenordnung (federal regulation on lawyers' fees, herein- after 'the BRAGO'). Paragraph 24a(1) there of reads as follows: 'For the pursuit of activities relating to the representation of a client in legal proceed- ings, a Member State may require lawyers to whom Article 1 applies: '(1) If the lawyer acts as a local lawyer, under Paragraph 28 of the Law on the activities of European lawyers in Ger- many, he shall receive remuneration equivalent to the fee for lodging the application (Prozessgebühr) or for assuming responsibility for the conduct of the case (Geschäftsgebühr) to which he would be entitled had he himself been instructed by the client. That remuneration shall be charged to the corresponding fee received by the law- — to work in conjunction with a lawyer yer instructed by the client. who practises before the judicial auth- ority in question and who would, where necessary, be answerable to that authority, or with an "avoué" or "procuratore" practising before it.' '
6. The BRAGO is silent on the remuner- B — German law ation of the foreign lawyer.
4. In Germany, under Paragraph 91(1) of the Zivilprozessordnung (German Code of 7. The Gesetz über die Tätigkeit euro- Civil Procedure, hereinafter 'the ZPO'), the päischer Rechtsanwälte in Deutschland successful party in proceedings is entitled to (Law on the activities of European lawyers recover its legal costs from the unsuccessful in Germany, hereinafter 'the EuRAG'), to party, to the extent that they were necess- which the aforementioned provision refers, ary properly to bring or defend an action. was adopted in order to transpose various I - 15062
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directives concerning the rules governing 8. Paragraph 28(4) of the EuRAG refers in the legal profession. Paragraph 28 thereof turn to Paragraph 52 of the BRAGO, which establishes: establishes in its first subparagraph that a lawyer who merely liaises between the client and the legal representative or one who files expert witness statements in case-files transferred to a lawyer acting in a higher court shall receive remuneration '(1) In judicial proceedings and adminis- for that work equivalent to the fees for trative proceedings resulting from lodging the application (Prozessgebühr) criminal offences, summary offences, payable to the legal representative. service-related faults or infringement of professional obligations, in which the client cannot bring or defend proceed- ings himself, a European lawyer who provides services may act as represen- tative or defending counsel for a client only in agreement with a lawyer (do- mestic lawyer). III— Facts and procedure in the main proceedings
(2) The domestic lawyer must be auth- 9. The main proceedings, before the Ober- orised to act as representative or landesgericht München hearing the matter defending counsel before the judicial on appeal, concern the taxation of costs or administrative authority in question. pursuant to proceedings arising from a He shall ensure that the European contractual dispute brought before the lawyer providing services complies Landgericht (Regional Court) Traunstein with the principles of the proper (Germany), between an Austrian undertak- administration of justice when provid- ing, A & R Gastronomie GmbH (here- ing representation or defence services. inafter 'A & R'), established in Salzburg, and hence near the German border, and a German undertaking, AMOK Verlags GmbH (hereinafter 'AMOK'), the unsuc- cessful party. A & R was represented by its Austrian lawyer, acting in conjunction with (3) In the absence of agreement between a local lawyer, described by the referring the parties concerned to the contrary, court as a 'correspondence lawyer'. no contractual relationship is estab- lished between the domestic lawyer and the client.
10. A & R seeks recovery of its legal costs from AMOK, the unsuccessful party. Spe- cifically it is claiming, on the one hand,
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reimbursement of the costs of the Austrian the following question to the Court for a lawyer calculated according to the rates in preliminary ruling: the Rechtsanwaltstarifgesetz (Austrian law on lawyers' fees, hereinafter 'the RATG') and, on the other, reimbursement of the fees of the German local lawyer who acted in conjunction with him. 'Are Articles 49 EC and 12 EC to be interpreted as precluding a decision of a national court in accordance with which, in a Member State (domestic territory), the maximum amount of a claim for reim- bursement of the costs of the services of a 11. The opposing party disputes the claim, lawyer of a different Member State in arguing that the costs of a foreign lawyer domestic proceedings and of an Einverneh- must be limited to the costs calculated mensanwalt (domestic lawyer acting in according to the German scale set in the conjunction with the foreign lawyer) is BRAGO which is, here, a considerably the sum of the costs including VAT which lower scale. Nor does AMOK see any would have been incurred in the case of reason why it should reimburse the costs representation by a domestic lawyer?' of two lawyers.
12. The Oberlandesgericht München, hear- ing the application for the taxation of costs IV — Law at second instance, informs us that, accord- ing to its settled case-law, a foreign party who instructs a foreign lawyer can only claim legal costs from the opposing party up to the amount it would have incurred in 14. At the hearing the Commission told the instructing a German lawyer, and under no Court that it no longer held the reservations circumstances the costs of the local lawyer it had expressed in its written observations who acted in conjunction with the foreign regarding the admissibility of the order for lawyer. reference.
15. For my part, I take the view, likewise, 13. Uncertain, however, as to whether that that even if the order for reference is very case-law practice is consistent with Com- brief, it does nevertheless contain the munity law, the Oberlandesgericht necessary information to enable the Court München stayed proceedings and referred to give an interpretation of Community law I - 15064
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which will be helpful to the referring and is indirectly obliged to engage a lawyer court. 3 I also take the view that there is established in the place where the proceed- no reason to doubt that the Oberland- ings are held. At the same time, the fore- esgericht München is acting, in the main going restricts the freedom to provide proceedings, as a court or tribunal within services of the foreign lawyer'. the meaning of Article 234 EC.
18. According to A & R, the Austrian fee A — The first limb of the question (ap- scale should furthermore be used according plicability of the Austrian fee scale) to private international law, since the Community connection for the lawyer's claim for costs is the place where he is established. 1. Arguments submitted to the Court
16. A & R, the defendant in the main 19. The facts of the case likewise, in the proceedings, asserts that limiting to the view of A & R, justified use of the Austrian BRAGO rates the maximum costs recover- fee scale. As a party established abroad, it able in respect of a foreign lawyer contra- was entitled to instruct a reputable lawyer venes Article 49 EC. established close to the place where it has its address.
17. Thus, 'whereas, where its case is suc- cessful, a (German) domestic party to proceedings can in principle claim reim- 20. The Austrian Government, for its part, bursement in full of its lawyers' fees, a draws a distinction between the lawyer- foreign litigant, and a party to the proceed- client relationship, which is a matter of ings, which has to pay higher fees under contract law, and the issue of the recovery foreign rules governing the fees of lawyers of legal costs, which can give rise to an established in that other place, is liable for action in public law, since it is a matter of an at times not insignificant part of the fees procedural law and subject to the lex fori. payable. The litigant is accordingly The lex fori applies, moreover, as a result restricted in its freedom to choose a lawyer of the principle of equality of arms, according to which each party should bear the same risk as regards the reimbursement 3 — See, in particular, the order in Case C-190/02 Viacom [2002] ECR I-8287, paragraphs 13 to 16. of costs.
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21. Consequently, the Austrian Govern- 24. The German Government asserts, ment submits, there is no restriction on thereafter, that the nationality of the the freedom to provide services within the parties is completely irrelevant, as is the meaning of Article 49 EC nor any dis- lawyer's nationality or place of establish- crimination within the meaning of ment. Even if a lawyer registered in Ger- Article 12 EC, since an Austrian lawyer many, under a fee agreement, claims can pursue his activity in Germany on the remuneration above the BRAGO rates, it same terms, as regards the recovery of will not be recoverable at the level under costs, as the Federal Republic of Germany that agreement. prescribes for its own nationals.
25. According to the German Government, the rules under the BRAGO, which lays 22. The German Government, in turn, down non-discriminatory arrangements for points out that, under the law applicable the exercise of the profession which apply in Germany, liability for a lawyer's fees to the costs of every lawyer practising in falls under the law of the place where he is Germany, are analogous to selling arrange- established, whereas the successful party's ments which fall outside the general pro- action against the unsuccessful party for hibition on restrictions. It refers in this reimbursement of its costs is a matter of the regard to the judgments in Alpine Invest- German law of civil procedure. ment s4 and Gourmet International Prod- ucts 5in which the Court, it claims, broa- dened the scope of the case-law on selling arrangements in the Keck and Mithouard 6 ruling to cover restrictions on the freedom to provide services. The German Govern- ment draws the conclusion from the fore- going that the limitation on the reimburse- ment of legal costs is not a prohibited 23. The German Government also draws restriction. attention to the fact that the limitation on the reimbursement of lawyers' costs emerges from the notion of necessity in Article 91(1) of the ZPO and adds that there may be cases where it is necessary to have recourse to a foreign lawyer as a result of the particular nature of the case, for 26. Even if, the German Government con- example because foreign law applies. The tinues, the limitation on the reimbursement amount of the recoverable costs may then of legal costs laid down by the BRAGO did exceptionally take into account a foreign fee scale. The restriction being questioned by the referring court, however, clearly 4 — Case C-384/93 [1995] ECR I-1141, paragraphs 33 to 35. does not relate to a situation in which 5 —Case « 0 5 / 9 8 [2001] ECR I-1795, paragraphs 18 to 21 recourse to the foreign lawyer was necess- and 39. ary due to the particular nature of the case. 6 — Joined Cases C-267/91 and C-268/91 [1993] ECR I-6097, paragraphs 13 and 17.
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include a restriction on the freedom to 29. The Commission, for its part, draws provide services, that restriction would be attention to the fact that Article 4(1) of the justified on the basis of the conditions Directive expressly states that (cross- identified by the Court in Gebhard.7 border) activities relating to the represen- According to that government, it meets tation of a client are pursued in each host requirements for the proper administration Member State under the conditions laid of justice, which in Reisebüro Broede the down for lawyers established in that State. Court has acknowledged to be an impera- Lawyers established in a different Member tive requirement in the general interest. 8 State who engage in the cross-border provision of services in Germany are there- fore subject in that State to the same rules on costs as are applicable to German lawyers.
27. The German legislature has chosen the BRAGO to be the guiding framework for establishing an adequate balance between the interests involved. By limiting the reimbursement of costs to set rates, it 30. Those rules apply irrespective of what protects the unsuccessful party from exag- has been agreed between the lawyer and his gerated claims for costs. Where, in the client. If the agreed fees exceed any costs event of losing a case, a party has to which the opposing party may have to reimburse costs, the relevant liability must, reimburse under the law of the host in the interests of legal certainty, be pre- Member State, the client remains liable to dictable and cannot depend on the arbit- its lawyer for that debt. rary decision of the opposing party. The unsuccessful party in fact has no influence over the choice of lawyer nor on the level of fees set between the opposing party and its legal representative.
2. Analysis
28. The German Government further points out that Article 49 EC, which is a special provision on the freedom to provide services, has precedence over Article 12 EC. 31. The Oberlandesgericht München asks the Court whether Article 12 EC or 7 — Case C-55/94 [1995] ECR I-4165, paragraph 37. Article 49 EC precludes the costs arrange- 8 — Case C-3/95 [1996] ECR I-6511, paragraph 38 et seq. ments it has customarily applied.
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32. The first paragraph of Article 12 EC has been applied and enacted by Article 49 provides that 'within the scope of appli- EC. It is therefore that article and the cation of this Treaty, and without prejudice following provisions in Chapter 3 on ser- to any special provisions contained vices which it is necessary to interpret. therein,9 any discrimination on grounds of nationality shall be prohibited.'
36. According to the first paragraph of Article 49 EC, '[wjithin the framework of 33. Before finding that the provision in the provisions below, 11 restrictions on question applies in a particular case, it is freedom to provide services within the therefore necessary to ascertain that there is Community shall be prohibited in respect no special provision which defines the of nationals of Member States who are operation of that principle in the field established in a State of the Community concerned. other than that of the person for whom the services are intended'.
34. The foregoing has been confirmed by 37. The last paragraph of Article 50 EC settled case-law from which it emerges that specifies that '[w]ithout prejudice to the Article 6 of the EC Treaty (now, after provisions of the chapter relating to the amendment, Article 12 EC), 'which lays right of establishment, the person providing down the general principle of the prohib- a service may, in order to do so, tempor- ition of discrimination on grounds of arily pursue his activity in the State where nationality, applies independently only to the service is provided, under the same situations governed by Community law in conditions as are imposed by that State on respect of which the Treaty lays down no its own nationals'. specific prohibition of discrimination'. 10
38. According to the first paragraph of 35. So, in the present case, the Court is Article 52 EC, '[i]n order to achieve the called upon to rule on an issue of the liberalisation of a specific service, the freedom to provide services, an area in Council shall, on a proposal from the which the principle of non-discrimination Commission and after consulting the Econ- omic and Social Committee and the Euro- pean Parliament, issue directives acting by 9 — Emphasis added. a qualified majority'. 10 —Case C-100/01 Oteiza Olazabal [2002] ECR I-10981, aragraph 25, and, with respect particularly to Article 49 ĒC, Case C-18/93 Corsica Ferries [1994] ECR I-1783, paragraphs 19 and 20. 11 — Emphasis added.
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39. Such a directive has been issued in 43. The fact that many of those conditions relation to the services provided by law- and rules may be different from those in the yers. I refer to the Directive 'to facilitate the State where the provider of the services is effective exercise by lawyers of freedom to established, and that they might therefore provide services', and hence to eliminate all be perceived as burdensome, or that they restrictions incompatible with the Treaty. may be such as to make the provision of cross-border services less attractive to the foreign lawyer, does not have to be taken into consideration since there is a harmon- ising directive which has confirmed their legitimacy.
40. It follows from Article 4(1) of that Directive that '[a]ctivities relating to the representation of a client in legal proceed- ings or before public authorities shall be pursued in each host Member State under the conditions laid down for lawyers estab- lished in that State,12 with the exception of 44. One of those conditions or rules which any conditions requiring residence, or regis- make the pursuit of cross-border activity tration with a professional organisation, in less attractive but which must none the less that State.' be allowed is that relating to the ceiling on fees imposed by the BRAGO.
41. Article 4(2) adds that '[a] lawyer pur- suing these activities shall observe the rules of professional conduct of the host Member 45. It has not in fact been disputed in the State...'. course of the proceedings before the Court that the expression 'conditions laid down for lawyers established in that State' also covers the terms of lawyers' remuneration.
42. Although the Community legislature has therefore excluded two conditions which would have the effect of rendering the provision of services analogous to establishment, it plainly took the view that 46. Admittedly, the main proceedings do all other conditions and rules in force in the not directly concern the Austrian lawyer host State can apply. himself. His entitlement to act in proceed- ings in Germany and to charge his client fees higher than those under the BRAGO 12 — Emphasis added. has not been called into question.
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47. The issue which the Oberlandesgericht 52. The fact that a party to proceedings München has raised does nevertheless fall taking place in Germany which wins its within the scope of application of case having called upon the services of a Article 4(1) of the Directive, because the lawyer established in a different Member conditions on which a client can recover his State cannot recover in full the (higher) fees lawyer's fees from the opposing party are charged by that lawyer amounts to a closely linked to the conditions on which restriction within the meaning of that lawyer can pursue his activity. Article 49 EC. That litigant is, effectively, discouraged from having recourse to such a lawyer. There is, as a result, an indirect obstacle to the provision of cross-border services by lawyers established in different 48. Furthermore, the very fact that the Member States. successful party can, in Germany, recover the fees in question is the result of the 'conditions laid down for lawyers estab- lished in that State'. In a number of other Member States there is indeed no such right. 53. It is apparent nevertheless that the case-law practice in question does satisfy the four requirements defined by the case- law of the Court. 13 49. By reason of all the foregoing I take the view that it can be inferred from Article 4(1) of the Directive that the German courts are entitled to set the amount of the fees recoverable by a lawyer established in a different Member State on the basis of the relevant national rules. 54. The practice is adopted without dis- tinction in all proceedings taking place before a German court.
50. It is therefore unnecessary to examine the first limb of the question referred for a preliminary ruling in the light of Article 49 EC.
55. It is also justified by imperative require- ments in the general interest, namely to uphold the principles of legal certainty and 51. Since A & R, the German Government the proper administration of justice. 14 and the Commission have nevertheless analysed that limb, I shall comment as follows, by way of observations in the 13 — Case C-79/01 Payroll and Others [2002] ECR I-8923, paragraph 28 and the judgments cited therein. alternative. 14 — Reisebüro Broede, op. cit.
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56. Where, under domestic legislation, the which limits the maximum amount unsuccessful party in proceedings has to recoverable by the successful party of the reimburse the legal costs of the successful costs of the services provided by a lawyer party, the relevant liability must not, so far established in a different Member State to as possible, be unpredictable nor excessive. the legal costs, including VAT, which would have been incurred in the case of representation by a lawyer established in the State where the proceedings took place.
57. A party to proceedings in fact has no influence over the opponent's choice of its lawyer nor on the level of fees set between that party and its legal representative, whether the latter is established in the country in issue or in a different Member State. B — The second limb of the question (recovery of the fees of the local correspon- dence lawyer)
58. The risk that it might find itself, should it lose its case, facing actions for the 1. Arguments submitted to the Court recovery of unforeseeable costs could, therefore, prompt an economically weak party to decline to assert its legal rights even if, on a first analysis, it has a good case.
61. A & R asserts, in essence, that the fact that a foreign successful party which uses the services of a foreign lawyer established in the place where it is resident cannot 59. Lastly, a rule such as that in issue is recover the fees of the local lawyer further also suitable for securing the attainment of exacerbates the infringement of Article 49 the objective which it pursues and does not EC. go beyond what is necessary in order to attain it.
62. A foreign party in fact, it claims, has an 60. I therefore propose that the Court even greater incentive, for financial rea- should reply, as regards the first limb of sons, to use only the services of a lawyer the question referred, that Article 49 EC established in the place where the proceed- and the Directive should not be interpreted ings are heard. Its right freely to choose a as precluding a national rule of case-law lawyer is therefore restricted.
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63. According to the German Government, within the meaning of Article 49 EC if the the fact that the involvement of the local foreign lawyer were obliged to have lawyer gives rise to additional costs is an recourse to a (local) domestic lawyer but inherent consequence of Article 5 of the was not able to recover the corresponding Directive. costs. There could be no justification for such a — financial — barrier, which would amount to a clear infringement of Article 49 EC'.
64. That rule does not in its view require that the person for whom the service is intended should be able to enjoy the assist- ance of both the local lawyer and the 2. Analysis foreign lawyer 'at no cost', and with all the more reason because there are also types of procedure, it submits, in which there is no provision for any reimbursement by the unsuccessful party. 67. It is common ground that no provision of Community law requires Member States to prescribe that the unsuccessful party in proceedings must reimburse to the success- ful party the costs incurred by the latter. 65. Since the client is always itself liable in the first place to pay its lawyers, there can be no discrimination against the foreign lawyer as a result of the fact that the client's opponent is not bound, in certain cases, to reimburse to the client the costs of the local lawyer. 68. Nor does Community law require Member States to provide that, where one party to an action has recourse to a lawyer established in a different Member State, that lawyer must act in conjunction with a local lawyer. Article 5 of the Directive 66. The Commission, conversely, takes the merely establishes a power to do so. view that, 'where a foreign lawyer acts in conjunction with a local lawyer within the meaning of Directive 77/249/EEC, both lawyers will receive costs in accordance with domestic law. That conclusion flows indirectly from the Directive, with the 69. Is it possible, none the less, to infer effect that it is scarcely necessary to refer from Community law that, where a to the Treaty provisions. It is therefore Member State has availed itself of both expedient only for the sake of completeness those rights, the losing party in proceedings to add that there would plainly be an must reimburse to the winner the fees of its obstacle to the freedom to provide services local lawyer? I - 15072
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70. Without doubt, a reply in the negative 74. That being the case, it is impossible to to that question would mean that, in such a see how the same principle of the proper Member State, the parties to a dispute administration of justice could also dictate would be discouraged from having recourse that the successful party cannot recover the to lawyers established in other Member costs of that involvement. States and there would in consequence be an impediment to the freedom of those lawyers to provide services.
75. The only contrary argument which might be put forward is that the unsuccess- ful party should be protected from exagger- ated claims for reimbursement. 15 71. In that respect one can point out first of all that, where the legislation in a Member State provides for reimbursement of costs which are 'necessary' properly to bring or defend an action and where the same legislation requires the engagement of a local lawyer, whose involvement is, as a 76. I did, admittedly, allow, with regard to result, deemed to be 'necessary', the fees of the first limb of the question referred for a that lawyer must be recoverable because preliminary ruling, although only in the their reimbursement is one of the 'con- alternative, that the argument referred to ditions laid down for lawyers established in could justify limitation of the recoverable that State' within the meaning of Article 4 fees of the foreign lawyer to the level set by of the Directive. the BRAGO.
77. The position is different, however, as 72. Even were it appropriate to examine regards the costs of the local lawyer. the issue in the light of Article 49 EC rather Paragraph 28 of the EuRAG, effectively, than from the point of view of the Direc- requires him to act, and Paragraph 24a(2) tive, the outcome would be the same. of the BRAGO defines his remuneration.
78. There is therefore no legal uncertainty 73. It should be noted here that, where a in that respect. Member State requires a local lawyer to act, it is because it considers such involve- ment to be necessary for the proper admin- 15 — See the arguments of the German Government in point 27 istration of justice. above.
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79. Any party to an action is aware that it 80. As regards the second element of the runs the risk of the opposing party calling question referred for a preliminary ruling, I upon the services of a foreign lawyer, who propose that the Court should, accordingly, must be assisted by a local lawyer, and that find that Article 49 EC and the Directive it may be liable to pay the fees of both those require that the costs recoverable by a lawyers. It therefore has to take that risk successful party in proceedings who has into consideration when deciding to bring used the services of a lawyer established in proceedings or when it declines to seek an another Member State should take into amicable solution despite being open to a account the costs arising from the involve- legal action by the other party to the ment of the local lawyer. dispute.
V — Conclusion
8 1 . Having regard to the foregoing considerations, I propose that the Court should reply as follows to the question referred by the Oberlandesgericht München:
(1) Article 49 EC and Council Directive 77/249/EEC of 22 March 1977 to facilitate the effective exercise by lawyers of freedom to provide services should not be interpreted as precluding a national rule of case-law which limits the maximum amount recoverable by the successful party of the costs of the services provided by a lawyer established in a different Member State to the legal costs, including VAT, which would have been incurred in the case of representation by a lawyer established in the State where the proceedings took place.
(2) Conversely, Article 49 EC and Directive 77/249 do, in this case, require that the successful party should be able to recover the costs of a local lawyer where, under the legislation of the same Member State, the lawyer established in a different Member State was obliged to act in conjunction with such a lawyer.
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