This article was published in the 2015 edition of the International Comparative Legal Guide to Litigation & Dispute Resolution (Global Legal Group Ltd, London):
I. LITIGATION
1 PRELIMINARIES
1.1 What type of legal system has Austria got? Are there any rules that govern civil procedure in Austria?
Austria is a civil law country; thus, laws are codified into collections. Civil procedural rules are contained in various acts such as:
the Austrian Jurisdiction Act (“Jurisdiktionsnorm”, AJA), regulating the organisation and jurisdiction of courts;
the Austrian Code of Civil Procedure (“Zivilprozessordnung”, ACCP), governing the contentious proceedings in civil courts; and
the Austrian Enforcement Code (“Exekutionsordnung”, AEC), determining the enforcement of judgments (as well as arbitral awards and preliminary remedies).
In addition, Austria is inter alia party to the Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters (“Brussels Convention”) and the Lugano Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters.
1.2 How is the civil court system in Austria structured? What are the various levels of appeal and are there any specialist courts?
On the first level, civil proceedings are initiated either before the district court (“Bezirksgerichte”) or regional courts (“Landesgerichte”).
District courts have jurisdiction in most disputes relating to tenancy and family law (subject matter jurisdiction) and in matters with an amount in dispute of up to €10,000 (monetary jurisdiction). Appeals on points of fact and law are to be made to the regional courts. If a legal question of fundamental importance is concerned, another final appeal can be submitted with the Supreme Court (“Oberster Gerichtshof ”); see below.
Regional courts have monetary jurisdiction in matters involving an amount in dispute exceeding €10,000 and subject matter jurisdiction in IP and competition matters, as well as various specific statutes (Public Liability Act, Data Protection Act, Austrian Nuclear Liability Act). Appeals are to be directed to the Higher Regional Courts (“Oberlandesgerichte”). The third and final appeal goes to the Supreme Court.
As a general rule, a matter may only be appealed to the Supreme Court if the subject matter involves the resolution of a legal issue of general interest, i.e. if its clarification is important for purposes of legal consistency, predictability or development, or in the absence of coherent and previous decisions of the Supreme Court.
With respect to commercial matters, special Commercial Courts (“Handelsgericht und Bezirksgericht für Handelssachen”) only exist in Vienna. Apart from that, the above-mentioned ordinary courts decide as Commercial Courts. Commercial matters are, for example, actions against businessmen or companies in connection with commercial transactions, unfair competition matters, etc. Other special courts are the Labour Courts (“Arbeits-und Sozialgericht”), which have jurisdiction over all civil law disputes between employers and employees resulting from (former) employment as well as over social security and pension cases. In both commercial (insofar as Commercial Courts decide in panels) and labour matters, respectively, lay judges and professional judges decide together. The Court of Appeal in Vienna decides as the Cartel Court (“Kartellgericht”) on the trial level. This is the only Cartel Court in Austria. Appeals are decided by the Supreme Court as the Appellate Cartel Court (“Kartellobergericht”). In cartel matters, as well, lay judges sit on the bench with professional judges.
1.3 What are the main stages in civil proceedings in Austria? What is their underlying timeframe?
The statement of claim (“Klage”) is filed with the court and passed on to the defendant, along with an order to file a statement of defence (“Klagebeantwortung”). If the defendant replies in time, a preparatory hearing will be held, which mainly serves the purpose of shaping the further proceedings by discussing the main legal and factual questions at hand as well as questions of evidence (documents, witnesses, experts, etc.). In addition, settlement options might be discussed. After an exchange of briefs, the main hearing(s) follow. The average duration of first instance litigation is one year. However, complex litigations may take significantly longer. At the appellate stage, a decision is handed down after approx. six months.
1.4 What is Austria’s local judiciary’s approach to exclusive jurisdiction clauses?
Mutual agreements on jurisdiction are permitted unless expressly prohibited by law. If a valid jurisdiction clause is applicable, courts (if their jurisdiction is not agreed upon) have to dismiss the case.
1.5 What are the costs of civil court proceedings in Austria? Who bears these costs? Are there any rules on costs budgeting?
Legal costs comprise court fees and – if necessary − fees for experts, interpreters and witnesses. According to the Austrian Court Fees Act (“Gerichtsgebührengesetz”), the claimant (appellant) must advance the costs. The amount is determined on the basis of the amount in dispute. The decision states who should bear the costs or the proportion in which the costs of the proceedings are to be shared. Lawyers’ fees are reimbursed pursuant to the Austrian Lawyers’ Fees Act (“Rechtsanwaltstarifgesetz”). There are no rules on costs budgets, therefore there are no requirements to provide a detailed breakdown for each stage of the litigation, or to identify costs and disbursements incurred already together with those estimated.
1.6 Are there any particular rules about funding litigation in Austria? Are contingency fee/conditional fee arrangements permissible? What are the rules pertaining to security for costs?
Unless agreed otherwise, lawyers’ fees are subject to the Austrian Lawyers’ Fees Act. Agreements on hourly fees are permissible and common. Lump sum fees are not prohibited but are less commonly used in litigious matters. Contingency fees are only permissible if they are not calculated as a percentage of the amount awarded by the court (“pactum de quota litis”).
Legal aid (“Verfahrenshilfe”) is granted to parties who cannot afford to pay costs and fees. If the respective party can prove that the financial means are insufficient, court fees are reprieved or even waived and an attorney is provided free of charge.
If a foreigner files a lawsuit, upon a defendant’s request, a security deposit for legal costs must be made unless an international agreement provides otherwise. This does not apply if the claimant has its residence in Austria, the court’s (cost) decision is enforceable in the claimant’s residence state or the claimant disposes of sufficient immovable assets in Austria.
1.7 Are there any constraints to assigning a claim or cause of action in Austria? Is it permissible for a non-party to litigation proceedings to finance those proceedings?
One single action containing several claims is permitted if the claims get assigned to another legal entity; such legal entity acts as the sole claimant if the claims rely on the same or similar legal and factual basis. The concept has been approved by the Supreme Court.
Third party financing is permitted and usually available for higher amounts in dispute (minimum approx. €50,000), yet it is more flexible regarding fee agreements. Note that fee agreements which give a part of the proceeds to the lawyer are prohibited.
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