A decision by the German Federal Court of Justice is causing considerable unease in the German legal profession. What was at issue?
A debt collection company had low-threshold claims from consumers assigned to it in order to bundle them into a class action and then bring them before the court in its own name. A professional association had filed a complaint against this, claiming that this procedure exceeded the scope of the so-called "collection privilege" of the German Legal Services Act. The Court of Appeal also agreed with this view and denied the debt collection agency the right to sue. The Federal Court of Justice, however, does not consider this view to be supportable.
As reported by lto.de, the court refers almost exclusively to the question of whether the consumers who have assigned their claims have a special interest in protection that speaks against the collection agency asserting their claims. In short: this is not the case, since the collection agency must also be represented by a lawyer in court. The BGH also considers the business model, according to which the collection agency assumes the sole litigation risk in order to retain 35% of the awarded claim amount in the event of success, to be appropriate. On the other hand, there is no question of a protective interest on the part of the legal profession, nor are they unduly disadvantaged by the fact that the lawyers themselves are barred from success fees to this extent.
German lawyers must accept, according to the article in lto.de, that they will face even more structural competition from debt collection companies.
This case law is not directly applicable to the Austrian market, as the "debt collection privilege" of the German Legal Services Act has no direct equivalent in the Austrian legal system.
