OGH on laesio enormis in connection with a lawyer's fee

Aug 25, 2021 Benn-Ibler Rechtsanwälte

In the case at hand, the Austrian Supreme Court (Oberster Gerichtshof, OGH) dealt with the question of which standards are to be used to assess whether a freely agreed lawyer's fee is laesio-enormis.

In the case at hand, the plaintiff sought payment of an outstanding fee for legal services rendered in the amount of EUR 5.378 from the defendant. The defendant in turn claimed a reduction by more than half (laesio enormis).

The claim was unanimously granted by the lower courts.

In earlier decisions, the OGH had already clarified that lawyer's fee agreements are in principle contestable on grounds of laesio enormis (Sec. 934 Austrian Civil Code - Allgemeines Bürgerliches Gesetzbuch, ABGB), but that the reduction by more than half always depends on the individual case. Nevertheless, the OGH once again clarified the standards to be applied when assessing laesio enormis in the case of lawyers' fees:

Pursuant to Sec. 305 ABGB, the "fair value" of an object can be calculated according to the benefit it usually provides, taking into account time and place. In principle, this is the remuneration customary in the market, which can also be determined in the case of legal services. The customary fee can be determined by reference to similar cases and in consideration of all circumstances. The defendant's assertion that a laesio-enormis assessment is not feasible due to the lack of explicit assessment criteria is therefore incorrect.

The rules of burden of proof also state that in the case of a reduction, the "reduced party" bears the burden of proof. In order to be able to make a comprehensible assessment of the mutual services, concrete evidence is therefore required. Merely stating that there is a striking disproportion between performance and compensation is not sufficient.

The defendant could not provide any evidence that the market price of the services rendered by the plaintiff was more than 50% below the plaintiff's fee. Therefore, the appeal was dismissed.

OGH 8 Ob 52/21m (26.05.2021)