When lawyers are represented by other lawyers...

If a law firm is sued for damages together with the professionally associated lawyers because of a lawyer's error in advice, it can be represented in the process by a lawyer other than that of the co-sued lawyers and, in the event of its success, demand from its opponent in principle the reimbursement of the lawyer's fees incurred in the amount of the statutory fees and expenses.     

No obligation on the part of the lawyers to mandate the law firm

If the law firm (here: an LLP under American law) and the co-sued lawyers would have had to jointly appoint a lawyer with their representation in the liability proceedings for reasons of cost law due to similar interests, an abusive action of the law firm based on the commissioning of another lawyer cannot be referred to the decision of the Federal Court of Justice of 02.05.20071 be denied. It was not assumed that the law firm could also appoint the legal representative for the partners if they were sued jointly, but rather the shareholders of a law firm were advised to mandate the law firm as usual and not one of its members; then none of the social associations would be favoured or disadvantaged.

However, it has been decided that as a rule only the motor vehicle liability insurer, but not the policyholder, is entitled to reimbursement of the lawyer's fees if insurers and policyholders each appoint a legal representative in the traffic accident proceedings. The additional costs incurred by the policyholder's engagement of an own lawyer are non-refundable. In liability proceedings, the insurance condition E.2.4 AKB applies in the internal relationship between insurer and policyholder. Accordingly, in the event of a legal dispute, the policyholder must leave its management to the insurer and grant power of attorney to the lawyer appointed by the insurer. It must therefore be concluded that, in principle, there is no reason for the policyholder to appoint its own legal representative.2.

However, there is no corresponding regulation in the relationship between the law firm and its shareholders. The fact that the company would have reserved the right in the articles of association to appoint a joint legal representative in the liability proceedings has neither been established nor alleged. A corresponding justification does not arise, as the defendant claims to 1, from No. 1008 RVG VV. It only stipulates that a lawyer who is commissioned by several clients is entitled to an increase fee. This does not determine which of the client may commission him, nor who of the clients has to pay the fee and in what amount and who is entitled to the claim for reimbursement against the opponent. In the relationship between the commissioned lawyer and the client, the payment obligations of the disputed party can be derived from § 7 RVG. Insofar as the lawyer's claims for remuneration against the party to the dispute overlap, there is joint and several liability (§ 426 BGB). In relation to the opponent of the proceedings, the litigant are share creditors with regard to the total legal fees incurred on their part (§ 420 BGB)3. Which legal representative a lawyer chooses in the liability proceedings is at his discretion. In principle, he does not have to be prescribed by the law firm by whom he is represented4. It only has consequences under cost law if the jointly sued lawyers and the law firm are abusively represented by different legal representatives.

Commissioning of separate legal representatives

The law firm and the co-sued lawyers do not have to be treated in terms of costs as if they had only appointed a joint representative to defend the action. Rather, both the law firm on the one hand and the defendant lawyers on the other hand may demand reimbursement from the plaintiff under § 91 sec. 1 sentence 1, sec. 2 sentence 1 ZPO of the lawyer's fees incurred by them in the amount of the statutory fees and expenses.

In principle, as in the present case, the simple comrades in the dispute (§§ 59, 60, 61 ZPO) are free to be represented by their own lawyer if they are sued jointly. In terms of costs, this means that in the event of victory, your opponent must reimburse the lawyer's fees incurred by each party in dispute in accordance with § 91 ZPO. However, depending on the circumstances of the individual case, exceptions to this principle must be made if it is clear that a separate legal representative will not be required for an interest-oriented litigation. In such a case, it is an abuse of rights to engage your own lawyer without a special objective reason, so that the costs claimed twice are not to be regarded as necessary within the meaning of § 91 sec. 1 ZPO and are therefore not reimbursable. This follows from the procedural relationship between the parties, from which each party is obliged in good faith to keep the costs of its litigation low.5.

Such an objective reason has been denied in the case-law when the members of a still existing law firm represent themselves.6 or they are each represented by an external lawyer7. In any case, this regularly applies if they are looking for the fulfilment of contracts entered into by the firm – for example, for payment of rents for the firm's office space.8 – be sued and it is not about liability for professional errors.

On the other hand, an objective reason for separate litigation has been assumed in the case law if only one of the sued lawyers has supervised a mandate and the other has left the joint partnership after the end of the mandate.9 or the law firm has been dissolved in the meantime10. The same may apply if there is a threat of recourse between the shareholders11. A conflict of interests justifying the separate assignment of lawyers is also assumed if there are indications that in the internal relationship of the sued lawyers a compensation obligation deviating from the principle of § 426 sec. 1 sentence 1 BGB comes into consideration12.

If, if professionally united lawyers may also be claimed for damages by the client as a litigated party in addition to the company due to an error in legal advice, there is usually an objective reason for separate litigation that excludes the abuse of rights. In cases of liability of a lawyer for errors in advice, it cannot in principle be assumed that the interests of the jointly sued lawyers are aligned and that they can be expected to conduct joint proceedings.

The liability risk may be insured with different insurers, which in turn insist on the commissioning of certain, different legal representatives. The articles of association or § 426 BGB may result in different liability rates in the internal relationship. Also, the position of the sued lawyers within the law firm may be so different that they decide to conduct separate proceedings without this being seen as an abuse of rights. It is obvious that the interests of social partners and co-adhering sham law firms, of senior partners, full partners, junior partners and employed partners diverge. This applies in particular to large international law firms with a large number of partners specified on the letterhead.link;www.lawyerlabo.com

The present dispute in particular clearly shows this: The law firm is a globally active LLP under American law, the defendant lawyers are partners with it and have advised the plaintiff as lawyers in the German branch. Whether and how the lawyers acting in Germany advising for an LLP are liable to the client in the event of recourse, whether under company law, contractually, from liability of legal appearance or trustee or from tort13, has not yet been clarified by the highest court. Due to its amount, the claim for damages asserted was potentially a threat to existence. All this makes it not seem abusive that the law firm on the one hand and the defendant lawyers on the other hand have opted for separate litigation.

1 Response to "When lawyers are represented by other lawyers..."

Iklan Atas Artikel

Iklan Tengah Artikel 1

Iklan Tengah Artikel 2

Iklan Bawah Artikel