• The ABA Has Approved the 10% Increase in Attorney Fees Effective January 1, 2021

    | Updated on July 7, 2023
    Attorney Fee Increase from January 2021

    After 7 years, the attorney’s fee is going to be increased along with other court costs. The ABA (American Bar Association) decided on November 27th 2020, agreed after a tremendous match. The need for change was undeniable, but the federal states wanted to postpone the impending cost burden to 2023. Other judicial fees are also to be increased. 

    The increase in attorney fees is overdue. The ABA has long been complaining that the fees that were last increased in August 2013 have decoupled the American legal profession from general economic developments.

    Since the required dynamic fee adjustment to the general wage and economic development did not materialize with this increase/reform, which the federal states would not have agreed to, the contested, hesitant and jerky adjustments remain.

    In addition to a moderate increase, there are also structural adjustments – The draft law passed by the cabinet in September is intended to increase fees moderately but significantly and to make up for a number of necessary structural adjustments. In addition to increasing legal fees, the fees for experts, interpreters (Section 9 Judicial Remuneration and Compensation Act), compensation for witnesses and court costs are to be increased. The experts and interpreters * inside the increase was lower than planned.

    Role of Coronavirus

    The government draft was forwarded to the regional chamber on September 25, 2020, and was designated as particularly urgent in accordance with Article 76, Paragraph 2, and Clause 4 of the Basic Law, which leads to shorter deadlines – go through chapter 7 bankruptcy, https://attorneydebtfighters.com/chapter-7-bankruptcy-lawyer-tampa-fl/. The first consultation in the Federal Council is scheduled for November 6, 2020.

    The Legal and Finance Committee of the Federal Council had pointed out, in a statement, the heavy financial burdens of the countries as a result of the COVID-19 pandemic as well as the significant tax shortfalls to be expected. Against this background, considerable improvements in remuneration for certain professional groups are not justifiable because of the associated considerable additional burdens on the state budgets and also on the citizens and the economy. In addition to other detailed changes, he proposed an amendment to Article 11 of the draft law to the effect that the law would not come into force until January 1, 2023.

    ABA Insisted on Reform as of 1.1.2021

    The ABA reacted extremely annoyed and decidedly refused to postpone the fee adjustments. The ABA intervened with an immediate letter to the prime ministers of the federal states and insisted on the introduction on 1.1.2021. The planned increases are not about a gift for the lawyers, but about making up for long-overdue adjustments to general income and monetary developments that were recently granted to the public sector.

    The adjustment of the fees provided for by the law does not lead to a complete compensation of the financial disadvantages compared to the general income development in the legal profession and was only approved by the ABA as a compromise to implement the proposals immediately. This is another reason why the introduction of the law on January 1, 2021, is essential. That doesn’t seem to have gone unheard.

    What’s Next?

    After the second and third reading in the ABA on November 27th, 2020. According to the current status, the Federal Council will deal with the law on December 16. However, the ABA decides on the date of entry into force.

    What is in the Proposed Law?

    This is the plan of the fee adjustment legislation: 

    Attorney Fee Increase: Combination of Structural and Linear Adjustment

    With some structural changes and the linear increase in the fees of attorney, the lawyer’s higher material costs, for example for office space rental, office communication materials, employee salaries, etc., and the general increase in wages are to be taken into account. The negotiated wages in the manufacturing sector and the service sector are increased since August 2013 by about 18%, the remuneration of lawyers to zero during the same time have continually increased running costs.

    No Full Alignment of Attorney Fees with Monetary Value Developments

    The increase in attorney’s fees will be significantly more moderate than the general wage increases and what the professional organizations had hoped for.

    • The law provides for a  linear overall increase in fees by approx. 10%,
    • For mandates under social law, there is an additional increase of a further 10%.
    • In the lower value grades, however, the fee increase is only around 9%, since in the lower value grades the legal prosecution costs are disproportionately high for those seeking justice,
    • Accompanying structural changes also lead indirectly to fee increases, especially for legal aid mandates and in child cases (Section 48).

    In some cases, however, the proposed reform may also lead to a reduction in legal fees. The best example is the new value assessment base for rent reductions. According to the case law, the value of a declaratory action for a reduction in rent was previously calculated in accordance with Section 9 ZPO according to three and a half times the annual amount of the rent reduction. An amendment to the § 41 paras. allowed only the total annual rent reduction in future to be used as a basis.

    The Changes to The Lawyer’s Fees in Detail

    In addition to the linear increases of 10%, which apply to all areas of law, the following individual regulations are intended to contribute to more appropriate remuneration for legal services:

    Civil Right

    • Extension of the settlement fee:-

    An agreement reached through out-of-court advice from the lawyer is honoured by an independent agreement fee in the law.

    • Extension of the scope of the appointment fee:-

    For participation in private written settlements and the resulting settlement of legal proceedings, an appointment fee is charged under certain conditions, although no judicial appointment has taken place. Reason: the incentive for the lawyer to save an appointment at the court and thus relieve the judiciary.

    • Limitation of the crediting of the multiple transaction fees:-

    The offsetting of the multiple legal fees incurred against the uniform procedural fee in the case of an objective accumulation of claims will in future be limited by a cap.

    Higher Flat Rates

    The travel allowance, daily allowances and absence allowances will be increased, the travel allowance from 0.30 cents per kilometre to date to 0.42 cents in future, and daily allowances and absence allowances to $30, $50 and $80.

    Change of Procedural Values in Child Affairs

    The control method value in adoption matters is raised from $3,000 to $4,000.

    Disproportionate Increase in Fees in Social Court Proceedings

    In social law mandates the legal fees occur to the general alignment of 10%, an additional linear ten percent increase, that is an increase thus a total of 20% for social law mandates.

    In Criminal Law, Breaks Should be Taken into Account in Terms of Fees

    When calculating the uniform appointment fee in criminal matters, the break times will be taken into account in future.

    The value fees, according to which the assigned lawyers are paid from the state treasury, have been capped for decades by an object value of $30,000 in accordance with Section 49 RVG. Besides, there is no longer any increase in fees. This cap limit will be $50,000 raised.

    In addition, the assignment of the lawyer by way of the PKH is extended to all non-pending matters in the event of an additional settlement.

    Increase in Court Fees

    The court fees and more for § 34 courts in conjunction with the cost of the directory and the legal costs in family matters be raised near to 10%. In land register and estate matters, however, the previous fees will remain.

    Changes to the Law on Judicial Costs

    • In judicial costs law, the  bailiff’s fees for the evacuation of  immovable property are adjusted (simplified Berlin eviction), which in this case means a reduction in accordance with No. 240, 241 to Section 3 Bailiff Costs Act
    • For the certificate of acceptance of the executors’ Office a new court fee comes.
    • In the case of a court order for care or custody of only a short duration  (maximum three months), the court fees are limited to $50 (note on No. 11102 of the list of costs).
    • The land registry fees for mere changes to the content of entries are capped.
    • For certain methods of the agricultural Court, a new court fee is inserted (Note to no. 15112 of the cost of the directory).

    Many Demands of the BRAK and the ABA are not Met

    The reform does take some into account Joint suggestions of the ABA to adopt the RVG from their catalogue of requirements from 2018, however, the implementation of the required increases is significantly more cautious than required by the two professional organizations. This is one of the reasons why the current call for postponing the reform in the professional organizations of the legal profession does not meet with any understanding.

    Reform Disappointing on Other Points Too

    Every single increase in attorney’s fees will therefore have to be fought for in the future. The struggle for the reform that has now been adopted has lasted for many years. Other demands of the legal profession were not taken into account, the required separate appointment fee for particularly complex negotiations in civil matters (more than three days of hearings, each with more than 2 hours duration). The required appointment fee for working in interim criminal proceedings is also not included.

    Aaron Harris
    Legal Counselor
    Related Post
    error: Content is protected !!