Legal Tech Act to enter into force on 01.10.2021

The law to promote consumer-friendly offers in the legal services market will enter into force on 01.10.2021.

After the Act, which is also referred to as the “Legal Tech Act” and which was highly controversial in the legislative process, was still passed by the Bundestag and approved by the Bundesrat at the end of June, shortly before the parliamentary summer recess, it was promulgated in the Federal Law Gazette on 17 August 2021 and can therefore enter into force on 1 October 2021, as provided for in Art. 9 of the Act. The Act provides, among other things, that lawyers may in future work on monetary claims of up to 2,000 euros in return for a contingency fee; it also regulates requirements for registration and for remuneration agreements as well as information obligations for debt collection service providers. It contains amendments to the BRAO, the RDG, the RVG and other laws.

The BRAK had criticised the draft law, among other things, because it would make it more expensive for consumers to enforce their rights and would in fact limit access to justice by legal tech debt collection service providers to cases that are economically attractive for them. It is also critical of the fact that the limited opening of the contingency fee will impair the independence of the legal profession as well as the system of cost reimbursement and legal aid. It calls for an evaluation of the regulations on contingency fees in particular.

Source: BRAK, Nachrichten aus Berlin No. 17/2021 v. 25.08.2021