The German federal parliament wants to create more equal opportunities between legal tech providers and the legal profession. This includes all legal professionals in any field, from family law (rechtsanwalt scheidung) to criminal justice law. On the night of June 10, 2021 to June 11, 2021, the Bundestag passed the law on legal tech debt collection with some – but ultimately rather minor – modifications. The law passed the Federal Council on June 25, 2021 and will therefore come into force on October 1, 2021.
The Law On Legal Tech Debt
The law on legal tech debt collection is intended to allow lawyers to pay the contingency fee primarily where they are also allowed to offer debt collection services. It is also approved for (attachable) monetary claims up to 2,000 euros. However, the ban on litigation financing will not be relaxed; litigation financing will only be permitted in the case of out-of-court debt collection and judicial dunning proceedings. At the same time, the legislature defines what will count as debt collection in the future. This increases the requirements for the registration of legal tech companies. New information requirements for legal tech portals, including rules for external funds and remuneration agreements, are also intended to provide better protection for consumers.
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The government draft for a law on legal tech debt collection (official name: draft of a law to promote consumer-friendly offers in the legal services market) with 57 pages was passed by the federal cabinet on January 20, 2021. The Bundestag passed the law on June 10, 2021 in the version of the grand coalition in the second and third reading and the Bundesrat passed the law on June 25, 2021. The tightening of the framework conditions for legal tech debt collection and the liberalization of the contingency fee for the legal profession (without the originally intended release of litigation funding) could therefore come into force on October 1, 2021. The reform – triggered by the judgment of the BGH zu littleermiete.de (BGH, AnwBl 2020, 63) – was with theDraft of the federal jus-tiz-mi-nis Ministry initiated (processing status 6 October 2020 10:49, distributed on 11 November 2020).
The federal government ignores the resistance of the BRAK and takes up criticism from the DAV
Perhaps the most important message of this legislative process on legal tech debt collection: Federal Justice Minister Christine Lambrecht continued the reform even against the declared tough resistance of the Federal Bar Association (BRAK) (see BRAK statement No. 81/2020 ) and the Bundestag followed her. The BRAK opposed any liberalization of the contingency fee and wanted to subject the collection service to a regulation that can hardly be justified with public interest. The DAV’s criticism of the draft bill ( DAV statement No. 88/2020) the Federal Ministry of Justice has taken up key points in the government draft. And the two lawyers’ organizations were heard by the Bundestag with their criticism of a relaxation of the ban on litigation funding, so that everything remains the same here. The financing of the proceedings is only possible in the case of out-of-court debt collection and in the case of judicial dunning procedures, in order to enable synchronization with debt collection service providers.