The criminal defense attorney has a number of basic rules to follow when taking over and continuing the criminal mandate. At the center of this is the lawyer's handling of third-party funds and legal fees. Experience shows that young lawyers in particular have a considerable need for information in this regard. Dealing with fees and third-party funds is a sensitive topic in times of increasing competition and a rather poor job market for lawyers. However, the serious handling of cash in day-to-day business should not be neglected, especially since minor mistakes can result in the loss of your license to practice law.
1. Money laundering according to § 261 StGB
After the introduction of the money laundering offense in 1992, every lawyer had to fear prosecution for money laundering if he accepted fees from unknown sources. After all, the money could have come from criminal activity. The decision of the Federal Constitutional Court of March 30, 2004 (NJW 2004, 1305 et seq.) has allayed the fears of the legal profession for the time being. Recently, the freedom of the bar and the undisturbed vocational training are supposed to entail that the lawyer is no longer obligated to investigate the origin of the money. Only the intentional and bad-faith acceptance of tainted money is punishable. A negligent realization of the money laundering offense would violate the Basic Law (freedom of occupation, Art. 12 GG) and is no longer possible. However, this case law applies directly only to criminal defense attorneys; whether it can be applied to civil mandates is the subject of lively discussion. The German Federal Bar Association has issued "Recommendations for Lawyers with regard to the provisions of the Money Laundering Prevention Act (GwG) and money laundering, § 261 StGB" following the above-mentioned ruling. The assumption of an electoral mandate as a result of a catalog act pursuant to § 261 (1) StGB should not suffice as an indicator for an initial suspicion of money laundering. In addition, assets within the meaning of Section 261 StGB must have been acquired from the catalog offense. Accepting a lawyer's fee under conspiratorial conditions is just as risky as accepting large cash payments (over EUR 15,000). Even a completely unreasonable amount of the fee in relation to the legal service can justify initial suspicion. As a rule, the defense lawyer does not expose himself to any risks if non-cash forms of payment are chosen.
2. Excessive fees according to § 352 StGB
When calculating and collecting legal fees, the lawyer must observe the criminal offense of § 352 StGB. According to § 352 para. 2 StGB, the attempt is also punishable. In addition to the collection of a fee that the payer does not owe at all or only owes in a smaller amount, the penal provision also requires – as an unwritten element of the offense – that the perpetrator deceives the fee debtor about the fees to which he is entitled. No criminal behavior is present if only the basis of a fee claim is disputed, e.g. due to differing opinions about the establishment of a client relationship. Accordingly, a lawyer does not expose himself to the risk of being accused of an criminally excessive fee if he asserts a fee claim against his client that is disputed on its merits. It is disputed whether unjustified claims from fee agreements also constitute a criminal offense. In this case, the fee claim is asserted on the basis of the individual contractual fee agreement and is therefore not the legally regulated claim under the RVG. In most cases, the mere fact that an inadmissible fee agreement has been concluded does not constitute an attempt at an excessive fee.
3. Ban on free legal advice
Pursuant to Section 49b I 1 of the Federal Lawyers' Act, it is generally not permissible to agree on or demand lower fees and expenses than those provided for in the Federal Lawyers' Act, unless the Act stipulates otherwise. In individual cases, the Lawyer may take into account special circumstances in the person of the client, in particular his need, by reducing or waiving fees or expenses after completion of the assignment.
On November 22, 2006, the Higher Lawyers' Court ruled for the first time (AnwGH Berlin, AnwBl 2007, 375) that legal advice can also be offered free of charge under Section 34 RVG, which was revised as of July 1, 2006. However, the decision cannot be generalized. Free legal advice is and remains prohibited in principle and could result in a severe private claim by fellow lawyers under §§ 8ff. UWG.
4. Advances pursuant to § 9 of the German Lawyers' Fees Act (RVG)
Lawyers can demand a reasonable advance on the fees and expenses incurred and likely to be incurred from their client. Lawyers are also entitled to demand an advance on costs from legal expenses insurance. The amount of the fee is based on the fee-determining criteria set out in Section 14 of the German Legal Advice Act (RVG) (scope and difficulty, financial circumstances of the client, etc.). This authorization is of particular importance for criminal defense attorneys. If an advance invoice that has been issued is not settled, the lawyer is entitled, after prior warning, to refuse further services and to terminate the mandate. Incidentally, the right to demand an advance also applies to claims for remuneration from the state (Section 47 of the German Lawyers' Remuneration Act (RVG)). So even public defenders can protect themselves in terms of costs.
5. third-party funds pursuant to § 4 BORA
The utmost caution is also required when handling third-party funds. In the event of misconduct, the attorney faces punishment for embezzlement under Section 246 of the German Criminal Code (StGB) or for breach of trust under Section 266 of the German Criminal Code (StGB).The rules of conduct for lawyers with regard to handling third-party funds are standardized in the Federal Lawyers' Act (BRAO) and the Professional Code for Lawyers (BORA). Pursuant to § 43a (5) BRAO and § 4 (1) BORA, the lawyer is obliged to handle third-party assets carefully and to forward them without delay (sect. 4 para. 2 BORA). From § 43a (5) BRAO and § 4 (2) BORA follows the obligation to forward third-party funds without undue delay, i.e. within a few days.If this is not possible, for example because the lawyer does not have the client's account details, the third-party funds must be paid into an escrow account in accordance with Section 43a (5) BRAO and Section 4 (2) BORA. Nevertheless, a lawyer is not prohibited from offsetting his own fee claims against incoming third-party funds (AG Berlin-Charlottenburg - 09.04.2003 - 20-2 C 541/02, JurBüro 2003, 424).The prerequisite for this is the existence of a set-off situation and a set-off declaration to the client. However, in certain cases, offsetting against the client's claim for surrender may violate the principle of good faith and therefore be inadmissible. The exclusion of set-off follows from the nature of the legal relationship if a set-off with the special content of the legal relationship established between the parties were not compatible (BGHZ 25, 211, 215).It is to be determined whether the special content of the contractual obligation established between the parties, the nature of the legal relationship or the purpose of the performance due make fulfillment by way of offsetting appear to be incompatible with good faith (BGH, judgment v. February 23, 1995 - IX ZR 29/94, loc. cit.). A special prohibition of set-off is contained in § 4 (3) BORA, according to which own claims may not be set off against funds that are earmarked for payment to parties other than the client. Incidentally, the lawyer's fee increases when third-party funds are received (so-called collection fee, No. 1009 VV-RVG). The collection fees are intended to cover the costs incurred by the lawyer in making the transfers and for additional due diligence. The costs are incurred separately for each amount paid out.
6. Fee and attorney-client confidentiality, Section 203 of the German Penal Code (StGB)
In fact, the duty of confidentiality remains the most important of the profession-specific duties (Kleine-Cosack, F.A.Z. of 14.07.2007, p. 12). Lawyers are subject to a duty of confidentiality, which means that, as a matter of principle, they are not allowed to disclose any secrets that clients have shared with them. In the case of legal proceedings for fees, it is recognized that a lawyer is not prevented from presenting the necessary information to fulfill his burden of proof, even if this means violating the duty of confidentiality. A right to disclose arises from the basic principles of justifiable emergency (Section 34 of the German Criminal Code (StGB)) or from the aspect of the protection of legitimate interests (Section 193 StGB). Any other view would violate the freedom to practice one's profession, since the lawyer would never be able to enforce a fee claim. Since the law provides for such actions (Section 11 RVG), the substantiation required by procedural law is lawful. This is now also explicitly stated in § 2 (3) BORA. In the case of employed lawyers, it is disputed whether they have a right to remain silent as witnesses or whether they are obliged to testify in their employer's fee-based proceedings (see Fromm, advoice 01/2007, p. 30 et seq.). The question of whether a lawyer may assign fee claims to another lawyer without the client's consent is still highly controversial. Some argue that the assignment pursuant to § 134 BGB, § 203 I No. 3 StGB is invalid. According to the correct view, this is permissible under § 398 BGB since the relevant amendment to the Federal Lawyers' Act in 1994 in accordance with § 49b IV BRAO, because both are subject to the same obligation of confidentiality (LG Regensburg, NJW 2004, 3496).In case of doubt, further information can be obtained from the author. Before taking an unjustifiable risk, the bar association can also be asked for advice.
The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.