Independent forfeiture proceedings against transport companies

In both criminal and administrative fine law, the state can confiscate funds that the perpetrator or a third party has obtained through an illegal act. Neither the perpetrator nor third parties should profit from criminal offenses and administrative offenses; the principle of "crime does not pay" applies.^{2 While}the forfeiture in the penal code according to § 73 has always been applied^since its introduction^{in 19623}, especially in narcotics law, the option of seizing illegally obtained profits in fine proceedings under This has changed. Ever more frequently, forfeiture orders are being issued in which exorbitant sums are demanded from the company. In particular, transport and logistics companies are being targeted by the authorities. Six-figure fines are no longer an exception. The fact that several departments of local courts are continuously scheduling appeal proceedings against forfeiture orders was unthinkable just a few years ago.

If the company in question carries out transportation journeys, for example, in which the trucks are overloaded in violation of the regulations, many road traffic authorities tend not to hold the drivers responsible for this administrative offence, but to confiscate any illegal advantages gained by the company, such as the higher remuneration achieved through the excess transportation. The idea of the authorities is no longer to investigate individual truck drivers in order to prove that they have committed an offense, but to discontinue the costly fine proceedings against drivers and owners, and to take action against the company directly. In this context, searches of legal entities often take place in order to determine the number and degree of overloading as well as the economic turnover. According to the case law of the highest court, however, such forfeiture orders and estimates of illegal pecuniary gains are only possible under very strict conditions. This opens up the possibility for the defense to comprehensively object to the revocation order in fact and in law. This article discusses the central problematic aspects of independent revocation proceedings under Section 29a (4) OWiG, which are regularly directed against transport and logistics companies.

B. Committing an act punishable by a fine in accordance with Section 1 ( 2) OWiG

The forfeiture notice addressed to a company may state, for example: "(...) approx. 25,000 weighing slips were secured. These revealed that a total of 19,235 trips were made with excess weights in the period from [...] to [...]. The addressee (a limited liability company) thereby gained an economic advantage, which consists in the fact that it achieved a higher remuneration through the excess transportation."

This example shows that the authorities imposing the fines and even local courts regularly do not sufficiently investigate the question of who, as a natural person, has committed an administrative offense. The driver's violation of the law is not enough on its own to justify siphoning money out of the company. Rather, it must be proven that the company's management has behaved unlawfully, i.e. the managing director must have "ordered or permitted" the actions of his employees and thus have committed a violation (of his own) himself.^{4 In}this context, the Higher Regional Court has stated that it must be apparent from a forfeiture order against the party subject to forfeiture that another party has committed an act punishable by a fine. Any offense committed by the driver must be disregarded from the outset because a forfeiture based on this could only be ordered in proceedings against the driver, as long as these have not been discontinued. According to the definition in Section 1 (2) of the German Act against Unfair Competition ( OWiG ), an act punishable by a fine is one that is both unlawful and constitute the elements of an offense. It need not be reproachable.⁵ However, an act that is not open to reproach must fulfill the elements of the offense. If only intentional acts are subject to fines, then the realization of the offense presupposes that the perpetrator has acted at least with natural intent. If negligence is also covered, the perpetrator must at least have acted in a manner that objectively violates the duty.^{6 Such an} act, which is subject to a fine, is a prerequisite for forfeiture both in the case of § 29a para. 1 OWiG and in the case of the order against a third party under § 29a para. 2 OWiG.

If the action threatened with a fine is seen in the fact that the managing director of the legal entity, as the body authorized to represent the affected party (§ 35 para. 1 GmbHG ), has objectively committed the offense, e.g. of § 31 para. 2, 32 para. 1, 69a StVZO, § 24 StVG, this accusation must be substantiated in detail.

It is necessary to establish either that the managing director himself issued an order or allowed the operation to be started up, for example, by objectively selecting the order in a manner that was contrary to duty or by insufficiently supervising another person who issued the order and to whom the matter was possibly delegated. In the case of the order for forfeiture, it is not possible to leave it at that, because of the interlocking of the objective and subjective proceedings, who has committed the act threatened with a fine.

C. Target and amount of the forfeiture

The forfeiture may only be ordered if the perpetrator or a third party (§ 29a ( 2) OWiG ) has obtained something for the offense relevant to the fine or from it. The company must have actually obtained the financial advantage. According to general opinion, this refers to economic values that can be measured in monetary terms.^{7 On the} other hand, intangible values are ruled out from the outset. The fining authority often contents itself with determining an invoice amount. Money not transferred to the company or other failures, e.g. due to the irrecoverability of the invoice in the event of the debtor's insolvency, are not deducted from the forfeit amount. This requires correction by presenting non-"collected" amounts.

The authorities impose the fine according to the so-called gross principle, which states that " all that is obtained directly from the action, without deduction of profit-reducing costs, can be skimmed off".^{8 In fact}, not only the "profit" but also the "turnover" can be declared forfeited, with unforeseeable crisis-inducing consequences for the company. In particular, determining the amount of the forfeiture causes significant difficulties.

I. Direct causal relationship between offense and benefit

In the context of the amount of the economic advantage gained, it must be noted, according to the case law, that this amount must correspond to the pecuniary advantage. The Higher Regional Court of Koblenz (1 Ss 247/06)^{9 has} stated the following in a new landmark decision on September 28, 2006:"The decisive factor is the economic advantage determined according to the gross principle, which the third-party beneficiary (company) has achieved through the act of the person acting on its behalf (e.g. managing director). The disgorgement must correspond inversely to the pecuniary advantage that the third-party beneficiary derived from the act." The OLG thus solidifies the previous case law, which requires a precise determination of what was obtained and a direct causation.¹⁰

In many cases subject to fines, "what has been obtained" can hardly be quantified. In the case of goods that have not been properly transported (excess width of the load), the capital gain to be realized may lie in the revenue necessary to cover the costs of carrying out the transport. In this regard, the Higher Regional Court (1 Ss 247/06)^{11 explained} that a benefit obtained through the offense only exists if the transport by the party subject to the forfeiture would have been categorically not eligible for approval or authorization. If special permits or authorizations could be issued – if necessary, subject to (further) conditions and/or for other vehicles available to the third-party beneficiaries – the advantage gained from violating the width regulations applicable to the vehicle combination or the load, the advantage obtained would be limited to saved expenses (for example, for permits, the use of another vehicle or the use of escort vehicles or other security measures that may be required).

II. Estimates of the gain pursuant to Section 29a ( 3) sentence 1 OWiG

Since the exact calculation of the alleged pecuniary gains for the transport companies would be highly complex and time-consuming, the administrative authorities increasingly estimate the extent of the gains and their value "for the sake of simplicity". Although the estimation is generally regarded only as^a "second-best^solution"12 to determine the illegal gain. However, according to Section 29a ( 3) sentence 1 OWiG, an estimate is generally permissible without obtaining an expert opinion, but only if no other findings are possible. A lack of opportunity to determine the amount obtained precisely by evaluating receipts and records is also assumed if such determinations would require a disproportionate amount of time and money.^{13 In} the context of the estimation, the authorities regularly follow the "calculation principles of the Federal Association of German Freight Transport (BDF)". In a court judgment, the judge must state the supporting principles of his estimation. These must be verifiable for the court of appeal.

However, the estimation must never be based on average values, i.e. extrapolation by means of a calculated value multiplied by the number of trucks is not permissible. Rather, the lowest value should be assumed, which is derived from criminal tax proceedings. This follows from the principle of "the benefit of the doubt going to the defendant".¹⁴

D. Principle of certainty

Decisions on forfeiture in administrative offense law must meet the requirement of certainty. As in criminal law, every fine and forfeiture notice must describe the relevant offense and its consequences with sufficient certainty. Even in the case of various actions punishable by fines, such as overcharging in the five-digit range, the forfeiture order must sufficiently indicate to the recipient for which actions a pecuniary advantage is to be forfeited. In this case, the actual

J. Limitation of the forfeiture order

After the limitation period for the administrative offense has expired, no further independent proceedings may be ordered.²⁴ The statute of limitations for the administrative offense therefore excludes, in accordance with Section 31 ( 1) OWiG^excludes the ordering of ancillary consequences, which also includes the revocation. The order of forfeiture, like the underlying administrative offense, is generally subject to a limitation period in accordance with Section 31 ( 2) OWiG. In the case of a traffic offense (overloading), the limitation period is only three months according to Section 24 in conjunction with Section 26 ( 3) of the German Road Traffic Act ( StVG ). The limitation period begins with the completion of the act (§ 31 (3) OWiG).

K. Legal remedies against revocation notices

The deadlines for appeal against penalty notices according to Section 67 OWiG also apply in independent revocation proceedings for revocation notices. The revocation notice is equivalent to a fine notice, see § 66 para.1 no. 5 OWiG. The party affected by the revocation may therefore file an objection against the independent revocation notice within two weeks of its delivery.

L. Conclusion

The number of forfeiture notices in traffic fine law has increased dramatically in recent times. While in the past, it was primarily the drivers or owners of the vehicles who were held responsible for overloading and improperly transported goods, various regulatory authorities have begun to levy fines to skim off a pecuniary advantage from the legal entity and to leave the administrative offense as such aside. However, this practice does not lead – as perhaps intended – to making it more difficult for the person concerned to mount a defense. On the contrary: although a profit-seeking behavior does not require the perpetrator to act unlawfully, However, the forfeiture order must meet certain minimum requirements: In summary, the forfeiture order must state who is to be found guilty of the offense and unlawful behavior. Often, the managing director can exculpate himself by means of an otherwise functioning delegation structure or regular further training events for the drivers and the fleet manager(s). Estimates may only be made on a subsidiary basis if it is not possible or disproportionately difficult to determine the actual advantage. Estimated values must not be based on average values, but on minimum values. Even if an amount to be collected has been determined, the authority must use its discretion to determine whether and to what extent funds should be declared forfeited. The risk of insolvency in the event of the forfeiture amount being enforced may speak against an order. In any case, hardship cases are to be filtered out in the context of this consideration.