*by Dr. Johannes Fiala, lawyer (Munich), mediator (Univ.), MBA Financial Services (Univ.Wales), MM (Univ.), certified financial and investment advisor (A.F.A.), lecturer in civil law and insurance law (Univ. of Cooperative Education), banker (www.fiala.de) and Dipl.-Math. Peter A. Schramm, actuary DAV, expert for actuarial mathematics, publicly appointed and sworn by the IHK Frankfurt am Main for actuarial mathematics in private health insurance (www.pkv-gutachter.de)
bAV company consultants: liability trap for intermediaries
Some initiators and management consultants offer advice on setting up, auditing and restructuring occupational pension schemes. Such contracts are however often “null and void”, as a new judgement of the OLG Duesseldorf of 05.12.2006 (Az. I-23 U 54/06) shows. For the intermediary it is significant that in case of doubt he not only loses his commission if he mediates such consulting services – he is also regularly liable for the correctness of the advice: However, the liability policy of the intermediary does not offer any coverage here, because legal and tax advice are excluded from the insurance coverage, as are the cases of a violation of the legal prohibitions regarding legal and tax advice.
Tax consultant (StB) as multiplier of faulty U-cash model
The present case was simply a case of an accountant seeking the assistance of a management consultant. The management consultant advised not only economically, but also legally and fiscally, in particular with regard to the “over-endowment”, the deductibility of contributions and in the context of a settlement between the U-Kasse as an association and as a GmbH. The whole thing ended with a claim for damages – the StB demanded damages from the management consultant due to incorrect advice on the occasion of the foundation of an “R … überbetrieblichern Unterstützungskasse eV”.
Reasons for Judgment:
After the court had determined that the contract with the management consultant was void according to § 5 StBerG, § 134 BGB (German Civil Code), it nevertheless left the StB exceptionally sitting on the damage. The court saw the reason for this in the fact that the StB himself could and had to recognise that the borderline to unauthorised assistance in tax matters had been crossed here: StBs who “deliberately place tax advice in the hands of an adviser who is not authorised to do so” should not be protected.
Tips for intermediaries:
First of all, the intermediary should inquire about the creditworthiness of the provider and those responsible there, oath of disclosure, arrest warrant, previous bankruptcy could be discovered – not exactly rare cases. With little effort, a provider can also be placed on the “watch list” at Experten.de: If no transparency is offered, this can also be a clear signal. Finally, it is advisable to take a close look at the contractual framework of the “model”. An experienced StB or RA will often be able to identify significant risks and gaps in the model with a manageable amount of time. Often an assessment by means of an initial consultation (costs a good 200 euros) is already sufficient for initial target-oriented advice.
The insurance products offered, including reinsurance, should also be analysed by an actuarial expert – often, for example, the allegedly “uncompensated” tariffs conceal even greater disadvantages. An initial assessment can be provided here for around 300 EUR – with transparency about how the products work and the level of costs included.
And then there is the property damage insurance: if this does not “fit” with the contract on the sales connection, the agent risks being left alone and personally to deal with any damage. And finally, a network of colleagues helps to find out about nasty rumours (the following examples are of course fictitious, similarities would be coincidental and are not intended): – Then it could say something like “Yes, I know the R… Unterstützungskasse – and also the associated brokerage firm through which the kick-backs flow” – Or “The employees in the office occasionally mix up text modules when crafting the text of the promise – then the employer is liable for more than he had wanted”. – Or “Yes, a colleague brokered the model – unfortunately the company auditor later overturned it”. – Or “My client complained about not getting balance sheets and performance information for employees from his U Fund for years.”
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About the author
Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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