Initiator support and controlling: Uninsured tax and legal advice ? Liability trap in distribution law

*by Johannes Fiala, lawyer (Munich), MBA Financial Services (Univ.Wales), MM (Univ.), certified financial and investment advisor (A.F.A.), banker (
The demarcation between business advisory and legal advisory activities is decisive for the question of what an initiator, a distributor and an intermediary may currently offer as a ?model or system? as their own or third party commercial services. In practice, it is not only a question of conceivable criminal and UWG proceedings (warning) for providers and intermediaries, but also personal liability without VSH protection. In addition, however, the development of case law on the Legal Advice Act (RBerG) also offers remarkable opportunities for the development of lucrative business areas.
Business advice or legal advice? According to the case law of the Federal Court of Justice (Bundesgerichtshof, BGH), the core and the main focus of the activity must be taken into account in order to distinguish between the provision of services that do not require a licence and the provision of legal services that do require a licence. because the management of economic matters is often also linked to legal processes. The provision of legal services for third parties – which requires a licence – within the meaning of Art. I 5 1 I RBerG exists if a business-like activity is directed towards and suitable for realising concrete third-party legal matters or shaping concrete third-party legal relationships. It must therefore be asked whether the activity is predominantly in the economic field and is aimed at the representation of economic interests or whether the legal side of the matter is in the foreground and it is essentially a matter of clarifying legal circumstances. The decisive factor is whether the activity is predominantly in the economic field and is aimed at safeguarding economic interests or whether the legal side of the matter is in the foreground and it is essentially a matter of clarifying legal circumstances. What do you think will be at the forefront of your mind when it comes to exemption from compulsory social security or status checks?
Example of the trustee: By its decision of 08.05.2006 the BGH (Az. II ZR 123/05. click here) confirmed again that legal advice (and not economic advice) is present, if the order goes to realize concrete rights and/or to arrange legal relations. If it is the trustee’s task ? as has been customary, for example, in building owner and junk real estate cases ? to conclude contracts for the client, to rescind them, to shape them in terms of content, etc., this constitutes legal advice. This applies therefore always, if the trustee does not only have to notice the economic interests for example of an investor, but to realize its rights or to arrange its legal relations, in particular in its name the necessary contracts to lock has. If the trustee is to ?hold? against it for an investor only its kg portions, has it only the task of acquiring and of holding in the own name in each case a limited partner portion specified in the trust agreement, no legal advice is present. Contracts, by which the investor is obligated, in particular financing contracts, are not to lock such a trustee. Also with the right to vote in the partners’ meeting the investors granted priority in the exercise. These are clear signs that the emphasis lies in the economic area, and is thus permission-free.
Risk for the initiator: Occasionally it is offered that a StB-GmbH arranges the folder for a closed participation ? such a contract is naturally ineffective, there legal arrangement. similarly the case lies, if an accountant or a tax counsel, gives itself for it to apply a certain (own ?) U-cash: In doing so, he makes himself a trader and initiator, which is strictly prohibited by professional law ? and, by the way, not insurable in any case. Note: The mere advertising of a model is fully sufficient for this. The case is similar with the StB offer of a ?bAVAuslagerung? in a pension fund. If you read that a chartered accountant advertises an investment model (working time account, pension fund, etc.) as a trustee or tax advisor, then this advertising acquisitive activity is subject to sharp disapproval as being contrary to the profession and uninsurable.
Brazen swindling? A financial planner advertises the transfer of assets abroad via a family foundation under his IT company together with a tax advisor (StB). The form letter reveals both the commercial activity of the StB (isolated financial planning) and/or the legal advice (family foundation). As a cooperation, this would have been possible (almost) without any problems, especially with a legal advisor on board: But not as a ?solution from one source? but as a team player, each within the scope of his possibilities. An insurance company has a tax advisor draft a trust agreement; later it assigns its own policyholders to the tax advisor as trust clients. Unfortunately, this puts the tax advisor in a collision: The model is null and void ? as I said: In case of doubt, without insurance coverage for the intermediary (as instigator or because of aiding and abetting?) and the tax advisor. The situation becomes complicated when the working time account and the occupational pension scheme are covered by a double trust (trustors are employer and employee): If the employer ceases to be the trustor because he becomes insolvent, the trust becomes “managing”. Besides the trustee is later a criminal procedure as good as certain. Because the insolvency administrator will ask himself, why the company had paid the trustee, if he cannot handle anything in the case of insolvency for example because of collision, breach of trust or insolvency contestation. The intermediary bears the greatest risks here, but often only gets a very small book part from the proceeds. It becomes even more violent when masses of bAV appraisals are prepared without evaluating the balance sheet from the point of view of over-indebtedness: The mediation of wonderfully commissioned investment contracts can, upon closer examination, present itself as creditor disadvantage in the sense of §§ 283 ff. StGB represent. And again the VSH does not pay a penny, even if the consultation was otherwise really very best. The public prosecutor will not believe the newcomer to the bAV that he had no idea about balance sheets and valuations.
Risk of incorrect training: The initiators of working time accounts or of the distribution of occupational pension schemes offer in series also the labour law examination, consultation and design. It is repeatedly claimed that this is “within the green zone”. Unfortunately, this is often not the case. Here then the initiators and distributors, with personal adhesion of the management, stand in the fire. The BGH assumed with wrong information of the mediators repeatedly ?deliberate immoral damage? also for it no VSH pays: The mediator has to fight then also for its cover, because it could have questioned times the plausibility. With many offers the expert recognizes after short examination that contents correspond partially, neither to the professional right nor the VSH-conditions.
Often hairy distinctions: The intermediary may provide legal advice as an ancillary business to his product brokerage. Tax advice in connection with this is also permitted ? both in the VSH policy without insurance cover. The supplier of the intermediary, the ?baVUnternehmensberatung? or the allegedly ?independent bAVInstitut? is usually not allowed to do this, even if a professional lawyer, tax consultant or auditor works there. This is still the case, as the Legal Advice Act is soon to be amended. But today orders for example to the ?labor-legal examination of the pension promise? lead in beautiful regularity to the voidness of such orders: Claim your money back !?! If a company offers ?portability? as a collection agency, it is questionable if the company is known to the BaFin, but no permission for the collection business is known. The impression is similar if some bAV-/Zeitwertkontenanbieter not only charge a premium, but additional considerable costs as it were behind the back of the employee for the administration from the earned wages branch off. If a company offers the retrieval of social security ? for later investment ?, then it can (still?) be a permissible auxiliary business: Provided, however, the facts are ?determined? by forms and via the intermediary – and if then also no consultation takes place by the cooperating lawyer directly and directly opposite the customer, the handling is again not even insured (with the lawyer): Have you ever experienced that the secretary instead of the lawyer advises the client? New business models by the constitutional court (BVerfG): Already since 2002, up to 50% success fee remained so far unobjected by national courts up to the BVerfG. Of course this requires the organization ? however these business models are called then ?collection enterprises? (e.g. with regard to incorrectly billed life insurance policies) or process financiers (which may also work out of court). This can go so far that a collection agency is allowed to give legal advice to its own clients (e.g. regarding claims against a bank). The crux of the matter is that, from the client’s point of view, this is the ‘introduction of the success-based lawyer’s fee through the back door’. In this context, lawyers would regularly not be allowed to finance ?their own lawyer cases? via their (also) own litigation financing company, because this would be seen as a collision of economic interests with those of the honorary profession. In the areas of debt collection and litigation financing, there are good opportunities to provide legal advice. For initiators and intermediaries – especially in times of decreasing margins and increasing risks – the money is literally on the street here.

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Dr. Johannes Fiala Dr. Johannes Fiala

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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