The Hand File of the Tax Advisor, Auditor and Lawyer (Part I)

For tax consultants, auditors and lawyers alike, the reference file is a tool of everyday professional life.

 

1. the so-called biggest enemy of the professional is not seldom the own client, because just in the case of disagreements with the client can arise in connection with the hand file inconveniences for the professional, which can be avoided by exact knowledge of the legal situation. Carelessness in keeping the manual file can lead to considerable annoyance.

Outline:

In this issue:

1. hand file as a personal duty of the professional

2. costs

3. ownership of the file

4. entitlement to the hand file

 

In the next issue:

5. right of access to the file

6. information on the inventory of the reference file

7. conflict with confidentiality interests

8. seizure, submission of the case file, record-keeping obligations

9. compulsory activity

10. sale of the firm

11. death/retirement of the occupation holder

12. document destruction

 

1. hand file as a personal duty of the professional

The Federal Lawyers’ Act (BRAO), the Auditors’ Act (WPO) and the Tax Consultants’ Act (StBerG) impose on the professional the obligation to keep files (cf. § 50 BRAO/§ 51b WPO/ § 66 StBerG). In this context, the BGH speaks of a duty which affects the professional in his personal responsibility as the person entrusted with a set of rules of procedure and which can and must therefore be fulfilled by him. Not only the WPO, BRAO and StBerG, but also common sense dictates that hand files be kept for organisational as well as liability reasons. The purpose of the manual file is to reproduce all the essential events of a mandate. In this way, the professional can document the progress of a case on the basis of the case file and, if necessary, use it as evidence in fee or liability disputes with the client. The reproach of a later manipulation of the hand file can be prevented by pagination of the individual documents.

 

1.1 Contents

The contents of the case file include everything that the professional has received from the client, received on behalf of the client or prepared himself on the occasion of his assignment in a particular matter, e.g. letters, documents, receipts, pleadings, court orders, decisions, enforcement orders, expert opinions, extracts from registers, notes. For reasons of later provability of activities, it is quite recommendable to document in particular meetings, consultations, telephone calls, etc. by a note of the conversation and to include it in the reference file. In doing so, everything must be made part of the file, for example by stapling it in. Loose slips are inadmissible under settled case law. Money, jewellery, valuables or bulky items do not belong in the hand file. Of course, it makes sense to keep an inventory of the objects held in custody and the securities on file. Already because of the consequences for the statutory minimum fee, different matters should not only be kept with an individual subject but should also be assigned to a separate file.

 

1.2 Obligation to keep

The duty to preserve the hand file has two primary legal roots. It is explicitly stated in § 50 para. 2 BRAO, Section 66 para. 1 StBerG and § 51b para. 2 and 3 WPO and logically results from the duty of surrender according to § 667 BGB (German Civil Code) originating from the law of mandates. The retention period shall commence upon termination of the matter. The BRAO grants the lawyer the possibility to use the services described in § 50 para. 2 sentence 1 named five years storage obligation to shorten de facto to six months. In order to shorten the retention period, the professional must ask his client to collect his file within these six months. If the latter does not comply with the request, the adviser shall be free to destroy the file.

The same applies to the tax adviser/authorized representative and the chartered accountant who can shorten the legal retention period of seven years likewise to six months, § 66 Abs. 1 StBerG and § 51b para. 5 WPO. In practice, however, this procedure is not recommended, as the professional may give away important evidence in liability disputes. Therefore, in practice, the retention period will be based on the statute of limitations. According to the case law of the BGH, the secondary limitation period for recourse claims against the professional is six years. Consultants who have disposed of assets by means of a trust or escrow account may possibly be personally liable for levies under AO (cf. §§ 33 ff. in conjunction with § 69 AO). If the accusation of aiding and abetting and complicity in tax evasion could arise, it is advisable to orientate oneself towards the limitation period of 10 years. Recourse claims arising from honorary offices typical of professionals, such as guardianships or guardianships of estates, only become time-barred after 30 years, §§ 1833 , 195 BGB. Again, you can get rid of the onerous deadline by filing a declaration of discharge. Even if the documents are released to the client before the end of the limitation period, in case of doubt a copy of at least the essential documents should always remain with the professional, unless a declaration of exoneration is issued. This makes it much easier to provide evidence in case of doubt. The costs for this could already be included in the fee agreement. moreover, the professionals – not only in the case of fiduciary asset management – must observe the regulations of the HGB and the AO in and as their own matter: For example, the bankruptcy trustee may have to not only keep the files at his own expense but also fulfil the tax declaration and storage obligations.

 

2. costs

It may well be of interest to the professional who bears the costs arising from the maintenance and keeping of the hand file. Since, according to § 25 BRAGO and § 12 StBGebV, the fees already cover the general business costs, the only way out is via writing expenses (§ 27 BRAGO, § 17 StBGebV) or via a clause in the fee agreement. The costs covered by the fees undoubtedly also include the material for the creation of the case file, such as folders, rubric sheets or the like. It becomes more interesting with the distribution of costs over the contents of the file. Unless otherwise stipulated in a fee agreement, the Professional may, in accordance with the provisions of the German Civil Code (BGB), charge a fee of In accordance with § 27 BRAGO and § 17 StBGebV, a lawyer may only claim expenses for copies from court and official files or additional copies made with the client’s consent.

In this regard, the copy or reprint of a pleading that has gone to court is not considered “additional” and therefore does not trigger a writ display. This applies mutatis mutandis to correspondence with the authority, in particular in appeal proceedings. The professional may only claim expenses for typing if the additional copies were made with the agreement of the client. The consent can be declared explicitly or impliedly. Even if the circumstances indicate that this is the case, the consent of the principal cannot be assumed without further ado.

Although prices for photocopying on the open market may be lower than the statutory fees, the law firm’s expenses are likely to be even higher when other office costs are taken into account. It is advisable to point out to the new or inexperienced client that the copying of original documents and deeds by the professional involves costs which can be avoided by the client providing the professional with copies made by himself for the purpose of processing the mandate.

In this respect, it is a relief at the end of the mandate if the consultant has agreed that these are working copies to remain with the consultant and has documented in writing an order to make the copies for his file. A distinction must be made between documents which have been made available “for the execution of the mandate” (such as original contracts, accounting documents) (which must be handed over) and such documents (such as working copies of originals which the client has kept) which, as annexes, form part of the correspondence with the professional (which must not be handed over).

Furthermore, the practice of the respective professional with regard to the costs for copies should be explicitly included in any fee agreements so that the relationship of trust does not suffer due to surprisingly high ancillary costs of processing. In practice, it has proven to be useful to point out to the client already when initiating the mandate that only copies of the required documents should be handed over for processing by the professional. In this way, the professional leaves the responsibility for the completeness of factual information with the client, who then retains the originals in his direct possession. In addition, the advisor thereby avoids the client’s accusation that he was not in a position, due to the lack of documents available to him, to properly examine the work results, letters and pleadings in order to then effectively release them for circulation.

In the event of any claims for recourse by the client, the latter will then be faced with considerable contributory negligence in accordance with the German Civil Code. § 254 BGB suspended if the working copies were incomplete. Furthermore, if copies are provided by the client, claims for compensation which would be associated with the loss of original documents at the professional’s premises cannot arise in the first place. For tax advising professionals, however, it is sometimes customary to receive the original financial accounting documents if the documents are not recorded at the client’s premises and the information is exchanged by way of data (carrier) exchange.

In document proceedings, too, the professional requires the originals relevant to the evidence to be certified as an attachment to the pleading. When dealing with matters related to accounting or disputes (contract, family, corporate, inheritance law, etc.), clients often submit a not inconsiderable volume of original documents for processing. Even if it may be a blessing for the consultant that the client has to prove in case of doubt which documents he had handed over to the consultant, it is advisable to confirm to the client in writing which things were submitted and taken into the file:

This gives the client another opportunity to check completeness and limits his own responsibility. In the context of the keeping of files, care should be taken to ensure that when copying costs are recorded, those which are recoverable in the context of a determination of costs are specifically identified:

These are copies of documents as annexes to pleadings, for the court, the opponent and one’s own hand file11. Reimbursable costs also include those for copies made on the occasion of file inspections: Jurisprudence grants the professional a wide discretion as to which elements are copied.

 

3. ownership of the file

3.1 External ownership (client)

The hand files are an “epitome of objects” in the sense of § 260 BGB13. According to the opinion of the BGH14 , hand files are by no means complete documents within the meaning of § 267 StGB, so that in the event of the destruction of handwritten information, the professional is therefore not liable to prosecution for forgery of documents. However, this is without prejudice to a professional judgement.

The question of ownership is not problematic in the case of documents which are intended for the professional and those which the professional has prepared for himself, such as the file sheet or notes on personal impressions and confidential background information. Even if the professional hands over these documents to the client with the file, he does not in any way implicitly transfer ownership to the client. If the latter steals such parts of the file, he commits misappropriation.

Documents which belong neither to the client nor to the professional, but which have been entrusted to the latter by third parties, for example in trust, shall of course remain the property of the third party entitled to dispose of them. In this context, it is probably not reasonable to expect the professional to hand over these documents without being asked to do so after the processing has been completed. The owner must explicitly express the desire for restitution to the professional.

The documents (titles, letters from the opponent, etc.) which the professional receives on behalf of the client within the meaning of § 667 of the Civil Code arguably become the property of the client at the moment of receipt by the professional. Since the lawyer acts outwardly as the principal’s agent, the principal is to be regarded as the owner from the outset. This can be of importance if the contractor goes bankrupt, as this would give the client a right to separate satisfaction. Here, one should take a copy for the files and pass the original on to the client, of course not without explicitly noting in the outgoing mail book that the original was sent. Letters from the other party to the appointed professional are initially the property of the professional. However, this ownership is transferred to the client within the framework of the surrender according to § 667 BGB.

 

3.2 Ownership in the internal relationship of the partnership

Since tax advisors and law firms are usually civil law companies, the ownership of hand files must be measured against these regulations. As a rule, mandate agreements are concluded with all partners, even if only one of the professionals is instructed. This also applies to mixed tax and law firms.

Therefore, the company, as the mandate holder, must also have ownership of the hand file parts to which the contractor is entitled. Alternatively, it can be stated that contributions of the partners and the objects acquired by the management for the company become joint assets of the partners, § 718 BGB. In this context, pursuant to Art. In accordance with § 719 of the German Civil Code (BGB), a shareholder may neither dispose of his share of the company’s assets and the individual items belonging to it, nor demand a division. This means that a professional who leaves a partnership is not entitled to take with him the case files of the mandates he has worked on for the partnership up to that point.

 

4. entitlement to the hand file

4.1 Fiduciary duty or debtor’s duty?

A contractual relationship, which as a whole constitutes a relationship of custody within the meaning of Section 246 of the Criminal Code, may contain obligations the breach of which is not protected by the offence of embezzlement. If a lawyer neglects to hand over the file in breach of duty, this does not constitute embezzlement within the meaning of § 246 StGB (German Criminal Code), but merely a breach of an accessory obligation under civil law. The exercise of a right of retention does not constitute an act of appropriation by the professional. Accordingly, the surrender of the hand file is not a fiduciary duty, but merely a debtor’s duty.

 

4.2 Scope of the claim for restitution

The claim for surrender of the board of the bar association according to § 56 BRAO is unproblematic. Pursuant to section 56 para. 1 sentence 2 BRAO can be countered with a simple reference to an imminent breach of confidentiality or to the risk of being prosecuted for a criminal offence, an administrative offence or a breach of professional duty by submitting the file. This effectively undermines the Board’s ability to exercise control. The regulations of the tax advisory professions, on the other hand, are stricter.

In this case, the professional can only invoke a right to refuse to submit documents if he would thereby breach his duty of confidentiality (cf. § 80 StBerG, § 63 f. WPO). The professional is obligated from the contractual relationship to hand over, upon request of the client, everything he receives for the execution of the order and everything he obtains from the agency, § 667 BGB. The duty to surrender is set out in section 50 para. 3 sentence 1 BRAO for the lawyer, for the auditor in § 51b para. 4 WPO and in § 66 StBerG for the tax consultant.

Even and mostly especially after the termination of the mandate, this duty to surrender continues to exist vis-à-vis the client20. This protects in particular the client, who has not made copies of the documents himself, in the event of a possible change of advisor. The professional should also for this reason and as far as practicable only accept copies for processing and leave the original documents with the client. This claim for restitution must be differentiated in more detail. There is no blanket claim; rather, the diversity of the share contents must be taken into account in the claim for surrender.

 

4.2.1 Documents from the client

As a rule, documents and other original documents which the client has made available to the professional for processing remain the property of the client and must, of course, be surrendered.

 

4.2.2 Receiving documents for clients

“Obtained in the course of business”, in the case of professionals, generally means the third party correspondence received and conducted by the professional on behalf of the client21. This includes court mail. The claim for surrender expires here by regularly sending copies or transcripts to the client.

 

4.2.3 Meeting notes with third parties

Minutes or notes of conversations on the content of negotiations or conversations with third parties are, like correspondence with third parties, considered to be part of the information obtained from the provision of services, since it can be assumed that they are not merely for the internal use of the professional (e.g. as an aid to memory), but that it is also in the interest of the client to document the content of such conversations. For marketing reasons alone, attention should be paid to the external appearance of such notes, as the client may have insight in case of doubt. The professional only fulfils his duty to inform if he informs his client of the content of such meetings as soon as possible. A client letter as report leads regularly to the fulfilment – the contentwise illustrated discussion note itself, thus the memory aid over the discussion, is not to be given out then any longer.

 

4.2.4 Records of personal impressions of professionals

Notes made by the professional about personal impressions, even if they result specifically from conversations with the client or third parties, are generally not intended for inspection by the client and, according to the case law of the Federal Supreme Court, do not need to be handed over. The same applies to “confidential background information” which the professional has collected in the course of handling the mandate.

 

4.2.5 Correspondence between client and professional

The client’s claim is governed by sec. 50 para. 3 sentence 2 BRAO, Section 66 para. 2 StGB and § 51b para. 4 WPO is restricted to the effect that correspondence between the client and the contractor is not subject to the duty of disclosure. Analogously, this also applies to telephone notes or minutes of meetings with the client. In the opinion of the Munich Lawyers’ Court24 , the professional is obliged under §§ 675, 667 BGB, § 43 BRAO to hand over the documents handed over to him without delay. For the tax adviser this obligation results directly from § 30 Abs. 2 BOStB.

It is advisable to file or mark the documents to be surrendered under a separate heading after the mandate has been resigned (see also seizure of the file). However, in the event of an existing claim for surrender by the client, the professional is not obliged to send the file. In case of doubt, the client has to collect them from the lawyer (§ 269 BGB), it is only questionable whether the professional should refer to the obligation to collect with regard to further orders. The burden of proof regarding the surrender of the documents in accordance with § 667 BGB shall be borne solely by the agent. It is therefore advisable to hand over documents to the client only against receipt.

To avoid any subsequent misunderstandings, the nature and extent of the documents returned should be specified in the receipt.

 

4.2.6 In-house and off-site computer data

Client data stored at DATEV are work results from the mandate, which are to be processed in accordance with DATEV. §§ 667, 675 BGB25. The professional must transfer the data to the client, the client’s successor or the successor advisor or release the data to DATEV using the usual form for data transfer26. It is sufficient to hand over the declaration of consent to the client or the new advisor27. Also with regard to other self-generated data and computer products, such as client master data or rebooking lists, the professional initially has a right of retention28 . In this context, DATEV is deemed to be an auxiliary of the professional, so that the professional alone must decide whether the information is to be provided in accordance with §§ 93 , 102 para. 1 AO is denied.

Moreover, there is generally only a claim for one’s own client, in particular for notification and information pursuant to Sections 33 et seq. BDSG30. It has not yet been decided whether the client has the right to choose between handing over a data carrier with the data or a printout of the data when handing over the files. If retention is permissible under civil law, the consultant cannot be accused of criminal extortion in this case either.

 

4.2.7 Organizational means of the manual file

According to case law, the professional only satisfies the typical duties of care if he supplements his hand file with further components which are not standardised by law.

(1) The beginning and expiry of time limits must – in addition to the note in the calendar of time limits – also be noted in the case file32. This applies in particular in the case of delivery against acknowledgement of receipt or against PZU. The professional would do well to keep a copy of the acknowledgement of receipt on file not only as proof of the beginning of the time limit, because cooperation in service is a professional obligation. Furthermore, even if a first instance judgment or decision is handed over to the client, the date of service must remain verifiably noted in the case files.

(2) In the case of service of judgments and notices, the professional must ensure, before signing an acknowledgement of receipt, that the expiry of the time limit is noted both in the calendar and in the file34. Without these notes, it is not possible to prove that the date on the acknowledgement of receipt was in error.

(3) Particularly with regard to time limits, the professional only fulfils his obligations if the file is equipped with a time limit sheet, which should be placed on top, to ensure that the expiry of time limits is clearly and conspicuously indicated (e.g. in colour).

(4) Phone slips and orders of the clerk must become part of the file37. It is a fortiori the case that orders to produce files containing time-limits (for example, to the professional’s representative) are not affixed to the file by means of a paper clip or handwritten, for example, on Post-it notes38 . Here, too, a deadline calculation sheet or a copy template “Accurate deadline control” or “Deadline reminder” is helpful as a disposal for the file.

(5) Orders given by clients by telephone shall be recorded by a note in the file as an aid to memory. An order confirmation letter is recommended.

(6) It is advisable to draw up a chronology for the file: this will make it easier to keep track. In addition, this simplifies the accountability towards the client at the end of the mandate, as this must be correct, comprehensible and complete.

(7) The conduct of the examination of time limits for appeal must also be documented, in particular by means of a time limit calculation sheet on file.

(8) It is essential to record the date and time of meetings with clients. In liability proceedings, the advisor is required to specifically demonstrate the completeness of his advice and the information he has provided on the matter. Therefore, in his own interest, the advisor should at least document this for the file – including the often important question of the client’s reaction to it.

Documentation is also recommended to prove that fees have been incurred:

For example, a statement in which assistance is provided pursuant to § 33 para. 7 StbGebV existed, is just as necessary as, for example, proof of the content of meetings for the assessment of whether a meeting fee has been incurred, sec 118 (1) StbGebV. 1 sentence 2 BRAGO, §§ 23 , 31 , 40 f. StBGebV. Finally, any arguments for charging more than an average fee must be recorded at the latest when the invoice is issued, so that “permanent exhaustion of the fee limit” cannot lead to the revocation of the licence.

This also applies to hourly fee agreements in particular, so that proof of the non-existence of punishable fee overcharging can be provided in accordance with a comparison with the statutory fee: Because six times the statutory fee is no longer permissibly agreed with the client, so that the fee claim is then usually completely void45. As a general rule, the professional’s responsibility begins when the file is presented – not when the case disappears from the desk again (after days?) after processing46. A professional’s own default is not precluded by the fact that his own staff did not remind him again.

 

4.3 Claim for surrender extinguished?

4.3.1 Fulfilment

Only consistently do the professional regulations follow the principle that the claim for restitution of the contract law with the objection of fulfilment according to the German Civil Code (HGB) is not subject to a claim for restitution. § 362 BGB can be countered. Accordingly, the obligation to surrender shall expire when the surrender is effected to the principal – the timely act of performance shall suffice. This applies in particular to other documents which the client has received in original or copy, section 50 subs. 3 Sentence 2 2nd Alt. BRAO, § 66 para. 2 StBerG.

Fulfillment in Practice:

– Documents from client: If possible, make working copies and return original to client.

– Documents for client: copy to client is already sufficient (exception, deeds, titles etc.)

– Meetings: Summarize discussions, including with client, in writing in a letter to client. Here, the professional should send a copy of every pleading and correspondence that he writes in a case to his client, in order to thus meet the client’s claim for surrender through fulfilment. In the case of documents received on behalf of the client, again only the copy should be kept on file and the original passed on to the client. This is also advisable with regard to the professional’s activity requirement (see below).

However, the burden of proof for performance always lies with the debtor, i.e. the contractor. Here it is necessary to take care for the contingency in practice. It is helpful to keep an outgoing mail book. By adding a supplement, such as “The following employee confirms that he has franked, checked the contents, sealed and personally posted the above mail items in this order by hand sign/signature” on the individual outgoing mail book sheets, it is easy to obtain the employee’s testimony that the document in question has left the premises. However, such an outgoing mail book only has probative value as proof of the outgoing mail. All forms of registered mail cannot – on their own, without an outgoing post book – prove the receipt of a document (the envelope could also have been empty, or similar).

If the adviser does not have a computerised outgoing post book with a sorting facility both by date and by client, he should instruct his secretary to have the date of the outgoing post noted on the copy for his own file with the date and hand sign: Otherwise, in a busier office, subsequent research in the outgoing mail book would become the proverbial search for a needle in a haystack. (Occasionally, particularly prudent professionals with larger office apparatus additionally keep incoming mail books to ensure permanent checking or revision of the files).

The most practical way to prove receipt of the document is to challenge the client to respond. Conceivable here would be trick questions which the client should answer or other requests which are suitable to provoke the client to a prompt answer. Only if he acknowledges, even indirectly, receipt of the document itself (e.g. by returning a power of attorney form) can performance be readily proven.

 

4.3.2 Impossibility

Even in the case of impossibility through no fault of the client, the client’s claim for restitution expires. The consultant does not bear the risk of accidental loss48. However, he must prove that he was not at fault and that it was impossible to surrender the goods.

 

4.3.3 Burden of proof

For the sake of completeness, it should be pointed out at this point that, in case of doubt, the client must of course also prove what he has left to the agent. Furthermore, the client must prove that the agent has obtained something from the agency, whereby the right to information according to § 666 BGB is helpful49. If there are reasonable doubts, the client can choose the procedure according to §§ 259 f. BGB (German Civil Code) in order to secure himself through an affidavit.

 

4.4 Professional’s right of retention

The professional has the right to claim damages in the form of § 273 BGB by § 50 para. 3 BRAO or § 66 para. 4 StBerG is entitled to a right of retention of the file, insofar as he has not yet been satisfied with regard to his expenses and fees. A right of retention also exists in the case of time-barred claims if the claim for expenses and remuneration was not yet time-barred when the claim for restitution arose50. The § 50 para. 3 BRAO, Section 66 para. 4 StBerG does not only refer to due claims.

The provision of § 273 BGB is narrower here in that only due claims can be the basis for a right of retention under § 273 BGB. However, claims for fees arise in principle with the commencement of the activity and are only due when the invoice is issued. On the other hand, the right of retention under civil law is not limited to the manual file. Common to all the above provisions is that the professional must expressly invoke the right of retention, i.e. must assert it:

This is only different in the context of the exchange relationship according to § 675 BGB, i.e. as far as the main service in the synallagma is concerned, i.e. the work results of the professional: the consultant only has to hand these over concurrently against payment of the fee owed, §§ 320, 322, 641 BGB53. An absolute prerequisite for the assertion of a right of retention by the professional is the connection with the matter. Claims of a different nature – such as personal loans – are not eligible for the exercise of a right of retention pursuant to section 273 BGB, section 50 para. 3 BRAO, Section 66 para. 2 StBerG, on the other hand, cannot be used. Therefore, the right of retention according to § 50 para. 3 sentence 1 BRAO, Section 66 para. 4 StBerG as a rule only because of the fee claim from the specific matter to which the retained file relates.

The prerequisite for invoking § 273 BGB is always that there is a due and enforceable fee claim – thus, the formal requirements for the fee statement according to the fee schedule must be observed. Insofar as the client’s business papers are concerned, hand files relating to another matter may not be withheld even if the overall relationship is a single one.

Already from the point of view of a (joint) responsibility for the late submission of tax returns, original documents should be handed over as far as possible, so that an own responsibility of the professional is already certainly omitted for lack of causality. Only in the case of work results has the BGH granted the professional an (additional) right of retention pursuant to § 273 para. 1 BGB (German Civil Code), so that only here a refusal of surrender due to outstanding fees from other matters is permissible56. In principle, only the owner of the hand files can exercise a right of retention.

It does not matter what the nature of the possession is. Thus, it is possible for the correspondent lawyer as indirect owner to assert a right of retention. In order to open up this possibility, it is advisable to include a passage in the accompanying letter in the case of file transfers which expresses that the attorney of record is to keep the files for the correspondent (cf. § 688 BGB). There is no right of retention in the power of attorney (cf. § 175 BGB), in working papers (often – as in the case of the LSt-card – owned by third parties, e.g. the client’s employees), insurance premium card etc.. Moreover, the right of retention in bankruptcy is excluded: This does not apply with regard to the work results if the bankruptcy trustee terminates the mandate within the scope of his right of choice according to § 17 KO, refuses payment and demands the surrender of the hand file.

However, there is generally no right of retention with regard to a claim for the surrender of client documents and a claim for information of the bankruptcy trustee, for example with regard to the accounts of the bankrupt. By the equity clause of § 50 para. 3 sentence 2 BRAO, Section 66 para. 4 StBerG or § 30 para. 2 sentence 3 BOStB, the right of retention is severely restricted.

In this context, the exercise of the right of retention is inadmissible insofar as the withholding of the case files or individual documents would be unreasonable under the circumstances. Section 273 of the German Civil Code (BGB) also takes account of unreasonableness through the wording “unless the contractual obligation provides otherwise . . .” according to the principles of § 242 BGB. The professional who exercises a right of retention in an inadmissible manner runs the risk of exposing himself to possible liability claims due to the inadmissible exercise of rights. By asserting the right of retention, unpleasant consequences may well arise for the client, since the non-payment of outstanding fees and expenses represents a serious breach of the contractual relationship, but the exercise of the right of retention is unreasonable if the resulting damage to the client and the interest of the professional are no longer proportionate.

threatening limitation of claims of the client, which can only be recovered on the basis of documents in the file (in this case the specific handing over of individual parts of the file suffices)

– preferably accompanied by an instruction),

– proportionate insignificance of the amounts due,

– retention of titles which causes acute distress to the client, or

– if the debt can only be paid from a savings account on file.

In this case, the professional should, together with the client, issue a trustee order to the bank to the effect that the sum owed is to be taken from the savings balance and credited to the professional without reservation or preconditions. The professional breaches a post-contractual duty if he does not inform the (former) client of an impending limitation of his claims and/or if he withholds all documents due to non-payment.

A right of retention does not exist under any circumstances as a means of exerting pressure in order to enforce an increase in fees!64 Pursuant to § 17 of the Code of Professional Conduct, the lawyer who refuses to hand over the case file may take into account a justified interest of the client in handing it over by providing him with copies, unless the justified interest is directed precisely at the handing over of the originals. Of course, the making of copies can also be made dependent on an advance payment. In such a case the professional may also offer to hand over the originals in trust to a professional to be instructed by the client, if the legitimate interest of the client is thereby taken into account. In the opinion of the OLG Koblenz, the professional may not be ordered to fulfil the claim for surrender in interim injunction proceedings, as this would result in a final settlement.

However, the purpose of preliminary injunction proceedings is only to provisionally secure the claim. Averting the right of retention pursuant to § 50 para. 3 BRAO, Section 66 para. 4 StBerG by way of security is not provided for, since the lawyer may demand receipt of the fees and expenses, which is clear from the wording of sec. 50 para. 3 BRAO, Section 66 para. 2 StBerG results. On the other hand, the provision of security is possible when exercising the right of retention in accordance with the provisions of § 273 BGB. Here, the amount of the security deposit depends on the fee claim. The right of retention can also be waived by agreement. A passage in the contract, e.g. “The agent shall hand over the documents to the client after the end of the mandate”, can, according to the German Civil Code (BGB), be interpreted as a “clause in the contract”. § 133 , 157 BGB already have a preclusive effect for the right of retention.

The client has in any case, even in the case of an existing right of retention, the right to inspect the case file in accordance with the law. § 666 BGB. This claim is an advance performance obligation on the part of the commissioner, which is why there can be no lien on the right to inspection. It should be noted at this point that the client has the right, within the framework of his right of inspection, to make copies of the file at his own expense or to have them made by an authorised messenger. This should also have an influence on the diligence in keeping the manual files in the well-understood self-interest.

Furthermore, there may be a claim for inspection via § 810 , 811 BGB. In this case, however, the client must demonstrate a legal need to inspect the documents. Such a legal interest does not apply if the “investigations” serve to enforce recourse claims against the commissioned professional. The client has to advance the costs of a presentation according to § 810 BGB. As a general rule, the (former) client can render the right to retain the file or the restriction on the delivery of the work results concurrently invalid by providing security, i.e. by depositing the fee, Section 273 (2). 3 BGB.

 

4.5 Obligation to name the documents precisely?

Documents which are to be surrendered according to § 667 BGB do not have to be individually designated by the client requesting surrender according to author, date and content69. It is sufficient if the client demands the handing over of all documents concerning the matter, since in this way it is also clear to a third party without any doubt which documents are concerned.

 

by Dr. Johannes Fiala

 

1In the following, the term “professional” is used as a proxy. 2Cf. NJW 1990, 510. 3Cf. Handbuch das RA, E II, Rn. 45. 4Borgmann/Haug, in: Anwaltshaftung, 1996, § 23 Rn. 139. 5BAG, MDR 1995, 965. 6Henssler, in: BRAO, 2nd ed, § 50 Rz. 10. 7BFH, BFHE 175, 309 and BFH v. 23. 8. 1994, VII R 143/92. 8Madert, in: Anwaltsgebühren in Zivilsachen, 1992, p. 78. 9FN 8. 10FN 8. 11OLG Frankfurt, Rpfleger 1980, 399 f. 12LG Essen, AnwBl. 1979, 117 ff. 13Borgmann/Haug, (FN 4), marginal no. 149. 14NJW 1953, 514. 15Borgmann/Haug, (FN 4). 16KGJW 1926, 222. 17Borgmann/Haug, (FN 4), marginal no. 150. 18Isele, in: Bundesrechtsanwaltsordnung, 1976, § 50 IV B 3. 19Palandt/Thomas, § 705 marginal no. 37. 20Cf. BGH v. 30.11. 1989, III ZR 112/88, NJW 1990, 510. 21Palandt/Thomas, § 667 marginal no. 3. 22Cf. BGH, NJW 1990, 510. 23BGHZ 85, 327. 24Cf. AnwG München v. 11. 10. 1996, 3 AG 11/96. 25Cf. LG Münster v. 10. 7. 1981, 10 S 29/81. 26LG München, DStR 1989, 1989; LG Bielefeld, Stbg 1994, 46. 27LG München, DStR 1989, 1989. 28BGH, BB 1988, 656 and 1988, 2824. 29Cf. Streck, Stbg 1988, 92. 30Zuck, Anwaltblatt 1996, 549 ff. 31LG Lahr v. 27. 5. 1997, 3 Ds 10 Js 925/95, n. v. 32BGH, VersR 1983, 5590 as well as 1981, 39 f. 33BGH, VersR 1981, 39 f. 34BGH, FamRZ 1992, 1058 ff; BGH, AP No. 21 to § 233 ZPO 1977. 35BGH, NJW 1987, 325. 36BGH, VersR 1980, 746. 37BGH, VersR 1978, 841 f. and BGH, VersR 1980, 746. 38BGH, NJW-RR 1989, 125. 39BGH, VersR 1978, 1116 f. 40MüKo to § 666 BGB. 41BGH, VersR 1981, 551 f. and 1983, 988 f. 42BGH, NJW 1987, 1322. 43OLG Düsseldorf, Gl 1997, 250. 44FG Brandenburg v. 11. 6. 1997, 2 K 1423/96 StB, n. v. 45Gerold/Schmidt, BRAGO, para. 20 to § 3 BRAGO. 46BGH, NJW 1992, 841 ff. 47BGH, NJW-RR 1991, 191. 48BGH, WM 69, 26. 49Palandt/Thomas, § 667 Rn. 10. 50EG Düsseldorf, AnwBl. 1979, 123. 51Borgmann/Haug, (FN 4) p. 152. 52Cf. OLG Düsseldorf v. 25. 11. 1993 13, U 19/93. 53Cf. OLG Düsseldorf v. 12. 9. 1996 13, U 128/95. 54BGH, NJW 1997, 2944. 55BGH, IX ZR 244/96, NJW 1997, 2944 (leading sentence). 56BB 1988, 656. 57Cf. Borgmann/Haug, (FN 4), p. 152 Fn. 501. 58Cf. Borgmann/Haug, (FN 4) p. 152. 59BGH, BB 1988, 2428 and BGH, ZIP 1988, 1474. 60LG Düsseldorf, ZIP 1997, 1657 f. 61Gehre, in: StBerG, 3rd ed, Rz. 12 to § 66. 62Cf. Handbook of the RA, p. 1252. 63BGH, v. 11. 10. 1983, VI ZR 95/82. 64AG Düsseldorf, StB 1985, 274, 275. 65OLG Koblenz, v. 20. 10. 1982 1 U 1091/82. 66Cf. LG Köln, v. 27. 10. 1987 11 S 196/87. 67Palandt/Thomas § 666 BGB, Rn. 1. 68WP-Handbuch, 11th ed, Part A, Rz. 336 ff. 69A. A. Nassall, in: KTS 1988, 633 ff. with reference to the inventory in accordance with § 260 BGB. 70Cf. AG Bad Neuenahr-Ahrweiler, v. 25. 11. 1987, 3 C 127/87. Reference ? DStR 1998, 694

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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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