AUSTRIA Law and Practice Contributed by: Bettina Knoetzl, Katrin Hanschitz, Kirstin McGoldrick and Natascha Tunkel, KNOETZL
The court of appeal may, on the grounds of a proce- dural deficiency: • set aside the judgment and refer the case back to the court of first instance; or • complete the proceedings and decide by judgment on the merits. In the event of an incorrect legal assessment, the court of appeal may confirm or amend the first instance judgment. If the procedure/judgment is rendered null and void, the court of appeal will nullify the procedure/judgment and refer the case back to the first instance. As a rule, the Supreme Court decides the merits by confirming or amending the appellate judgment. On the grounds of procedural deficiency and if factual findings are missing, the Supreme Court will set aside the judgment and refer the case back to the court of appeal or the court of first instance. 11. Costs 11.1 Responsibility for Paying the Costs of Litigation Austrian law operates under the “loser pays” principle. Accordingly, every party is required to pay its own costs during the proceedings. At the end of proceed- ings, the court will render a decision on costs, order- ing the unsuccessful party to reimburse the legal costs of the other party. Legal costs and fees consist of: • court fees (to be paid by the plaintiff when filing a claim or an appeal); • lawyers’ fees; and • cash expenses such as expert/translator costs and travel costs of witnesses. The reimbursable fees for lawyers are fixed according to a tariff, depending on the amount in dispute and the procedural steps taken by the lawyer. The actual fees a lawyer charges a client may, and often do, exceed
the tariff. The winning party may still end up having to pay the excess amount. 11.2 Factors Considered When Awarding Costs The court’s decision on costs depends on which party prevails and in what proportion. 11.3 Interest Awarded on Costs By law, Section 54a Austrian Code of Civil Procedure, and without the need for being explicitly stated in the decision on costs, the party liable to pay compensa- tion shall be obliged to pay statutory default interest on the amount of costs from the date of the decision on costs. 12. Alternative Dispute Resolution (ADR) 12.1 Views of ADR Within the Country ADR and, particularly, mediation, is viewed positively in Austria. Yet mediation is still rarely employed to set- tle commercial disputes. Parties to complex commer- cial and corporate disputes prefer to sue in court or to initiate arbitration proceedings, thereby delegating the resolution of the dispute to judges or arbitrators. How- ever, nowadays a good number of judges are aware of and appreciate the power of mediation and actively refer parties to mediation. The Law on Mediation Regarding Civil Claims ( Zivil- rechts-Mediations-Gesetz ), enacted in 2004, aims to promote and facilitate access to mediation by set- ting out basic parameters for mediation. It establishes required qualifications of certified mediators, provides that mediation conducted by a certified mediator pre- vents the limitation period from expiring, and sets out that certified mediators shall not be required to tes- tify in court proceedings. In many areas, the Austrian Law on Mediation Regarding Civil Claims pre-empted most of the provisions foreseen by the (EC) Directive 2008/52 of 21 May 2008 regarding certain aspects of mediation in civil and commercial matters. 12.2 ADR Within the Legal System The prevailing opinion is that parties should engage in ADR proceedings voluntarily. There are only a few
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