AUSTRIA Trends and Developments Contributed by: Bettina Knoetzl and Katrin Hanschitz, KNOETZL
KNOETZL Herrengasse 1 A-1010 Vienna Austria Tel: +43 1 3434 000
Fax: +43 1 3434 000 999 Email: office@knoetzl.com Web: www.knoetzl.com
Austria continues to be hit hard by inflation – harder than most EU member states – with consumer prices still increasing by as much as 4%. Economic strain and high inflation have exacerbated financing costs and market uncertainty, leading to an increase in disputes, particularly in areas such as commercial contracts (price adjustment clauses, force majeure, non-performance), insolvency and employment litiga- tion. Public spending is at an all-time low, with Austria currently in breach of the EU’s deficit limit and strug- gling to comply with EU fiscal requirements. Litigation costs are rising with higher court fees, typically linked to price indices or administrative costs, and legal fees. Litigation is therefore more expensive, and may incen- tivise parties to shift towards out-of-court settlements or alternative dispute resolution. For those who do end up in court, the Austrian judici- ary maintains its reputation as one of the most efficient and independent in Europe. In the 2025 Rule of Law Report on Austria, the EU Commission noted that the independence of the judiciary is perceived as high by businesses and very high by the general public, and that the overall efficiency of the justice system is high. However, already high court fees increased by a fur- ther 23% in 2025. Despite this, delays in the budget- ing process and budgeting cuts mean that insufficient funds are delegated to the courts, with lawyers also concerned that courts are now insufficiently staffed. Addressing these issues, the government has prom- ised to evaluate and adjust court fees to ensure accessibility to the courts and to allocate significant
resources to fill existing posts and create additional posts for judges and legal support staff. Insolvency The burgeoning volume of insolvencies is one of the main drivers behind overburdened courts. With approximately 19 new insolvency filings per day in the retail and real estate sectors, judges are refining case handling techniques to deal with the increased load, with insolvency judges in some cases holding hearings at ten-minute intervals throughout the day. An increasing number of cases do not even make it to court: in the absence of sufficient assets to cover the cost of insolvency proceedings, more and more companies are liquidated without them. Efforts within the EU to harmonise insolvency law may provide relief in the future. After many years of negotiations, EU member states have agreed on key points to create a more unified framework that attracts cross-border investment and reduces complexity. In June 2025, they resolved the most contentious issues. These include uniform rules on avoidance actions, expedited access by insolvency practitioners and courts to centralised bank account registers and asset information across the EU, “pre-pack mecha- nisms” (packaging of a business sale before filing for insolvency) and creditor committee rules, as well as uniform rules on the duty of directors to file for insol- vency. This signals a decisive acceleration towards a consistent EU-wide insolvency regime. The next step is for the European Parliament and Council to finalise and introduce the directive, with implementation by member states expected to begin in early 2026.
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