AUSTRIA Law and Practice Contributed by: Bernd Rajal, Maximilian Klein and Moritz Üblagger, Schönherr Rechtsanwälte GmbH
14. Costs 14.1 Mechanisms to Protect Claimants From Excessive Costs Principle of Bearing One’s Own Costs In administrative proceedings, each party must bear its own costs, regardless of whether the proceedings were initiated by the party, anoth - er party or ex officio. This applies both before administrative authorities and courts (Section 74 AVG in conjunction with Section 17 VwGVG). The outcome of the proceedings – whether a party wins or loses or is partially successful – is irrelevant. Even if a party was obliged to take procedural steps, they must still cover their own costs. This principle includes expenses such as law - yer’s fees, private expert opinions, and travel or subsistence costs. It also applies to authorities, meaning they cannot claim cost reimbursement from parties. Exceptions to the Principle Legal provisions may specify cases where a party is entitled to cost reimbursement (Section 74 paragraph 2 AVG). For example, in expropria - tion proceedings, costs are typically borne by the railroad company. Legal Aid Legal aid ensures that financially disadvantaged parties can pursue their legal rights by exempt - ing them from certain costs, including court fees and expert witness fees. If necessary, a lawyer may also be provided free of charge. To qualify, a party must be unable to cover the costs without jeopardising their basic livelihood. The intended legal action must not be obviously futile or hopeless and must be required by fun - damental rights (Section 8a paragraph 1 VwG -
VG). Legal entities may receive legal aid only if they lack the necessary funds and cannot obtain them from financially involved parties. 14.2 Public Interest Costs No Public Interest Costs In general, there are no “loser pays” arrange - ments in Austrian administrative proceedings. The principle that each party must bear its own costs applies (see 14.1 Mechanisms to Protect Claimants From Excessive Costs ). There are no provisions for public interest costs. 14.3 Wasted Costs Attorney’s Fees In principle, the claim for attorney’s fees arises from the agreement between the attorney and the client (Section 1 paragraph 1 General Fee Criteria (AHK)). As such, a civil law contract exists between the attorney and the client. The conditions for claiming damages depend on whether the attorney causes harm to the party they are contractually obligated to represent or directly violates a law that protects the injured party. Liability under the mandate arises primar - ily from the standards set forth in attorney law. One of the primary duties of an attorney is to protect the client’s interests and uphold the law, which includes obligations such as the duty to warn, inform and prevent. Wasted costs resulting from improper, unreason - able or negligent actions by legal representatives must be pursued in civil proceedings. (For the distinction between ordinary jurisdiction and administrative jurisdiction, see 3.4 Agreements Between Private Entities and Public Bodies .) Costs Due to Official Action Apart from costs incurred by legal representa - tives, procedural costs (and other related
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