European Court of Justice: The minimum rates of the HOAI can still be applied to older contracts between private individuals

In 2006, the European Union adopted the so-called Services Directive. The mandatory minimum and maximum rates of the HOAI for architects and engineers were not compatible with this Directive. This was already established by the European Court of Justice (ECJ) in 2019 (judgment of 04.07.2019 – C-377/17). The HOAI was then changed by the German legislator – but only on 01.01.2021. At the request of the Federal Court of Justice (BGH), the ECJ now had to decide whether the minimum rates provided for in the old version of the HOAI 2013 can continue to be applied to old contracts between private individuals concluded before 01.01.2021 (judgment of 18.01.2022 – C-261/20).

Circumstance

In 2016, a real estate company and an engineer signed an engineering contract. A flat fee was agreed for the services, which was below the regulated minimum rates of the HOAI. After termination of the contract, the engineer billed his remuneration according to the minimum rates laid down in the old version of the HOAI. To that end, he brought an action (so-called top-up action). In the context of this dispute, the BGH referred to the ECJ the question of whether the minimum rates of the old HOAI 2013 can continue to be applied to older contracts between private individuals due to the violation of the Services Directive.

Decision

According to the ECJ, the minimum rates can still be applied to old contracts between private individuals, even if the binding regulation violates the Services Directive. Among other things, he justifies this with the fact that an EU directive – unlike an EU regulation – cannot create obligations for individual persons. Rather, it only obliges the member states. These have to transpose the EU directives into national law. A national court is therefore not obliged in a dispute between private individuals not to apply the minimum rates of the HOAI solely because of a breach of an EU directive.
Something else does not apply on the basis of the above judgment of the ECJ from 2019. In it, the ECJ had found that the Federal Republic of Germany had breached its obligation under the Services Directive. The latter failed to amend the HOAI and the minimum and maximum rates laid down therein after the adoption of the Services Directive. According to the ECJ, however, the judgment served above all to establish the violation of the state. It does not grant rights to individuals. Consequently, that judgment does not require a national court not to apply the minimum rates of the HOAI. However, the General Court may exclude its application on the basis of national legal provisions.
The minimum rates of the HOAI are therefore applicable to old contracts concluded between private individuals before 01.01.2021.
In addition, an interested party may claim compensation from the Federal Republic of Germany for the damage suffered by the Federal Republic of Germany as a result of the failure to transpose the Directive.

Practical tips

On the basis of the decision of the ECJ, the BGH must now decide on the top-up case pending before it. It can be assumed that both the BGH and the courts of appeal will (again) take into account the mandatory pricing law of the HOAI in the case of top-up actions between private individuals for old contracts.
For contracts that have been or will be concluded from 01.01.2021, no binding fee rates apply. Rather, the fee tables of the HOAI 2021 represent non-binding orientation values. These are now referred to as the “basic fee rate” (instead of “minimum rate”) and “upper fee rate” (instead of “maximum rate”). In principle, fee agreements according to the HOAI 2021 require the text form (§126b BGB) to be effective. In the event that no agreement has been made on the amount of the fee or the text form has not been complied with, the basic fees apply.

By Miriam Modesto, MELCHERS, Germany, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact germany@transatlanticlaw.com

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