Gerhard Dannemann

Dedicated to Hans Stoll on his 70th Birthday, 4 August 1996

The article takes a comparative and statistically based approach to evaluate access to justice in England and in Germany as expressed in particular by frequency of litigation, costs and the availability of legal aid. It demonstrates how remunerating legal practitioners on an hourly basis (England) or under a fee scale based on the value of the claim (Germany) influences the accessibility of justice, the availability of legal insurance, the expenditure on legal aid, the case load of courts, and the interplay between legal practitioners and judges.

Outline

Comparing the Case Load

Table 1 Plaints before lower courts (county courts and German equivalents)

Table 2 Plaints plus written summary proceedings, contested plaints and judgments

The Judiciary

The Time Factor

The Cost of Going to the Law

Fee Scales

Table 3 Cost of litigation in Germany: some examples

Legal Expenses Insurance

Legal Aid

Legal Advice

Table 4 Green Form Scheme and German Equivalent

Criminal Proceedings

Litigation

Table 5 Legal Aid for Litigation

Conclusions

The year 1995 saw the publication of two major proposals for sweeping justice reform in England and Wales, namely the Green Paper on Legal Aid¹ (henceforth: Green Paper), and the Woolf Report on “Access to Justice” (henceforth: Woolf Report), concerning reform to the civil justice system.² The reports, and the debate which they have stirred, show that access to justice is of growing concern in British politics and society, and generally perceived as a pressing social need. Both reports consider the spiralling costs for going to the law to be the primary threat to the accessibility of justice.³

In spite of the different subject-matters of the Green Paper and the Woolf Report, their authors converge in proposing that the present system of practitioner’s fees being based on the time spent on the case should, to a larger degree, be replaced by systems of fixed fees, a proposal which has been further developed in a recent discussion paper by Adrian Zuckerman.⁴ It is for this reason that, for the purposes of the present article, a comparison between English and German law seems particularly appropriate, as a general system of fixed fees for lawyers has operated in Germany for a long time. Besides, the Woolf Report contains a number of other proposals which would reduce the considerable differences between English and German law;⁵ some writers see German influence behind such proposals.⁶ Indeed, the Woolf Report contains an Annex 5 with examples for the fixed fees which German legal practitioners are entitled to claim. This Anglo-German comparative approach has recently been enhanced by the inclusion of a presentation of the German system of court and lawyers’ fees in an important collection of essays on the Woolf Report.⁷ The present article aims to widen this comparative approach by juxtaposing English and German systems of legal costing and legal aid, and by using statistical data to demonstrate the interdependence between approaches towards costing, the accessibility of justice, and the interplay between courts and legal practitioners (1).⁸ Necessary as such a statistical comparison is if one aims to go beyond the merely circumstantial, a few words of caution seem appropriate.⁹ There are some fundamental differences between the English and the German legal systems which can make comparisons by numbers very difficult, and may necessitate detailed explanations and adjustments to the figures. The statistical data available will often be based on different criteria, and thus prevent direct comparisons. Evidently, there are also more economic and cultural factors which influence litigation and cost patterns than could be mentioned in this article.¹⁰

Courts and Cases

Comparing the Case Load

Another difficult figure in terms of access to justice is the number of divorce proceedings, which make up a sizeable proportion of court cases in both countries. As a party who seeks a divorce in England, Wales or Germany has no choice but going to the courts, the number of cases and divorces is more likely to reflect the stability of marriage as a social institution than the availability of legal remedies. This is particularly true where the substantive requirements for obtaining a divorce are, grosso modo, fairly similar, as is the case for Germany and England.¹² As regards divorce proceedings, therefore, the degree of access to justice will, as a rule, be less reflected in the number of cases and divorces, and more in the availability of legal aid and other factors which influence the outcome of divorce related proceedings, in particular decisions on matrimonial property, maintenance and childcare. For this reason, divorce proceedings are not counted in the following statistical comparison.

Also, when access to justice is voiced as a political concern, people tend to be less worried about British Airways or Siemens mustering the funds to sue some other business for several million pounds or marks, and more about ordinary citizens and their day-to-day legal concerns. For these reasons, the present author has chosen first-instance litigation before the lower courts in England and Wales on the one hand and in Germany on the other as a starting point for statistical comparisons.¹³

Table 1 Plaints before lower courts (county courts and German equivalents)

The Judicial Statistics for England and Wales reveal that around 2.7 million (2,658,416) plaints were entered at County Court level in 1994, down 28 per cent from 3,694,536 in 1991 (see Table 1).¹⁴ The picture is somewhat more complicated to start with in Germany, as there are different courts for ordinary (civil and criminal) jurisdiction, for administrative, labour, social insurance, and tax jurisdictions. But if one counted all comparable lower level first instance proceedings and consoled oneself with the 1991 figures – with legendary efficiency, these are the latest which are available in full from the German Federal Statistics Office for West Germany, and none at all for East Germany – the figure is somewhat lower, but not dissimilar: just over 2 million, figures which incidentally have been fairly steady over the last years.¹⁵ Considering that the population of West Germany, with some 60 million, is not much higher than that of England and Wales with some 50 million, one arrives at the conclusion that the English and Welsh take a clear, but not a drastic lead over the Germans in their need, desire, and ability to litigate.¹⁶ Accordingly, access to justice, if reduced to a statistical viewpoint, should be essentially similar in the two countries, and somewhat easier in England and Wales.

However, these figures should mainly serve as a warning. They reveal how difficult it is to make statistical comparisons between two legal systems which are so fundamentally different as are the two under consideration in this article. What the numbers of plaints do not tell the reader is the fact that out of the some 2.7 million English and Welsh county court level plaints, the vast majority are not contested and end in a default judgment, and that nearly half of those default judgments are obtained by a group of 125 large-scale plaintiffs such as banks and mail-order businesses which are pooled in the Summons Production Centre.¹⁷ In most of these 2.7 million cases, no judge ever looks at the merits, and no more than just over 110,000 of the total figure represent contested litigation. At the end of the day, 2.7 million plaints result in just under 25,000 proceedings disposed of by trial (i.e., a full hearing in court), while another some 90,000 cases are disposed of by what is called arbitration, a procedure providing a decision for claims not exceeding £1,000 which do not require a full hearing in court (see Figure 2).¹⁸No figures are available as to how many judgments are produced as a result of these some 110,000 procedures for contested claims; some allowance should be made for withdrawn and settled actions.

The German figure of 2 million, on the other hand, does not include summary written proceedings in the so-called Mahnverfahren. This is the closest German equivalent to English default judgments and the quickest way of obtaining a non-contested enforceable money title without going into the merits of a case.¹⁹ The number of these proceedings exceeds 5 million per year.²⁰ Therefore, one must add another 5 million to the 2 million cases which were taken as a starting figure for Germany. Also, these 2 million plaints lead to over half a million judgments over contested claims, and more than 300,000 in court settlements, the latter being settlements with the force of a judgment which are negotiated during a court hearing and usually brokered by the court.²¹ In some areas, in particular labour law, they are essentially a consensual shortcut to a judgment which the court would impose on the parties at any event. There is not much of an English equivalent to these German in court settlements, but they should nevertheless be mentioned because they lead to an enforceable decision in contested cases.

Table 2 Plaints plus written summary proceedings, contested plaints and judgments

a The total of 515,947 contested judgments consists of 375,029 decisions by the Amtsgerichte, 37,476 by the Arbeitsgerichte, 39,967 by the Sozialgerichte, 48,112 by the Verwaltungsgerichte, and 15,363 by the Finanzgerichte; Statistisches Jahrbuch 1995 pp. 368-372. Again, these figures do not include family law decisions, where at any rate statistics do not reveal whether or not a decision is contested.

b The total of in court settlements, i.e. 325,831, is the sum of 115,647 before the Amtsgerichte, 193,827 before the Arbeitsgerichte (where cases are nearly six times as likely to be settled as decided by contested judgment), and 16,357 before the Sozialgerichte; Statistisches Jahrbuch 1995 pp. 368-372. In court settlements are generally not arbitrated by administrative and tax courts.

The bottom line is therefore this. Some 2.7 million plaints in the county courts of England and Wales compare to some 7 million similar actions and related proceedings in West Germany; some 110,000 contested plaints in England and Wales compare to some 800,000 contested similar cases in Germany; some unknown figure below 110,000 judgments and similar decisions over contested claims in England and Wales relate to more than 500,000 judgments in Germany. Germans are therefore, on a per capita basis, more than twice as likely to avail themselves of judicial remedies. If we compare the likely outcome of judicial remedies, we note that a German defendant is nearly three times more likely to contest a claim than an English/Welsh defendant, and that any given German case is nearly twice as likely to result in a contested decision than an English/Welsh case. On a per capita basis, these figures imply that Germany has more than six times the amount of contested litigation when compared to England and Wales, and four to five times more contested judgments. We must therefore conclude that Germans are overwhelmingly more litigious than English people (which is certainly true), but also that litigation is more accessible to the German public. This has mainly to do with costs, as will be explained below.

On the other hand, these judicial figures fail to reveal the amount of alternative dispute resolution. It must be noted that this is more common in England and Wales, in particular as regards employment disputes.²² Statistical comparisons are particularly difficult in this area. While little use is made of outside arbiters in German employment disputes, German law does provide an in-house mechanism for dealing with disputes through strong works councils, which are composed of representatives of the workforce, and which must be consulted ex officio (i.e. without intervention by the employee concerned) before a dismissal can become effective.²³ This mechanism is situated halfway between conflict prevention and conflict resolution. Even if figures were available, little would be gained by comparing the numbers of works councils interventions plus labour court proceedings in Germany on the one hand with industrial tribunals plus labour law court proceedings in England and Wales on the other. Such a purely statistical analysis would fail, simply because in this area there is no common set of circumstances which could be amply reflected in figures. However, if access to justice is not limited to judicial remedies but also includes alternative dispute resolution, the striking discrepancy between the above English/Welsh and German litigation figures must nevertheless be somewhat downscaled in order to reflect the higher number of arbitration proceedings in England and Wales.

The Judiciary

The above figures can nevertheless be misleading, because they exclude court masters and registrars on the English side (who, overall, deliver more decisions than judges),²⁸ as well as Rechtspfleger (senior registrars) and honorary (lay) judges (ehrenamtliche Richter, or Schöffen) on the German side. Of these groups, only the German lay judges perform solely judicial functions; but since they (contrary to English magistrates) never decide cases without a professional judge on the same bench, their exclusion may be justified and could possibly make up for the fact that the English masters and registrars may perform more judicial functions than the German Rechtspfleger.

The pattern which nevertheless remains is repeated in the court structure, and even more obvious when it comes to appeals. The number of judges at the Court of Appeal in England (twenty-nine) is nearly matched by the number of regional courts of appeal in Germany (twenty-five);²⁹ ninety appeals decided by the House of Lords in 1994 compare to 12,446 appeals decided in 1991 by the German Federal Court of Justice and the supreme courts of the other branches of jurisdiction.³⁰ However, these high German figures should be savoured with caution, as they are not necessarily indicators for better access to justice. For example, the division into different branches of jurisdiction, while allowing for the development of specialized expertise, can in itself be a barrier to access to justice because it is not always entirely evident towards which court a German plaintiff should turn. This is a problem which has been felt most by East Germans who were not used to different branches of jurisdiction. Similarly, the high number of appeal courts and of judges at the highest court of ordinary jurisdiction, the Bundesgerichtshof (Federal Court of Justice, with ninety-six judges for civil matters alone) poses problems of bringing so many minds to agree what is the law as interpreted by the courts.

The Time Factor

It is probably safe to say (but there is no statistical evidence available) that English default judgments and their German counterparts can generally both be obtained fairly quickly. This implies that in the vast majority of very straightforward cases (usually defaulting debtors), judicial relief can be obtained within a reasonable time.

The same cannot necessarily be said about contested litigation. However, the available statistics allow no direct comparison. The English figures indicate that, at county court level, it takes on average around one year and a half from the time of issue of summons until trial starts.³¹ In German statistics, the time is measured between commencement and termination of proceedings (i.e., until the final judgment or in court settlement), and if one looks at overall figures for litigation, no more is revealed than the percentage of cases which are terminated within six months or one year. Around 95 per cent of cases are terminated within one year in the lower civil and labour courts, around 50 per cent in the social insurance and fiscal courts, and around two-thirds in the administrative courts.³² For the most important branch of jurisdiction – i.e., civil law litigation – the average length of proceedings is 4.1 months at the Amtsgericht level.³³ This comparison is itself not quite fair on the English courts, because the German figures include non-contested, withdrawn and settled actions (but exclude Mahnverfahren). Also, it is more common in England for plaintiffs to commence court proceedings in order to improve their bargaining position for a settlement, which adds substantially to the average time between commencement of proceedings and trial. In Germany, plaintiffs would tend to commence proceedings only after having ascertained that there is no room for an out of court settlement in the case. We can therefore derive no other conclusions from these figures than that German lower courts are, on an overall, probably slightly faster than English and Welsh county courts. Nevertheless, the time factor does remain a problem in both countries.

The Cost of Going to the Law

German courts do part of the work which the English system assigns to solicitors or barristers. In particular, German judges are more actively involved in the estab­lishment of facts than their English colleagues. Also, in a tradition derived from Roman law, litigants only have to submit the facts of the case and do not have to discuss points of law (iura novit curia: da mihi factum, dabo tibi ius – the court knows the law: give me the facts, and I will give you the law). Therefore, a court may not refuse to give judgment merely because the parties have not clarified the points of law in question. As a result, lawyers focus their work particularly on the factual situ­ation and procedural points. Nevertheless, good lawyers will comment on any critical questions of law involved and cite statutes, court decisi­ons or scholarly writing in favour of their clients. The fact that a German client will consult and be represented at court by the same lawyer (i.e. not by a barrister anda solicitor) will often imply that liti­gation is less costly. Yet another factor which makes litigation in Germany cheaper than in England is the complete absence of pre-trial discovery in Germany.³⁵ It should also be mentioned, however, that in practice, all these differences are less evident at the lowest (i.e., county court and equivalent) level.

Fee Scales

If, for instance, a claim of DM 10,000 (£4,500) is at stake, the appropriate fee unit is DM 595 (some £270). One unit covers pre-trial activity. For bringing the case to court and pleading, a lawyer can claim a total of two fees, and an additional third fee if evidence is heard (§ 31 BRAGO).³⁶ Curiously, the lawyer is entitled to a fourth fee if a settle­ment between the parties is reached at court (§ 23 BRAGO) – obviously an incentive towards lawyers to convince their clients of the merits of an agreement with the opponent. If evidence is heard and no settlement reached, the lawyer is generally entitled to three fees. This implies that in a normal first instance action for DM 10,000, each lawyer can claim DM 595*3= DM 1,785 or some £800. As costs follow the event, a plaintiff who brings an action for DM 10,000 therefore risks twice DM 1,785, plus VAT for lawyers’ fees.

Court fees are generally higher than in England, and regulated by the Court Fee Act (Gerichtskostengesetz, GKG). The fee, set out in § 11 GKG and its Annex 1, again depends on the value of the claim in question. In our example of contested litigation for DM 10,000 ending in a judgment, court fees would amount to 3 times DM 235= DM 705. Eventually, the cost risk which a plaintiff in an action for DM 10,000 incurs is twice DM 1,785 + DM 705 = DM 4,275, plus VAT and sundry expenses, in total just under half of the value of the litigated claim. The ratio between the value of the litigated claim and costs does, of course, depend on many factors; pro rata, more costs are incurred for low value claims and less for high value claims. If one sues for more than DM 1 million, the overall costs for first instance proceedings are not likely to exceed 5 per cent.

Table 3 gives some examples for court and lawyers’ fees as well as the actual overall costs to be paid by the losing party, including VAT and lump sum expenses, but excluding detailed expenses for items such as experts or travel costs. Figures apply to first instance litigation only.³⁷

Table 3 Cost of litigation in Germany: some examples

aIn a typical case, court costs equal 3 court fees.

b In a typical case, the costs for one lawyer equal three fees. These figures exclude VAT and expenses.

cThe total consists of 3 court fees, 2 lawyers at 3 fees each, and includes a lump sum for expenses as well as VAT at 15%. Figures for totals have been taken from Otto, Gebührentabellen für Rechtsanwälte, Notare, Gerichte und Gerichtsvollzieher, 18th ed. Neuwied etc. 1994, and rounded to full marks. They exclude additional expenses, e.g. travel costs, or expenses for experts and witnesses.

A juxtaposition with English law runs into several difficulties. English solicitors and barristers generally calculate their fee according to the number of hours they spend on a case.³⁸ It is therefore very difficult to predict the likely costs of a given case. Apparently, little forensic research had been undertaken into costs until very recently.³⁹ However, as part of the Woolf project, Hazel Genn has conducted a preliminary cost analysis of 673 cases submitted to the Supreme Court Taxing Office. Her findings are appended to the Woolf report. The figures allow no direct comparison to the German Fee Scale, mainly for the reason that, in the Genn study, cases are listed in six bands of value of claims (e.g., £0-12,500), without indicating the values of individual claims, or the average value within a given band. In about one half of the cases of this lowest value band, taxed costs for one side alone were close to, or exceeded, the total value of the claim;⁴⁰ therefore, on average, the total costs for litigating a claim in this value band are likely to equal or exceed the litigated value even if one only looks at taxed costs (which, as a rule, will be in the region of two thirds of the costs which the client will ultimately have to pay his or her lawyer). As the above figures demonstrate, in Germany it is only in the very lowest value band, i.e. up to the equivalent of around £500, that total costs for the first instance proceedings can come close to the value which is litigated. For the average value of the £0-£12,500 band (i.e., £6,750 or DM 15,000), the total overall costs in Germany would be under 50 per cent.

Genn’s study also shows that in a value band of £250,000 and more, costs allowed for one side average around £60,000.⁴¹ For a lawsuit with equivalent total costs of £120,000 (DM 270,000), under the German fee scale one would have to litigate a claim in the region of £4 million,⁴² while a lawsuit for £250,000 (DM 560,000) would cost no more than £20,000. These two examples show that, on average, litigation is considerably cheaper in Germany both at the lower and at the upper end of a scale of litigated values.⁴³

One should add that the German costing system has another built-in limitation factor. The rule that costs follow the event is understood in Germany to refer to the value of the litigated claim. If therefore a plaintiff sues for DM 100,000 in a personal injury case, and the court awards 20,000 in damages, the plaintiff is considered as having lost 80% of the claim, and therefore has to bear 80% of the total cost. This encourages plaintiffs to be realistic in their demands. Likewise, defendants can reduce their costs by paying or offering to pay what they think is a fair amount of money. Finally, for cost-conscious plaintiffs it is possible to litigate for only a fraction of a given claim, e.g. DM 20,000 out of a DM 100,000 claim.⁴⁴

On the other hand, perhaps because litigation is cheaper, parties are generally more likely to go on appeal in Germany.⁴⁵ The German system may therefore encourage litigants to spend on appeal what they saved in the first instance.

So far, this comparison shows that litigation is considerably cheaper on average in Germany. However, what makes litigation so particularly threatening in England and Wales is the fact that it is impossible to predict the likely costs of a case before going to court. It follows from what has been said above that this is not a problem under German law.

Perhaps this particular aspect can be illuminated by using the recent highly publicised case of Verity and Another v. Lloyd’s Bank,⁴⁶ where a couple succeeded in recovering from their bank for bad mortgage advice, but lost the bank’s counter claim arising from previous mortgage loans. The case concerned a loan of £150,000, with the counter-claim amounting to just over £100,000. Had the plaintiffs lost the counter claim in Germany, they would have faced legal costs amounting to some £8,000.⁴⁷ As the proceedings took place before the High Court in Leeds rather than before e.g. the Landgericht Düsseldorf, the couple, according to their own lawyer, faces a legal bill which could amount to £250,000, placing them financially in a much worse position than if they had never litigated.

However, it should be mentioned that it is possible for German lawyers and their clients to agree in writing on a higher fee than the one provided by the fee scale. Negotiated fees are not infrequent, particularly in commercial and in low value matters. Nevertheless, the fee scale remains the rule. For one, the winning party in a lawsuit cannot recover from the losing party fees in excess of those provided by the fee scale. This implies that, even if a client agrees to pay a hourly fee to his or her lawyer, less than half of the cost risk is moved out of the safe haven of the fee scale: the costs this client may have to pay for the opponent’s lawyer in case of losing the lawsuit, as well as the court costs, remain limited and predictable. Also, where lawyers succeed in negotiating hourly fees, they may nevertheless find that the fee scale remains a reference against which they must justify to their clients why it is worth to invest more time and money into a case. At any event, while the fee scale does not place a ceiling on lawyer’s fees, it does provide a floor: lawyers may not agree in advance to work for less than the fee provided by the fee scale (a rule which sometimes is nevertheless disregarded in practice). In addition, contingency agreements are void.

Since German lawyers can count on an income similar to that of English lawyers, the fee scale necessarily entails the consequence that German lawyers spend much less time on a given case than English solicitors and barristers, and gain their salary by volume of cases rather than by meticulous preparation. German lawyers have an incentive to spend the minimum time on their cases, while English solicitors and barristers have an incentive to spend the maximum. The German approach encourages a more summary preparation of cases. This may speed up the case, but may also make the work for courts more difficult and may ultimately influence the outcome.

Another aspect of the fee scale is that it prevents what has currently become a trend for large scale commercial transactions in England, namely that clients invite bids from various law firms, thus making legal costs predictable and using competition as a cost reducing device.⁴⁸ On the other hand, this is not an option which is normally available to individual would be litigants. For private consumers in England and Wales, shopping around for prices is mainly available for standard non-litigation legal services, such as conveyancing; again, this would not be possible in Germany.

Legal Expenses Insurance

While this ensures that those who are protected by legal insurance will be in a position to litigate whenever the need arises, there are also less desirable side effects. In particular, this promotes a specific litigation culture. If I have prudently paid premiums for eight years, the moment I have noisy hotel room neighbours on my package holiday, I will take the travel company to court faster than they can say “last minute trip with 40 per cent reduction”. And when the judge proposes a friendly settlement, I will be in no mood for compromise and declare that I will fight this one out to the bitter end. If I then lose the first round, I will insist on going on appeal, all paid for by the insurance company, and therefore by all those who pay their premiums. An experienced judge can often tell whether or not a party has legal insurance just by the way they behave in court, which is often not a pretty sight.

Legal Aid

Legal Advice

Table 4 Green Form Scheme and German Equivalent^a

a Legal Aid Board Annual Reports (1994-95) pp. 4 and 96; BT-Drucks. 12/6963 p. 22 (1990 figures).

These figures fail to reveal another difference between English and German law, namely that there is no true German equivalent to Citizen Advice Bureaux. By statute, and with rather limited exceptions, only practising lawyers are permitted to give legal advice in Germany.⁵⁴One of the rationales behind this regulation is to protect the public against unqualified legal advice, but another rationale, less obviously beneficial to the public, is to protect practising lawyers against competition. Therefore, if one adds the huge workload of the Citizen Advice Bureaux in England and Wales to the Green Form scheme, one arrives at towering figures which completely dwarf the German equivalents. The low rejection rate in Germany for applications for legal advice (6 per cent) does little to allay the suspicion that too little is done in Germany to provide legal advice to those who cannot afford to pay a lawyer. German residents are usually not aware that such aid is available at all, and practising lawyers will often be disinterested in taking up advice cases because they promise little income.⁵⁵

Criminal Proceedings

Indeed, in comparison with England and Wales, some criticism of the German system seems justified. For one, the vast majority of offenders cannot benefit from legal aid because they are charged with less serious offences, as only very serious crimes (such as murder, rape, armed robbery) carry a statutory minimum of one year imprisonment. In contrast, likelihood of a prison sentence in case the defendant is guilty is sufficient reason to grant legal aid in England under sec. 22 Legal Aid Act 1988; in practice, almost all defendants in the Crown Court are legally aided.⁵⁸ Also, legal aid comes at a rather late stage in Germany. There is no German equivalent to the Duty Solicitor Scheme under sec. 58 Police and Criminal Evidence Act 1984, providing legal assistance to persons being questioned at police stations. In Germany, legal aid will often only operate after the state prosecution has decided to bring the case to court by a formal accusation (Anklage, somewhat similar to an indictment in English law). If the defendant is detained on remand, no legal aid is normally granted during the first and rather crucial three months of detention. It should also be mentioned that the fees payable under legal aid are lower than the normal statutory fees, so that lawyers who rely on legal aid cases for an income tend to work under dire conditions. Also, the fact that the courts have the final say on which lawyer should be assigned to the defendant – even if they must normally respect the defendant’s choice – can create an unhealthy dependency which can influence the behaviour of counsel at court.⁵⁹ All in all, legal aid given to defendants in criminal proceedings is a rather unsatisfactory area within Germany’s record on access to justice. If such a comparison is permitted at all, the German legal aid in criminal proceedings resembles the National Health Service in Britain: less money is spent, staff are notoriously overworked and underpaid, other than very serious cases are low in priority, many cases are treated too late, and the rest of the clientele must rely on aspirin and their own resources. In spite of these shortcomings, however, reforming criminal legal aid seems to figure very low on the German political agenda.

Litigation

The requirements to be satisfied in order to be granted legal aid for litigation are set forth in §§ 114ff Zivilprozeßordnung (ZPO, Code of Civil Procedure). Not surprisingly, § 114 ZPO combines a means-based test with a merit test, the latter being the requirement that the party in question must have a sufficient chance of winning the case. However, according to the jurisprudence of the Bundesgerichtshof, if evidence needs to be heard in order to decide on the merits, this will indicate that there is a sufficient chance of winning. It is therefore not infrequently that both plaintiff and defendant are granted legal aid for the same action.

The application is handled and decided by the trial court – somewhat similar to the English system of administering legal aid in criminal matters. In deciding whether or not legal aid should be granted – and this is a non-discretionary decision – courts must therefore look at the merits of the case, and sort the evidence which is available. If it is the plaintiff who applies for legal aid, a draft statement of the claim must be supplied, which is then communicated to the defendant, who will in turn be expected to supply a draft statement of defence. Therefore, legal aid proceedings look very much like a normal action, only that they occur in writing, and that no evidence – other than documentary evidence – is heard at this stage.

However, this is not considered a real action until either legal aid is granted or the plaintiff decides to go ahead with the action regardless of whether or not legal aid will be granted later. As a consequence, if the plaintiff does not decide to move ahead to an action stage, and if legal aid is not granted, there never has been an action, and both parties have to bear their own costs. This implies that the defendant in a would-be action cannot recover for any costs which were incurred when defending against the plaintiff’s application for legal aid. This can be hard on the defendant, in particular if the plaintiff’s case was very weak or even frivolous; however, similar problems do arise in England and Wales. Another potential problem with this way of handling legal aid is that the decision on whether or not to grant legal aid can take the character of an interlocutory decision on the merits, which can be prejudicial for the eventual outcome of the trial even before any evidence has been heard. It is not quite clear whether this really poses much of a problem in practice, though. On the other hand, clever plaintiffs will sometimes use an application for legal aid as a low-cost way of testing the merits of a case, where only a fraction of the costs for an action is lost when the application is turned down. To this effect, legal aid can turn into an incentive for litigation which would not normally be conducted before a court.

One advantage of the German practice is that it avoids double work. The same judge or court which has decided about the legal aid application will also decide the case on the merits. This saves time and expense.

As regards figures, again, the latest available overall figures for West Germany are those for 1990, which must lead to some distortion when compared to the latest English figures (see Table 5).

Table 5 Legal Aid for Litigation^a

aLegal Aid Board Annual Reports (1994-95) pp. 53-65. English figures are for civil legal aid. German figures include an estimate for labour, administrative, social insurance, and tax cases.

bThis figure indicates the average ultimate cost per approved application, not the average cost per bill paid. With 357,771 bills paid in 1994-95 (as opposed to 362,591 applications approved), the discrepancy is not very significant for England and Wales, as the average cost per bill paid is £2,151, and the average cost per application approved is £2,122. The difference should be even less significant for Germany, where the trial court approves of applications for legal aid.

Legal aid was granted to a total of some 350,000 parties at the courts of ordinary civil jurisdiction in Germany in 1990,⁶⁰ to which an estimated 30,000 should be added for the other branches of jurisdiction, so that some 380,000 parties to non-criminal court proceedings were supported by legal aid. Interestingly, nearly the same number of applications for civil legal aid were approved in England and Wales in 1994-95.⁶¹ One can of course doubt whether these fairly similar figures are an indicator of equal access to justice. There are three factors which could question such a conclusion, but they may tend to eliminate each other. On the one hand, Germans are much more litigious, so if the absolute figures are similar, the percentage of parties who are granted legal aid is much lower in Germany. On the other hand, as we have seen, litigation is much cheaper in Germany, so less people need legal aid in order to sue or defend. In addition, many German residents who would otherwise qualify for legal aid have taken out legal insurance, and therefore need not and cannot rely on legal aid.⁶² In fact, research undertaken by Erhard Blankenburg has revealed that in 1989, German legal practitioners received DM 850 million in income through legal expenses insurance, compared with DM 147 million by way of legal aid cases.⁶³

If one takes a look at the amounts which were paid out, the English figures are some £770 million for 1994-95, the average cost of legal aid per party being around £2,120.⁶⁴ The corresponding German expenditure on legal aid bills was around DM 380 million,⁶⁵ which implies an average cost of around DM 1,000 per party, i.e. around £450. Therefore, the expenditure per grant of legal aid is nearly five times as high in England and Wales. This is not surprising, as it largely reflects the higher cost of going to the law in England and Wales. It should also be mentioned that the German 1991 total expenditure figures were slightly lower, in spite of the fact that they for the first time include East Germany.

Conclusions

As the German experience shows, however, such reform would not just result in lower legal expenditure, but is prone to create a number of side effects, which, depending on the eye of the beholder, may be more or may be less desirable.

First and foremost, the more successfully legal costs are curbed, the more litigation is likely to increase. With some reservations, the German figures can serve to indicate the potential for litigation in England and Wales if it was more affordable. This sounds like a commonplace, as increasing access to justice is the outspoken aim of curbing cost. However, this will result in extra burdens on courts and the judiciary, the number of which will have to increase in order to meet the extra demand. This built-in effect of reducing legal costs will be enhanced by a number of related factors. For the less time legal practitioners spend on a case, the more time judges will have to invest, who no longer will able to rely on counsel to introduce and present all relevant legal and factual aspects of a case, and who sometimes will have to make up for the fact that counsel may lose all interest in a case once they have earned their fixed fee. Also, the more of the caseload is eventually to operate under a fixed fee system, the more likely the volume of legal expenses insurance is to expand.⁶⁷ In turn, legal expense insurance tends to inflate the caseload. Additionally, if the costs for going to the law are predictable and affordable, parties will be more likely to go on appeal.

Still, even if present proposals to submit a substantial part of litigation in England and Wales to a fixed fee system were to succeed, the overall effects would be unlikely to reach German proportions of litigation. For one, nobody has suggested that all litigation in England and Wales should, in principle be costed on a fee scale basis (which, in the present author’s view, might at any rate not work in the present English legal environment). For another, there are other and notably cultural factors which increase the German caseload to the extent that some writers believe that this caseload has developed into a major problem in Germany,⁶⁸ and that access should sometimes not be facilitated, but rather discouraged.⁶⁹ This is a problem which is not likely to be encountered in England and Wales in the foreseeable future. But a more active role for what would eventually have to be a substantially larger judiciary could result in fundamental changes of a legal system which, for centuries, has relied on a comparatively small group of experienced and high-profile judges to apply and to develop the law. At the same time, this shows that there are hidden costs to such reform proposals, as the taxpayer would eventually be burdened with additional costs for courts and their staff; even the higher court fees in Germany fail to pay for the operation of German courts. Another hidden factor is that the operation of a Fee Scale could discourage practitioners from presenting a case with the same level of skill and care as they would under time-related remuneration schemes. It is not clear whether the courts would be able to make up entirely for such deficiencies, and the quality of judgments could consequently suffer. In turn, this might provide another incentive for an increased load of appeal cases. However, such consequences may be more likely at High Court level and above, and less obvious at County Court level, where standards of preparation and pleading are less exacting at any rate.

On the other hand, the German experience shows that a fee scale based system can serve to make justice accessible to the public at large, and in very substantial savings to the taxpayer, without necessarily affecting the number of cases which are litigated on civil legal aid. If the cost for going to the law do indeed become more predictable, and if legal expenses insurance thrives in consequence, the German experience again demonstrates that legal expenses insurance can substantially reduce the financial burden of legal aid, and even – as in Germany – outgrow the legal aid budget.

It has also been hinted above that German law could greatly benefit from some moves towards an English system of legal aid to defendants, in particular by granting defendants access to a legal aid funded lawyer immediately upon arrest (similar to the English duty solicitor scheme), rather than after three months on remand, and by loosening some of the outdated and litigation generating restrictions on legal advice, e.g. by allowing the operation of schemes similar to Citizen Advice Bureaux in England and Wales. Sadly, however, no reform proposals to this effect are presently under way in Germany.

The above article was first published in 2 European Public Law (1996), 271-292. © 1996 Kluwer Law International. Reproduced with kind permission. This HTML edition © 1999 Gerhard Dannemann. The contents of this page may be downloaded and printed out in single copies for individual use only. Making multiple copies without permission is prohibited.