Contingency Fees May Become Allowable In Germany In Some Cases.
I don't know if it is widely known abroad that contingency fees are strictly off-limits when hiring German attorneys-at-law, patent attorneys or tax advisors under German Law. In particular U.S. colleagues sometimes have difficulties understanding that in Germany the law is so much different in this respect.
Today the German Constitution Court ("Bundesverfassungsgericht") has published a decision [in German only, sorry] saying that this strict ban on contingency fees is incompatible with the German Constitution because it might, in very special cases, deter potential clients from enforcing the law. This is in particular considered relevant if a potential client has not enough money for funding an attempt to enforce the law on his or her own risk. See also a related press statement [in German only, sorry].
In the particular case decided by the Court descendants (living in the U.S.) of a Jewish victim of the Holocaust had hired a German lawyer on the basis of contingency fees in order to enforce some compensation claims arising from compulsory surrender of some estate located in Dresden during the time of Nazi rule in Germany. The lawyer was successful in obtaining a compensation payment in the amount of some 155.000 Euros. In accordance with her agreement closed with the U.S. plaintiffs, she got one third of this sum. Later on the authorities got wind of that deal, and the lawyer was convicted to payment of a Euro 5.000 fine on professional misconduct.
But the Court did not help the lawyer in this case. Her conviction has not been overturned. What might be perceived as a somewhat odd kind of decision, the Court has blessed all former decisions of lower Courts against contingency fees which were based on de-facto invalid law, for the sake of preserving stability of the law. The only enforceable point is that the Court has ordered German Government and German Parliament to amend applicable statutory law by June 30, 2008. Up to that date, statutory law as it stands might be further applicable unless German Parliament passes appropriate amendments to enter into force before that date.
For today, I do not have any idea as to whether or not this decision might have any effect for patent attorneys. Will there be in future a legal basis for agreeing on contingency fees e.g. when an inventor would not be able to pay for the charges of his patent attorney otherwise? The political discussion of the coming months will show in which direction the law will move.