Follow-up decision of the ECJ on minimum HOAI rates

In its judgment of 18 January 2022 (C-261/20), the ECJ ruled – to the surprise of many observers – that German courts are allowed to continue to apply the HOAI (Schedule of fees for architects and engineers) of the 2009 and 2013 versions of the HOAI, despite the fact that these are in breach of European law. The ECJ had already ruled earlier that these minimum rate regulations violate the European Services Directive (2006/123/EC), and the Federal Republic of Germany subsequently removed the minimum rate regulations from the HOAI, in belated implementation of this directive. However, the statutory amendment only applies to contracts that were or will be concluded from 01 January 2021. Subject to a decision of the Federal Supreme Court for such contracts, lawsuits that apply to these minimum rates are thus still possible in principle.

It remained open whether the minimum rate regulations would continue to apply to contracts concluded before 1 January 2021, regardless of their fundamental incompatibility with EU law, with the result that it was unclear whether a planner could demand the minimum rates under the old version of the HOAI. In its decision of 14 May 2020, the German Federal Court of Justice (BGH) had asked the ECJ as to the extent to which German price law, which is contrary to European law, may continue to be applied to legacy contracts.

The ECJ has clarified that in a dispute in which the client is a natural or legal person under private law (“private person”) and not a public entity of some kind, national courts would not be forced solely based on EU law to disapply a national rule that infringes the Services Directive (which does not have direct effect) (cf. Art. 15 (1), (2)(g) and (3) Services Directive).

Because of the primacy of EU law, in a dispute exclusively between private individuals, the national courts, when applying the provisions of national law adopted to implement a directive, are in principle obligated to take account of the whole of national law and to interpret it, as far as possible, in the light of the wording and purpose of the directive, in such a way that the result of the interpretation is compatible with the objective intended by the directive. However, this principle of interpretation in line with EU law has certain limits and must not lead to an interpretation contra legem, in particular if the non-application of national law would entail imposing an additional obligation on a private person or depriving him of a right. This was precisely the situation in the case at issue, as the mandatory price law of § 7 HOAI 2009/2013 would then no longer be applied – to the detriment of the architect/engineer.

In principle, the party harmed by the belated implementation of the directive (i.e. the client) could, if necessary, seek regress with the Federal Republic of Germany in order to obtain compensation for any damage caused by the delayed implementation of the Services Directive (which was only implemented with the HOAI 2021).

It is however questionable whether a client who would now be obligated to pay a minimum rate under German law for contracts predating 1 January 2021, even though a lower fee was agreed, would actually succeed with a damages claim against the Federal Republic of Germany under public liability law.

The ECJ decision is in any event favourable for architects and engineers, as contracts concluded until the HOAI 2021 comes into force (prior to 1 January 2021) will continue to be subject to the minimum rate protection.

Until the statute of limitations has expired, lawsuits pursuing such claims therefore continue to offer the prospect of success, provided that the BGH does not issue a precluding ruling in its pending decision.

However, the question remains as to how the BGH will deal with this ruling: According to the questions submitted to the ECJ, the Federal Supreme Court itself also favours the continued application of mandatory minimum rates under German law for legacy contracts between private individuals. In the author’s opinion, however, this principle must apply even more so in contracts with clients from the public sector, as the latter are even less in need of protection than clients who are private persons. It is only reasonable that the initial failure of the German government to implement the Services Directive correctly should burden public sector clients.

In view of this, the author expects that the BGH – contrary to many higher regional courts – will continue to apply the minimum rates of the HOAI 2009/2013 to contracts predating 2021, and this should include contracts with public sector clients.