Did they exist or did they not exist? The minimum rates according to Section 7 HOAI an the ECJ

Are the minimum rates for planners and architects provided for in the HOAI 2013 still applicable after the ruling of the European Court of Justice (ECJ) of 04.07.2019 (Case C 377/17) until the HOAI is amended at the beginning of this year? We had already discussed this question here several times in the past based on decisions of the Federal Court of Justice (BGH) and the ECJ. This question is relevant, among other things, to the supplementary actions currently pending before the courts, with which planners and architects intend to hoist a contractually agreed fee that is “too low” to the minimum rate level.

The current proceedings are significant because the ECJ, had previously determined in its ruling of 04.07.2019 in the context of the above-mentioned infringement proceedings, that the mandatory setting of minimum and maximum rates for the planning fees of architects and engineers in the HOAI violates Union law and thus Germany violates the Services Directive under the aspect of the violation of the freedom of movement requirement.

 Despite this decision of the ECJ, it remained unclear whether this has direct legal effect on contractual relationships between private parties or “only” obliges Germany to remedy the infringement and, as a possibility, to abolish the binding character of the minimum and maximum rates (which has already been done in the meantime by the adoption of the new HOAI).

The Federal Court of Justice therefore referred the question to the ECJ for a preliminary ruling in another civil law dispute (Case C 261/20) concerning an architect’s claims for top-up payments, namely whether Section 15 (1), (2) (g) and (3) of the Services Directive have direct effect in the context of ongoing court proceedings between private individuals in such a way that the national provisions in Section 7 HOAI 2013 on binding minimum rates – which, according to the decision of the Court of Justice, are contrary to this Directive – are no longer applicable to the parties’ contract.

Now, the ECJ is once again devoting itself to this problem with the prospect of creating legal certainty. On 03.05.2021 the oral hearing took place, in which the plaintiff (claimant) as well as the European Commission (Commission) and the Kingdom of the Netherlands (Netherlands) participated as parties.

As was to be expected, both the Netherlands and the Commission maintained – albeit with completely different argumentation – that the minimum rates regulated in Section 7 HOAI 2013 cannot be applied to the legal relationship in dispute. The plaintiff, on the other hand, assumed a mere ex nunc effect (i.e. “from now on ” effect) of the ECJ’s ruling on the unlawfulness of EU law in the infringement proceedings and thus the subsisting binding nature of the minimum rates of the HOAI, which form the basis of its claim for an increase in fees.

In view of the numerous questions posed by the ECJ in the course of the oral proceedings both to the Netherlands and to the Commission with regard to the dogmatic derivation of the direct effect of the Services Directive and of Art. 16 Charter of the Fundamental Rights of the European Union (GCR), it seems likely that the ECJ assumes that Section 7 HOAI 2013 is inapplicable, i.e. that it does not regard the minimum rates as binding, but does not yet know exactly how it intends to substantiate this. The question at present therefore appears to be the “how” rather than the “whether” of the inapplicability of the minimum rates regulated in Section 7 HOAI 2013. The temporal point of connection is also open, which can be seen, on the one hand, in the expiry of the implementation period or the pronouncement of the infringement judgment and, on the other hand in the time of the conclusion of the affected contract and thus the respective version of the HOAI or the last oral hearing in the increase action.

If the decision is as expected and the minimum rates thus lose their binding force, many current actions for increases will probably be groundless, because the agreement of fees below the minimum rates was not actually invalid due to a violation of the minimum rate with the result that the fee agreement was legally valid.

Hence, the judgment is eagerly awaited. The Advocate General´s opinion has been announced for 15th July 2021. A judgment could therefore follow before the end of the year.