Since the German Legal Tech Act came into force in October 2021, allowing lawyers to charge success-based fees and cover clients’ legal costs in certain cases, these opportunities have been rarely used. A recent survey conducted by the Federal Bar Association (BRAK) as part of the law’s three-year evaluation found that most lawyers have not adopted these new options due to high personal risk and lack of client interest.
The survey revealed that only 8.43% of lawyers have agreed on success fees since the law took effect. The most cited reasons for this reluctance were client disinterest, the high risk of non-payment, and concerns that success fees threaten lawyers’ independence. As a result, BRAK sees no justification for increasing the current €2,000 limit on monetary claims for which success fees are permitted.
Similarly, the option for lawyers to finance clients’ legal costs has been almost entirely unused. Over 98% of surveyed lawyers reported never using litigation financing, citing the high financial risk and ethical concerns about lawyers funding cases. Those few who did finance litigation—mainly court costs—reported no significant issues.
BRAK sees these findings as confirmation of its initial concerns during the legislative process. It continues to advocate for reforms to debt collection regulations, emphasizing the need to strengthen oversight of debt collection service providers. It also calls for stricter consumer protection rules under Section 13b RDG, ensuring greater transparency in debt collection practices while opposing any relaxation of penalties for violations.
Furthermore, BRAK strongly opposes introducing lawyer-like professional duties for debt collection service providers, arguing that doing so would dilute the legal profession’s core values and reduce consumer protection rather than enhancing it.