Court Structure

Civil court proceedings are initiated either before a district court (Bezirksgericht) or regional court (Landesgericht), depending on the subject matter of dispute and/or the amount of the claim. The jurisdiction of the court of first instance is governed by the monetary value of a claim. District courts have first-instance jurisdiction where the amount in dispute is €15,000 or less, whereas disputes concerning amounts exceeding €15,000 are heard by regional courts. In terms of subject matter, district courts typically hear disputes relating to landlord-tenant and family law, while regional courts hear cases relating to labor and social law disputes, public liability cases, as well as various specific statutes (e.g., Public Liability Act, Data Protection Act, Austrian Nuclear Liability Act).

The third organizational level in the court system is made up of the four Higher Regional Courts (Oberlandesgerichte, OLG) situated in Vienna, Graz, Linz, Innsbruck, while the highest instance is the Austrian Supreme Court (Oberster Gerichtshof, OGH).

In addition to the ordinary courts, the Austrian civil judiciary has the following specialized courts:

Labor and Social Court (Arbeits- und Sozialgericht) in Vienna dealing with employment disputes exclusively in Vienna;
Higher Regional Court of Vienna simultaneously acting as a single specialized Cartel Court (Kartellgericht) dealing with competition cases;
Two specialized courts for commercial matters:

the District Court for Commercial Matters (Bezirksgericht für Handelssachen);
the Vienna Commercial Court (Handelsgericht Wien).

Specialized Commercial Courts

As mentioned above, there are two specialized commercial courts that sit exclusively in Vienna. These are the District Court for Commercial Matters (Bezirksgericht für Handelssachen) and the Vienna Commercial Court (Handelsgericht Wien). Outside of Vienna, the abovementioned district and regional courts decide as commercial courts over matters which are subject to ordinary civil procedure (exceptions notwithstanding).

The District Court for Commercial Matters

The Vienna District Court for Commercial Matters has first-instance jurisdiction in the province of Vienna for commercial disputes that do not exceed € 15,000, if the action is directed against an entrepreneur/entity registered in the commercial register and the dispute is business-related for the defendant.

Irrespective of the amount in dispute, the court has federal jurisdiction for disputes under the Inland Waterways Act (Binnenschifffahrtsgesetz) and for issuing European payment orders (Europäische Mahnklage) under the EU Order for Payment Regulation.

The Vienna Commercial Court

The Commercial Court of Vienna is a specialized regional court for the federal capital of Vienna. Its competences, as well as those of other regional courts acting as commercial courts, are provided for by Section 51 of the Austrian Jurisdiction Act (Jurisdiktionsnorm), which distinguishes between value jurisdiction and subject-matter jurisdiction. Section 51(1) nos. 1-8b lists types of disputes that belong in front of the Vienna Commercial Court, acting as a regional court, if the value in dispute exceeds €15,000. These include, inter alia, disputes arising from business-related transactions if the action is directed against an entrepreneur/entity registered in the commercial register and the dispute is business-related for the defendant, disputes arising from the sale of a business between the contracting parties, disputes under the Stock Corporation Act (Aktiengesetz) and the Limited Liability Company Act (GmbH-Gesetz), and disputes under the Product Liability Act (Produkthaftungsgesetz).

Section 51 (2) nos. 9-11 Austrian Jurisdiction Act contains a list of issues that fall within the jurisdiction of the Vienna Commercial Court, or regional courts acting as commercial courts, regardless of the amount involved, such as disputes arising from unfair competition, under the Copyright Act (Urheberrechtsgesetz), and from certain provisions of the Consumer Protection Act (Konsumentenschutzgesetzes).

The Vienna Commercial Court has federal jurisdiction over cases concerning intellectual property rights (patents, designs, trademarks, etc.), as well as non-labor lawsuits against the Austrian National Bank.

It also deals with corporate insolvencies and maintains the company register and serves as an appellate court to cases heard by the aforementioned commercial district court.

Stages of Appeal

District court rulings can be appealed to regional courts on points of fact and law. A final appeal can be made to the Austrian Supreme Court. Appeals of regional court rulings are directed to the Higher Regional Courts, while final appeals are heard by the Supreme Court.

Generally, the Supreme Court will hear appeals that raise legal questions of fundamental importance – for instance, if the legal issue requires clarifications for the purpose of legal consistency, predictability, or development, or if there are no coherent or previous decisions by the Supreme Court.

Civil Procedural Rules

Civil procedure rules can be found in (1) the ACCP, (2) the Jurisdiction Act, and (3) the Austrian Enforcement Code (Exekutionsordnung). In addition, rules may be derived from various treaties to which Austria is a signatory or state party, such as the Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters (“Brussels Regime”).

Commencing Proceedings

Proceedings are commenced by submitting a statement of claim (Klage) with the court of first instance. In addition to certain formalities, statements of claim must state the facts which build the basis of the claim, declare the supporting evidence, and specify the relief sought. The statement of claim is considered officially submitted upon receipt by the court.

If the court considers the claim admissible, it will serve it on the defendant, who has four weeks to file a statement of defense, which must present the facts, declare evidence, and contain a specified request. The defendant may either raise a counterclaim (Widerklage), which represents an independent claim or claim a set-off (Aufrechnungseinrede). If the defendant fails to submit a statement of defense on time, the claimant may request a default judgment. A written statement of defense is not required at first instance proceedings before a district court.

Withdrawal/Amendment of Pleadings

Pleadings can be withdrawn at any time, provided that the substantial right to the claim is waived. If this is not done, the defendant must agree to the withdrawal. Before the submission of the statement of defense, however, a claim can be withdrawn without a waiver of claims.

Amendments to pleadings are generally admissible. The statement of claim itself can only be amended with the consent of the other party, once it has been served, although the court may nonetheless grant the amendment if its competence remains and there is no risk of major delay.

Evidence

Evidence is the primary means by which parties will substantiate their claims over disputed facts of a legal matter. The need to substantiate a claim is often referred to as the burden of proof. The burden may switch depending on the nature of the claim.

Admittedly, there is no pre-defined sequence under which evidence (both oral and written) should be submitted or taken at trial. The hearing of evidence takes place during the trial and the parties are allowed to submit new evidence relating to the subject matter of the dispute until the closing of the oral proceedings at the court of first instance.

Notably, all evidence submitted at trial is subject to free assessment by the judge, meaning that after evidence has been taken, the court examines it according to its independent conviction.

Types of Evidence

The main types of evidence listed in the ACCP are documents (Urkunden), witness statements (Zeugen), examination of the parties (Vernehmung der Parteien), expert opinions (Sachverständige), and judicial inspection (Augenschein). However, this list is not exhaustive, and a broad scope of resources can be admitted as evidence to substantiate a claim.

Documents

Generally, documents can be submitted to the court as evidence referenced by the parties in their oral and written pleadings. Under Austrian civil procedural law, documents are categorized into public documents (Öffentliche Urkunden) and private documents (Private Urkunden).

Public documents

Official documents refer to documents provided by authorities or persons officially appointed for that purpose (notaries, architects, consulting engineers, etc.), documents that are declared official, and foreign authenticated (official) documents (Section 292 ACCP). According to Section 310 ACCP, official documents are presumed to be authentic.

Private documents

Private documents include all other documents not falling under the category of official documents such as private expert reports, expert opinions, etc. There are no legal rules on the evidentiary value of private documents. Rather they are subject to the court’s free assessment of the evidence.

Witness statements

As a rule, evidence is taken only during the course of the litigation and thus, witnesses, as well as parties, need to testify orally before the court. If called as a witness, witnesses are obliged to appear, testify, and swear an oath before the court. In case a witness fails to appear before the court, the court may find a witness in contempt of court and impose a penalty (Ordnungsstrafe); A repeated infringement may result in the imposition of compulsory attendance (zwangsweise Vorführung). If the witness refuses to testify, the testimony may be enforced by means of enforcement proceedings, for example through fines or custodial sentences (Section 354 Austrian Enforcement Act).

According to Section 320 ACCP, persons who were either unable to perceive the fact to be proven or who are unable to express their perceptions are incapable of testifying. The same applies with regard to priests, state officials, and registered mediators in terms of their respective official secrecy.

Examination of the parties

Examination of parties generally assists the court on controversial facts of the case and can be carried out if a party applies for the evidence to be taken or through an ex officio decision of the court (Sections 371 ACCP). Notably, legal provisions regarding witnesses’ capability to testify (Section 320 ACCP) and grounds for refusal to testify (Section 321 ACCP) apply to party examinations as well.

Expert opinions

Expert opinions are particularly important in litigation because experts assist the court by providing knowledge that judges may not possess concerning complicated facts of the case. Expert evidence must in principle be taken before the trial court and shall be submitted in the form of a written report. Written reports must be explained by the expert during the oral hearing if this is requested by the parties (Section 357 ACCP).

Judicial inspection

The court, by its own initiative, may issue an order to carry out a judicial inspection (e.g. inspection of a device) to clarify the alleged fact relevant to the resolution of the dispute. Typically, the inspection measures are carried out by an expert appointed for this purpose, who draws up written expertise on the results of the inspection. Any costs necessary to carry out such an inspection will be paid by the party alleging the fact (Section 368 ACCP).

Document Production

As touched upon in the general overview, the ACCP contains a process whereby litigating parties may request that certain documents be admitted as formal evidence. The admission of certain documents may strengthen claims at pre-trial and warrant the continuation of the hearing. A party may apply to the court under Section 303 ACCP if it believes the opposing party possesses a document that will materially affect its claim. Under Section 303(2) ACCP, if the requested party cannot provide the document, it must describe the document’s contents “as accurately and completely as possible.” The court will consider an application after consultation with the requested party.

If the court accepts the request for document production, Section 304 ACCP provides a list of grounds under which the requested party must strictly comply, namely:

where the party have themselves relied on the requested documents as part of their case;
where there is a statutory duty to provide the documents requested; or
where the document has a material role in the creation of a legal relationship between the parties (e.g., an arbitration agreement).

However, the judge cannot order the submission of a document if both parties have objected to it (Section 183 (2) ACCP).

A party may still refuse to produce requested documents on several grounds listed in Section 305 ACCP. These include where:

the documents relate to private and family life;
disclosure would cause the requested party to suffer reputationally;
disclosure would cause harm or incriminate either the disclosing party or a third party;[1]
disclosure would involve breaching a recognized duty or business secret; or
if there are other equally important reasons justifying the refusal to disclose.

In addition to requests between the litigating parties, the request for documents possessed by third parties may be made as provided for by Section 308 ACCP. There are currently no formal grounds whereby third parties may refuse to provide requested documentation. The court will, however, consult with third parties as with any litigating party.

Duty to Provide Evidence

Section 178 ACCP provides a duty for the parties to provide the facts truthfully and entirely and indicate necessary evidence to substantiate their claims. Meanwhile, as a consequence of the discretionary power of the court, the judge has the power to order the parties to submit documents under the circumstances mentioned above (see “Document production”). Furthermore, the judge may request the parties to appear in person (Section 183(1) ACCP). However, the ACCP does not contain any rules on the enforceability of the order to submit the evidence, the requested appearance, or the testimony. If a party refuses to comply with the order of the court to submit evidence, the court must consider its conduct in its free assessment of evidence (Section 307(2) ACCP). The same rule applies in case a party refuses to appear or testify (Section 381 ACCP).

Privilege

Under certain circumstances, Austrian civil law will reserve evidentiary privilege for participants within litigation. According to Section 321 (1) ACCP, a witness may refuse to testify:

if the answers would disgrace or pose the threat of criminal liability for the witness or other close persons;
if the answers would cause an immediate pecuniary disadvantage to the witness or other close persons;
on matters subject to a state-approved obligation of confidentiality;
on matters subject to business and art secrets; and
on voting matters, in case they are legally declared secret.

In addition to the above, Austrian civil procedure recognizes other privileges which may allow a witness to refuse testimony, for instance:

- Secrecy of confession (Section 320 (2)ACCP);
- Official secrecy (Section 320 (3)ACCP);
- Banking secrecy (Section 38(1) of the Banking Act (Bankwesengesetz)).
- Data protection and data secrecy (Section 1 of the Data Protection Act 2000 (Datenschutzgesetz)).
- Secrecy of telecommunications (Section 93(1) of the Telecommunications Act 2003 (Telekommunikationsgesetz)).
- Postal secrecy (Section 5 of the Postal Market Act (Postmarktgesetz)).
- The protection of journalistic sources (Section 31(1) of the Media Act (MedienGesetzt)).

Medical secrecy (Section 54(1) of the Act on the Medical Profession (Ärztegesetz)).
Lawyers’ secrecy (Section 321(1) ACCP, Section 9(2) of the Attorney’s Code (Rechtsanwaltsordnung)).

Main Stages in Civil Proceedings

Upon submission of a timely statement of defense, the preliminary hearing (Vorbereitende Tagsatzung) usually takes place within 6-10 weeks. Here, the parties will discuss the main legal and factual questions at hand in order to facilitate further proceedings. Additionally, settlement options may be discussed. Already after the preliminary hearing, the court may issue a judgment and close the proceedings.

If the proceedings continue, there will be an exchange of briefs. One or multiple evidentiary hearing(s) will then follow. The dates of these hearings a generally agreed on at the preliminary hearing.

The duration of first instance proceedings varies considerably. The average duration is one year but may be significantly longer in complex litigations. At the appellate stage, decisions are handed down after approximately six months.

Funding

Litigation costs in Austria are mainly composed of court costs, lawyer fees, and evidence expenses. Lawyer fees are, unless otherwise agreed, subject to the Austrian Lawyers’ Fees Act (Rechtsanwaltstarifgesetz). It is common and permissible for lawyers in Austria to work based on an agreed-upon hourly rate. Lump-sum fees are not prohibited but are less commonly used in litigious matters.

Cost-Shifting

The basic rule in Austrian civil litigation is that the loser pays for the costs of the litigation (known as the loser-pays principle). Generally, this means that all three costs – court costs, lawyer fees, and evidence expenses – are paid by the loser of the proceedings, with few exceptions. If a party only partially prevails, the costs are proportionately split between the parties. The Austrian Lawyers’ Fees Act (Rechtsanwaltstarifgesetz) and the Court Fees Act (Gerichtsgebührengesetz) provide predictability over the costs that a prospective claimant may expect.

Third-Party Funding

There are no specific statutory rules governing third-party funding in Austria. Third-party funding is relatively new in Austria but is accepted in practice and was endorsed by the Austrian Supreme Court in 2013 (6 Ob 224/12b). Third-party funding is available for both plaintiffs and defendants, and there is no restriction on the types of litigation that may be funded by third parties. It is used in both litigation and arbitration in a variety of civil/commercial disputes. However, there are restrictions where a lawyer is acting as a third-party funder since it is prohibited for lawyers to work on a contingency fee only basis.

Contingency Fees

Contingency fee arrangements are only permitted if they are not calculated as a percentage of the amount awarded by the court (pactum de quota litis). Contingency fee arrangements that entitle the lawyer to the recovery of a certain percentage of the amount obtained by the plaintiff are prohibited.

Legal Aid

Legal aid (Verfahrenshilfe) is available in Austria and is granted to parties who cannot afford to pay the costs and fees of the litigation and if the case is not devoid of any chance of success. If legal aid is granted, court fees are reprieved or even waived, and an attorney is provided free of charge.

In the context of civil and commercial matters, Section 63 ACCP stipulates that legal aid can in principle be made available not only for natural persons but also for legal persons such as companies. The primary requirement for corporate legal aid is that both the applicant company and its individual “economic participants” lack the necessary funds to conduct the litigation. Moreover, the litigation in question must not be hopeless, i.e., it must have some prospect of success.

The scope of legal aid in Austria may be partial or extensive but must be made in reference to a specific legal case. The provision of legal aid may provide an exemption from the payment of court fees, as well as cover witness fees, fees related to experts, interpreters, translators, and assessors, as well as cash expenses and additional out-of-court activities. Austrian legal aid will provide legal counsel where legal proceedings by law require the presence of a lawyer (e.g., in a dispute that exceeds a value of €5,000).

Legal Costs Insurance and After-the-Event (ATE) Insurance

Legal costs insurance is widely available and used in Austria, and it may – depending on the individual insurance policy – cover a wide range of costs arising out of legal proceedings, including the party’s costs and potential liability for the counterparty’s costs. However, its maximum coverage and applicability to certain types of disputes may be limited, and it furthermore must be arranged before the occurrence of the event that gives rise to the damage.

After-the-event insurance is in its infancy in Austria. So far, it is only known to have been offered by foreign insurers in a small number of disputes.

Powers & Duties of the Courts

As mentioned above, Austria uses an inquisitorial legal system, which relies on judge-led trials. At the constitutional level, judges are independent (unabhängig) (Article 87 of the Federal Constitutional Law (Bundes-Verfassungsgesetz, B-VG)) and can not removed or transferred from office (unabsetzbar und unversetzbar) (Article 88 BV-G).

The judge adjudicates and determines disputes which have been brought before the court based on the evidence and arguments brought forward and shall not address any issue not referred by the parties. The judges are in control of case management and to ensure that the trial proceeds properly, they order the parties to submit briefs and produce evidence in accordance with the court’s schedule. Moreover, the court may grant injunctive relief upon a party’s request, enforce the attendance of any person to the trial, and impose penalties to compel obedience to its judgments and orders. The judge may put questions to counsel or witnesses (Section 182 (1) ACCP) and decide to take any kind of evidence that he or she expects will contribute to the truthful fact-finding. In order to document the conduct of the procedure, the judge has to produce a court record (Sections 207-217 ACCP).

Judgments & Remedies

In Austrian law, a court addressing matters of private law will issue a judicial decision known either as a judgment or order.

A court may award one or more of the following remedies to a litigant:

Specific Performance is a type of remedy whereby a court issues an order requiring a party to perform as contractually agreed between the parties. Specific performance can be ordered only if it is not impossible to perform. This largely depends on the nature and purpose of the transaction. Notably, even if the debtor refuses to perform, the creditor can be authorized by the court to have the performance rendered by the third party at the expense of the debtor.
A permanent injunction is a final order of the court whereby a person or entity is required to refrain from certain activities permanently or take certain actions until completed. Permanent injunctions are mostly ordered by the court in intellectual property, competition, and media law disputes to force a party to cease an infringement of a right.
Creation/alteration of legal status is a judgment that creates or alters the legal status of an entity. Most relevantly in the current context, Section 133 of the Austrian Commercial Code (Unternehmensgesetzbuch, UGB) provides that the dissolution of a company may be pronounced by judicial decision upon action brought by a shareholder.
Declaratory relief is a court’s judgment declaring the rights of parties without ordering any specific action or granting monetary damages. According to Section 228 ACCP, declaratory relief will be granted by a court on existence/absence of a right, legal relationship, recognition/non-recognition of the authenticity of a document only if a party has a legal interest in it.
Damages are a remedy that is awarded to compensate a party for a loss they have suffered as a result of a circumstance for which the other party is responsible. An obligation to pay damages may arise, among other things, from a contract existing between the parties, pre-contractual negotiations, or tort or strict liability. Courts may additionally order the liable party to pay interest at a statutory rate set either in Section 1000(1) of the Austrian Civil Code (Allgemeines bürgerliches Gesetzbuch, ABGB) or in Section 456 UGB.

[1] C.f. the 5^th Amendment of the U.S. Consitution.