The Professional Negligence Law Review: Austria
i Legal framework
Background – organisation of professions in Austria
Professions in Austria are, to a large extent, organised in autonomous, self-administered chambers with compulsory membership. These chambers generally not only decide on admission to the profession, they also monitor professional conduct and administer disciplinary sanctions, issue professional codes of conduct and fee guidelines, organise professional liability insurance and often also provide fora for alternative dispute resolution.
General legal framework for damages claims
The fundamental legal framework for professional liability in Austria is found in Section 1295 et seq. of the Austrian Civil Code, which are complemented by various regulatory provisions and professional codes of conduct and by the rules and due contractual performance and warranty.
The four prerequisites for damages claims under Austrian law are: (1) occurrence of damage; (2) causation; (3) wrongfulness or unlawfulness; and (4) fault.
Professional liability cases predominantly revolve around contractual liability. However, in particular in the areas of construction and malpractice, damages claims against professionals may be based on tort law. The main differences between tortious and contractual liability are:
- under tort law liability, the plaintiff is generally not able to recover pure economic losses (i.e., pecuniary damage not connected to the violation of an absolutely protected right such as life, liberty and property), whereas contractual parties are generally also liable for pure economic loss;
- agents' actions are fully attributable to the principal in contractual cases; in contrast, for tort claims, the principal is only liable for its agents' actions if he or she knowingly employed an unfit person or knowingly makes use of a dangerous person; and
- in tort law, a plaintiff must prove the defendant's fault whereas in contract law the law presumes that the defendant was at fault. It is up to the defendant to prove otherwise.
Since the standard for tort claims is much more restrictive than for contractual liability, initiating a successful professional negligence claims based solely on tort can be difficult. To bridge this gap, case law has extended the rules on contractual liability to certain third parties that are affected by the professional's performance of a contract (i.e., 'contract with protective effect to third parties');2 this is particularly relevant for auditors and construction professionals.
Additionally, violation of 'protective laws' (i.e., laws designed to protect certain persons and assets from harm) leads to a reversal of the burden of proof outside contractual relationships and may entail liability for pure economic loss. The pertinent protective laws are generally specific to each profession, including, for example, the rules on auditing a company (protecting creditors and investors), rules on securing construction sites (protecting workers, passers-by, tenants etc.), fraud and criminal breach of fiduciary duty.
Core provisions for professional negligence
The core provision specifically governing professional liability is Section 1299 of the Civil Code, which provides that professionals are held to an increased and objective standard of diligence and care. While the general standard of care is that required of an average reasonable person, professionals are held to the abilities and standards of performance of their respective occupational groups. Accordingly, a higher degree of diligence is required, for instance, from a specialist doctor than from a general physician.
When assessing who qualifies as a professional under Section 1299 of the Civil Code, Austrian courts take a very broad approach and include anyone acting as if they had certain qualifications, regardless of whether they are actually experts and have the applicable qualification.3 Besides actual trained experts, this also includes trainees who are not (yet) fully qualified, for example, associates in law firms.
In addition to general contractual liability, pursuant to Section 1300 of the Civil Code, bad advice given negligently 'for a consideration' leads to liability, whereas advice given as a favour establishes additional liability for pure economic loss only if it is knowingly wrong. Advice is deemed to have been given for a consideration if it was provided within the framework of a special contractual or legal relationship or for any reason other than a purely altruistic reason.4 For example, the Arbitration Board of the Medical Chamber in Austria, which offers dispute resolution services free of charge, was held liable for failing to point out a special statute of limitation in a leaflet it had published because its actions serve the interests of the medical profession, in particular by promoting trust and avoiding (criminal) court cases.5
Common defences against professional liability claims include time-bar, contributory negligence of the plaintiff and the failure to mitigate damages, as well as procedural objections (in particular, jurisdiction and standing) and objections regarding the value of the claim.
ii Limitation and prescription
Damages claims generally become time-barred three years from the time the damage, the damaging party and the causality became known to the injured party (or would have become known to them if it had undertaken due investigations). In certain areas, specific limitation periods apply (e.g., for auditors).
The absolute limitation period is 30 years, regardless of whether the injured party had this knowledge or not. If the damage was based on a criminal action with intent that is sanctioned by a prison sentence of one year or more, the limitation period is also extended to 30 years, regardless of when the injured party obtained this knowledge. In the context of professional negligence, the most relevant crimes are fraud and criminal breach of fiduciary duties.
The claim has to be filed in court before the end of the limitation period. The limitation period may be interrupted by settlement talks. It is common for parties in settlement discussions to agree to waive the time-bar defence for the duration of the time spent in settlement talks.
iii Dispute fora and resolution
Although many of the professional chambers provide fora for dispute resolution, these are in general voluntary. To the extent damages claims are disputed and cannot be settled with the involvement of the insurance professionals, they are generally adjudicated by the civil and commercial courts. Where criminal investigations are pending, the damaged party may also request a judgment on damages claims from the criminal court in ancillary proceedings; however, in professional liability cases, criminal courts generally refer the claimants back to the civil courts for judgment on damages.
The amount claimed and the legal nature of the claim define which type of Austrian court has jurisdiction. District courts are generally competent to hear claims of an amount up to €15,000. Claims exceeding an amount of €15,000 are generally heard by regional courts. If, broadly speaking, the dispute is commercial in nature, the commercial courts have jurisdiction rather than the general district and regional courts.
Civil proceedings are governed by the Austrian Procedural Code and are mainly oral. Witnesses are first examined by the court, with additional questions from counsel and cross-examination by opposing counsel; there are no written witness statements. Although there is no discovery, there is some – limited – scope for the court to order parties to produce documents.
Professional negligence cases often turn on expert witness opinions. These expert witnesses are appointed by the court and serve to replace the judge's lack of expertise in the relevant areas. The court will generally rely on the expert witness' opinion, unless this is seriously undermined by counsel's challenges.
The 'loser pays' principle applies, namely the defeated party bears not only its own costs, but also the costs incurred by the successful party, including legal fees pursuant to a tariff, court fees and advances paid to the court for experts and translators.
iv Remedies and loss
The basic principle of compensation is the restoration of the previous condition as if no damage ever occurred (restitutio in integrum). If, as is often the case in professional negligence cases, restoration is not possible or feasible, monetary compensation is due.
In the context of contractual liability, positive interest (performance) may be claimed for failure of due performance of a valid contract. In cases where the damaged party relied on information given by the other party, negative interest becomes due, that is, so that the damaged party is in the position it would have been if it had not relied on these disclosures (generally frustrated expenses and disadvantages caused by missing alternative opportunities).
Loss of profit is generally only due in cases of gross negligence, unless contractually otherwise agreed; the burden of proof for gross negligence lies with the plaintiff.
Benefits obtained by the damaged party as a result of the damaging occurrence, such as social security benefits, may reduce liability, depending on their nature and purpose.
Austrian civil law differentiates between material and non-material damage. Material damage can be quantified (e.g., property damage). Non-material damage, on the other hand, generally cannot and, therefore, require a quantification process. An example is compensation for pain suffered by the injured person as a result of the injury: usually, 'day rates' are used, which are classified into mild, moderate and severe pain. The number of day rates results from the duration and intensity of the pain, which are usually determined by experts.
In the context of professional negligence, damages claims are often contractually modified; restrictions for permissible limitations apply, in particular in relation to consumers, to liability for physical harm and for crass gross negligence and intent.
Access to the profession and conduct of the profession is governed by the Austrian Lawyers' Act, the lawyer's professional code of conduct, the Civil Code and the lawyer's Disciplinary Statute. Membership of the applicable regional Bar association is compulsory.
Every lawyer is obliged to obtain and maintain liability insurance. The compulsory minimum insurance sum is €400,000 (for each insured event); for law firms in the form of an LLC or a lawyer-partnership whose sole general partner is an LLC, the compulsory minimum insurance sum is €2.4 million. The regional bar associations provide a further level of liability insurance for large-volume claims. Lawyers are permitted to limit the liability for damages to the minimum sum insured in a written agreement with their clients; limitations are, for example, provided in the template General Terms and Conditions issued by the bar association.
Lawyers are obliged to conduct mandates undertaken by them in accordance with the law and to represent the rights of their clients with loyalty and conscientiousness. They do not, however, guarantee the success of the proceedings, rather only professional advice and representation of their clients.
The body of case law on damages claims against lawyers includes such mainstays as missed deadlines, delivery or non-delivery of monies or documents by lawyers acting as trustees, failure to take the interests of the counterparty into account where the counterparty has no legal representation, failure to adequately investigate facts and the failure to warn about specific legal or factual risks. Many cases are settled by professional liability insurance without recourse to the courts.
Similar rules apply to public notaries. To the extent public notaries act as public authority (e.g., in probate proceedings), special rules apply.
ii Medical practitioners
Doctors, be they employed or in private practice, are compulsory members of the regional medical chambers and are subject to the Code of Medical Practitioners. They are required to have professional liability insurance (€2 million per occurrence, up to €10 million per year, depending on the legal form). Dentists have their own regional chambers.
A peculiarity of the Austrian medical system is that treatment costs are generally borne by the social security carriers. Accordingly, in malpractice cases patients will generally claim only compensation for pain and suffering as well as increased costs and loss of income. Social security carriers can, however, seek recourse from the medical practitioner for treatment costs in certain situations.
The main bases for medical liability are treatment errors (malpractice) and information errors: malpractice is a violation of the treatment contract between the physician and the patient. A physician does not have to carry out every single treatment successfully6 but has to act lege artis. The standard of care of the practitioner is increased and objectified in line with Section 1299 of the Civil Code (see Section I.i). Classic examples of malpractice are damage resulting from wrongful drug prescription, major mistakes in surgery or damage caused by infections through lack of hygiene during treatment.
Since patients generally do not have full access to their entire medical file and have insufficient expertise to assess whether malpractice occurred, case law has shifted the burden of proof to the medical practitioners by allowing prima facie proof: to establish causality, the patient only has to prove that the doctor's mistake increased the probability of damage occurring; the doctor, on the other hand, has to prove that the error was, with high probability, not relevant for the occurrence of the damage.7
Medical practitioners can also be held liable if they fail to properly inform patients about the proposed treatment.8 A patient can only give consent effectively if he or she has been sufficiently informed about the significance of the planned medical intervention and its possible consequences.9 Since without effective consent any violation of the physical integrity of a patient in the course of the treatment is unlawful, failure to obtain sufficient consent can entail criminal liability. There is a large body of case law on failure to duly inform patients of risks and treatment alternatives.
There are a number of fora for patients to seek redress, before turning to courts to resolve their disputes. The injured parties can turn to patient advocates10 in special complaints offices. In line with Section 11e of the Hospitals and Health Institutions Act, there are independent patient representatives in each province. Their main duty is to provide a preliminary clarification of complaints.
In addition, there are arbitration and conciliation boards within the medical chambers, which are intended to facilitate out-of-court settlements.
Both fora are of a non-mandatory nature and free of charge for the patient. However, if the patient appoints a lawyer, the patient shall bear the costs.
Many malpractice cases can be resolved efficiently and economically in these fora; as a minimum, they generally provide further information to patients at low cost, giving them a broader base to assess the potential for obtaining damages in civil proceedings.
iii Banking and finance professionals
The banking and finance sector continues to be very heavily regulated, with relevant laws including the Securities Supervision Act 2007 (currently 2018), the Banking Act and the Capital Market Act, with the Financial Market Authority and, currently, the Austrian National Bank being the main supervisory bodies.
Banking and finance experts were, historically, not organised as a 'profession' in their own professional association. In the past, most banking and finance experts were employed or mandated by banks and financial institutions, their actions generally being attributable to these institutions.
Apart from banks and financial institutions or securities services providers, the provision of independent investment advice is a 'regulated trade' under the Austrian Trade Commerce and Industry Regulation Act, requiring, inter alia, formal qualifications and a licence, as well as compulsory insurance (approximately €1.4 million per occurrence or €2 million per year).
The past decade has seen the development of a large body of case law regarding liability to customers and investors, with a strong focus on disclosure obligations. Austrian courts tend to protect those who want to invest but do not have access to necessary information before making a decision.11
In addition to general damages rules, Section 11 of Capital Market Act establishes a specific prospectus liability to compensate investors for disadvantages suffered in reliance on incorrect or incomplete information in a prospectus. The liability established by the Capital Market Act does not require an existing contract as it is based on the same principles as culpa in contrahendo, giving rise to pre-contractual obligations. In parallel, case law has developed 'civil-law prospectus liability' for incorrect or misleading information in marketing materials.
iv Computer and information technology professionals
In the field of computer and information technology professionals, the general rules laid out in Section I.i apply.
v Real property surveyors
Austrian law does not separately classify 'real property surveyors' as a profession. Technical surveyors are classed as civil engineers (see Section II.vi), whereas real estate evaluation is undertaken by a variety of experts, including property managers and real estate trustees.
vi Construction professionals
Technical construction professionals – including architects and chartered engineering consultants – are compulsory members of the regional chambers of architects and chartered engineering consultants. The conduct of the profession is governed by the Civil Engineers Law and Civil Engineers Chambers Law. Regional disciplinary boards monitor the practice of the profession.
Civil engineers are not required to have professional liability insurance. However, since in practice every contractor requires professional liability insurance, almost all civil engineers offer this insurance, with support from their regional chambers.12 Moreover, self-employed engineering consultants are required to provide a professional liability insurance when tendering for public contracts.
The primary areas of activity for architects that lead to disputes are negligence in planning, tendering and local project management (construction supervisor). Case law in this area predominantly involves planning activities, with courts clarifying that architects have to provide comprehensive advice, also taking economic aspects (financial possibilities of client, cost-effective planning) into account.13 With regard to project management activities of architects, the Supreme Court has clarified that the supervisor does not always have to be present on site and, in general, random checks are considered sufficient.14
Disputes in this area are generally made more complex by the multitude of professionals and subcontractors involved, with numerous contractual and quasi-contractual relationships leading to complex issues regarding recourse and attribution of (contributory) negligence.
vii Accountants and auditors
The Austrian Auditors, Chartered Accountants and Tax Advisers Act governs the practice of auditors and tax accountants, who are required to be members of the chamber of auditors or chartered accountants and tax advisers and to maintain a mandatory insurance (minimum €72,673 per occurrence).15 Similarly to lawyers, chartered accountants and tax advisers are subject to the chambers' disciplinary statutes.
The scope of auditors' liability is regulated in the Austrian Corporate Code (UGB). Auditors are obliged to conduct a conscientious and impartial audit and to adhere to strict rules on conflict of interest. Different maximum liability limits apply depending on the degree of fault and size of the company.
According to case law, the contract between the audited company and the auditor has a protective effect for the benefit of third parties, in particular investors and creditors,16 which establishes the auditor's liability to these third parties. The exact grounds for liability are disputed; in recent case law, the Supreme Court clarified that this liability to third parties is based on an objective statutory obligation, so that liability limitations agreed between the audited company and the auditor have no effect on this statutory protection of such third parties. An auditor's failure to meet his or her obligations can also lead to criminal liability pursuant to Section 163b of the Criminal Code, which as a protective law provides a broader basis for damages claims – including for pure economic loss – by persons relying on the auditors' certificate.
Claims arising from the auditor's liability towards audited companies, as well as, injured third parties17 become statute-barred after five years, irrespective of knowledge of the damage and the injuring party.18
In contrast to auditors' liability, tax accountants are regularly not liable to outside third parties for the accuracy of their annual accounts.19
viii Insurance professionals
Insurance professionals can be divided into two groups: insurance brokers and insurance agents.
Insurance brokers are governed by the Austrian Trade Commerce and Industry Regulation Act, pursuant to which insurance brokers must be entered into the Insurance and Credit Mediation Register and require compulsory insurance (€1.25 million per occurrence or €1.85 million per year).20 Pursuant to Section 26(1) of the Brokers Act, a broker mediates insurance contracts on a commercial basis, namely arranges transactions with a third party on the basis of an agreement under private law (brokerage contract) for a client without being permanently entrusted with this duty.
Brokers are obliged to arrange the best possible insurance cover according to the circumstances of the individual case (i.e., 'best advice') and must carry out successful risk management for their clients with the most favourable cover possible in each individual case. It is also their contractual obligation to explain to the insurer the specific insurance cover they are seeking for their customers, with specific duties of results in duties of protection, care and advice for the latter. As experts within the meaning of Section 1299 of the Civil Code, they are also liable for identifying relevant problems and providing correct information.
Insurance agents, in contrast, who are constantly entrusted by an insurer to close insurance contracts for the insurer, are subject to the Insurance Contract Act. Liability claims arising from negligent acts of these agents are generally (also) directed against the insurer, who will generally be held liable for the actions of an insurance agent under Section 1313a of the Civil Code.
Year in review
i General developments
Virtually no area of private or professional life remained untouched by the covid-19 pandemic in 2020 and 2021. As has been true in most of the world, both the coronavirus and the measures taken by the Austrian government to limit its spread have had a significant impact on court proceedings and the substantive legal issues facing professionals.
While the courts have mostly remained in operation, the lack of availability of sufficiently large and well-ventilated courtrooms for hearings has certainly slowed court proceedings down. Since oral hearings and witness testimony are the cornerstone of Austrian proceedings, many parties and judges are reluctant to try cases via videoconference, despite the new procedural rules permitting this.
Substantive issues facing the courts are beginning to involve covid-19-related cases that affect professionals and businesses in all industries, including issues such as insurance coverage for covid-19-related business closures, obligation to pay rent despite business closure, public liability of the Republic for mismanagement of the crisis, and covid-19-related extensions of various deadlines (financial disclosure requirements, procedural deadlines).
Questions of insurance coverage for covid-19-related losses of professionals have also been a central issue in the past year and can be expected to remain a focal point in the coming years.
While most professionals have adjusted to the strict requirements of the General Data Protection Regulation (GDPR), the medical community in particular has had to face new challenges regarding the processing of sensitive medical data in the context of covid-19 measures, as is the case for all employers regarding employee health data and health safety measures.
More generally, GDPR-related cases are now reaching the highest courts, with cases concerning data access and deletion requests, restrictions of access to court files and damages for improper use of personal data forming the bulk of the relevant case law.
ii Profession-specific developments
Legal practitioners – case law developments
The past year has seen the Supreme Court dealing with a number of professional liability cases concerning legal practitioners.
In May 2020, the Austrian Supreme Court provided clarification on lawyers' duty to specifically warn clients of potential negative consequences of a transaction. A lawyer had been instructed to draw up a contract transferring a hotel from one – over-indebted – corporation of the plaintiff to another of the plaintiff's companies for a minimal price. The purpose was to prevent enforcement over these assets. The lawyer was aware of the enforceable judgment. While the lawyer had doubts about the entire transaction, when expressly asked by the client about potential consequences, the lawyer only informed the client of the possible contestability under insolvency law; the lawyer failed to inform the client that the transaction might make the client criminally liable. The client was subsequently criminally sentenced for fraudulent bankruptcy practices. He then sued for compensation of the costs of his representation in the criminal proceedings and declaratory judgment of liability for any future damages. While the appeal court held that the lawyer's duty to advise should not be overstretched and that the lawyer is not responsible for preventing clients from acting criminally, the Supreme Court's view was rather stricter: the lawyer's duty to ensure the client's interests are protected and to properly and comprehensively advise of potential consequences of a transaction are the lawyer's 'cardinal obligation'; clients must always be specifically warned of any known negative consequences of an envisaged transaction and any failure to do so will make the lawyer liable.21
In another case, a client sued his lawyer for damages because the lawyer had failed to advise him of the risk of incurring substantial fees in reversing a real estate transaction. At the time of the transaction, there was no pertinent legal literature or case law; the legal provisions themselves were unclear. The Supreme Court held that where such a lack of legal clarity exists and the lawyer bases the advice on a justifiable legal view, the lawyer cannot be held liable for professional negligence, even if the courts subsequently take a different legal view.22
Medical practitioners – case law developments
While case law on medical practitioners' duty to warn patients is notoriously strict, in a recent case the Austrian Supreme Court emphasised that patients also have a fundamental responsibility for their own affairs. The doctor had referred his patient for a magnetic resonance imaging (MRI); the report, which the patient dropped off at his doctor's practice, unopened, indicated the risk of a tumour and the necessity of further tests. The treating doctor had called the plaintiff using the mobile telephone number provided by the plaintiff to discuss the results of the examination. The doctor had also sent his patient a message by post requesting his patient to contact him to discuss the results of the MRI examination. The patient failed to respond. While both lower courts assumed the doctor was liable for failing to continue to attempt to contact the patient to discuss the results of the report, the Austrian Supreme Court ruled that the medical practitioner had complied with his duty to inform by calling the number given by the patient and sending a note to the address given by the patient.23
Medical causality is notoriously difficult to prove. This has led to various methods of decreasing the burden of proof for patients in Austrian case law. Among these is permitting prima facie evidence, where causality is prima facie assumed if there is an empirical link between the established facts and the damage that occurred. This is, however, only helpful where such empirical findings exist. Another line of case law deems causality to be established if causality of the treatment error is 'more likely than not', in particular if, once it has been established that the treatment error increased the risk significantly or at least 'more than marginally', the medical practitioner fails to show that there is a high probability that the treatment error was not causal. In a recent case, the Supreme Court ruled that these methods are not always sufficient or indeed justified. If the patient fails to fulfil the (decreased) burden of proof because of the physiological complexities of the human body, the concept of liability for alternative causality may apply: whereby, if despite having obtained comprehensive medical opinions, it cannot be established whether a treatment error or 'coincidence' (i.e., predisposition, external causes, a primary injury) was causal (more likely than not) for the damage, the medical practitioner may be held liable for 50 per cent of the damage, provided the doctor acted unlawfully and negligently and his or her actions at least increased the risk of such damage. In the case at hand, the doctor should have intubated the six-year-old patient suffering from a primary brain injury and ordered an EEG examination and monitoring to prevent secondary brain damage. It was unclear whether the patient's massive neurological damage was caused by the primary injury or if the damage could have been prevented by intubating the patient and by proper treatment. The doctor was held liable for 50 per cent of the damage.24
Banking and finance professionals – statutory amendments and case law
In the past year, the Austrian Supreme Court has been called upon to assess various professional liability matters in the banking and finance industry. One recent case demonstrated the drastic consequences clerical error may have: two brothers with the same surname who had inherited equal amounts deposited the inherited funds in two separate saving accounts. The bank negligently allocated the deposits of one brother to the other and, moreover, incorrectly assigned the identity documents. The brother, to whose account both sets of inherited amounts were – mistakenly – credited, subsequently instructed his wife and his son's partner to clear the account. When the other brother's son attempted to access his father's account, he was – again incorrectly – informed by the bank that these family members had withdrawn all funds from his father's savings account. In the ensuing criminal investigations, the bank reiterated its incorrect statement to the public prosecutor, resulting in an indictment. The bank's errors came to light in the course of the criminal proceedings, leading to acquittal. The acquitted family member then sued the bank for compensation of their defence costs. The Supreme Court held that an element of the duty of care a bank owes to its customers is the duty to carefully identify the customers and to correctly allocate funds. The bank is contractually liable when customers are criminally prosecuted for its negligent failure to duly fulfil these contractual obligations.25
In another case, the Austrian Supreme Court extended protection to an investor who had 'blindly' relied on his investment adviser. Under Austrian case law, if investors ignore written risk warnings and information material, this usually counts as contributory negligence and decreases the liability of investment advisers for faulty advice. In this judgment, however, the Supreme Court held that where an intense relationship of trust exists between an investor and his or her investment adviser to the extent that the investor, with the adviser's consent, relies on the adviser entirely – in particular relying on the adviser to filter investment opportunities according to the investor's risk profile – that investor's failure to read written information does not constitute reproachable carelessness or contributory negligence.26
Construction practitioners – case law developments
Under Austrian regulatory law, building developers are required to appoint 'construction site coordinators' to ensure safety on construction sites, in particular to protect the workers on site. In a case where a carpenter fell from a roof because of incorrectly installed scaffolding, the Austrian Supreme Court clarified the obligations of the site coordinator: The coordinator is, in principle, liable in tort and ex contractu as an expert for ensuring construction site safety. Due performance of these duties requires the coordinator to visit the construction site on a regular basis; the intervals depend on the nature of the construction site and the types and level of activities there. Constant presence at the site is not required. In this case, the coordinator had visited the construction site two days before the accident, at which point the safety scaffolding had been partially, but correctly installed. While the appellate court held that the coordinator should have inspected the scaffolding before permitting carpentry work on the roof to commence, the Supreme Court held that the coordinator could not be held liable for mistakes made in the erection of the scaffolding after his most recent visit, as there were no indications that could have led him to anticipate such mistakes or that further inspection would be required in the near future to ensure safety. The coordinator could only have been held liable if, at the most recent visit, an erection error had existed that he should have recognised.27
Outlook and future developments
While covid-19-related professional liability cases have not yet hit the higher courts, it seems likely that medical and legal practitioners in particular will face increased liability allegations as a consequence of the covid-19 pandemic.
More generally, the increase in remote working entails numerous information technology and data protection challenges, with data breaches and cyberfraud increasing liability exposure for all professionals. The organisational transitions required of firms and employees because of the pandemic will have increased the risk of – potentially liability-inducing –'slip-ups', with professionals working from home, simultaneously juggling work, childcare and administrative minutiae. While some deadlines have been extended – in particular deadlines for disclosing financial information, giving businesses and auditors more time to adjust – in many cases professionals may be struggling to perform to deadlines at a high level of diligence. To what extent these challenges will be taken into account by the courts when ruling on negligence in future remains to be seen. However, despite the plethora of new challenges facing professions, the underlying rules of professional negligence and the requirements for successful claims will remain, with claimants still needing to prove damage, causality, wrongful act or breach of duty and fault.
1 Katrin Hanschitz is a partner and Tomer Granit is an associate at Knoetzl.
2 'Vertrag mit Schutzwirkung zugunsten Dritter'.
3 Austrian Supreme Court, decision of 2 December 1970, docket No. 6 Ob 282/70.
4 Austrian Supreme Court, decision of 24 January 2008, docket No. 6 Ob 104/06x.
5 Austrian Supreme Court, decision of 27 March 1995, docket No. 1 Ob 44/94.
6 Austrian Supreme Court, decision of 4 July 1991, docket No. 6 Ob 558/91; see also Austrian Supreme Court, decision of 4 August 2009, docket No. 9 Ob 64/08i.
7 Austrian Supreme Court, decision of 29 January 2008, docket No. 1 Ob 138/07m.
8 Austrian Supreme Court, decision of 11 December 2007, docket No. 5 Ob 148/07m.
9 Austrian Supreme Court, decision of 30 January 1996, docket No. 4 Ob 505/96.
11 Austrian Supreme Court, decision of 26 November 1996, docket No. 10 Ob 2299/96b.
13 Austrian Supreme Court, decision of 26 January 2010, docket No. 9 Ob 98/09s.
14 Austrian Supreme Court, decision of 14 October 1997, docket No. 1 Ob 2409/96p.
15 See Section 11 of the the Austrian Auditors, Chartered Accountants and Tax Advisers Act.
16 Austrian Supreme Court, decision of 27 November 2001, docket No. 5 Ob 262/01t.
17 Austrian Supreme Court, decision of 23 January 2013, docket No. 3 Ob 230/12p.
18 Section 275(5) of UGB.
19 Austrian Supreme Court, decision of 29 November 2005, docket No. 10 Ob 57/03k.
20 See Section 137(c) of the Austrian Trade Commerce and Industry Regulation Act (GewO).
21 Austrian Supreme Court, decision of 27 May 2020, docket No. 7 Ob 209/19i.
22 Austrian Supreme Court, decision of 27 May 2020, docket No. 8 Ob 28/20f.
23 Austrian Supreme Court, decision of 20 February 2020, docket No. 6 Ob 17/20y.
24 Austrian Supreme Court, decision of 29 September 2020, docket No. 6 Ob 137/20w.
25 Austrian Supreme Court, decision of 28 January 2020, docket No. 4 Ob 209/19t.
26 Austrian Supreme Court, decision of 1 April 2020, docket No. 1 Ob 159/19t.
27 Austrian Supreme Court, decision of 27 May 2020, docket No. 7 Ob 218/19p.