The fact remains: No reimbursement of costs for out-of-court activities by the lawyer in labor law

In civil proceedings, the general rule applies that the losing party must also reimburse the winning party for its legal fees. In first instance labor court proceedings, this principle is excluded by the regulation of Section 12a Paragraph 1 Sentence 1 ArbGG. Each party therefore bears its own legal fees. According to the prevailing opinion to date, this special regulation also includes reimbursement of costs extrajudicial Activities of the lawyer in labor law matters. It remains that way, as two current decisions by the LAG Munich and the LAG Baden-Württemberg show.

The principle applicable in civil proceedings that the “loser” has to bear all costs of the legal dispute and must also reimburse the “winner” for his legal fees means that a claimant has to think very carefully about whether he is actually taking the risk of starting a legal dispute respectively. A special legal requirement applies to labor law disputes. Section 12a of the ArbGG stipulates that in judgment proceedings at first instance, the winning party is not entitled to reimbursement of the costs of engaging a legal representative. In other words: In the labor court, i.e. in the first instance, the “winner” bears his own legal costs. This is intended in particular to enable the employee to enforce his rights in the labor court without immediately being exposed to the risk of losing the case Having to pay the employer's legal costs.
It has always been controversial whether this principle also applies to costs incurred by the employee or the employer for the out-of-court work of a lawyer. Such costs can arise in particular if, after the employee has requested payment from a lawyer, the claim is fulfilled by the employer and a lawsuit is therefore not necessary, or if the employer immediately engages a lawyer after a request for payment from the employee and the employee then refrains from filing a lawsuit . The Federal Labor Court has made a clear statement on this question: The special regulation in Section 12a Paragraph 1 Sentence 1 ArbGG also excludes any claim for reimbursement for the lawyer's out-of-court activities.
Recently, however, this clear case law of the Federal Labor Court has been repeatedly called into question. Two state labor courts have recently had to deal with the question of whether an employee can be entitled to reimbursement of his legal fees for the lawyer's out-of-court work against the employer. However, both the Munich LAG (judgment of July 26, 2018, Ref.: 8 Sa 34/17) and the Baden-Württemberg LAG (judgment of September 28, 2017 (ref.: 17 Sa 71/17)) have clearly answered this question in the negative. The established case law of the Federal Labor Court remains.
The purpose of the legal provision in Section 12a Paragraph 1 Sentence 1 ArbGG is particularly relevant for this. This consists of a “cheapening” of the first instance labor court procedure. The aim is to prevent employees from shying away from legal proceedings in labor courts for cost reasons. This purpose suggests that pre-litigation legal fees should also be included in the exclusion of reimbursement of costs. In addition, experience has shown that it is easier to reach an amicable solution through a settlement in a labor court case if the question of bearing the costs for a lawyer's out-of-court activities does not also have to be clarified. The legislative changes made in the course of the new regulation of lawyers' remuneration through the Lawyers' Remuneration Act would also have no influence on the exclusion of reimbursement of costs in labor law.
Employees do not have to worry about having to pay the employer's legal fees in the future if the employer hires a lawyer immediately after the employee requests payment. However, they cannot demand reimbursement of legal fees from the employer if they assert their claims through a lawyer and the employer then fulfills them. Even if labor court proceedings follow, these pre-litigation costs are not reimbursable. If an employer wants to insure against this cost risk, it is advisable to take out legal protection insurance.
Everything looks different in the second instance at the State Labor Court. The general principles of civil court proceedings apply here. The losing party must therefore reimburse the winning party for all legal costs, including legal fees.