CJEU overturns HOAI scale of fees – from now on price competition for architects and engineers
The Court of Justice of the European Union has overturned the minimum and maximum remuneration according to the scale of fees for architects and engineers. For the first time in Germany, genuine price competition for services by architects and engineers has now become possible (July 04, 2019, C-377/17).
The official scale of fees for services by architects and engineers HOAI has stipulated mandatory upper and lower limits for the remuneration of architects and engineers. According to the CJEU, this violates the EU Services Directive on the freedom to provide services.
Neither the minimum nor the maximum tariffs of the HOAI are proportionate. In the legal dispute, the Federal Government held that the minimum tariffs ensured quality standards and contributed to the protection of consumers. These arguments failed to convince the court, since the HOAI fees only apply to architects and engineers. Corresponding planning services may also be provided by ther service providers who have not demonstrated their professional capacity to do so, however.
According to the CJEU, the maximum prices of the HOAI are also too far-reaching. In order to protect consumers, “guidance as to prices” for the various categories of services provided by architects and engineers would be sufficient. They would be a less restrictive measure.
“The consequences of the judgement are enormous,” commented lawyer Christopher Marx, based in Düsseldorf. “The German legislator must now revise the HOAI scale of fees in compliance with European law. Existing contracts referring to the HOAI, however, will remain in force. On the other hand, architects and engineers can no longer claim the minimum tariff under the HOAI in court if they have previously agreed a lower fee.”
Ute Jasper, specialist for large-scale projects at federal, state, and local level, pointed out: “From now on, private builders may allow price competition for architects, while the public sector even has to do so.” This has an impact on all ongoing public construction projects.
The Public Sector & Public Procurement department led by Ute Jasper has been one of the three best procurement law practices for years. Since 1991, it has advised on awards, restructuring, large-scale projects, and cooperations in the public sector and has accompanied several hundred large-scale projects of the federal, state, and local authorities and their subsidiaries with a total volume of more than EUR 20 billion without any procedures having been successfully challenged.
Dr. Ute Jasper is one of the most renowned lawyers for procurement and infrastructure projects in the public sector. She advises federal and state ministries, municipalities, and businesses, particularly on innovative and complex projects. Ute Jasper heads Heuking Kühn Lüer Wojtek's "Public Sector & Public Procurement" department. For years, she has been ranked number 1 in JUVE Handbook of Commercial Law Firms, most recently in its 2017/2018 issue, and according to "Law Firms in Germany," is the "premier contact on the market" for infrastructure. In October 2016, she received the JUVE Award for Regulated Industries with her team.
Dr. Christopher Marx is a lawyer in the “Public Sector & Public Procurement” practice group, Düsseldorf. His practice focuses on complex and innovative projects in public procurement law as well as the drafting of contracts under civil law.