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Reimbursement of or Contribution to Defence costs in Criminal Proceedings: New Draft Bill Is a Missed Opportunity

Reimbursement of or Contribution to Defence costs in Criminal Proceedings: New Draft Bill Is a Missed Opportunity

Austria
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It has been a long time coming and is among the most requested changes in criminal procedure law. Finally, on 24 April 2024, the Austrian government presented a draft bill aimed at increasing the contribution to legal costs for suspects acquitted in criminal proceedings. While it is a giant step forward, serious doubts remain about whether it goes far enough.

Background

Until now, the highest possible contribution to defence costs in trial proceedings (Hauptverfahren), before a jury, was capped at EUR 10,000. If proceedings were terminated in the pre-trial period (Ermittlungsverfahren), legal costs were not reimbursed at all.
The inadequacies of the status quo have been starkly highlighted by the complexity and length of white collar crime proceedings. They often last over a decade and thus demand a robust, and consequently costly, defence from the suspects. Even in cases where such defence proves successful, suspects usually remain stuck with the costs.

On 24 April 2024, the Austrian government finally presented a new draft bill addressing this issue. Its aim is to fully implement the law before the end of summer 2024. The review period (Begutachtungsverfahren) runs until 8 May 2024.

The law would bring vast improvements by increasing the contribution to defence costs in case of an acquittal in trial proceedings and, for the first time, if proceedings are terminated in the pre-trial period. But it still seems like a missed opportunity to provide for adequate reimbursement.

Key aspects of the draft bill

In case of an acquittal in trial proceedings, the amount of costs reimbursed would depend on which competent court tried the matter:

  • at district courts: up to EUR 5,000 (previously up to EUR 1,000);
  • at regional courts, if a single judge is competent: up to EUR 13,000 (previously up to EUR 3,000);
  • at courts consisting of lay judges or jurors: up to EUR 30,000 (previously up to EUR 5,000 and EUR 10,000 respectively).

The draft bill further provides for a two-step mechanism when such caps (Höchstbeiträge) can be exceeded:

  • for a longer trial (surpassing approx. 10 days), the cap can be exceeded by half, i.e. resulting in reimbursement of up to EUR 7,500, EUR 19,500 and EUR 45,000 respectively;
  • in proceedings of extreme scope (extremer Umfang), the cap can be doubled, i.e. resulting in reimbursement of up to EUR 10,000, EUR 26,000 and EUR 60,000 respectively.

The explanatory notes on the draft bill (Erläuternde Bemerkungen zur Regierungsvorlage) provide some guidance on when the latter requirement should be met, highlighting the exceptional scope of the content of the file and, as far as appeal proceedings are concerned, the exceptional scope of the trial transcript, judgment or opposing appeals. When assessing the adequacy of the reimbursement, the entire proceedings (pre-trial and trial period and appeal proceedings) are to be taken into consideration.

For the first time, defence costs would also be reimbursed if proceedings are terminated in the pre-trial period. Like in the event of an acquittal, the amount is capped, amounting to up to EUR 6,000, with the possibility to exceed the cap if:

  • the proceedings are of extraordinary scope (außergewöhnlicher Umfang) or are particularly complex (besondere Komplexität), or if they last longer than three years, then the cap can be exceeded by half, i.e. to up to EUR 9,000; and
  • the matter is of extreme scope, the cap can be doubled, i.e. up to EUR 12,000.

When assessing whether such prerequisites are met, the explanatory notes refer to the lengths of the proceedings, the scope of the file, the number of parties, the complexity of the facts (including aspects such as the traceability of cash flows or the complexity of corporate structures), the need for experts and for requests for mutual legal assistance, the amount of damage and the number of encroachments on fundamental rights.

A request to have legal costs reimbursed must be filed within three years after a suspect has been informed of the acquittal or termination of the proceedings. A decision by the court (competent for the pre-trial or trial period) can be appealed (Beschwerde) within 14 days.

The law should apply retroactively for acquittals and terminations after 1 January 2024.

Comment

Undoubtedly, the draft bill is a big step forward and a vast improvement on the status quo. However, as laudable as it might be, due to the provision of caps the sense of an opportunity missed lingers. Instead of implementing a necessary and overdue reimbursement of all necessary and useful (notwendig und zweckmäßig) legal costs (Kostenersatz), still only a contribution to such legal costs (Kostenbeitrag) is meant to be implemented.

In particular, the very moderate caps for costs incurred in pre-trial periods leave a sour taste. In reality, white collar crime proceedings are being played out to a significant part at this stage. This is where the foundation is being laid for the facts of the case and the defence (strategy) and where investigative steps are taken by the Public Prosecutor's Office and often challenged by suspects. The draft bill offers no incentive for suspects to play an active role already in the pre-trial period.

It is hoped that lawmakers will soon revise the draft bill. In the meantime, it is important for courts handling suspects' requests to adopt a tolerant, even generous, approach.

By Oliver Michael Loksa, Counsel, Schoenherr

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