The provisions relating to the actuarial deposit are not applicable to British plaintiffs

Vienna, 2022-06-09

The United Kingdom's withdrawal from the European Union has raised numerous uncertainties regarding bilateral law enforcement. For example, the Austrian Supreme Court recently had to deal with the issue of the actuarial deposit. The purpose of the actuarial deposit (§ 57 of the Austrian Code of Civil Procedure (öZPO)) is to protect a domestic defendant from not being able to recover legal costs from a foreign plaintiff who has unsuccessfully filed a claim against the defendant; as a security for legal costs, the actuarial deposit is thus intended to protect against abusive or costly legal action by foreign plaintiffs.

The Austrian Supreme Court ruled on 23/03/2022 that a British plaintiff did not have to provide an Austrian defendant with an actuarial deposit. The Supreme Court based the decision on the enforcement obligation between the European Union and the United Kingdom agreed by the United Kingdom's ratification of the Hague Convention on Choice of Court Agreements in Civil and Commercial Matters on 28/09/2021. Due to this contractual agreement, the defendant's argument that the lack of enforcement of Austrian legally established procedures in the United Kingdom would create significant uncertainties for Austrian contracting parties was not valid.

This decision is part of a growing body of post-Brexit case law in the European Union. After a hard Brexit was avoided at the last moment via a trade agreement with the EU, Prime Minister Boris Johnson declared his intention to adjust the remaining EU influences on the hierarchy of standards in favour of British companies. It can therefore be assumed that EU companies will be increasingly confronted with legal uncertainties in the future.

Author: Mag. Kristina Steflitsch / Mag. Johannes Zink, hba Rechtsanwälte Vienna, Austria