Noncompliance of Fixed Tariffs for Architectural and Engineering Services with European Law

Abstract

The German fee system for architectural and engineering construction planning services is characterized by fixed minimum and maximum tariffs. In July 2019, the Court of Justice of the European Union ruled on the noncompliance of the German Official Scale of Fees for Services by Architects and Engineers (HOAI) with European law. The court found that minimum and maximum fees for construction planning services infringe the Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on Services in the Internal Market by building up barriers for providers from other European Union countries in developing their service activities within the German market. Although the Court of Justice of the European Union is not authorized to declare member states’ legal regulations to be invalid, Germany is obligated to revise its respective regulations with regard to this decision. The verdict was expected but will have a huge effect on the fees system for architectural and engineering construction planning services in Germany because the legislature must revise the fee regulations, and in the meantime the unclear legal situation is affecting contractors and service providers. To elaborate recommendations to the German legislature on whether and how to revise the HOAI, the authors analyzed the verdict and compared it with the current legal situation in Europe and especially in Germany. Furthermore, the paper contains information for contractors, engineers, and architects on how to deal with the new legal situation resulting from an analysis of former German court decisions in comparable cases. The conclusion is that Germany must react to the new development regarding the fees for construction planning services and should revise the German Official Scale of Fees for Services by Architect and Engineers (HOAI). Meanwhile, contractors and service providers may continue to agree to fees following the principles of the existing regulations laid down in the HOAI.