Finances and Fees: Your costs for the lawsuit and access to benefits

One of the biggest factors for many when deciding whether or not to file a lawsuit is the financial impact. Though this can be alleviated to a degree with the purchase of legal insurance, there are still other things to consider.

Legal Fees:

Before delving into this topic, it should be noted that any lawyer you speak to in Germany has taken an oath to provide full transparency about the costs, risk and potential outcomes of a case when speaking to potential clients. If the lawyer you’re consulting isn’t clear about costs, we would not suggest speaking to them further. We would also use any inquiry calls as a baseline for understanding what the full impact of the case could be for you.

Generally speaking, there are two options you have when it comes to discussion compensation with your lawyer for their time: hourly, with a rate being shared by the lawyer or through flat rate via Rechtsanwaltsvergütungsgesetz (also known as RVG, which is how we will reference it in the remainder of this article). RVG fees are directly related to the amount of income you are earning - the more you earn, the higher the fixed fee. Depending on the level of support you need, you can decide which route is better for you.

For example: if the lawyer believes that they can settle the claim out of court by negotiating with your former employer, and can tell you how many hours they will need in order to handle everything, it might be more cost-effective to do the hourly route.

Alternatively, if it seems clear that there is going to be a lawsuit filed in order to apply pressure on the employer, the amount of hours spent will likely cross a threshold of how much a RVG fixed rate fee would be. Therefore, using the RVG would save you money in the long run. What is also helpful about RVG is that there are different phases to which each fee comes into play - and it corresponds to the stage of additional work the lawyer has to go through. The types of fees are as follows:

• Consulting Fee: the lawyer speaking with you about the strategy, potential outcomes and generally is available for questions when needed.

• Litigation Fee: the fee for formally filing a lawsuit with the courts

• Appointment Fees: the fee associated with going to court and representing you

• Settlement Fee: represents a percentage of the amount of the settlement in total that you are able to get - inclusive of total value including stock options, lump sum payments, garden leave, etc

When you are speaking to a lawyer, ask them what the fees would be for each. Generally they are all based upon a percentage of your salary, with the cost basis being the equivalent to three months of your income. What we suggest: ask them to break down what the costs could be through multiple scenarios for example: negotiating a settlement before going to court, filing a lawsuit and settling before going to your court appearance, going to court and settling within court and winning the lawsuit outright.

Having those numbers in front of you will give you a much better picture of what to expect, and will make it more clear as to whether hourly or RVG (i.e. fixed rate) makes the most sense for you. Be advised that you need to decide which route before you start working with your lawyer you cannot switch, so choose wisely!

Unemployment:

During the litigation process, you are entitled to get unemployment benefits from the government assuming you have paid into the social system long enough to be awarded them. As is standard practice, you should file for unemployment within three days of receiving your termination to ensure no gap in coverage of insurance and other social support.

When speaking to your contact at the unemployment office, make them fully aware of the lawsuit and the proceedings. In most cases, they will reach out to your employer to clarify the grounds of the termination and then will calculate the benefits. .

Employment during litigation:

A common tactic for employers that have unlawfully let someone go - and know it - will be to extend the litigation process for as long as possible; this is because they want to cause financial strain on the former employee that is accusing them. Their hope: you find another job and/or settle for less to move on from the case.

However, it’s a common misconception that you cannot work. In fact - many do. You can either find a full time role, start doing freelance work or even start your own company. In case you are not an EU citizen, you will want to discuss with the Auslanderbehorde how this affects the type of visa you are on, as this may pose limitations. Additionally, if you are getting unemployment benefits you will need to see how this would work for them also.

The process of litigation can make finances feel less clear for a while. Look at the numbers, think about what it could mean for you, and discuss with the loved ones around you as a sounding board.