European Court of Justice – HOAI Judgement

On 4 July 2019 the European Court of Justice unfortunately declared that, by maintaining fixed tariffs for the planning services of architects and engineers, the Federal Republic of Germany failed to fulfil its obligations under the Services Directive.

The German legislator is now obliged to change the regulation immediately.

Although the result is a disappointment not only for Germany but also for many other countries awaiting the infringement procedure, the argumentation is very interesting in regard to the ongoing discourse with the European Commission about professional regulation. The Court stresses very clearly that not only the quality of work and the protection of consumers are overriding reasons relating to the public interest but also the preservation of Baukultur and ecological construction, which can be subsumed the more general objectives of preservation of the cultural and historical heritage and environmental protection. The court also stresses that recital 40 of Directive 2006/123 confirms that the protection of recipients of services, the protection of the environment and cultural policy objectives also constitute overriding reasons relating to the public interest. The Court even concedes that the existence of minimum tariffs is potentially capable of helping to ensure a high level of quality of planning services and, consequently, of achieving those objectives. Nevertheless it came to the conclusion that in the case of Germany the minimum tariffs cannot be suitable for attaining the objective of ensuring a high level of quality of planning services as the German legislation does not pursue it in a consistent and systematic manner. The argument for this is that since the actual provision of planning services in Germany is not reserved to persons practising a regulated activity there is no guarantee – even with the HOAI - that the planning services are carried out by service providers who have demonstrated their professional capacity to do so.

In regard to the maximum tariffs the Court stresses their capability to increase transparency and consumer protection, but regards them as not proportionate as the possibility of making available to clients guidance as to prices for the various categories of services covered by the HOAI would be a less restrictive measure that could suffice to achieve transparency and consumer protection as well.

Click to read: Judgement of the Court