Oehlboeck and Immanuel Gerstner
Update by Johannes Öhlböck
Johannes Oehlboeck holds a law degree from the University of Vienna (2001), LL.M. (2002), and a Ph.D. in law (2008). He is attorney at law (www.raoe.at) in Vienna and specializes in Competition Law, Antitrust and IP- and IT-LAW. He is also a member of the board of it-law.at. He is admitted to the Austrian Bar.
Immanuel Gerstner holds a law degree from the University of Salzburg (2000), a Ph.D. in law (2001), and an LL.M. from the New York University School of Law (2002). He is partner at SCWP Saxinger Chalupsky & Partners and specializes in Corporate Law, M & A, Antitrust and International Arbitration. Immanuel Gerstner is admitted to the Austrian Bar and to the Bar of New York.
Published October 2012
(Previously updated by authors in March/April 2009)
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Table of Contents
Austria is a democratic, federal republic comprising 9 Provinces: Vienna, Upper Austria, Lower Austria, Styria, Carinthia, Salzburg, Tyrol, Vorarlberg and Burgenland. Each of the 9 Provinces is administered by its own government. The Provinces are headed by a governor who is elected through the Provinces legislature.
Immediately after World War II, on 1 May 1945, Austria's Constitution of 1920 as amended in 1929, which was notably drafted by Professor Hans Kelsen, was re-enacted. However, it took ten more years until Austria's full sovereignty was re-established by the conclusion of a state treaty on 15 May 1955 between Austria and the Allies, France, the UK, the USA and the USSR. In the same year, Austria declared its permanent neutrality by constitutional law and became a member of the United Nations. On 1 January, 1995, Austria joined the European Union and also became a member of the European Currency Union.
The Austrian legal system is based on the civil law tradition and has its origin in Roman law. As shown below, Austria’s law consists of public law, private law and criminal law.
The Austrian Constitution establishes Austria as a representative, or indirect, democracy with a two chamber parliamentary system, in which the separation of powers principle is recognized. Most legislative power lies with the Nationalrat (National Assembly), which is elected by general federal elections every fourth year. On the other hand the members of the second chamber, the Bundesrat (Federal Assembly), are nominated by the diets of the nine autonomous Provinces (Länder). The Federal Assembly represents the interests of the Federal Provinces.
In order for a bill to become a federal Law, it must be resolved upon by the National Assembly. Bills that are passed are sent to the Federal Assembly for corroboration. The bill succeeds if the Federal Assembly either approves of the bill or does not react for eight weeks. Even so, the Federal Assembly can not effectively prevent the adoption of legislation by vetoing a bill, as the National Assembly can simply force a bill into law by passing it again. However, for bills curtailing the constitutional rights of Austria's member states, bills concerning changes in the Federal Assembly’s rank, treaties that fall in to the provinces’ sphere of action, and federal principle laws, in which a time limit of less than 6 months or more than a year is set for the legislation to be implemented, the Federal Assembly’s approval is mandatory.
Austria's formal head of state is the "Bundespraesident" (Federal President), who is directly elected by the populace once in every six years and is limited to two consecutive terms of office. The Federal President appoints the “Bundeskanzler” (Federal Chancellor) as well as the other members of the Federal Government. Besides the Federal President, the Federal Government is the highest administrative body. The country's government is headed by the Federal Chancellor, in whom most political power is vested. Federal legislation is first signed by the Federal President and then countersigned by the Federal Chancellor. The government can be removed from office by either a presidential decree or by vote of no confidence by the National Assembly.
The civil rights of the citizens were first guaranteed in 1867. These rights were adopted and incorporated into the present Constitution, along with the rights provided by the European Convention on the Protection of Human Rights and Fundamental Freedoms of November 4, 1950, which was ratified by Austria in 1958.
Constitutional law is given a higher status by virtue of the fact that it is harder to amend. An amendment to a national constitutional provision requires a two thirds majority in parliament, with at least half of the members present and voting. The provision thereby adopted is then known as a "Constitutional Law" or "Constitutional Regulation." By contrast, to pass a valid motion in parliament relating to a law that is not constitutional in nature, a simple majority of votes is required, with one third of parliamentary members present and voting.
The highest ranking laws in the Austrian legal hierarchy are outlined in the "Fundamental Principles" of the Austrian national constitution. The Fundamental Principles are the following: the democratic principle; the principle of the separation of powers; the principle of the rule of law; the republican principle; and the liberal principle. As a whole, these leading principles form the basic constitutional legal system. Particular constitutional weight is thus accorded to these principles, so that any "complete alteration" to the national constitution can only take place if first agreed to by the Austrian people in a referendum. A "complete alteration" to the constitution takes place when the constitution is so radically amended that either one of the leading principles needs to be removed, or the relationship of the principles to each other becomes essentially altered.
Austria's entry into the EU on January 1 1995 required a "complete alteration" to the national constitution. Austrian constitutional law was thus joined with EU law as the most fundamental source of law (Dual-constitution). The general view is that EU law now takes precedence over domestic Austrian law and the national constitution, but is subordinate to the fundamental principles of the constitution.
Corresponding to national constitutional law and national law is regional constitutional law and regional laws relating to each of the nine Austrian federal regions. Regional constitutional law is subordinate to national constitutional law and must not conflict with national constitutional law. However, as a matter of convention, national laws that are not constitutional in nature take no priority over regional laws.
Private law is divided into general private law applicable to all persons, and specialized forms of civil law, which are applicable only to certain categories, such as commercial law for businessmen or employment law for employers and employees. The major part of what is considered general private law is regulated in a comprehensive private law code called the Allgemeine Buergerliche Gesetzbuch (ABGB) which was enacted in 1811 and came into force in 1812. Through the first significant amendments in the years 1914, 1915 and 1916, parts of the ABGB were adapted to the German Bürgerliche Gesetzbuch of 1896. Further important amendments, especially concerning the “Familienrecht” (Family Law), were made in the seventies. Other parts of general private law are regulated in separate laws like the “Ehegesetz” (Marriage Act), “Mietrechtsgesetz” (Act on Tenancy law) and the “Konsumentenschutzgesetz” (Consumer Protection Law).
Although case law is not legally binding, it does have decisive persuasive authority.
A number of fundamental principles, all of which originate from Roman law, form the basis of Austrian Private Law. The principle of Privatautonomie (individual freedom) is the freedom to pursue legal relations in the form and manner determined by the parties. Said principle is expressed more precisely in the principle of contractual and testamentary freedom (Vertragsfreiheit) which includes the freedom (i) over the form of the contract, (ii) the content of the contract, and (iii) to dissolve a contract. A further fundamental principle is the principle of consensus (Konsensprinzip), which provides that any change in the legal position can only be achieved by consent. Any contract infringing good mores will be deemed void according to Section 879 ABGB. Good faith is protected by Section 367, allowing those in good faith to acquire from bad faith or non-entitled possessors.
Legal Capacity - Any natural or legal person is able to bear legal rights and obligations. Different forms of legal persons are recognized, such as a corporation or a trust or certain legal persons, under public law. As far as natural persons are concerned, contractual capacity is limited according to age and certain other individual circumstances.
Contracts - To establish a valid and binding contract between parties, the following prerequisites must be satisfied: contractual capacity, consensus of the parties, intention, possible and acceptable content, and if required the observation of formal requirements. A defect in any one of these elements will either render the contract void or give rise to a right to rescind the contract. In case of a party's insufficient performance the non-breaching party's remedies vary from price reduction to - e.g. if the defect cannot be corrected and essential to the contract - collection of the goods and rescission.
Torts - The ABGB provides a uniform system applying to both contractual and tortious damages. According to Sections 1293 et seq. ABGB, that person that caused damages to another person or property shall be liable to compensate this damage to the extent of restoring the previous position of the other party if: (i) the damages would not have occurred but for the party's conduct or omission; (ii) that conduct or omission was unlawful and fault on the part of the person causing the damages is established.
Business Associations - A general division between the types of business associations that can be drawn are partnerships and corporations. The main distinction between the two types is that the latter confers only limited liability on its members. Austrian law knows two types of corporations: (i) Aktiengesellschaft" (joint stock corporation) and (ii) Gesellschaft mit beschränkter Haftung (limited liability company). An Aktiengesellschaft can be a private or a public company. It is managed by a management board (Vorstand), which is appointed and supervised by a supervisory board (Aufsichtsrat). The corporate form of a limited liability company is simpler and more widely used. Only large limited liability companies require a supervisory board. All corporations must be registered in the Commercial Register, which provides publicly available information about every corporation. Foreign corporations may establish branch offices in Austria, which must also be registered in the Commercial Register.
Substantive criminal law (i.e. those provisions concerned with the crimes themselves rather than the criminal process) is the branch of public law that defines criminal acts and sets out the respective criminal penalties. Criminal law is a broad concept, and it includes as a separate sub-category, the so-called "non-criminal" penal law (concerned with administrative crimes and disciplinary penalties). Thus, within the concept of criminal law, one differentiates between judicial criminal law and administrative criminal law depending on whether the criminal law is to be enforced by the courts or by the administrative authorities. The law is thus determined by the relevant body. The law must, however, comply with the provisions of the constitutional laws which allocate the criminal justice to the courts.
The requirements of culpability correspond to an arbitrary (a reflex movement would for example not be seen as arbitrary), factual (it must be a standard fact), unlawful and culpable (the act must be linked to the offender; he must have some responsibility for it) behavior which can be threatened by legal sanctions. An act can only fulfill the requirements of culpability if it satisfies all the characteristics of a type of crime as provided for by the law ("no punishment without a lawful justification"). The elements of a crime (offences: tort and crime) are regulated either by the Austrian Criminal Law (StGB) or in one of the instruments of secondary legislation. Through the Constitutio Criminalis Theresiana, which came into effect in 1768, Austria finally had a uniform, substantive criminal and criminal proceedings law. In 1804, a new law came into effect, which was amended in 1852 and for a greater part remained valid till 1974. In 1974, the StGB came into effect. Important amendments, especially concerning juvenile court law and the law governing sexual offences, were made in the eighties.
The criminal procedural provisions regulate the procedure for determining whether a suspect has committed a crime and whether, as a result, a sanction should be imposed on him. These provisions are contained in the Austrian Criminal Procedure Law (StPO) and in secondary legislation. The provisions regarding the preliminary criminal proceedings on the imposition of a remand in custody or on the carrying out of an asset seizure, house search or telephone surveillance are also regulated there.
The Fair trial principle and the principle of the presumption of innocence (the accused remains innocent until his guilt is proven) are guaranteed; the accused must be acquitted if some doubts persist due to some arguments indicating that he is guilty and others indicating the opposite (Principle in dubio pro reo). Some of the principles of criminal law, like the public principle or the speech principle, which the Constitutio Criminalis Theresiana did not do justice to, were implemented in 1873 through the code of criminal procedure.
All jurisdictions in Austria proceed from the Federal Republic. Verdicts and findings are proclaimed and published in the name of the Republic. Austrian Law draws a basic distinction between two principal jurisdictions: (i) tribunals and courts concerned with public law matters, and (ii) the courts of ordinary jurisdiction.
The Supreme Court of Justice (Oberster Gerichtshof – OGH) is the final instance in civil and criminal proceedings (Art. 92 Para.1 of the Federal Constitution) and hence the supreme institution of ordinary jurisdiction (Sec.1 Para.1 of the Supreme Court Act). Accordingly, it would be in breach of the constitution to establish a further instance above the Supreme Court of Justice for civil or criminal cases. However, that does not mean that an appeal must lie to the Supreme Court of Justice in all ordinary judicial proceedings.
The Supreme Court sits in civil and in criminal cases in panels (currently 17 panels; 11 in civil cases, 5 in criminal cases, one panel as a Superior Court for anti-trust cases).
A simple panel has to be enlarged by the addition of six further members of the Supreme Court (enlarged panel) if following submission of the report, it holds by ruling that a decision on an issue of fundamental importance is to depart from the Supreme Court's established court practice or from the last decision rendered on the issue by an enlarged panel, or that a legal issue of fundamental importance has not been given a uniform answer in the court practice of the Supreme Court.
As part of overall ordinary jurisdiction, the Supreme Court performs a comprehensive guiding function consisting of the safeguarding of legal unity, legal certainty, and the development of the law.
In civil cases, the Supreme Court decides above all on appeals. An appeal is subject to statutory limits based for instance on the value of the matter at issue decided by the appeal court, on the importance of the legal question in the proceedings in question for unity of the law, legal certainty or the development of the law, an admissibility declaration issued by the appeal court, or the assertion of certain grounds for granting leave for an appeal to the Supreme Court. Where admissibility of the appeal to the Supreme Court depends on the amount at issue, this amount must in any event exceed € 4,000.
In criminal cases, the Supreme Court primarily decides on nullity appeals and associated appeals, as well as on nullity appeals filed by the Procurator General to uphold the integrity of the law, on appeals regarding fundamental rights, and other appeals against individual rulings of the superior provincial courts.
In addition to the ordinary jurisdiction, the Supreme Court also has a number of other functions (e.g. opinions on draft legislation; final employment and disciplinary court for judges; final instance in disciplinary proceedings against notaries; …)
The Constitutional Court (Verfassungsgerichtshof - VfGH) is the highest state body in Austria when considering constitutional law. By their decisions, the constitutional justices create legal certainty for federal and state legislators, for the administration, as well as for every individual. This is their core responsibility. The Constitutional Court is also one of the highest political bodies in Austria. Sometimes the justices of the Court have to make decisions that carry extensive political consequences. As a court, it cannot take action on its own; however, it is required to make a decision if it is called on to do so by a permissible application. The opposition is thereby given the opportunity to oppose a law, which it thinks may be unconstitutional. A review of legislation is also possible if the Court, while reviewing a particular case, has some doubt as to the constitutional validity of the law.
Its task is to protect the civil rights of the citizens and to ensure that legislation is in conformity with the Austrian Constitution. Citizens may apply to the Constitutional Courts if acts of a public authority directly violated any of their personal rights granted by the Constitution. The Constitutional Court also adjudicates conflicts: (i) in the legislative competences between the federation and the federal provinces; (ii) between courts of ordinary jurisdiction and administrative authorities and/or courts of public jurisdiction; (iii) between itself and the Administrative Court (Verwaltungsgerichtshof - VwGH).
The Administrative Court (Verwaltungsgerichtshof – VwGH) monitors the legality of administrative acts. It is limited to controlling the legal justification of individual decisions, while appeals regarding violation of rights guaranteed by constitutional law or the application of unlawful general norms have to be addressed to the Constitutional Court. Appeals to the Administrative Court are of the following types: "appeal against a notice of an order or a decision" ("Bescheidbeschwerde"): open to all persons who claim that their subjective right has been injured by an official notice ("Parteibeschwerde" - "party appeal") and to certain state organs in specific cases determined by law in order to maintain control of the objective legality of the administration ("Amtsbeschwerde" - appeal on the part of an administrative authority); a "default appeal" ("Säumnisbeschwerde") can be lodged by any party to administrative proceedings to claim that an authority has failed to meet its obligation to deliver a decision within the legally stipulated time; another type of appeal is the "appeal against an official instruction" ("Weisungsbeschwerde").
The courts of ordinary jurisdiction deal with all matters outside the competence of the public law courts, i.e. matters of private law, criminal law, as well as aspects of competition law.
Courts of first instance - Depending on the facts of the case, such as the amount claimed in civil cases or the type of offense in criminal cases, the case falls within the jurisdiction of either a District Court (Bezirksgericht) or a Regional Court in the first instance. If the first instance court is a District Court, decisions are taken by a single judge. The district courts have jurisdiction in lawsuits where the value does not exceed € 10,000 and in cases that have been assigned to them by law, such as family law and rental matters, and in criminal law on all offences that are liable to a fine or a prison sentence that does not exceed one year. On the other hand, the composition of the Regional Court in criminal matters differs according to the nature of the proceedings and the possible penalty. It may also be constituted as a Schoeffengericht with two professional and two lay judges, or a Schwurgericht with three professional judges and a jury of eight people. Regional courts decide in all cases that are not assigned to the district courts.
Courts of second instance - In civil matters where the case was initially brought before a District Court, an appeal must be made to a Regional Court. Where a Regional Court already decided in the first instance, decisions must be appealed before a Province Court (Oberlandesgericht). The four province courts in Austria are in Vienna (for Vienna, Lower Austria and Burgenland), Graz (for Styria and Carinthia), Linz (for Upper Austria and Salzburg) and Innsbruck (for Tyrol and Vorarlberg). On the other hand, in criminal matters, the Province Courts are always the second instance courts.
Supreme Court - The Supreme Court (Oberster Gerichtshof - OGH) is the highest court in civil and criminal cases. It has 6 Senates for criminal cases, 10 for civil cases and 2 additional for labor cases and social cases. The Supreme Court hears cases at last instance only. The composition of respective Senates depends on the importance of the matter brought before the Supreme Court. In criminal cases the Supreme Court will only hear appeals for nullity against a guilty verdict of a Schoeffengericht or a Schwurgericht or an appeal against the penalty.
The Legal Information System of the Republic of Austria is a computer-assisted information system on Austrian law, which is coordinated and operated by the Austrian Federal Chancellery. Its beginnings date back to 1983 when the essential features of the system were designed. After federal legislation had been incorporated into the system, decisions of the supreme courts started to be included. A section of the Legal Information System offers a selection of important Austrian laws in English translation.
The Legal Information System contains the following databases: Federal Law Gazette (Bundesgesetzblatt), Draft bill, Government bill, Federal law, State Law Gazette, Municipal law, European Community Law, Case-law documentations, Instruction edicts, Instruction edicts of the Federal Ministry of Justice, and Austrian laws in English.
The federal law database covers 99% of Austrian federal law. Amendments are incorporated as soon as they are promulgated so that the database always contains the applicable version of a document (one document: 1 section or 1 article or 1 annex). In addition to the applicable version, many norms also offer the opportunity to access previous versions, making it possible for the user to reconstruct the development of the regulation.
As a result of the cooperation with the office of the State (regional) government, the State Law Gazette contains all issues of the State Law Gazette of all the Austrian Provinces in their original versions. The Municipal law database contains the laws of some Austrian municipalities. The database also contains selected municipal laws of Austrian Provinces.
The European Community Law Database (CELEX) contains the European Community law. The Austrian Federal Chancellery receives the data from The Office for Official Publications of the European Communities. The CELEX database is made up of the following sections: treaties, external relations, secondary legislation, complementary legislation, preparatory works, case law, national measures, parliamentary questions, consolidated texts (at present time there are no documents available), official journals (C-series), and EFTA documents.
Case-law is now a third key component of the Legal Information System. The databases contain both the legal principles and the full text of the rulings. The database contains the case-law of the Constitutional Court (nearly all rulings since 1980), the Administrative Court (comprises nearly all its decisions since 1990; substantial rulings are also available from previous years), of the Supreme Court (decisions of civil and criminal law), the Independent Administrative Tribunals (selected rulings since 1991), the Independent Federal Asylum Board (selected rulings since 1998), the Environmental Senate, the Procurement Review Authorities (rulings of the Federal Public Procurement Review Authority, the Federal Public Procurement Arbitration Body since 1997 and the Procurement Review Authorities of Salzburg and Vienna since 2004), the Data Protection Commission, the Federal Communications Board, the Appeals Tribunal and Supreme Disciplinary Commission (case-law on disciplinary matters and matters pertaining to employee transfers in the Federal Government since 1999) and the Supervisory Tribunal for Employees' Representation (case law on matters of employees' representation).
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Ø Rill / Schaeffer, Bundesverfassungsrecht. Vienna: Verlag Oesterreich, 2001 (lose leaf)
Ø Rummel, Kommentar zum Allgemeinen bürgerlichen Gesetzbuch. 3th edition. Vienna: Manz, 2000-2007.
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Code of Civil Procedure
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Code of Criminal Procedure
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Labour Law and Industrial Relations in Austria
Strasser Rudolf - Manz Verlag
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Company Law & Accounting in Austria
Andrewitch / Hammerl / McFerren / Prachner / Simon
A translation of the related provisions of the Commercial Code, etc.
Manz Verlag, 1995, 316 Pages, ISBN: 3214002163
Austrian Labour Law
Goldmann Henry / Komar Andrea / Unterweger Josef
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European Tort Law 2002
Koziol Helmut / Steininger Barbara
Tort and Insurance Law Yearbook
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Legal English: German/English - English/German
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The Austrian Banking Act and the Austrian Financial Market Authority Act
Special Issue for the Österreichische Nationalbank
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The Austrian Privatstiftung
Bank Privat AG, 2002
Games of Chance in the EU and in Austria
Law - Internet - Social Aspects
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The Austrian Legal System
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Introduction to Austrian Constitutional Law
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