Court decisions on “wenigermiete.de”: Legal situation relating to Legal Tech companies in tenancy law remains unclear

In two recent decisions, Berlin Regional Court dealt with the activities of a Legal Tech company. The court divisions adjudged the company’s legal competencies and the effects of the application of Legal Tech contrary to each other. The legal situation remains unclear.

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Computer programs that automate legal work are considered part of Legal Tech. Lexfox GmbH (until February 12, 2019: Mietright GmbH) operates the wenigermiete.de platform and uses Legal Tech to offer tenants a quick assessment of their chances to prevail in tenancy disputes. Tenants enter data about the apartment and the lease contract in an online rental price calculator and are offered a result showing potential claims. In return for a contingency fee, they are then supported in enforcing the (alleged) claims.

In two decisions, Berlin Regional Court adjudged the company’s competencies and the impact of Legal Tech in legal advice contrary to each other. In its January 15, 2019 judgment (Case No. 15 O 60/18), the 15^th Division of Berlin Regional Court mostly dismissed an action for an injunction brought by the Berlin Bar Association against the activities of the Legal Tech company. The judges denied that the company had infringed the Legal Services Act. They did not consider the use of the online rental price calculator to be a legal service, but a mere comparison of data. From the court’s point of view, the company’s remaining activities are permitted as authorized debt collection.

The 67^th Division of Berlin Regional Court assessed the legal situation entirely differently in a judgment dated January 24, 2019 (Case No. 67 S 277/18). The judges affirmed the existence of a legal service since legal advice is provided on a case-by-case basis. From the point of view of these judges, no other assessment is justified by the use of Legal Tech.

The judges also considered the company’s debt collection authorization to be insufficient, as expertise is necessary for advice on tenancy law that a debt collection service provider does not have. The assertion of the tenant’s claims by the company failed.

Practical tip:

Legal Tech is also a good approach in tenancy law to keep costs and efforts of legal advice low. There is still no legal certainty regarding the use of Legal Tech by legal service providers, however. Even two divisions of Berlin Regional Court hold entirely different views. Legal Tech companies are therefore rightly pushing for legal clarification. Ultimately, Legal Tech will not be able to entirely replace the legal examination of individual cases in complex German tenancy law anyway, but will merely supplement it.