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Legal tech: contract generator permissible

This post is also available in: Deutsch

An electronic generator of legal documents does not violate the Legal Services Act. This was decided by the 6th Civil Senate of the Cologne Higher Regional Court in its ruling of June 19, 2020 and amended a different ruling by the Cologne Regional Court.

The Hanseatic Bar Association of Hamburg had filed a lawsuit against the product distributed by a legal publisher. The program is aimed at non-specialist audiences. With its help, consumers can create legal documents, especially contracts, in different areas of law after being guided through a question-and-answer catalog. Among other things, the publisher had advertised the product with the statement that it produced “lawyer-quality legal documents” and was “cheaper and faster than the lawyer.” The bar had objected to both the advertising and the product. It was of the opinion that the program provided legal services reserved for the legal profession (§§ 2, 3 RDG). In contrast, the publisher had argued that the contract generator worked in a similar way to the programs for preparing tax returns that have been established for many years. The target group is people who draw up their contracts themselves without the help of a lawyer and who have previously relied on printed forms and samples.

The 6th Civil Senate of the Cologne Higher Regional Court dismissed the action and amended a different judgment of the Cologne Regional Court. In justification, the Senate essentially stated that no prohibition could be derived either from the wording or from the legislative history of Section 2 ( 1) RDG. In its “” decision, the Federal Court of Justice had also spoken out in favor of a generous approach against the backdrop of deregulation and liberalization of the legal services market. The protection against unqualified legal services intended by the Legal Services Act does not require the prohibition of the program. In individual cases, contract drafting may be a supreme discipline of legal advice. A document generator, however, merely extends the existing range of aids, such as templates or form manuals, for handling one’s own legal affairs on one’s own responsibility by adding an obvious digital option. Protection against unqualified legal advice would only have to be guaranteed where legal advice was actually or ostensibly given. However, it is readily apparent to users that the document generator combines predefined word modules according to a question-answer scheme and that the result depends on the quality of the modules and the logical links specified in the program on the one hand, and on the correctness, meaningfulness and consistency of the user’s own selection decisions on the other.

With regard to the requirements of Section 2 ( 1) RDG, the Senate stated, inter alia: According to the provision, only an “activity in concrete third-party matters is prohibited as soon as it requires a legal examination of the individual case”. The requirements were not fulfilled. The program itself does not develop any “activity” within the meaning of the provision. An “activity” namely requires a human or at least thinking activity. In contrast, a purely schematic subsumption process that works through predefined yes/no decision structures does not fulfill this requirement. Whether this was to be assessed differently with the use of genuine artificial intelligence was not to be decided. The programming of abstract legal decision trees is an activity, but it does not concern “concrete” foreign matters. Moreover, the legal evaluations incorporated into the program did not concern a “legal examination of the individual case,” but rather a multitude of conceivable cases. The program runs recognizably according to a fixed routine in a question/answer scheme, with which a fact is inserted into a given grid. Strictly logical procedures that always lead to the same unambiguous results are therefore also not to be evaluated as an objective legal examination within the framework of a legal subsumption. After all, the customers who used the program were not acting on “someone else’s” behalf, but on their own. It is clear to anyone who actually uses the program that they do not receive legal advice when selecting the options, but rather insert a life issue into a predefined grid on their own responsibility, while a purely schematic yes-no code is executed in the background.

In the first instance, the publisher had also been prohibited from advertising the product with statements such as “Cheaper and faster than the lawyer” and “Legal documents in lawyer quality”. The publisher withdrew its appeal against this after being advised to do so by the Senate, so that this ban has already become legally binding.

The Senate allowed the appeal on the grounds of the fundamental importance of the matter.


Marian Härtel

Marian Härtel

Marian Härtel is a lawyer and entrepreneur specializing in copyright law, competition law and IT/IP law, with a focus on games, esports, media and blockchain.


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