What is this article about?
Are you currently involved in a legal dispute and need specialist expertise? Are you wondering how much an expert report will cost when it comes to machines? In this article you will not only find out what costs are incurred for court reports. You will also receive information about the costs of machine appraisals commissioned by the party and what factors influence this fee.
An expert report may be necessary in mechanical engineering in various legal disputes, such as in the case of machine damage, determining the amount of damage or determining the cause of the damage. The expertise of an expert and court expert can be crucial in clarifying the facts of the case and helping the court reach a verdict.
When estimating the costs of court reports, various factors play a role, such as the time required, travel costs, the technology to be used, the time required for completion and, if applicable, the number of experts required. All of these factors must be taken into account when determining the costs.
Find out more about the costs of court reports and expert reports commissioned by industrial companies, commercial companies and insurance companies. Don’t be put off by the cost, make sure you get the best technical expertise as a machine appraisal to protect your legal interests.
Why an expert report may be necessary in mechanical engineering
An expert report in mechanical engineering is indispensable in various situations. As a rule, expert reports are commissioned by three different clients:
- Industrial companies or commercial companies: commission for different reasons and at different times. These may concern questions when initiating a technical-legal dispute. It can also be after a technical problem occurs or when technical aspects are being clarified when the company is confronted with technical and legal allegations.
- Insurance companies usually commission after the damage has occurred. This often involves the key points of cause, responsibility and the amount of damage.
- Courts commission this if there is a decision to take evidence and technical issues in the field of mechanical engineering, machines and technically related areas are to be clarified in a binding manner as part of a legal dispute or an independent evidentiary procedure .
You can find an overview of some topics here:
Costs for court reports
The costs for expert reports for courts are calculated according to JVEG.
The JVEG is a German law that regulates the remuneration and compensation of persons who work within the framework of the judiciary, in particular experts, interpreters, witnesses and other persons who act on behalf of the judiciary.
The JVEG sets out the principles and rules for the remuneration of these people who, for example, appear as experts in court, testify as witnesses or act as interpreters.
It contains detailed provisions on the level of remuneration, travel costs, expenses and other aspects that must be taken into account when compensating people in the context of justice.
JVEG
The current JVEG is from 2021. The basis was a market analysis carried out in 2018. Furthermore, the judiciary has taken into account a so-called “judicial discount” of 5%, on the grounds that the state is “a good client”.
The legislature wants experts to bill their time expenditure to the minute.
Hourly rates for “expert reports, court costs”
This means that the hourly rates in the JVEG should represent the average hourly rates in the respective specialist area from 2018. Then a discount of 5% was also taken into account.
The supposedly average hourly rates per specialty in 2018 are at least six years old and have since been reduced in relation to the average. The costs for court reports are therefore based on hourly rates that are too low.
The different hourly rates for the many subject areas are contained in “Appendix 1 to Section 9 Paragraph 1 Sentence 1 JVEG”.6
Hourly rate for “machinery and systems”
According to Section 24.4, including the judicial discount, the hourly rate set in 2018 and valid since 2021 is €130.00 net.
Hourly rate according to JVEG §13 paragraph 1 or paragraph 2
According to JVEG §13 para. 1 request a higher hourly rate. This is granted if either
both parties or one party and the court agree to this hourly rate.
However, consent should only be granted if twice the permissible fee, i.e. €260.00 net in the area of “machinery and systems” for the court expert’s hourly rate is not exceeded.
Experts also regularly use this application when working on behalf of courts because
the hourly rate in the court order is simply well below the usual market hourly rates
lies. Without this application, the costs for court reports, all other things being equal, are always cheaper than if ordered by the party.
Additional costs
The following will continue to be paid:
- reimbursement of travel expenses,
- Flat rate per kilometer when traveling with your own or rented car,
- parking fees,
- Rail for the use of 1st carriage class and all associated costs as well as the costs of using public transport;
- Hotel costs if an overnight stay away from home is necessary;
- Reimbursement for other expenses such as
- Costs of necessary representatives and necessary accompanying persons,
- Making copies and printouts,
- …
Price increases and JVEG
Figure 1 shows the price increases with reference to the data from the Federal Statistical Office for Consumer Prices in Germany ( Federal Statistical Office (Destatis), 2023 | As of: December 31, 2023 / 5:39:40 p.m. ).
This data was simply converted so that 2018 represents the base at 100%. Finally, in 2018, the respective “ average hourly rate ” for experts was determined for different specialist areas.
You can see that the price increases in the comparison between 2023 and the year of the survey were already almost 20%.
The hourly rate according to JVEG for experts in the area of “ machinery and systems ” was determined to be €130.00 net, with reference to the supposedly determined average hourly rates for 2018, including the judicial discount. Without the judicial discount, this average rate would have been €136.50 in 2018. I don’t know anyone who, as an expert, only claimed an hourly rate of €136.50 net for party reports in mechanical engineering in 2018. The hourly rates for full-time and professional experts were already higher in the “machinery and systems” area.
The vertical line in Figure 1 indicates the starting point of the current JVEG. Taking into account the price increases, the hourly rate should have been significantly higher, even with a “judicial discount”, based on the average costs determined. Taking into account the price increases in the meantime and assuming that the average prices in the “ machinery and systems ” sector from 2018 actually represent the average, which I clearly doubt,
Today’s hourly rates for court reports in the area of “machinery and systems” would have to be between €155.00 and €165.00 net.
Summary court hourly rate
The court hourly rate in the “machinery and systems” area was already determined to be too low in 2018 and is also provided with a judicial discount. Today’s rates based on 2018 have been anchored in the JVEG since 2021. Only on this basis would court hourly rates have to be significantly higher today due to the increase in costs. According to JVEG, the costs for court reports are not based on real market prices.
For this reason, most experts also make an application for an increased hourly rate in accordance with JVEG § 13 para. 1 or paragraph. 2 use.
Further information can be found in Section 7 “ Important Aspects: Expert Report Court Costs ”.
Hourly rates for party reports
A party report is when an expert has been commissioned to provide a report by one of the parties involved in a legal dispute or other contentious matter. In principle, reports that are not commissioned by courts and public prosecutors are always party reports.
Industrial companies and commercial enterprises
The hourly rates are of course higher than according to the JVEG in the court order and the considerations according to Section 3.1.1 and Section 3.3.
Daily rates plus travel costs and daily rates including travel costs can be agreed.
Insurances
Insurance companies often commission expert reports, particularly in the case of liability claims. Then the topic is often about the following questions:
- What is the cause of the damage?
- Who is responsible for that?
- How high is the amount of damage?
In analogy to industrial companies and commercial enterprises, the hourly rates are also higher than according to the JVEG in the court order.
Most insurance adjusters offer slightly lower hourly rates than commercial and industrial companies.
This has the following reasons:
- Insurance companies are very often regular customers who commission on a regular basis.
- Insurance companies very rarely have the time pressure that almost always exists when carrying out expert work for business and industry.
- The liability risk is higher than in court orders, but lower than in orders from industrial companies and commercial enterprises.
Expenses and additional costs
Expenses and additional costs will be passed on to the client for both party reports and costs for court reports (Section 7).
These are usually the following costs:
- Traveling expenses,
- Own car with flat rate per kilometer,
- Rental car including all additional costs,
- Train travel always 1st class,
- Flights:
- Standard if flight duration is less than 4 hours, otherwise
- Business class.
- Hotel costs: A business hotel is booked for business travelers with at least
- four stars in the Federal Republic of Germany and
- five stars abroad.
Examples of “expert reports on court costs”
Since the costs for court reports and party reports always depend on the individual case, I will only mention two exemplary examples here.
Example 1: Attendance at the hearing of witnesses on behalf of the court
Publicly appointed and sworn experts are also summoned by courts to examine witnesses in complicated and obscure technical cases. In the present case, the amount in dispute for a machine that was said to be defective was around €20,000.00 net.
The example lists the costs for the mandated attendance as well as participation in the witness interview and preparation for the appointment:
- Study of files to prepare for the hearing: 3.75 hours;
- Arrival at the hotel (Hannover-Berlin): 3.5 hours;
- Arrival from the hotel to the court, hearing, departure to Hanover: 7.25 hours.
This court activity requires only 14.5 hours, which requires only a small amount of hours.
In addition, there are the travel costs for the Federal Railway 1st class, taxi and hotel costs. The postage costs for returning the file and other correspondence with the court will also be charged. In this case, that amounts to €379.40.
The costs for court reports for this activity amounted to around 11.3% of the value in dispute. Further information can be found in Section 7 “ Important Aspects: Expert Report Court Costs ”.
Example 2: Costs for court reports (written) in the event of machine damage
There was damage to a milling machine. This damage had already been repaired at the time of the on-site judicial inspection.
The evidentiary decision contained “ only ” four questions. To do this, however, it was necessary to measure the geometries on site in order to be able to answer the questions posed in the evidentiary decision using the knowledge gained during the on-site visit as part of analytical investigations. It was a lawsuit with a claimed amount of net damages of €250,000.00.
The following example shows the costs for the commissioned written court report:
- Studying files to prepare for the on-site visit: 11.25 hours;
- Arrival, on-site appointment, departure: 8 hours;
- Interim correspondence with the parties and the court: 1.5 hours;
- Preparation of the written report with analyzes: 31.25 hours.
In addition, there are travel costs for the 1st class federal railway, taxi, five originals of the report for the court and postage costs amounting to €414.81 net.
The costs for court reports for this activity amounted to around 2.9% of the value in dispute. Further information can be found in Section 7 “ Important Aspects: Expert Report Court Costs ”.
Important aspects: Expert report, court costs
Disputes in the area of machines and systems as well as in mechanical engineering are usually associated with high costs. This is because the amounts in dispute are usually high. As a rule, the dispute is not only about a product defect in a machine, but in most cases failure damage is also taken into account because the machine or system could not be used or could only be used to a limited extent due to the alleged defect. In such scenarios, follow-up costs arise, which are then usually claimed and increase the amount of damage claimed.
Figure 4 shows the litigation cost risk for amounts in dispute up to €3,000,000.00 1st instance in court as well as cumulatively for the 1. and 2nd court instance.
So if the amount in dispute is €1,000,000.00, the cost risk for the process is as follows 2nd instance around €115,000.00. If you lose as a party in the first instance with a dispute amounting to €1 million, the legal cost risk is around €45,000.
In addition, Figure 4 shows the estimated costs for an expert report in mechanical engineering in the range of amounts in dispute up to €3 million. A minimum value is given (“SV-MIN”) and an estimated maximum value (“SV-Max”) in the event that the expert report becomes extensive or relatively costly due to the effort involved.
The estimated maximum value (“SV-Max”) takes into account the worst case scenario with the highest costs based on experience. However, it is expressly stated that this is only an estimate.
It must be emphasized again that the lower limit for an expert report in mechanical engineering is also an estimate, but it is much more realistic than the upper estimate.
These are estimates because no expert who is commissioned knows exactly
exactly what activities will be necessary until the report is completed and how much time this will require.
The process cost risk, however, can be determined relatively precisely. In the Federal Republic of Germany, the RVG (“Rechtsanwaltsvergütungsgesetz”) determines the costs.
The costs for lawyers depend exclusively on the value in dispute.
However, one thing must be taken into account in the event of damage in mechanical engineering:
good and successful lawyers do not work according to RVG,
but agree on special remuneration with their clients. In this respect, the costs of high legal disputes for lawyers and thus the legal cost risk, especially in difficult cases and high amounts in dispute, are generally higher than shown in Figure 4.
In general one can state:
The risk of legal costs is almost always significantly higher than the costs for court reports and party reports.
Particularly in the case of large damages with high amounts in dispute, such as those shown in Figure 1 and Figure 2, a
Expert reports are always recommended.
It clarifies technical issues and thus also helps lawyers to carry out legal assessments more objectively.
Figure 5 shows the litigation cost risk in comparison to the “ machine report costs ” for amounts in dispute up to €250,000. You can also see here that the relatively “certain” costs for an expert report are significantly lower than the costs for the litigation cost risk in the first instance. Just in case it is one
- technically complicated case
- extensive evidence and thus
- a lot of time and perhaps also
- high travel expenses
If the maximum consideration is taken, the costs are in the order of magnitude of the litigation cost risk in the first instance.
When the amounts in dispute in mechanical engineering are high, the costs for court reports are always low compared to the risk of litigation costs.
It can also be seen that experience shows that the costs for expert reports at the lower limit do not increase as significantly as the risk of litigation costs.
If the amounts in dispute in mechanical engineering are quite low, an expert report tends to be expensive compared to the amount in dispute.
This was also shown as an example in Example 1 in Section 6.1 of this article.
Costs for court reports and party reports do not depend on the value in dispute.
Therefore, as a party, you must carefully consider whether you need an expert report if the amounts in dispute are low.
For example, if an old machine is to be inspected as shown in Figure 3, the expert costs will be identical compared to the same task on a new machine of the same type. If the current value of the machine is low, the costs for an expert report on an old machine are relatively high. Are the costs for court reports or party reports worth it? The clients have to decide that. A good expert will point out this fact in old machines.
As can be seen in Figure 9, the expert costs or the “costs of machine reports” for small amounts in dispute can exceed the litigation cost risk in the first instance.
Costs of experts commissioned by the party: assumption of costs
As already explained, expert reports are not only required on behalf of courts, but also on behalf of commercial companies, industrial companies and insurance companies.
They are usually commissioned when there is a claim in the area of “ machinery and systems ” or in mechanical engineering.
Damage is understood as meaning
Changes to a product that significantly impair or render impossible one or more of its intended functions.
Damages
According to §249 BGB, the party obliged to pay compensation must restore the situation that would exist if the circumstance requiring compensation had not occurred.
Burden of proof
In the event of a claim, the claimant (“injured party“) is obliged to prove the cause and the amount.
The evidence can be presented via a party report.
Expert report costs
An expert report has a dual function:
- Proof of the reason and the amount as well
- Creation of evidentiary documentation.
The damage caused is determined. If necessary, the causes will be determined and the expected costs of restoring the original condition will be stated. A “usable” party report can be presented to the court or the tortfeasor’s insurance company to assert the claim.
Restoration
According to Section 249 II of the German Civil Code (BGB), the person causing the damage must pay the amount of money necessary to restore the damaged item to its original condition.
In the event of damage, the costs of the self-appointed expert are therefore borne by the person responsible or their liability insurance.
Even though insurers often use experts themselves, having their own expert simply makes sense, as the costs under the German Civil Code (BGB) are corresponding damage items and as the injured party you also have expertise on your own side.
Costs of experts in the event of a loss for parties
Figure 7 shows the basic process. Damage has occurred. The injured party (“ claimant ”) commissions a party report to prove the damage in terms of responsibility, the technical reason and the amount of damage (“ duty of proof ”).
The expert hands over the finished report to his client (“ claimant ”) and invoices the claimant accordingly. This pays the fee bill for the expert report.
If damage has occurred, the claimant can now approach the person responsible and attempt to resolve the matter out of court. The person responsible will usually contact their insurer, often a liability insurer. If the cause and amount of the damage has been clarified and the person who caused it is also responsible for the damage, the insurer will settle the damage in this case and also cover the expert costs with reference to Section 249 II BGB. Then they are
Costs for the expert report on behalf of the party are a continuous item for the claimant.
If the person responsible refuses to do so for any reason, the claimant always has the option of filing a lawsuit. This usually takes place at a regional court, as the costs for damage in the area of mechanical engineering, machines and systems are usually greater than €5,000.00 and regional courts therefore hear such cases in the first instance. In such a case, too, the expert’s fee in the event of damage is a damage item and, if the lawsuit is successful, also becomes a continuous item for the injured client of the party report.
Conclusion and final thoughts
Business and industrial companies know it from everyday life: legal disputes can hardly be avoided and occur again and again. This also applies in particular if one or perhaps several damages have occurred due to machines and systems or with machines and systems as well as in mechanical engineering.
The injured parties often quickly file a lawsuit through their lawyers. In almost all cases it will
“Evidence: expert report”
offered. But how much do court reports cost?
Courts often have “ interesting ideas ” about how much a court report should cost. Even for simple, real-world problems, it is not possible to obtain a simple court report for less than €3,500.00 for problems in mechanical engineering. Section 7 “ Important Aspects: Expert Report Court Costs ” goes into great detail about the costs depending on the amount in dispute.
The costs for court reports are regulated by the JVEG.
However, the costs for court reports are in no way dependent on the amount in dispute in the disputed matter.
That’s the big difference to the costs of lawyers. According to the RVG (Lawyers Remuneration Act), the costs for lawyers depend exclusively on the value in dispute.
In addition, reports are also commissioned as party reports by commercial companies, industrial companies and insurance companies. Here, experts are free to negotiate fees.
However, blanket solutions are not possible with serious collaboration because the effort usually cannot be estimated at the start of the order.
The cost of an expert report depends on the effort and additional costs. It is not possible to estimate these costs precisely in advance as an expert for damage to machines and mechanical engineering.
However, experience already makes it possible to roughly limit the cost framework. Section 7 in particular shows that expert reports are generally always worthwhile in mechanical engineering with regard to the risk of litigation costs for damages of €20,000 or more. It is also the case that as the value in dispute increases, the costs for an expert report decrease significantly compared to the risk of litigation costs and the amount of damage.
The higher the amount in dispute, the more advisable it is to obtain an expert report in mechanical engineering for examination.
On the other hand, as the injured party, you must carefully consider whether it makes economic sense to obtain an expert report in mechanical engineering if the disputed values and damage amounts are low. I am of the opinion that it makes little sense for damages that are less than €10,000.00. Unless you are the client of a party report where the amount of damage is low, you are very sure that the report will be in your own favour.
Furthermore, the costs for a commissioned party report are usually a recurring item for the injured party if the commissioned report determines damage and can be used as evidence within the meaning of Section 249 II BGB.
What is essential is:
Experts are “cheap” compared to lawyers and the litigation risk, especially when the amount of damage is high.
In addition, one must also take into account that good lawyers from large law firms do not work according to RVG and have significantly higher hourly rates than experts in mechanical engineering. This means that the risk of legal costs for parties increases even further if they lose the legal dispute. This is also why it is important as a party to be able to assess as well as possible where you “ technically stand ” in a legal dispute. That’s why I recommend legal disputes over a value of €20,000.00
always to obtain a party report as the injured party.
