Understanding dismissal protection lawsuit costs is essential when you receive a termination notice. Many employees hesitate to file a claim because they fear the financial risk. Yet the costs of a dismissal protection lawsuit are manageable in many cases – depending on the value in dispute, they typically range between €3,400 and €4,200. But what exactly lies behind these figures? This article explains which cost items you can expect and how to better assess the financial risk.
Dismissal Protection Lawsuit Costs: Figures and Facts
The €3,400 to €4,200 mentioned above are not a fixed fee, but a typical order of magnitude for proceedings before a German labor court. The actual costs depend on the so-called value in dispute (Streitwert), which is based on your gross monthly salary. It is customary for the value in dispute to equal three gross monthly salaries if no additional claims – such as continued employment or a reference letter – are added. With a gross salary of €3,000, that yields a value in dispute of €9,000 – and the fees are calculated from that amount.
Important to understand: These costs are not due immediately. They arise only if the case actually goes to trial. Many proceedings end after the first instance or even via settlement, so the final costs can be lower. Nevertheless, you should know the full risk before filing suit.
Another factor is the duration of the proceedings. A dismissal protection lawsuit can take several months to over a year, depending on whether an appeal is filed. During this time, additional costs may arise – for example, for witnesses or expert opinions, though these are relatively rare in employment law. Planning certainty is therefore a key factor when deciding for or against legal action.
Which Costs Arise for Employees in a Dismissal Protection Lawsuit?
Broadly speaking, the costs fall into two blocks: attorney fees and court fees. If you lose, you must also reimburse the employer’s attorney fees. We break down each item so you can better understand the dismissal protection lawsuit costs.
Attorney fees are governed by the German Attorneys’ Fees Act (RVG) and are tiered according to the value in dispute. The higher the value in dispute, the higher the fees. At a value in dispute of €9,000, attorney fees for the first instance – including the hearing fee and expenses – amount to roughly €1,500 to €2,000. You can use these figures as a reference point for your planning.
Court fees are comparatively moderate. For a first-instance proceeding before a labor court, fees likewise depend on the value in dispute. At a value in dispute of €9,000, court fees usually range between €200 and €400. The court invoices these costs once the proceedings are concluded – regardless of the outcome.
Additional costs for an out-of-court settlement may also arise. If you reach a settlement before the labor court, a settlement fee for the attorney applies, which is often more than offset by the saved time and the secured severance payment. Here, too, the exact amounts depend on your individual case.
Attorney Fees: What Does Representation in an Employment Law Proceeding Cost?
Attorney fees are the largest item in the cost risk of a dismissal protection lawsuit. They consist of several fees: the procedural fee, the hearing fee, and – in case of a settlement – the settlement fee. The exact amount depends on the value in dispute, but also on whether the attorney acts out of court or only in court.
Example: At a value in dispute of €12,000 (i.e., a monthly salary of €4,000), attorney fees for the first instance are approximately €2,000 to €2,500. Added to this are costs for a possible conciliation hearing that precedes the trial. Many attorneys offer an initial consultation at a fixed price, often between €200 and €400 – this can help you assess the risk before committing.
It is important to know that if you win, you are entitled to reimbursement of your attorney fees by the employer – but only up to the statutory amount. If your attorney charges more, the difference remains your responsibility. It therefore pays to clarify fees transparently in advance. A good specialist lawyer for employment law will disclose the expected costs before you engage them.
Another point is value-added tax: Attorney fees include the statutory 19 % VAT, which you cannot deduct as a private individual. This increases the actual burden once more. You should factor this into your calculation as well.
Court Fees: An Overview
Court fees are low compared to attorney fees. They are calculated under the German Court Fees Act (GKG) and are likewise based on the value in dispute. For a first-instance labor court proceeding, a fee generally applies that – at a value in dispute of €3,000 to €10,000 – falls between €200 and €400. At higher values in dispute, the fees rise accordingly.
These costs are initially borne by the plaintiff – i.e., the employee who files the suit. However, the court only invoices them at the end of the proceedings. If you win, the employer can be ordered to reimburse the court fees – then you do not have to pay them yourself. If you lose, the costs remain with you.
A special case is the settlement: If both parties agree, court fees are usually split equally. This is common practice in employment law and can significantly reduce the financial burden. Many employees underestimate the dismissal protection lawsuit costs until they see the invoice – yet a settlement often allows the risk to be contained.
What Happens If I Lose the Case? The Full Cost Risk
The biggest concern for many employees is the risk of losing. If you lose the dismissal protection lawsuit, you bear not only your own attorney fees and the court fees, but also the employer’s attorney fees. This can push the total costs up considerably.
In the example above with a value in dispute of €9,000, the full cost risk could look like this: your own attorney fees (approx. €1,800), court fees (approx. €300), and the opposing party’s attorney fees (again approx. €1,800) – together roughly €3,900. This matches the mentioned range of €3,400 to €4,200. At higher values in dispute, the risk rises accordingly.
There are ways to limit the risk, however. Many employees take out legal expenses insurance that covers the costs – but caution: In employment law, benefits are often limited, and waiting periods apply. Alternatively, you can agree a fee arrangement with your attorney that shares the risk. And finally, there are litigation funders like RechtStark that assume the cost risk.
Another aspect is the possibility of avoiding a loss by pursuing a settlement early on, for instance in cases of unfair dismissal with sham termination reasons. In many cases, the employer is willing to pay a severance if they want to avoid the risk of a lengthy proceeding. Here, an experienced attorney can act as a mediator and find a solution acceptable to both sides.
How RechtStark Helps Employees Manage the Cost Risk
RechtStark is a litigation funder specializing in dismissal protection and severance claims. We cover the costs of your proceedings – i.e., attorney and court fees – and bear the risk if you lose. You pay only if you win, and even then only a pre-agreed share of the severance payment obtained.
This means: You can pursue a dismissal protection lawsuit without risking your savings. We assess beforehand whether your claim has prospects of success and take on only cases where we see a realistic chance. This lets you focus on what matters – negotiating your severance – while we carry the financial risk.
If you want to learn more about your options, also read our article on using litigation risk as a negotiating lever or inform yourself about the waiting period for unemployment benefits, which can also play a role. Every case is individual – always consult a specialist lawyer for employment law before making decisions.
The dismissal protection lawsuit costs are therefore no reason to waive your rights. With the right preparation and, if necessary, support, you can minimize the risk and preserve your chances of a severance payment.
Note: This article is for general information purposes only and does not replace individual legal advice. For a free initial assessment of whether litigation funding may be an option for your case, you can contact RechtStark.