Franz Klein (1854-1926)
Peter Lewisch
I
Franz Klein, Viennese law professor and Austrian Minister of Justice, is best known as the drafter of the Austrian Civil Procedural Code (ZPO), a codification that has been praised (by Wolf, epilogue to Zeit- und Geistesstromungen im Prozesse, see Klein, 1958) as ‘the most influential modern civil procedural codification altogether’.
Apart from his rich legal work, both doctrinal and legislative, Klein also engaged in politics towards the end of his life, participating in the St Germain peace negotiations and, however unsuccessfully, leading a political party in Austria’s 1919 general elections. Since historical details regarding the personality of Franz Klein are well documented in the literature (see in particular the contributions in Franz Klein Forschungsband, Hofmeister, 1988), this survey concentrates on those aspects of his legal work that are of interest from a law and economics perspective, most notably his reform of the Austrian civil procedure.II
Klein was ‘Viennese’ throughout his life. Born in Vienna, as the son of an artisan, he enrolled in law at the University of Vienna (1872-76), achieved his PhD (Habilitation) in civil procedural law (thesis: ‘Die schuldhafte Parteihandlung - Eine Untersuchung aus dem Civilprocessrechte', published 1885) in 1883, and subsequently assumed a position in the university administration (Kanzleidirektor). This - in itself quite uninteresting - position granted him enough leisure for scientific work. In 1891, Klein was made an associate professor of civil procedural law at the University of Vienna; in the same year his venia legendi was extended to Roman law.
In 1890-91, Klein published a series of articles in the Juristische Blatter (also published in 1891 as a separate volume under the title Pro Futuro) that explicitly addressed shortcomings of the old, then still valid, Procedural Code.
He related these shortcomings to deficiencies in the institutional design of the old Code and, on the basis of such analysis, proposed avenues of institutional reform, culminating in relatively detailed suggestions for legal change. In the light of his general high academic reputation, but in particular because of his publications, Klein was offered a position as Ministerialsekretar (secretary) in the Austrian Ministry of Justice with the specific task of elaborating and pursuing the reform of the Austrian Civil Procedural Code.Klein held this position from 1891 to 1897. Unlike many other (also Austrian) examples, where large committees of experts tailored new codifications, the Austrian Civil Procedural Code was basically the sole work of Klein. He had clear ideas of the institutional goals to be accomplished, he drafted the Code himself, and he observed the Code subsequently in practice, commenting on various occasions on the success (and on the problems) emerging with the new Code in actual operation. Although during the years that followed various German universities offered chairs to Klein, he had to turn down all such requests because of his legislative work for the Austrian Ministry of Justice, where he was made a leading state official (Sektionschef) in 1895. In 1898, the ZPO was finally enacted.
Klein pursued his legislative work in other areas and twice assumed the position of Minister of Justice (1905-8 and for a short period in 1916). After 1908, he intensified his academic work. Whereas he was highly successful and influential with respect to his theoretical and legislative work, his political efforts failed. Originally proposed as the leader of the Austrian delegation to the St Germain peace negotiations, he was eventually admitted only as its legal counsel and engaged in fruitless disputes with his own Austrian colleagues there. His political ambitions in the Austrian general elections of 1919 for a middle-class democratic party were disappointed; Klein failed to gain a seat in the parliament by only 80 votes.
After suffering several strokes over a number of years, he died in 1926.III
Klein’s legislative work was all-encompassing, covering, inter alia, the legal right of construction (Baurechtsgesetz, 1912), which he considered in relation to state funding of home building, labour law (Handlungsgehilfengesetz, 1910), insurance law and company law. Under Klein’s ministership (1906), Austria enacted the Act on Limited Liability Companies which, however, was mainly a copy of the pertinent German legislation. Klein contributed to an amendment to the Austrian Civil Code (ABGB) and, moreover, to the then acute problem of agricultural indebtedness with respect to legal constraints of mortgages. He published on legal aspects of commercial papers and served as an expert for the League of Nations on the international standardization of cheque law. With respect to criminal law, beginning in 1905, the ministry enacted several regulations for the protection of minors both in criminal proceedings and in criminal enforcement. He himself pursued the reform of the Austrian Criminal Code, but did not accomplish the enactment of a proposed amendment. He also commented on cartel law and, in his famous 1904 speech, argued against a general prohibition of cartels (Klein, 1927, Briefe I, pp. 29ff.). His most important legislative work, however, remains the reform of the Austrian civil procedure.
IV
Klein’s major claim was that a Civil Procedural Code had to be designed such that it would allow for (i) speedy proceedings, (ii) cheap proceedings and (iii) a determination of facts according to actual truth (for an economic analysis of the ‘optimal procedure’, see Tullock, 1980). It is with respect to these major claims that Klein drafted his new Procedural Code.
The foundations of Klein’s legal philosophy and political agenda were eclectic (see Stampfer, 1998). One can identify, though, within his legal thinking, two quite heterogeneous elements. On the one hand, he held dear, as did many of his colleagues at the time, the ideal of the ‘welfare state’.
Whereas he was born in the days of libertarianism and maintained a deep appreciation for the ideals of the constitutional libertarian state, he was convinced that the state had to play an active role in the provision of elementary services, among them the provision of secular justice through a court system. These judicial services, according to Klein, had to be supplied effectively by the state regardless of the social and financial position of plaintiff and defendant. The intellectual sources of this somewhat ‘organic’ concept were twofold: first, Klein was influenced by his academic teacher, Anton Menger, whose collective approach to the law was inspired by turn-of-the- century socialism; second, another academic teacher, Emil Steinbach, represented the monarchic, religious and ‘organic’ (and still socioeconomic) approach to the law. Both influences shaped Klein’s idea of seeing the civil procedure as one component within the modern welfare state (for details, see Sprung, 1979). It is also with respect to this general idea that the new Code emphasized the legal responsibility of the judge for the revelation of factual truth and for a lawful ruling. On the other hand, as regards his concrete work as the drafter of the Civil Procedural Code, Klein was not interested in theoretical principles, but in workable solutions. He is therefore identified as a pragmatic reformer, whose main goal was the improvement of the ‘practical side of the civil procedure’ (Kralik, 1988, p. 89). As such, Klein showed a clear understanding of how legal rules operate. With respect to his analysis of the working properties of legal rules, his methodological approach was individualistic: when discussing the avenues of legal reform, he analysed shortcomings in the actual practice of the old Civil Procedural Code and argued for remedying these deficiencies by deliberate change of the incentives embedded in the legal framework - a change in the legal constraints would generate a change in results.V
Klein’s Civil Procedural Code was a piece of institutional reform. He was well aware of the basic truth in any kind of institutional improvement, namely that there was no feasible way of reform other than starting from the status quo. This status quo, the previous Austrian Civil Procedural Code, was one strongly characterized by adversarial elements, although not of the Anglo- Saxon type. This old Civil Procedural Code was in its substance still the Allgemeine Gerichtsordnung of 1781, amended on several occasions since. In its core provisions, it still reflected the old principles of non-public, non-oral, non-immediate proceedings that granted the parties most of the control over the pursuit of the lawsuit, the judge depending in most of his decisions on their initiative. In particular, the old Code lacked those ‘inquisitorial’ elements that are characteristic of the current one. Klein criticized the working properties of the old Code for leading to proceedings that were inefficient and slow. In his view, the principles that he advocated (speedy, cheap and truth revealing) were not only goals of a ‘good Civil Procedural Code’ as such, but also necessary avenues of reform with respect to the shortcomings under the old legislation. One necessary requirement of the ‘inquisitorial’ type of proceeding was, of course, the oral and ‘immediate’ (unmittelbare) court hearing. This hearing was fully developed in the Austrian Procedural Code only through Klein’s reform. The determination of factual truth was, however, of particular importance to Klein. He was determined to accomplish this institutional task by incorporating ‘inquisitorial elements’ into the still adversarial civil procedure; inquisitorial elements that would grant the judge under the ZPO a far more prominent position than under the German Code.
The above-mentioned elements within Klein’s legislative goal where thus interrelated: the oral and immediate hearing contributed both to the revelation of factual truth and to result-oriented speedy hearings.
In order to further accelerate the speed of the proceedings, Klein also (in part unsuccessfully, however) reduced competences and therewith related dilatory pleas. He also provided relatively short terms for procedural acts (such as for the defendant’s answer to the complaint). Among his, albeit not original, contributions (see Bohm, 1998) was the introduction of the Neuerungsverbot in the ZPO (prohibition on presenting new facts to the court in appellate proceedings). It is this Neuerungsverbot that also provides a clear difference from the German procedure. The driving force behind this institutional device was Klein’s attempt to speed up appellate proceedings by forcing the parties to present the relevant factual information at first instance. At the same time, the Neuerungsverbot was meant to avoid, with respect to proceedings at first instance, the disadvantages of the (old) principle of contingent claims (Eventualmaxime), whereby the parties were forced, at the very beginning of the procedure, to present all theoretically possible factual arguments that either fostered their own claim or weakened the opponent’s position. The Neuerungsverbot has proved successful: it reduced the duration of appellate hearings without prolonging proceedings at first instance. In his writings (1900, pp. 7ff.) Klein examined empirically the success of his procedural reform in terms of duration of hearings: he compared the duration of proceedings under the previous and the new procedural regimes, demonstrating the actual acceleration of lawsuits, as brought about by his reform.VI
As mentioned above, Klein was convinced that, in order to provide for a speedy, cheap and, in particular, truth-revealing procedure, he had to strengthen the ‘inquisitorial’ elements in the Procedural Code. The pertinent Austrian literature emphasizes (and praises) Klein’s concern for a correct determination of facts, in particular by the ‘materielle Prozeβleitungspflicht des Richters' (‘obligation of the judge to direct the proceedings in substance’). Its explicit goal was, as stated in the literature (Kralik, 1988, p. 92), the determination of facts according to the factual truth.
Klein’s basic approach is well reflected in his own writings: he argues (Klein, 1891, p. 12) that the civil procedure deals with given and objectively existent facts; with facts that, by and large, are something static, namely the result of an already completed development, (‘mit einer bestimmten vollendeten Entwicklung... also wieder mit etwas mindestens derzeit Festem''). Hence it was his understanding that there existed a factual truth ‘out there’ to be revealed by the appropriate proceedings (very much along these lines, Klein’s ideas were centred around ‘the determination of true and false in the proceedings’: Klein, 1900, p. 40).
In the light of this, Klein argued that an oral, immediate and ‘inquisitorial’ type of procedure would guarantee a thorough assessment of all merits of the case (Klein, 1958, p. 26):
For a thorough hearing is best provided by the intensive judicial guidance which not rarely is successful in distilling within a short time the relevant facts from the entire bulk of claims, so that the entire attention of all individuals concerned may be concentrated on those few decisive points.
On some other occasion, Klein (1900, p. 6) reports that, as a result of the new type of procedure, the facts of the disputed case are clearly reproduced in the presence of all parties concerned and legally determined without delay (‘das Tatsachliche des Streitfalles anschaulich reproduziert und daraufhin ohne Unterbrechnung zugleich festgestellt wird'~). He continues (ibid., p. 9) by arguing that factual truth and law can more easily be perceived in this light (‘in diesem Lichte man nicht bloβ Wahrheit undRecht viel leichter erkennt').
On the other hand, Klein argues (1891, p. 13) that, if the process by which truth is revealed lies entirely within the parties, the degree of such revelation will be ‘quantitatively reduced’ (‘quantitative Verkurzung'). In the context of the further development of this argument, he also considers the legal evaluation of the facts thus presented. In this respect, he makes the criticism that the adversarial system would grant the parties the right to reduce or change (obviously by collusion) the facts of the case, thereby also altering the pertinent legal interpretation. If this was so, the parties would be given the right ‘to lead the judge to an erroneous or only relatively correct, or imprecise judgment’ (‘den Richter zu einem irrigen oder doch nur relativ richtigen, bzw. ungenauen Urteil zu leiten und zu verhalten,: ibid.). Therefore it is the obligation and duty of the judge to search ex officio for the truth with respect to disputed facts (ibid., p. 18). The judge himself or herself should clarify disputed facts (ibid., p. 20).
In our view, a fair interpretation of Klein’s approach can be made by comparing it to Gordon Tullock’s argument for inquisitorial proceedings: the concepts share the idea that litigation typically involves a clear factual truth ‘out there’, involving a party who is right (and therefore should win) and a party who is wrong (and therefore should lose) and that in adversarial proceedings resources are invested to mislead (see Parker and Lewisch, 1998).
VII
Centred around this basic idea, Klein amended the Austrian civil procedure in several respects. On the one hand, he introduced the (however unsanctioned) obligation of the parties to produce ‘true’ claims and statements at court. On the other hand, the concern for the revelation of factual truth in the proceedings found its clearest expression in the so-called ‘materielle Prozefileitungspflichf (substantive obligation of the judge to direct the proceedings). This discretionary power of the judge is threefold. First, it contains an obligation to direct (advise) the parties (this obligation would, for example, require the judge to ask a party for clarification before turning down a motion). Second, the judge also has the duty to clarify open factual issues: he may oblige the parties to complete their statements or clarify existing ‘inner contradictions’ (so that the parties’ obligation to produce truthful statements at court is ultimately observed). Third, and most important, the judge enjoys ex officio competences to clarify and determine the facts of the case (ZPO, section 183): he may oblige the parties to appear personally at court for purposes of informal discussion of the case; he may oblige the parties to produce pieces of evidence that they have in their hands, namely objects of inspection or documents, provided that the parties have made reference to these documents; he may order the production of existing files (deposited at other courts) or of public documents (deposited with a public notary or public authority) provided that either party has made reference to such documents; he may order the appearance of witnesses at court, and he may require the opinion of experts or order inspection in the presence of the parties. These quite far-reaching competences are limited with respect to (i) documents and (ii) witnesses: if both parties object, the judge may not by himself require this evidence.
The ‘inquisitorial’ elements in the institutional reform of the then existing procedural law must also be seen in the light of feasible alternatives. In this respect, Klein devoted particular attention to the discussion of ‘mutual assistance’ of the parties, in particular the legal obligation to provide assistance to the opponent under the adversarial system: he explicitly addressed the legal devices of interrogatories (discovery by interrogatories) as existing under the Anglo-Saxon system. He discussed this issue along lines congenial to contemporary law and economics, in terms of the ‘monopolistic position’ a party may enjoy with respect to certain facts of the case or the respective evidence (Monopolisierung gewisser Sachverhaltsbestandteile und Beweisstucker). Under the old Austrian Procedural Code, there was hardly any legal possibility of gathering evidence that was located with the opponent (or a third party). Klein, in turn, introduced a relatively complex, though in substance limited, system of mutual assistance in the new Code.
Most illustrative of the direction of Klein’s reform was his conviction of the infeasibility of copying the Anglo-Saxon system and of incorporating it into the then existing Austrian procedure. He considered the concept of mutual assistance of discovery by interrogatories too alien to the Austrian tradition for it to be accepted by the legal community. The infeasibility of reform along these lines necessarily restricted the parties’ legal opportunities to search for and to reveal factual truth in the civil lawsuit. In this respect, the ‘inquisitorial’ elements in the Austrian proceedings provide, to a certain extent, a substitute for the impossibility of a full incorporation of the Anglo- Saxon system.
VIII
If, however, the position of the judge under the ZPO is so prominent, what about selective incentives that would avoid shirking and would induce judges to exercise their rights effectively so that they in fact substantially direct the proceedings? The extent of the involvement of the judge in the pursuit of factual truth does play an important role in the relative attractiveness of the ‘inquisitorial’ system. This fact has been well recognized by the Austrian doctrinal literature: Kralik (1988, p. 92) argues that the energetic and decisive participation by the judge with respect to the gathering of material and evidence is one of the core issues of the entire procedural reform introduced by Klein. But also Klein himself was aware that the true success of his reform depended on actual judicial involvement in the case. To a certain extent, (however small) there exist direct legal incentives (the ‘stick’) for the judge: a violation of the judge’s duty to direct the parties (pursuant to ZPO, section 182) would allow for successful appeal by that party not properly directed by the judge. However, the judge’s pursuit of the case in terms of revelation of factual truth is not subject to direct selective incentives. Klein argued that the judge’s successful direction and management of the case could not have been properly fixed by strict procedural rules: rather, quite the opposite: the more rigorous these procedural rules are, the more passive and guided by mere formalities the judge will be. Despite the necessary dependency on the judge’s temperament and individuality, Klein was convinced that the judges would use the opportunity for initiative and personal involvement, as granted under the new Code. Interestingly enough, he became personally involved in the ‘instruction’ of judges regarding the new Code: he himself gave a series of lectures and published short articles commenting on practical issues in order to familiarize the judges with the Code, its opportunities, duties and, in particular, its reliance on ‘an energetic judge in order to accomplish the goals sought’. Whereas Klein argued that judges had to alter their behaviour in order to make the new Code effective, he mentioned on various occasions that, empirically, such change in behaviour was already to be observed (for example, Klein, 1900, p. 57).
IX
Klein’s economic thinking has found its expression not only in the incentive- oriented tailoring of the Procedural Code, but also on various other occasions. He addressed, inter alia, the relation between macroeconomic growth and the frequency of lawsuits, arguing that an economic upturn would decrease the number of lawsuits (Klein, 1958, p. 28). He also discussed the influence of the interest rate on litigation (ibid., p. 20): if the interest rate was high, then the defendant might be tempted to delay the proceedings on grounds of ‘cheap credit’; conversely, if interest rates were low, the ex lege interest rate of 4 or 5 per cent, as provided in private law, might even be attractive for the plaintiff in terms of regular investment (for a thorough assessment of the role of interest rates on litigation in a law and economics perspective, see Adams, 1981).
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Bohm, Peter (1998), ‘Was will das Neuerungsverbot? Hintergrund, Funktion, Einfluβ auf das ProzeBverhalten in 1. Instanz’ [‘What is the “Neuerungsverbot” for? Background, function, influence on litigation in the first instance’] in Bundesministerium fur Jusitz, P. Lewisch and W. Rechberger (eds), 100 Jahre ZPO — Okonomische Analyse des Zivilprozesses [100 years of Civil Procedural Code - Economic Analysis of Civil Procedure], Vienna: Manz’sche Verlags- und Universitatsbuchhandlung, pp. 238-48.
Bundesministerium fur Justiz, Peter Lewisch and Walter Rechberger (eds) (1998): 100 Jahre ZPO — Okonomische Analyse des Zivilprozesses, with contributions by Martin Schneider, Peter Roth, Gerhard Clemenz, Klaus Gugler, Alex Stomper, Bettina Stomper, Walter Rechberger, Peter Lewisch, Erwin Weissel, Paul Oberhammer, Robert Fucik, Jeffrey Parker, Michael Adams, Hans-Bernhard Schafer, Vienna: Manz’sche Verlags- und Universitats- buchhandlung.
Fasching, Hans (1988), ‘Die Weiterentwicklung des Osterreichischen ZivilprozeBrechts im Lichte der Ideen Franz Kleins’ [‘The further Development of the Austrian Civil Procedural Law in the Light of the Ideas by Franz Klein’], in H. Hofmeister (ed.), Franz Klein Forschungsband, Vienna: Manz’sche Verlags- und Universitatsbuchhandlung, pp. 97-117.
Hofmeister, Herbert (ed.) (1988), Franz Klein Forschungsband, with contributions by Rainer Sprung, Peter Reindl, Winfried Kralik, Hans Fasching, Walter Rechberger, Peter Mayr, Jurgen Damrau, Franz Baltzarek, Fritz Fellner, Peter Bohm, Herbert Hofmeister and Egmont Foregger, Vienna: Manz’sche Verlags- und Universitatsbuchhandlung.
Klein, Franz (1891), Pro Futuro — Betrachtungen uber Probleme der Civilproceβreform in Osterreich [Pro Futuro - Observations on Problems of the Reform of the Civil Procedure in Austria], Leipzig and Vienna: Deuticke.
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Sprung, Rainer (1988), ‘Der Lebensweg Franz Kleins’ [‘The life of Franz Kleins’], in H. Hofmeister (ed.), Forschungsband Franz Klein, Vienna: Manz’sche Verlags- und Universitatsbuchhandlung, pp. 13-78.
Stampfer, Michael (1998), ‘Die ZivilprozeBordnung von 1898 vor dem Hintergrund zeitgenOssischer sozialer Rechtsgestaltung’ [‘The Civil Procedural Code of 1898 against the background of contemporary social modelling of the law’], in Bundesministerium fur Jusitz, P. Lewisch and W. Rechberger (eds), 100 Jahre ZPO — Okonomische Analyse des Zivilprozesses, Vienna: Manz’sche Verlags- und Universitatsbuchhandlung, pp. 69-93.
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