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Schoenherr partners Miriam Simsa and Wolfgang Höller talked to Dr. Franz Mohr, Head of the Department for Execution and Insolvency Law at the Federal Ministry of Justice, about the process of drafting laws, the restructuring directive and more.
Höller: Among Austrian insolvency lawyers you are a household name. You have been in charge of the unit for insolvency and enforcement law in the Civil Law Directorate General for decades. How did you get there?
Dr Mohr: After working as a judge for one year I transferred to the Civil Law Directorate General. Back then it was common knowledge that working for two years in the Civil Law Directorate General would be beneficial to one's career. Then I got offered to head the unit. So I stayed.
Simsa: How are legal experts (Legisten, i.e. the civil servants drafting laws) trained? After all, you don’t learn this at university.
Dr Mohr: In the Civil Law Directorate General every legal expert has previously been appointed judge, and therefore has a very solid education. But drafting laws – that's learning by doing. There are different approaches in the various units; you have to choose what to adopt. Thus, every legal expert develops their own style. An insider can read a law and know who has written it. There is no central office for legal experts that streamlines drafts. Certain phrases should be used consistently, but this is not always the case. For example, there is a law where the explanatory comments state that a certain word has deliberately not been used but then it is used a few articles further down.
Höller: How much influence does politics have on the process of drafting laws?
Dr Mohr: The government accord is the basis for our work. During the negotiations we provide information about ongoing projects, so that these projects are included in the government accord. The legal experts have to implement the topics included in the government accord, sometimes we have to interpret very brief statements. Of course, sometimes there is a lot of room for interpretation. With respect to procedural laws, a lot is based on input from legal practitioners. In these cases, whether or not projects get moved forward largely depends on the initiative of the relevant legal expert. If there is no substantial political interest in a project, we can move projects forward quite independently. There are no political instructions and we can focus on the legal questions at hand.
Simsa: Do you agree on a concept for a law in advance with the cabinet (i.e. the political wing of the Department of Justice)?
Dr Mohr: No, usually we get very few instructions. The detailed discussions take place in working groups hosted by the head of the unit. We usually also invite external experts. We also try to figure out what could be acceptable on a political level. Of course, we report regularly about the process, but usually we get only very high-level comments from the political players late in the process, often just before we finalise the final draft. In this case, the requests from the governing parties have to be incorporated last minute.
Simsa: Do you share draft laws with other federal ministries such as the Treasury Department?
Dr Mohr: Yes. It is not provided for in the law, but it is often done in practice. If we realise that another ministry might be affected by one of our drafts, we coordinate on a legal expert level. The cooperation usually is frictionless.
Höller: A lot of laws are initiated on the level of the European Union. How can Austria position itself on this level?
Dr Mohr: On the European level you have to position yourself very early in the process. Once the European Commission (EC) has produced a draft it is very difficult to push through substantial changes. Good contacts with the EC and the other Member States are therefore crucial. The permanent representation in Brussels is very important, it has to be alert and inform us early about new projects on the European level. Once we have received information from them it really is the competent civil servant who needs to take action. That is why expertise among the civil servants is so important.
Höller: A recent project is the restructuring directive. Was there a task force that reviewed various insolvency codes and used best practices to make the first draft?
Dr Mohr: The EC usually cooperates with external experts. There are typically two experts from the EC who will negotiate the draft. Though they are not always experts in the relevant legal field they are extremely well prepared.
Simsa: Final question: What is your favourite law?
Dr Mohr: That's a tough one. I can't really decide between the Insolvency Code and the Enforcement Code. But despite the comprehensive amendments I got to make to the Enforcement Code, I think I would pick the Insolvency Code. It is an extremely dynamic field of law, also on an international level. There is a constant need to balance the interests of creditors and debtors. The renaming of the act from Konkursordnung (short KO) to Insolvenzordnung (short IO; in German short for being OK) was very symbolic. But there are other abbreviations that are highly amusing, such as the one for the law on changing the adoption code, which sounds like "Oh crap". (chuckles)
interview: Dr Franz Mohr, Miriam Simsa and Wolfgang Höller
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