Civil Law Protection of Investors in Austria — A Situation Report from Amidst a Wave of Investor Lawsuits

Abstract

Austrian courts are faced with a tremendous wave of investor lawsuits, more than 1,200 are still pending. This challenging situation has given the Austrian Supreme Court the opportunity to clear up a lot of legal questions concerning inadequate investment advice and prospectus liability and to accept and develop new legal instruments to enforce claims of investors and compensate their damages. The main focus lies therefore not on questions of ‘classical’ capital market law but rather on fundamental issues of civil law such as contract law and transactions. Instead of dealing with the clauses of the MiFID and the Prospectus Directive, which are of course implemented in Austrian law, the investor and the courts refer to compensation claims under civil law by transferring old-fashioned civil law issues such as avoidance on the grounds of error and warranty claims to modern and dynamic capital market law with ongoing success.