Erich Fiala was born in Purkersdorf, studied in Vienna and obtained a doctorate in political science in June 1935. From 1928 to 1938 he and his father owned shares in the Manner-Fabrik – his grandfather Johann Riedl was the brother-in-law of the company founder Josef Manner – and he became interested at an early age in the art market. Together with his future wife Isolde Ahlgrimm he acquired historical pianos and string instruments for restoration. In 1937 they launched a concert series Concerte für Kenner und Liebhaber (concerts for connoisseurs and music lovers). Isolde Ahlgrimm performed at the opening of the collection of historical instruments on 28 October 1939 in Palais Pallavicini. In her memoirs in the archive of the Universität für Musik und darstellende Kunst (University of Music and Performing Arts) in Vienna, she wrote that she always performed in Palais Pallavicini when an important instrument had been made playable. She was the first person to play on the Erard grand piano belonging to Beethoven. In 1940 Fiala founded the Strudelhof-Galerie and applied in the summer of that year for admission to the Reichskammer der bildenden Künste (Reich Chamber of Fine Arts). He joined the NSDAP in 1932 and in 1938 applied for recognition, which was initially refused for lack of "adequate illegal activity" (cessation of payment of subscriptions to National Socialist works cells in 1937). It was not until 1 January 1941 that he was officially admitted to the local Strudlhofstiege section, where he was given the membership number 9290241. He was conscripted in 1938 but discharged provisionally from military service outside the Ostmark on the grounds of a medical report. According to his wife in an undated curriculum vitae, Fiala was court-martialled in 1943 and later arrested again in connection with the assassination attempt on 20 July 1944. In 1948 he stated that he had been sentenced to three years in prison for undermining military morale. He is documented as having been detained in 1944 in the military prison in Torgau an der Elbe, but the reason and length of imprisonment are not known. His application after the war for exemption from criminal prosecution and atonement for former NSDAP members was granted in accordance with § 27 of the Prohibition Act as amended in 1947. After 1945 the series Concerte für Kenner und Liebhaber was resumed in the Konzerthaus in Vienna. Fiala managed his wife's performances, but his own career as an art dealer must have stalled after 1945, and he worked again from time to time in the Manner factory. He divorced in 1956 and in 1959 married the medicine student Inge Weiskrab, who had previously been his secretary. He died in Vienna in 1978.

In his position as gallery director of Schwechater Brauerei AG during the Nazi era, he brought pictures for sale to the Dorotheum that were earmarked for the "Sonderauftrag Linz". They included a painting entitled Landscape with Ruin and Mule by Oswald Achenbach, which had been owned by the Jewish art dealer Richard Klein. Fiala also collected historical musical instruments and was involved with his wife in arranging historically informed performances on them. Between 1938 and 1975, the Kunsthistorisches Museum Wien Collection of Historic Musical Instruments acquired several objects from the Ahlgrimm-Fiala collection. As most of Fiala's acquisitions had taken place during the Nazi era, provenance researchers suspected that he might have used the desperate situation of Jewish owners to enlarge his collection. The suspicion could not be confirmed, however, as the surviving documents and correspondence have little information about former owners. A dossier was submitted to the Art Restitution Advisory Board in 2019 for information.