Belgium’s tort liability rules for directors underwent significant changes with the publication of a new Book 6 of the Civil Code on July 1, 2024. These changes will come into effect on January 1, 2025, impacting how directors can be held accountable for breaches of contractual obligations.
Previously, directors in Belgium enjoyed a form of “quasi-immunity” where they could not be held personally liable by a third party in case of a company’s breach of contract. However, under the new rules introduced by Book 6 of the Civil Code, this principle of quasi-immunity is abolished. This means that contracting parties now have the right to make a direct, extracontractual claim against directors in addition to the contractual claim against the company.
It’s important to note that these changes apply to all new claims arising from breaches occurring after January 1, 2025, regardless of when the contract was entered into. This shift in liability rules puts more pressure on directors to act with diligence and care in their roles, as they can now be personally held accountable for certain actions that go beyond mere contractual breaches.
Additionally, the liability cap for directors under Belgian law may come into play, limiting their personal liability up to a certain amount based on the size of the company and other exceptions outlined in the Belgian Companies and Associations Code. Article 6.15 of the Civil Code also addresses the issue of faultless liability for misconduct by directors, potentially leading to claims against both the company and its directors.
With these changes on the horizon, it’s crucial for contracting parties to be aware of the implications of these new rules when entering into new contracts and to review existing contracts to understand how they may be affected. This heightened focus on tort liability underscores the need for directors to exercise caution and fulfill their duties with a high level of care to avoid potential legal consequences.
In conclusion, the revised tort liability rules in Belgium mark a significant shift in how directors can be held accountable for breaches, emphasizing the importance of understanding and complying with the new regulations to mitigate risks and ensure legal compliance.