Vicarious liability (Managing Directors, directors, Supervisory Boards, Advisory Councils)
An almost unmanageable number of laws, ordinances and also internal regulations (for example procedural rules) results in a liability potential not to be underestimated for Managing Directors, directors, Supervisory Boards and also now for Advisory Councils.
In daily practice, rules are breached due in no small part to ignorance with the consequence that a personal liability of the executive body can be established.
It is particularly critical if the company is in a crisis. The Managing Director or director concerned about the company releases another payment or places another order, often in ignorance of the fact that he breaches compulsory statutory regulations of insolvency law and of company law. The consequence is personal redress.
Anyone who believes that he is free of all worries through a D&O insurance policy (Directors' & Officers' Insurance) is in practice often bitterly disappointed. He will note that the D&O insurance is not his partner but endeavours first and foremost to provide no indemnification. If there is wilful action, performance of the insurance policy is excluded. At the same time, wilful action is assumed by the courts faster than is generally known. Furthermore, numerous instances are known where executive bodies were sued just as a result of the existence of a D&O insurance policy because the creditor assumed a good creditworthiness of the insured executive body. If the insurance protection is then actually refused, the executive body is quite alone.
It is necessary, therefore, to avoid errors in advance and to be advised and represented competently in a liability case.
In view of our specific expertise in company and commercial law and criminal law relating to tax offences, we offer comprehensive advice and representation here both in and out of court.
Our spectrum of services:
- Advice with the configuration and conclusion of managing director and management contracts
- Advice on performance-related remunerations (bonuses etc.)
- Share option plans
- Configuration of procedural rules for the company management, directors, Supervisory Board and Advisory Council
- Advice under insolvency legislation for Managing Directors, directors, Supervisory Boards and Advisory Councils in crisis situations
- Advice on the conclusion of D&O insurance policies
- Advice to and representation of Managing Directors and directors in tax investigation cases and in investigations under criminal law relating to tax offences
- Defence of liability and recourse claims against Managing Directors, directors, Supervisory Boards and Advisory Councils
- Advice on the introduction of control systems for Supervisory Boards and Advisory Councils
- Advice on the configuration of redundancy payment agreements
- Advice on the configuration and phrasing of restraints on competition, particularly post-contractual restraints on competition
- Representation in legal disputes