Liability of Corporate Entities for Misconduct by Employees

One consequence of criminal proceedings based on business activity is civil-law claims for compensatory damages and disgorgement of profits file by the firm against management and other supervisors. Court decisions have imposed ever more extensive oversight and inspection duties on these agents. Increasingly, regulators seem driven by the motto: “He who does nothing can also do wrong” (Marcus Aurelius).

At least since the corruption cases at Siemens and MAN, it is clear the sort of dramatic consequences that the accusation of inadequate supervision can have. Fines for violations of oversight duties (§ 130 Law of Administrative Offenses) can be painful. Follow-on civil compensatory damages claims by the firm (e.g., pursuant to § 43 of Limited Liability Companies Act or § 93 of the German Stock Corporation Act) in excess of € 10 million can even threaten personal financial ruin.

Our preventive consultation helps board members, senior executives, and managers avert such risks from the outset. If claims are nonetheless made, we will support you by carefully investigating the processes and structures of responsibility, in order to defend against unjustified or excessive damages claims.