(R)evolution in liability law

What is it about?

This change in the law provides an additional possibility to hold "auxiliary persons" liable for damages suffered by a third party, due to a fault of this "auxiliary person".

"An auxiliary person" in this context is any person who is charged with the full or partial performance of a contract concluded between a client and a contractor and who is not himself a contracting party. It makes no difference whether this “auxiliary person” is a person or a company.

As a result of this broad definition, a surprising number of categories of persons can be an "auxiliary person": directors, employees, service providers, contractors, subcontractors, etc.

Let us clarify with an example:

A client (A) enters into an agreement with a contractor (B), who appoints an auxiliary person (C) to perform the whole assignment or at least a part of it. Based on the contractual relationship between A and B, A can still hold B liable when C executes in a wrong way. This principle of liability between contracting parties remains unchanged.

The new regulation now allows A to hold C directly (extra-contractually) liable when C executes in a wrong way and this without an existing contract between A and C.

Some examples:

• For example, a customer of a company can directly address a director for damage suffered by this customer due to an error or carelessness of the director concerned.
• Similarly, a customer of a company will be able to sue an employee of that company directly for the damage he has suffered as a result of that employee's fault in the performance of the contract.
• A client will be able to sue a subcontractor directly for errors made by the latter.

This general rule is without prejudice to existing specific rules. In that case, for example, an employee who is being sued will be able to invoke the limitation of liability under the Employment Contracts Act as a defence. The directors of companies and associations can invoke, among other things, the legal limits regarding directors' liability.

The new law will normally not enter into force until the 1^st of January 2025. However, the new law will also apply to contracts concluded before 2025 insofar as the fault and damage occur after the aforementioned date.

The law leaves room to anticipate any undesirable consequences of this change in the law in a timely manner.

After all, the new liability regime applies to the extent that the law or the agreement does not provide for a different regime. It is therefore possible to contractually limit and even exclude the liability of the "auxiliary person".

It is therefore of the utmost importance that you ask yourself the following questions in good time:

• To what extent can the increased liability as a director be limited?
• How can I, as a service provider, cover my liability towards a customer of my client?
• Are the liability clauses in my contracts with customers on the one hand and with service providers and subcontractors on the other sufficiently aligned?
• Is it necessary to change my terms and conditions?
• Should I take steps to provide additional protection for my employees in the light of the new rules, possibly by amending the social documents (employment regulations and/or individual employment contracts)?
• Do I know which subcontractors my suppliers use and the limitations of liability that these subcontractors have enforced?
• What can or should I do as an employee to avoid any liability claims?
• Am I adequately insured for all this?

We therefore recommend that you thoroughly analyse existing agreements and take the necessary action in a timely manner so that you are prepared as soon as the new law comes into force.

At Deloitte, we have all the expertise to support you in this. Together, we will look at how we can limit the negative impact of the new rules as much as possible.