Currently, apart from exceptions such as when the breach of contract constitutes a criminal offence, it is in principle impossible for a contracting party to invoke the rules of extra-contractual liability in the context of a contract if the other party fails to perform its obligations.
After Book 6 of the Civil Code enters into force, an injured party can both claim compensation or seek some other form of legal redress on the basis of a contract or, for example, property rights and invoke an extra-contractual liability rule.
This means that the ban on concurrent claims and the associated quasi-immunity of auxiliary persons, as laid down in the Court of Cassation’s Stuwadoorsarrest (Stevedore ruling) of 7 December 1973 will be scrapped.
The following can be regarded as implementing agents/auxiliary persons:
- employees in relation to an employer
- directors in relation to the company they direct
- subcontractors in relation to a main contractor.
In concrete terms, this means that a contracting party who has suffered harm or damage in the performance of a contract can at present only bring a claim against the party with which he or she concluded the contract, and on the basis of that contract. The implementing agents/auxiliary persons cannot currently be held directly liable by the person who suffered the damage, although they can possibly be held liable by their employer, main contractor or company.
As a result of the introduction of the new Book 6, contracting parties will be able to take action against a co-contractor or implementing agent in future.
Consequently, for example, if damage is caused by a subcontractor, as well as suing the main contractor a client can also take action against the subcontractor directly.
For the employee, this means that he or she can also be the target of direct legal action in line with Article 18 of the Employment Contracts Law, which remains applicable. As a result of this provision, the employee can only be held directly liable in the event of intent, major misdemeanours and recurrent minor misdemeanours.
Note that the law gives the parties the option of maintaining immunity and the ban on concurrent claims contractually. Limitation of liability clauses can therefore be included in general terms and conditions of sale and individual contracts (employment contracts, cooperation agreements, (sub)contracting agreements, etc.), subject to other legal provisions.
No adjustments to civil liability policies are needed for the time being, as the starting point for such a policy is cover for non-contractual liability, and cover is also often provided (to a limited extent) for ‘contractual damage’.
Employees and appointees are already insured under the civil liability policy, so there is no problem here. Furthermore, concurrent claims have always been possible in medical liability due to the exception on such claims in the current ban in the case of a criminal offence, namely unintentional bodily harm. No changes are therefore needed here either.
It is possible that the terminology used will be brought into line with the amended Book 6 of the Civil Code in the future.
For more information about the impact of this change on directors’ liability policies, read the next article.
