Forbidden price agreements
BGH checks: are managing directors for antitrust levels are liable?
If a board or managing director violates his duties, this can have serious consequences for the company. But do the managers have to personally stand up for antitrust law violations?
Forbidden price agreements and fines in the millions: The Federal Court of Justice (BGH) deals with the question of whether companies are allowed to take a former managing director and board member for antitrust levels in recourse. The judgment could have far -reaching consequences for German company bosses. It is unclear whether Germany’s top replica judges will make their decision on Tuesday.
Specifically, it is about the complaint of two intermediate stainless steel companies against a man who was also the managing director of Klagenden GmbH and CEO of plaintiffs AG. From 2002 to 2015 he participated in a price cartel with other companies in the steel industry. After several years of investigation, the Federal Cartel Office initially imposed fines against several participants in 2018.
355 million imposed against stainless steel cartel
“The companies have agreed important price components when selling stainless steel for years,” said Cartel Office President Andreas Mundt at the time. “The price competition between the company was significantly impaired by the coordinated, industry-unit calculation and application of scrap and alloy surcharges and through far-reaching exchange of competitive sensitive information.”
When the cartel office officially concluded the procedure against the stainless steel companies in July 2021, the competitive keepers had imposed a total of around 355 million euros against ten stainless steel companies, two industry associations and seventeen responsible persons. The GmbH, which is now complaining to its former boss at the BGH, had to pay 4.1 million euros. Against the managing director personally, the office imposed a fine of 126,000 euros. The plaintiff AG was spared a fine due to the punishment against the GmbH.
Who is liable for antitrust losses?
In court, the companies require the defendant to reimburse the paid fine, replacement for a defense against the defense of the fine and attorney costs as well as compensation for all other damage that will follow from the antitrust violation in the future. They argue that the former company boss violated his obligations as managing director and board member by participating in the price agreements.
Most recently, the Düsseldorf Higher Regional Court had decided that no recourse would be considered with a view to the fine imposed. According to the Senate, the social regulations on the liability of the boss did not extend to damage that arises due to fines imposed. Otherwise this would be thwarted the purpose of the corporate fine. The fine finally aims to make the company’s assets sustainably.
Existential risks for company bosses
If the BGH sees it differently, this would have significant consequences for German company bosses. “If the BGH affirms a recourse to recourse, managing directors and board members would be exposed to existential liability risks,” says lawyer Lorenz Jarass from the Noerr law firm. “The fines imposed on companies are often in the million, if not in the billion dollar area and in many cases, at least in accordance with the amount, not the D&O insurance protection for managing directors and board members.”
As a rule, managers such as managing directors and board members with their private assets are liable for damage caused by breaches of duty. The so-called Directors and Off-Officers or D&O insurance is liability insurance that protects those affected from financial loss in such cases.
dpa
Source: Stern
