In this issue of Brussels to the Point, we wish to draw your attention to a heightened risk of liability in three different contexts:
- Firstly, being a (private equity) shareholder is not without risk, as parent companies are increasingly being held liable for antitrust violations committed by their subsidiaries. Indeed, both the European Commission and the EU courts have extended the parental liability doctrine. It should be noted that the parent company is generally not fined due to independent, direct or indirect, involvement in or awareness or encouragement of the violation, but merely because it forms part of the same "undertaking" as the subsidiary which committed the antitrust violation. The parental liability doctrine has been applied in particular to entities participating in a company solely for financial reasons, i.e. financial investors.
- Secondly, it should be noted that de facto directors can be held liable in the same way as regular directors. A de facto director is a person who, without being officially appointed as a company director, exercises de factomanagement and decision-making powers. For example, shareholders of a (portfolio) company should be aware that if they are involved in the company's management without a statutory or contractual basis for doing so, they may be deemed de facto directors and held liable accordingly. Such liability (including in the context of bank-ruptcy) extends to tort, tax and criminal matters.
- Thirdly, an employer may expose itself to liability if it suspends the payment of its contributions to a group insurance (pension) plan. In a judgment of 2 December 2014, the Brussels Labour Court of Appeal ruled on a case brought by an employee against a Belgian company which had unilaterally decided to suspend the payment of its contributions to the group insurance (pension) plan for economic reasons. The appellate court found the claim to be substantiated and ordered the company to pay compensation equal to the lost contributions.
Furthermore, a new regulation on the labelling of foodstuffs entered into effect on 13 December 2014 and provides for greater transparency in the provision of food information to consumers. While the former regulation already provided for a large number of obligatory mentions on food labels, the goal of the new rules is to provide consumers with clearer, more comprehensive and more legible information. The most important changes in practice relate to the scope of application of the new rules (dining halls, restaurants and electronic commerce are all covered), the legibility of the information, particulars accompanying the names of certain foodstuffs, and specific provisions on the indication of ingredients.
Last but not least, companies are challenging new taxes imposed by the government. A key tax issue in 2014 was the Belgian fairness tax, which is intended to tax distributed profits (dividends) not effectively subject to corporate tax due to application of the notional interest deduction and/or carried-forward tax losses. Questions were raised mainly with respect to the constitutional principle of equal treatment in tax matters and the compatibility of the fairness tax with the Parent-Subsidiary Directive. On 28 January 2015, the Belgian Constitutional Court requested a preliminary ruling from the Court of Justice of the European Union on the question of whether the fairness tax is compatible with EU law.