On 23 February 2012, the Belgian Supreme Court (“Hof van Cassatie/Cour de Cassation”) confirmed the long-standing Belgian law principle that shareholders have no individual, independent right to claim damages when the company’s capital deteriorates and the value of the company’s shares decreases. This is irrespective of whether the loss was caused by an insider of the company or by a third party. Only the company itself (or the trustee, in the case of bankruptcy) has the right to claim damages in this context. A shareholder can only initiate a separate claim if it can demonstrate a personal, individual loss. There is no such loss when the shareholder only suffers “secondary damage”, which is the case when the damage for the shareholder only derives from the deterioration of the company’s capital that results in the loss of share value.

The Court of Appeal of Ghent applied this rule in its decision of 19 December 2012 . The Court indeed confirmed that the principle also applies when the loss of share value is caused by a third party. The case at hand concerned damages caused by the termination of the company’s operations, which itself resulted from the delay in the performance of municipal works near that company. Such damage was deemed secondary and therefore the shareholder had no independent right to claim damages, even though the company itself failed to recover these damages. The Court further stated that the following damages were also to be considered as indirect: decreased profit, investments which have become worthless, working hours and effort applied because of the reorganization of the company, and loss of clients.

In conclusion, Belgian corporate law is a far cry from mechanisms of corporate governance established in the United States, where direct or derivative shareholders’ actions play a central role in the corporate world.