Implementation of Book 6 of the New Civil Code: End of the Quasi-Immunity of Auxiliary Persons

On February 2, 2024, Book 6 of the New Civil Code was adopted by the Chamber of Representatives. This book modernizes the law of non-contractual liability by, on the one hand, codifying the most significant developments in case law and legal doctrine and, on the other hand, introducing new provisions. One of the most significant innovations concerns the liability of “auxiliary persons,” such as subcontractors. An auxiliary person is a natural person or legal entity who is entrusted by the debtor of a contractual obligation (the principal contractor) entrusted with the full or partial performance of that obligation, regardless of whether they perform it for their own account and in their own name, or for the account and in the name of the obligor. Typical examples of auxiliary persons include employees, subcontractors, corporate directors, representatives, and so on. Under current liability law, auxiliary persons enjoy strong protection. This is because they cannot be held directly contractually liable by the principal creditor (the principal contractor’s client), since they are not a party to the principal agreement between the principal creditor (the client) and the principal debtor (the principal contractor). Under the old rules, the principal creditor (the client) can only hold the auxiliary party (the subcontractor) only on a non-contractual basis for damages caused to him in the performance of the contract, and only under the same conditions under which he can hold the principal debtor liable on a non-contractual basis. The Court of Cassation has ruled that an auxiliary party—who performs (part of) the principal debtor’s obligations—is not a third party with respect to the performance of the main contract and in relation to the principal creditor. The auxiliary party is, in fact, involved in the performance of the principal contract, which means he is regarded as an “involved” third party. To this day, there remains a fundamental prohibition against the concurrence of contractual and non-contractual liability. An aggrieved principal creditor cannot invoke non-contractual liability against the principal debtor, unless the breach of contract also constitutes a tort or if the fault attributed to him constitutes a breach not only of the contractual obligation but also of the general duty of care, which results in damage other than that which is merely the consequence of the defective performance of the contract. Thus, the auxiliary person can also be held extracontractually liable only in the aforementioned exceptional cases. As a result, this is referred to as the “quasi-immunity” of the auxiliary person. This rule has not been without criticism, as it can give rise to highly unfair situations for the principal creditor. Consider, for example, a situation in which a claim against the principal debtor yields no useful result because the latter has been declared bankrupt or can invoke a clause in the contract that excludes his liability, leaving the principal creditor empty-handed. The new Book 6 departs from the case law of the Court of Cassation regarding the prohibition on concurrent claims, thereby also eliminating the quasi-immunity of the auxiliary party. Henceforth, a principal creditor will be able to hold the auxiliary party directly liable in tort for breaches of the general standard of care and will thus be able to choose between a contractual claim against the principal debtor and a tort claim against the auxiliary party. For directors of a corporation, the entry into force of Book 6 means that, in addition to the grounds for director liability, they may also be held directly liable on a non-contractual basis by contracting parties of the corporation they manage. To maintain the contractual balance, the legislature has provided that the auxiliary party may invoke against the aggrieved principal creditor the same defenses that the principal debtor may invoke based on the principal contract or by operation of law, as well as those that the principal debtor himself may invoke against his co-contractor (the principal debtor). Examples include clauses limiting liability toward the principal creditor, defenses based on the statute of limitations, and so on. Furthermore, the provisions of Book 6 are, in principle, supplementary law, meaning that the parties may deviate from them by contract. It is therefore possible and advisable to include contractual safeguards for the auxiliary party in the contracts that the latter enters into with its principal. For example, the auxiliary party may stipulate in its general terms and conditions and/or contract with its principal (main contractor) that it cannot be held liable by the principal creditor. The new rules are scheduled to take effect on January 1, 2025. Events that may give rise to liability on or after the effective date will be subject to the new regulations. At this time, it is not yet clear whether the new rules will also apply to contracts entered into before the effective date but where the damaging event occurred after the law took effect. We will, of course, continue to monitor this situation. Do you have any further questions or would you like more information? Please contact one of our specialists.