On 11 February 2025, the Cartel Senate of the German Federal Court of Justice (Bundesgerichtshof, "BGH") examined the much debated question of whether board members and managing directors are liable for fines imposed on a company for antitrust violations. We reported on the then scheduled appeal hearing in November 2024 and the initial landmark ruling in September 2023. The BGH has now referred this question to the Court of Justice of the European Union (“CJEU”) for a preliminary ruling.

The key issue is whether a liability of board members and managing directors for corporate cartel fines would defeat the purpose of the fine. While the relevant German provisions in Section 43 (2) of the Law on Private Limited Companies (“GmbHG”) and Section 93 (2) sentence 1 of the Law on Public Limited Companies (“AktG”) could be interpreted as permitting recourse by the company, European law may require a more restrictive interpretation. The effectiveness of fines could be undermined if the company could (fully or partially) exonerate itself from the burden of the fine. This is particularly true given that companies cannot deduct their cartel fines from their tax bills.

The BGH therefore referred to the CJEU the question whether Art. 101 of the Treaty on the Functioning of the EU (“TFEU”) precludes the German provisions allowing the company a right of recourse. 

Outlook

Based on past experience, it is unlikely that the CJEU will answer this question in 2025. Nevertheless, companies and insurers are eagerly awaiting the answer. If the liability of board members and managing directors is found to extend to antitrust violations, insurers will likely need to substantially revise their policies to manage the increased risk exposure.

If you need more information or further guidance on this topic, please contact Dr. Stephan Waldheim and Gitty Narymany Shandy.

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