Manager liability cases can give rise to questions regarding D&O insurance cover (see the blog post from 26.03.2024, https://www.reutercomplianceblog.com/artikel/leitpfosten-des-lg-frankfurt-zu-brennpunkten-von-manager-haftung-bussgeldregress-und-d-o-versicherung/). Two recent decisions of the Higher Regional Court of Cologne and the Higher Regional Court of Schleswig address such questions. They mainly deal with (i) the definition of an "insured event", (ii) the consequences of an assignment of coverage claims from the insured manager to the policyholder, i.e. the injured company, (iii) the proof of exclusion of coverage in the event of a "knowing breach of duty" and (iv) the consequences of breaches of duty and seting aside by the insurer of the policy. Such issues frequently arise in D&O liability practice. They harbor legal pitfalls. This article outlines the two decisions.

A recent decision of the Regional Court of Frankfurt sets guide posts on key issues of manager liability, recourse for fines and D&O insurance. It addresses issues (1) regarding the admissibility of the advance coverage proceedings by declaratory action of the insured manager against the insurer (vorweggenommene Deckungsklage), (2) regarding the admissibility of D&O insurances against recourse for corporate fines and (3) regarding the conditions under which the typical exclusion of coverage (carve out) due to "knowing" breaches of duty applies. All three areas are important in practice. Furthermore,. the legislator is also getting involved in the discussion on recourse for corporate fines against managers in connection with the planned implementation of the EU's NIS 2 Directive. This post is to outline anc comment the decision.

If fines are imposed on companies for illicit conduct, the question arises as to whether the companies can seek recourse against the responsible managers. The question is controversial. However, the higher fines become, the more important the question becomes. Because of their exorbitant amount, it is in particular fines for violations of European and national antitrust law which fuel the debate. Two very recent - contradictory - rulings of the Dortmund Regional Court and the Düsseldorf Higher Regional Court, as well as the German lawmaker, are giving new impulses to the discussion.

The article sums up the new decisions and draws the consequences for practice. As long as the issue has not been decided by the court of last instance, supervisory bodies have to decide on the assertion of claims. They cannot refrain from asserting the claims solely on the grounds that recourse is not legally possible. Furthermore, they must also observe the rules on the statute of limitations that the Dortmund Regional Court and Düsseldorf Higher Regional Court have drawn up on the commencement and the end of the limitation period. Furthermore, the question of how the situation stands under EU law remains open. Last but not least, the draft amendments to the new German BISG also gives new impetus. In the end, the question must be asked as to whether the overall system of corporate fines is not suffering from a systemic flaw.