Is a managing director liable for antitrust fines? That question is now with the ECJ

published on 17 March 2025 | reading time approx. 3 minutes

Are managing directors and board members personally liable under German law for an antitrust fine imposed on their company? This question remains unresolved. Antitrust fines can amount to up to 10% of a company's annual turnover. Being personally liable for such a fine represents a significant risk for managing directors and board members. The German Federal Court of Justice (Bundesgerichtshof, BGH) has now referred the question to the European Court of Justice (ECJ), so a clarification is not to be expected anytime soon.

The proceedings were initiated by a fine imposed by the German Federal Cartel Office (Bundeskartellamt) in 2018 for participation in a cartel in the stainless steel sector. The affected company is now claiming a breach of duties incumbent upon the managing director and is holding him liable for this fine as arising damages (Section 43(2) of the German Companies Act (GmbHG)). The Higher Regional Court of Düsseldorf (OLG Düsseldorf) rejected such personal liability. Although it is possible to hold a managing director or a member of the board of directors liable for cartel violations (for example regarding cartel damage claims), the Higher Regional Court of Düsseldorf held that fines imposed on a company by a cartel authority must be subject to a so-called "teleological reduction". This would create an exception for antitrust fines within the corporate liability regime.

Trend of the German Federal Court of Justice: Under German law, there is a tendency to assume personal liability

The parties have appealed against the judgment of the Higher Regional Court of Düsseldorf. In its oral hearing on 11th of February 2025, the Federal Court of Justice ex-pressed scepticism about the judgment of the Higher Regional Court of Düsseldorf. The necessary conditions for a teleological reduction of liability provisions are not met. Consequently, there is much to suggest that a managing director can be held liable under German law. However, it is possible that European law requires a restrictive interpretation of the liability rules. Under European law fines must be effective, proportionate, and dissuasive. Effectiveness may be compromised if the fine is passed on from the company to the managing director. Because of the influence of European law on the question of the liability of managing directors for fines, the German Federal Court of Justice has now referred the question to the ECJ for clarification.

It is uncertain how the ECJ will decide. It would not be surprising if the ECJ rejected personal liability for managing directors. For example, even the tax deductibility of a corporate fine is against European law, as it would reduce the effectiveness of the fine. Tax deductibility only partially relieves the company. Transferring the fine to a director or board member by way of recourse could potentially exonerate the company entirely. It is therefore likely that this would be an even more serious breach of European law.

The German Federal Court of Justice did not give much weight to the question of how a possible D&O insurance of the managing director or board member would affect the situation. Depending on the terms of this insurance and the breach for which a fine has been imposed, the D&O insurance may be obliged to cover the damages claimed against the managing director or board member. Whether the D&O insurance fully covers such a fine is of utmost importance for the affected managing directors or board members. Since antitrust fines can amount to hundreds of millions of euros, their eco-nomic existence is potentially at risk. It is currently unclear how insurers would react to the personal liability of board members and managing directors. If the courts accept the transfer of fines to managing directors, board members or ultimately to a D&O insurance there is a possibility that the legislator will intervene to correct the situation.

Risk Reduction Options for Managing Directors and Board Members

Even before the final clarification by the ECJ, managing directors and board members have a strong personal interest in examining their potential personal liability risks: Which risks (such as antitrust fines) are existentially threatening? Do they have or need D&O insurance, and which risks would it cover? With regard to antitrust law, managing directors and board members must ensure that antitrust violations do not occur within the company. An effective compliance programme tailored to the company's risks benefits both management and the company in multiple ways. Therefore, antitrust compliance policies should be implemented and antitrust awareness raised among managing directors, board members and employees through company-specific training. Critical decisions with a link to antitrust law should be assessed in advance by internal or external experts. This can significantly reduce antitrust risks.