What sources of law do you navigate in order to address questions of director and officer liability, and what trends do you see among the regulatory agencies and courts that supervise these issues?
The codification of director and officer liability is of great importance, since The Netherlands has a civil law-based judicial system.
Relevant articles can be found in the Dutch Civil Code, but, specifically, there are articles explicitly dealing with liability in relation to the organisation (article 2:9) as well as in relation to the insolvency estate (article 2:248).
Furthermore, case law has is well proven to be a decisive source of law. For instance, with reference to case law, directors and officers have been held liable on the basis of the Dutch tort-liability provision (article 6:162).
We note that traditionally there has been a high threshold for holding directors personally accountable and liable for their actions. However, in recent years there is an undeniable change of approach visible.
The trend nowadays is that directors are increasingly being held personally liable. In this context, one can think of situations in which the director engages in commitments, knowing the company cannot fulfil these, acts contrary to the statutory goals of the company, omits to keep a proper accounting of the company or carries out unlawful and selective payments.
Apart from this, it is also becoming apparent that factual executives under certain circumstances can be held liable on equal footing with directors. There also seems to be more incentive to specifically regulate the behaviour of directors. An example of this can be found in the Dutch Corporate Governance Code. Directors and officers (D&O) liability insurances has also become more popular.
