Reform of extra-contractual liability law: new Book 6 comes into force

Reform of the Civil Code: New rules on extra-contractual liability

Belgian law is changing, with Book 6 of the Civil Code coming into force on January 1, 2025. Published in the Moniteur Belge on July 1, 2024, this text clarifies the rules of extra-contractual liability and introduces reforms to resolve persistent legal ambiguities. Let's take a look at what this means for subcontractors, directors, employees and the impact on insurance policies.

What we've achieved so far

Traditionally, in the absence of explicit legal frameworks for extra-contractual liability, the Belgian system has been built around two fundamental principles:

1. The refusal to combine contractual and extra-contractual liability This principle, established notably by a 1973 ruling of the French Supreme Court (Cour de cassation), prohibited any extra-contractual liability action for damages arising from a breach of contract. The main objective was to prevent parties from circumventing, through extra-contractual remedies, the limits of liability defined in their contracts. Consequently, contractual liability claims were the primary remedy for breaches, relegating extra-contractual claims to the background. However, there were exceptions to this rule, notably in cases where a criminal offence arose from the breach of a contractual obligation, illustrating the complexity of the application of this principle.
2. Virtually no protection for executing agents This doctrine guaranteed agents involved in the performance of contractual obligations (directors, subcontractors, independent contractors, employees, etc.) a form of immunity from any action, whether contractual or extra-contractual, on the part of their principal's creditor. However, there were limits to this protection in exceptional situations, such as when the acts in question involved criminal activity.

These principles, although historically anchored in Belgian doctrine, have been the subject of debate due to their implications for the balance of responsibilities in contractual relations.

What happens with the new Book 6

Competition ban lifted

Book 6 introduces the possibility for an injured party to choose between compensation based on contractual or extra-contractual liability, provided the applicable conditions are met. The defendant may, however, invoke the limitation or defense clauses set out in the main contract, except in cases of physical or mental injury, or intentional fault.

The parties retain the option of restricting this choice by stipulating in their contract that this cumulexcept in the cases mentioned above.

End of quasi-immunity for executing agents

The new Book 6 abolishes the principle of quasi-immunity, since it will enable a contracting party to engage the direct liability of his co-contractor's agent in the event of an error in the performance of the contract. 

With regard to the defences available to an enforcement agent faced with an action for extra-contractual liability, the Book 6 provides a dual protection, whereby the executing agent may generally invoke contractual defenses arising both from the contract between the executing agent and his principal, and from the contract between the principal and his co-contractor (insofar as the executing agent has knowledge of the content of this contract), as well as defenses arising from any special laws applicable to these contracts. It is also possible to contractually exclude the executing agent's extra-contractual liability. 

If the latter commits a fault, either with the intention of causing damage, or which causes damage resulting from injury to physical or mental integrity, he will not be able to invoke the contractual defences arising both from the contract between the executing agent and his principal, and from the contract between the principal and his co-contractor.  

Why the change?

The aim of this reform is to eliminate certain disadvantageous situations. For example, the client, who previously had recourse only against the main contractor, was unable to sue a subcontractor if the main contractor went bankrupt.

This new legislation provides greater flexibility and enables financial responsibilities to be shared between the various players involved, thereby reducing the risk for injured parties.

Possible exemptions from the new regulations

However, the legislator allows for the maintenance of a contractual quasi-immunity. Clauses limiting liability can therefore be included in general terms and conditions or in individual contracts (employment contracts, cooperation agreements, subcontracting agreements, etc.).

This protects certain parties from extra-contractual claims, subject to compliance with legal limits concerning serious or intentional injury to physical or mental integrity.

Impact on insurance policies

R fontsivil liability :

• The possibility of bringing actions against vicarious agents now requires a broad definition of the insured to include all individuals working for a contracting party, such as employees, freelancers, trainees, temps and volunteers.
• Coverage over time should be the subject of a clause in liability policies.

Directors' liability insurance policy :

• The usefulness of this coverage has been proven more than ever, and it would be unwise to continue working without suitable cover.
• Directors' liability insurance policies already cover third-party claims for mismanagement.
• The introduction of extra-contractual liability does not alter the guarantees of this coverage, but with the extension of external directors' liability, an increase in claims and defense costs is anticipated.

When will Book 6 come into effect?

The provisions of Book 6 apply to events likely to give rise to liability which occurred after its entry into force. The old system continues to apply to harmful events that occurred before this date, even if their effects extend beyond the date of entry into force. 

At Avesta InsuranceWe recommend that our customers :

1. Take into account any exemption from extra-contractual liability for their employees when drafting and negotiating commercial and employment contracts.
2. Review their existing contracts to incorporate clauses limiting or organizing liability according to the new rules.
3. Check insurance policies to ensure adequate coverage for all policyholders over time.

This reform represents a major change for all companies, their managers and employees. We are at your disposal to discuss and advise you on the steps to take in terms of insurance.