On 1 January 2025, the fundamental liability protection of executing agents (including service providers, subcontractors, directors, freelancers, employees, etc.) will finally come to an end. From then on, the new Book 6 ‘Extra-Contractual Liability’ will apply.
In fact, the new rules will apply to all transactions after 1 January 2025, even under existing contracts.
So, what is changing?
The prohibition on concurrence is ending
Until 31 December 2024, an aggrieved contracting party could not file both a contractual and an extra-contractual claim at the same time. They had to opt for a contractual claim for breach of contract.
As of 2025, the principle of the concurrence prohibition will disappear, and the aggrieved party will be able to submit both a contractual and an extra-contractual claim and thereby obtain damages. Obviously the rules on extra-contractual liability will remain, i.e. there must always be fault, damage and a causal link.
Example: A contractor causes damage to the client’s house while doing building work.
As of January 2025, the client can choose to sue the contractor both on a contractual basis (poor performance of the contract) and on a non-contractual basis (breach of the general standards of care). Depending on the situation, it may sometimes be more advantageous to choose one or the other ground for liability.
Executing agents are no longer protected by law
Until 31 December 2024, executing agents enjoyed strong legal protection. They could only be held liable by their contracting party’s client in exceptional circumstances (e.g. a crime).
As of January 2025, this principle will also be a thing of the past: aggrieved contracting parties (e.g. the principal) will in future be able to directly sue the executing agent of their contracting party (e.g. the subcontractor) for deficiencies in the performance of the contract.
Example: An entrepreneur/client has commissioned their principal to carry out a total renovation of the shop premises and the showroom. During painting work by a subcontractor, damage is accidentally caused to the client’s materials in the showroom.
As of January 2025 the client can now choose to sue the contractor’s subcontractor (the ‘executing agent’) on an extra-contractual basis for the damage caused to their materials.
Are there solutions?
Inclusion of a contractual prohibition on concurrence
You can include a concurrence prohibition in your contracts with specific contractual clauses for this purpose. This way it is possible to preserve the current protection offered by quasi-immunity for your executing agents. This can be especially useful for contracts with a high liability risk.
Surety
For those who regularly use executing agents, contract law also offers a possible solution with the surety method. In these contracts you can stipulate that the executing agent cannot be held directly liable by third parties or that you – as the principal of the executing agent – will compensate any damage they cause.
Issues and opportunities in 2025
The above shows that there is not only room for numerous – new – liability claims, but also for entrepreneurs to strengthen their legal position contractually. The impact of these far-reaching liability rules – and the importance of providing contractual solutions – should therefore certainly not be underestimated.
PKF BOFIDI Legal will be pleased to help you
Do you have more questions on this subject, or would you like us to check your contracts for possible flaws? The lawyers at PKF BOFIDI Legal are ready to help you with their knowledge and experience, so that you and your company are prepared for the new legal reality in 2025.
This article was written by Jasper Caby, a specialist in company law, mergers & acquisitions and corporate law, and Alexander Meesen, a specialist in company law and mergers & acquisitions.