What does the introduction of a whistleblowing system have to do with your liability risk?
The EU Whistleblower Directive was implemented in Germany by the Whistleblower Protection Act . The HinSchG has been in force since 2 July 2023. The obligation to establish a Internal reporting office is based in particular on Section 12 of the HinSchG. There are many reasons why your company would need a whistleblowing system sooner rather than later. However, the two most important are as follows: Firstly Do you need time to select and implement the right WhWhistleblowing system schedule.
A missing whistleblowing system can constitute a compliance risk, especially if there is a statutory obligation to establish one or if the absence of appropriate supervisory measures facilitates a breach of duty. However, an automatic or „enormous“ increase in liability cannot be derived from this. The decisive factors are the legal form, duties of corporate bodies, specific risk, breach of duty, fault, causality and damage.
General definition of liability
Before we explain what a whistleblowing system is with Your liability risk to do, want we die both relevant principles briefly define:
The principle of shareholder liability
In the case of corporations, a distinction must be made between the liability of the company, the liability of company organs and the potential personal liability of shareholders. Shareholders are not personally liable solely because a criminal offence has been committed within the company or a compliance system is lacking. Individual, corporate, or state action is legal if it complies with applicable laws and statutes. For businesses, this means that from one company,ornor may criminal offences be committed, just as from Private individuals.
The principle of vicarious liability
The management also Managing directors or board members) must for compliance with the principle of legality within des Company worries. Do you have this Failure to do so may result in liability. Here it comes the Director's liability: According to this Principle is liable the Authorised Managing Directors for it, if he does not prevent his employees in business Commit criminal offences. Vicarious Liability arises For one thing of the criminal and administrativeregulatory offences and can lead to fines or penalties. Alternatively is also civil liability the Branch Manager conceivable to society for compensation for the damage causedr.
How can a whistleblowing system reduce your liability risk?
And what does this have to do with whistleblowing systems?
Imagine the following scenario: A crime is uncovered in your company. Now one of your employees comes forward and says: „I observed this months ago. But I didn't dare to address it personally and „snitch“ on someone. A confidential or even anonymous option, however, I do not know of one in our company for reporting the incident. At a friend's place, at least there is a whistleblowing system that you can use at any time for such cases.“
Now the public prosecutor's office is investigating. The public prosecutor's office will check, amongst other things, whether a compliance management system is in place in your company. If this is not the case, you as managing director may be accused of breaching the legality principle. Company managements must fulfil the duty of care appropriate to their respective legal form and implement appropriate organisational and supervisory measures. Whether a specific compliance management system is required and how it must be structured depends in particular on the size, sector, risk profile and specific legal obligations of the company. Compliance systems serve to prevent criminal offences, and that is precisely what matters. If you as managing director have done „everything“ to prevent criminal offences, you have fulfilled your duty and minimised your liability risk: A whistleblowing system can be an important element of a risk-adequate compliance management system.
Sanctions and liability each require specific legal prerequisites. Fines may be imposed on legal entities under the conditions of Section 30 of the German Regulatory Offences Act (OWiG). Persons in leadership positions can be held liable for their own breaches of duty.
Conclusion: Liability risk due to lack of whistleblower system
If a criminal offence is committed within a company and there is no compliance system, the shareholders are liable based on the principle of legality and the employer's liability. By introducing a whistleblowing system, you can minimise this liability risk and, above all, detect criminal offences in good time or even prevent them early on.
If you would like to learn more about whistleblowing systems or the legal framework, please visit our Know-How page. If you have already decided to implement a whistleblowing system in your company, our guide on "Implementing the Whistleblower Protection Act in Your Company" covers everything you need to know for a successful rollout. If you have any questions, please feel free to contact one of our experts.
(The male form used refers to all persons, regardless of gender.)
