What does the introduction of a whistleblowing system have to do with your liability risk?
If you our 5. Part of the Whistleblowing Basics Series „The EU Whistleblowing Directive“ have already read it, you may now be asking yourself: „If the directive has not yet into a German law implemented, why should I already today A whistleblowing system Introduction?“ One Understandable consideration. 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. Zanother Does your liability risk increase without an implemented and functioning whistleblowing system? Huge. So, it's about the principles of the membershAttention and principals' liability, which which we will explain to you in this post in connection with whistleblowing in the company.
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
The law of companies establishescompliance with the Principle of legality as a basis for the actions of societies. 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.
Wie kann ein Whistleblowing-System Ihr Haftungsrisiko reduzieren?
And what does this have to do with whistleblowing systems?
Imagine the following scenario: A criminal offence is uncovered within your company. Now, one of your employees comes forward and says: „I observed this months ago. But I didn't dare to address it in person and „grass“ on anyone. However, I am not aware of any confidential or even anonymous reporting options within our company. A friend of mine's company at least has a whistleblowing system that can be used for such cases at any time.“
The public prosecutor's office is now investigating. The public prosecutor's office will, among other things, check whether a compliance management system exists within your company. If this is not the case, you, as managing director, may be accused of violating the legality principle. According to the current state of case law, a compliance management system is a prerequisite for adhering to the legality principle. Compliance systems are designed to prevent criminal offences, and this 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. The crucial element of such a compliance system is the whistleblowing system.
A breach of the principle of legality is punishable by six-figure fines and the confiscation of all benefits derived from the offence.
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 want to learn more about whistleblowing systems or the legal framework, please take a look at our Know-how Page over. If you have already decided to implement a whistleblowing system in your company, you can learn more in our Guide „Implementing the Whistleblower Protection Act in Your Company“ Everything you need to know for the successful implementation of a whistleblowing system in your company. If you have any questions Contact want one of our experts.
(The male form used refers to all persons, regardless of gender.)
