In a judgment of 10 August 2011, the text of which has recently
become available, the German Federal Court of Justice (the
"Court") rejected an appeal on points of law brought by
the public prosecutor against a judgment of the Higher Regional
Court of Düsseldorf (see VBB on Competition Law, Volume 2010,
No. 4, available at www.vbb.com) acquitting an industrial property
insurance corporation, HDI-Gerling Industrie Versicherung AG
("HDI-Gerling"), from liability for the participation of
its legal predecessor in a cartel.
The German Federal Cartel office ("FCO") had fined
HDI-Gerling's legal predecessor, Gerling Konzern Versicherung
AG ("GKA"), as well as several other insurance
corporations, on account of its participation in an
anti-competitive agreement on the insurance market (see VBB on
Competition Law, Volume 2005, Nos. 4 and 10, available at
www.vbb.com). Subsequently, GKA merged with another insurance
corporation to form a new legal entity, HDI-Gerling. HDI-Gerling
refused to accept liability for the conduct of its legal
predecessor's employees and appealed against the FCO
The liability of legal persons for administrative fines is
regulated in section 30 of the German Administrative Offences Act
(OWiG), which states that a fine can be imposed on a legal person
if one of its organs or a senior manager infringed the
company's obligations by committing an administrative offence.
The Court held that the requirements of this provision were not
fulfilled in the case at hand because it had been the legal
predecessor's organs and senior managers who had participated
in the agreements, but not the organs or employees of the new
corporation. According to the Court, an extension of liability to
the legal successor would only be possible in the exceptional case
that both entities were virtually identical from an economic point
of view. The Court considered that, where a company merely changes
its name or its legal form, this exception may apply. However,
given that, in the present case, two companies of approximately the
same size had consolidated their respective divisions and the
merger led to significant restructuring, the Court concluded that
the predecessor and the successor could not from an economic point
of view be regarded as the same legal person.
The Court stated that any broader interpretation of Section 30
OWiG in order to extend the liability of legal successors would be
contrary to the clear wording of Section 30 OWiG and would violate
the requirement of legal certainty and the prohibition of double
jeopardy in criminal matters laid down in Article 103(2) of the
This judgment is interesting in that it is contrary to standing
practice and case law at European level. It remains to be seen
whether the German legislator will take the opportunity of amending
the law in the framework of the upcoming eighth revision of the
German Act Against Restraints of Competition (see, volume 2011,
n°12, VBB on Competition Law, available at www.vbb.com) so as
to remedy this situation.
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