Default Commercial Interest Rate Increases for First Time Since 2016

On 17 March 2023, the Belgian Official Journal (Belgisch Staatsblad / Moniteur belge) published the bi-annual default interest rate for commercial transactions which will amount to 10.5% during the first semester of 2023. This marks a strong increase over the rate of 8.0% which had been applicable since the second semester of 2016.

Pursuant to the Law of 2 August 2002 on combating late payment in commercial transactions (Wet van 2 augustus 2002 betreffende de bestrijding van de betalingsachterstand bij handelstransacties / Loi du 2 août 2002 concernant la lutte contre le retard de paiement dans les transactions commerciales), the default commercial interest rate for commercial transactions applies to compensatory payments in commercial transactions (handelstransacties / transactions commerciales), i.e., transactions between companies or between companies and public authorities, but may be deviated from by contract.

Draft Book 6 on "Tort Law" of New Civil Code Submitted to Federal Chamber of Representatives

On 8 March 2023, the Private Member's Bill inserting Book 6 on "Tort Law" in the New Civil Code (Wetsvoorstel houdende boek 6 "Buitencontractuele aansprakelijkheid" van het Burgerlijk Wetboek / Proposition de loi portant le livre 6 "La responsabilité extracontractuelle" du Code civil - the Draft Book on Tort Law) was submitted to the federal Chamber of Representatives to become part of the new Civil Code. The Draft Book on Tort Law is the result of several years of work by a commission of university professors and aims to modernise and codify the provisions on tort law of the old Civil Code. The old Civil Code covers tort law in only six provisions. As a result, this area of law was shaped mostly by the courts.

While the Draft Book on Tort Law in large part codifies the existing case law, such as the requirement of damage to be legitimate and the elaboration of the three elements of extracontractual liability (fault, damage and causal link between the two), it will also effect significant changes as follows:

Free Choice of Harmed Party between Contractual and Extracontractual Liability

While the current regime imposes strict conditions on the victim of a contractual breach who tries to rely on tort law to obtain damages, the Draft Book on Tort Law offers the harmed party the choice between the contractual and extracontractual liability regimes. This choice can have important implications as the reparable damage differs under both sets of rules. When opting for a specific regime, the harmed party will have to satisfy the specific conditions of application of the chosen regime.

Auxiliary Agents (uitvoeringsagenten / agents d'exécution) No Longer Benefit from Quasi-immunity

Under current rules, auxiliary agents, i.e., persons entrusted with the performance of all or part of the contractual obligations of the contract parties, benefit from quasi-immunity in performing the obligations entrusted to them, which means that, as a rule, they cannot be held liable under tort law by the contracting party of their principal. The Draft Book on Tort Law puts an end to this situation, as a result of which auxiliary agents will be liable under tort law towards the contracting party of their principal.

Possibility to Request Preventive Measures

Until now Belgian tort law was reactive, in that it only offered the possibility of requesting damages after the emergence of damage. Similarly to the Book on obligations which now recognises the anticipatory breach of an agreement (See, this Newsletter, Volume 2022, No. 4), the Draft Book on Tort Law allows potential victims of a violation of the tort rules to seek a court injunction to avoid harm.

Mitigation of Equivalence Theory

The equivalence theory establishes the conditions under which a fault is considered to be the cause of damage and provides that there is a causal link as soon as the damage would not have occurred in the absence of the fault. As all causes of the damage are considered to be equivalent under this theory, its application has sometimes led to situations in which even a remote fault gives rise to tort liability.

The Draft Book on Tort Law aims to change this approach by mitigating the equivalence theory in situations in which it would be unreasonable to hold a person liable for a tort. In particular, the foreseeability of the damage will be considered to be a relevant assessment criterion.

Miscellaneous Changes

Other interesting aspects of the reform include (i) the duty to take out insurance for actions of individuals for whom one is responsible; (ii) the inclusion of the rules on liability for defective goods in the new Civil Code; and (iii) the right to be compensated for costs incurred in avoiding the aggravation of damage.

Most provisions of the Draft Book on Tort Law are not mandatory.

By way of background, significant parts of the new Civil Code are already in force. That applies to Book 1 on General Provisions, Title 3 of Book 2 on Patrimonial Relationships within Couples, Book 3 on Goods and Property Law, Book 4 on Successions, Donations and Wills, Book 5 on Obligations and Book 8 on Evidence (See, this Newsletter, Volume 2022, No. 4)

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