Liability of managing directors in unfair competition


Jens Künzel

Over the last four years, Germany’s Supreme Court of Justice has made an array of judgments, the result of which is that a long-standing rule in the German law of unfair competition has finally come to an end.

In the past, German courts regularly affirmed the liability of people for acts of unfair competition where these people had knowingly and causally contributed to such an act. Under this so-called ‘Störerhaftung’ rule, which can be roughly translated as the liability of the ‘disquieter’ or ‘disrupter’, the courts regularly ruled in favour of plaintiffs who sought relief from managing directors for acts of unfair competition they did not commit themselves, but which were committed by others under their responsibility as representatives of the company.

In practice, the courts often went so far as to almost automatically award claims against managing directors if the managing directors were sued alongside the company for the same unfair competition act. These were mostly cases in which the managing director had knowledge of the acts but simply failed to stop them.

That rule has now been ended, at least in the area of unfair competition law. The Federal Supreme Court re-emphasised in a 2010 decision that the legal basis for claims for unfair competition was the notion of ‘illegal behaviour’. As a consequence, claims for unfair competition required that the person liable had acted him or herself as an offender (Täter) or as a participant (aide), both of which are categories of criminal law.

unfair competition; Federal Supreme Court; German Supreme Court;