A director’s misconduct separable from duties

October 25th 2015

In a ruling dated May 27, 2015 (1), the Cour de cassation (the French Civil Supreme Court) has confirmed its case law according to which a director’s misconduct that qualifies as a voluntary criminal offence, separable, as such, from his duties, implies his personal liability towards the third party victim of such misconduct (see the rulings of the Cour de cassation, Commercial chamber, dated September 28, 2010 and December 9, 2014).

The Cour de cassation has found new ground for applying these precedents to failure to subscribe a mandatory insurance, here, for the organisation of paragliding courses.

This ruling calls for vigilance, especially from construction professionals, bound to subscribe a ten-year insurance for their construction projects.

Temptation is great for these professionals to subscribe an insurance only for coverage of certain works, especially when starting the project.

However, over time, it appears that the areas of work are often extended and that the insurance contracts include ambiguities. Certain professionals may think they are insured when, in fact, they are not.

These professionals should have an attentive review of their insurance contracts and, possibly, have them evolve over time.

It should be noted that this case law holds up despite the resistance of some Courts of appeal (Aix-en-Provence, June 6, 2013; Chambéry, January 9, 2014).

Raphael Oualid

(1) Cass. Com., May 27, 2015, no.13-23772