It is clear following the spectacular ruling against a former top manager that case law is becoming tougher and compliance increasingly important for businesses and corporations.
GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London - www.grprainer.com/en conclude: It has hitherto been the exception rather than the rule for a former top manager to be sentenced to a term of imprisonment due to supposed or actual misconduct. A recent case clearly illustrates that case law is now becoming tougher. It concerned, inter alia, the convergence of private and business interests to the detriment of the company. It also demonstrates that compliance within a company is becoming increasingly important, as this convergence might not have been possible in the first place had there been a functioning system. Moreover, if there is no compliance system in place or it is inadequately equipped then the executive board or management may be liable for this.
The compliance system facilitates compliance with contractual provisions and statutory regulations so that no criminal offences arise from within the company. The executive board or management of a company is responsible for setting up a functioning compliance system. Failure to integrate an appropriate system into the company can have substantial consequences. Enormous economic losses may be incurred and damages claims arise against the company as well as those responsible for it, since companies, including legal persons, are obligated in accordance with the German Administrative Offences Act (Ordnungswidrigkeitengesetz) to ensure that legal infringements do no arise from within the business itself. Accordingly, corporate bodies also bear liability.
To this extent it is in the interests of corporate management to integrate a functioning compliance system. It is also necessary in doing so to ensure that the system is consistently assessed for effectiveness and, where appropriate, expanded. Having said that, the content and structure as well as the implementation of a suitable compliance system represent a major challenge for a lot of businesses, especially since many laws, regulations and rules have to be observed in the process. Lawyers competent in the field of commercial law and corporate criminal law can create, supervise and integrate a secure compliance system into your company.
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