Tue, May. 16, 2006

D&O Liability in Banking

CS - Cologne.   Anne Lehder gives an overview of, and introduction into, the liability of bank directors and officers in German law. In Director and Officer Indemnification by Bank Under German Law, Anne Lehder first outlines the liability of bank directors who are not members of the board of the bank. She shows that in this event only employment law applies, which exempts the director or officer from any claims in case of mere negligence.

Dr. Lehder explains that this general principle of employment law does not apply to bank directors or officers who are formally appointed as executive board members or supervisory board members. For these executives, a broad range of different liability laws apply that are by far stricter than the comforting employment liability law. The article briefly describes the statutes and provisions applicable to the respective legal entities bank directors or officers may work for. The article also distinguishes between the various sorts of claimants that may have claims against directors or officers.

The topic of her article could not be more up-to-date. The article is published at the same time when Deutsche Bank and its former bank director Rolf Breuer face a significant claim for damages brought by former media mogul Leo Kirch--a novelty under German law. The article therefore provides a very interesting overview of the various legal statutes that impose liability upon bank directors and officers and invites every lawyer--be it a German or American--to read further about this developing and more and more serious part of German law.


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