Liability of Subcontractors in the Construction Sector: A Paradigm Shift

On 1 January 2025, the new Book 6 of the Civil Code on tortious (non-contractual) liability will enter into force.

The new legal rules will apply to facts that occurred after the law’s entry into force. In concrete terms, this means that any harm or loss that occurs after 1 January 2025 in the context of contracts that have already been concluded falls under the scope of application of this new law.

Is it time to worry now? Not just yet. Is it time to read more about it? Yes, it is.

Let’s focus on Article 6.3 of the New Civil Code. This article governs the concurrence of tortious (non-contractual) liability and contractual liability, on one part, and abolishes the “legal doctrine of quasi-immunity of the performing agent or auxiliary person,” on the other part. In application of this legal doctrine, the client or principal (for example, the master builder or main contractor) cannot hold the subcontractor or sub-subcontractor liable for breach of performance of the contract.

Article 6.3 New Civil Code deals with two types of legal relationships. The first paragraph relates to the liability rules that apply between co-contracting parties, and the second paragraph aims at the rules between an aggrieved contracting party and the agent who was called on by their co-contracting party.

 

Concurrence?

In simple terms, the current situation is that a claim in contract remains separate from a claim in tort. If you have concluded a contract with a party, you can hold that party liable only within the context of this contract.

You may not bring two claims—one in contract and another in tort—against one party and make the claims “concurrent.”

There is, however, an exception to this, which the Court of Cassation developed in the well-known Stuwadoor judgment of 7 Dec. 1973. The Court held that such concurrent claims are allowed only if the fault amounts to not only a contractual breach but also a breach of a general standard of care and— moreover—it caused other harm or loss than that which was the consequence of the poor performance of the contract.

Concurrent claims are therefore possible only under strict, specific conditions.

The principle under the new law is that concurrent claims are always possible. You can therefore always hold your contracting party liable in both contract and tort. However, there are nuances that should be addressed here.

 

Quasi-immunity?

Under the old law, the legal doctrine of quasi-immunity of the performing agent applies.

In simple terms, it suffices in the construction sector to refer to the subcontractor.

The master builder concludes a contract with a contractor who, on its turn, designates an agent (i.e., the subcontractor) to perform the works.

The subcontractor is “immune” to a claim that is brought directly against him by the master builder. The master builder will have to follow the contractual chain and first hold the contractor liable. The contractor will then have to recover its loss by seeking redress from its subcontractor. The subcontractor therefore does not have full immunity but rather quasi-immunity.

As from 1 January 2025, this quasi-immunity will be abolished. The master builder will therefore be able hold the subcontractor directly liable.

 

Nuances

If the legislature were to permit this, then you should begin to—or must—get worried. De facto, it would indeed boil down to the fact that the master builder can hold anyone liable without considering the contracts that were concluded.

The legislature has even downplayed the introduction of the concurrence of claims and the abolition of the quasi-immunity.

The contractual provisions that parties have concluded remain valid even if the aggrieved party does not bring a claim in contract but rather a claim in tort. The statutory provisions continue to apply as well.

The buyer who suffers harm or loss cannot hold its seller liable “as if the sale had not taken place.” Both the statutory rules on sale transactions and provisions of the sales contract remain applicable, and the seller can invoke these means of defense unless the case concerns any violation of physical or psychological integrity or any willful misconduct.

The subcontractor can invoke the means of defense stipulated in the construction contract between the master builder and the contractor as well as its own subcontracting agreement.

Therefore, the master builder may not evade the limitations in its contract by holding the subcontractor liable in tort: the subcontractor (who is the agent) can also invoke the same provisions (under the contract or the law) against the master builder.

Consequently, you’re still protected by the contract that you have concluded, but the basic principle has made a 180° turn.

Not mandatory law – But add and adapt contractual clauses!

The most important point is that Article 6.3 of the New Civil Code is not mandatory law.

Parties can have their contract prohibit concurring contractual and tortious claims or stipulate that the legal doctrine of quasi-immunity of the auxiliary person remains valid, or stipulate both.

We will gladly inform you about contractual clauses that can best protect your legal position, either in a construction contract or subcontracting agreement. We will also draw your attention to clauses that do not offer you any relief because they are void, either in the framework of the legislative amendment or in application of the Code of Economic Law.

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