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New rules for criminal liability for corporate injury

An act amending the Penal Code and the Commercial Companies Code went into effect on 13 July 2011, modifying the rules for criminal liability of persons serving on the management boards of Polish companies.
The Polish Parliament adopted the Act Amending the Penal Code and Certain Other Acts on 9 June 2011. The act, which went into effect on 13 July, was intended to eliminate certain defects in the previous regulations defining the economic offence of acting to the detriment of a company and to establish new general rules governing the criminal liability of members of corporate boards.
The main changes were repeal of Art. 585 of the Commercial Companies Code, which provided for criminal liability of members of the authorities of commercial companies, and amendment of Art. 296 of the Penal Code, which defines such economic offences as causing injury to a company by a person responsible for handling the affairs of the company.
Under prior law, Art. 585 of the Commercial Companies Code provided the basis for criminal liability for the members of the authorities of a companies, or liquidators, for “acting to the detriment of the company.” Meanwhile, Penal Code Art. 296 provided for liability of persons responsible for handling a company’s financial or commercial affairs, for “incurring a significant material loss” by abuse of their rights or failure to perform their duties.
The vagueness of the concept of “acting to the detriment” of a company under Art. 585 resulted in major problems of interpretation in practice.
The prior offence of “acting to the detriment” of a company (defined by Commercial Companies Code Art. 585) has now been abrogated, and a new offence of a similar nature has been established in Penal Code Art. 296 §1a, an element of which is subjecting a company to “immediate threat of suffering a significant material loss.”
The amended Art. 296 extends not only to unlawful acts which result in causing a company a significant material loss (i.e. a loss exceeding PLN 200,000), but also acts that create an “immediate threat” of suffering such loss.
Under the amendment, the new offence defined by Penal Code Art. 296 §1a may be prosecuted only upon motion of the injured party, unless the injured party is the Polish State Treasury.
This amendment is the second attempt in recent months by the Polish Parliament to address the issue of criminal liability in connection with conducting the affairs of a company. We reported in the Litigation Portal on the Act on Restriction of Administrative Barriers for Citizens and Businesses dated 25 March 2011, which included amendments to Commercial Companies Code Art. 585 which ultimately were not enacted.
Maciej Szewczyk, Corporate Law practice, Wardyński & Partners