Lithuania: BD v MT, LSC 26 October 2015, No 3K /2015: Company Director’s Liability for Non-Pecuniary Damage to an Employee  An employee lost 80 percent of his earning capacity due to a work accident.  The director of the employer company was found criminally liable for this accident in January 2011;  In February 2013 the employer was liquidated; damage to the employee was not compensated, as the employee did not file the required paperwork and as a result was not included into a list of the company’s creditors.  The employee filed a direct claim for compensation against the director of the company.  The defendant replied that such a claim was not allowed by art CC.

Applicable law  Art CC: An employer shall be liable to compensation for damage caused by the fault of his employees in the performance of their service (official) duties. (official translation)  LSC caselaw interpreting art 6.264: ▫If a company is under a bankruptcy process, the proper defendant in employee compensation cases remains the employer. Therefore the employee who had been a victim of a work accident must present his claim for compensation in the company’s bankruptcy case. Failure to do so as a result of lack of care leads to a loss of the employee’s right to compensation of his damages. SB v RA, LSC 16 November 2005, No. 3K-3-579/2005.  Both the court of first instance and the court of appeal disregarded this rule and found in favour of the claimant.

LSC affirmed: reasoning  In a situation when an employer is liquidated, the application of the general rule that a victim may only claim compensation from the employer, not directly from the employee who inflicted the damage, would contradict the legislator’s intention to enhance the protection of the victims.  The purpose of art CC is to protect both the victim and the employee who inflicts damage – this mechanism ensures a quick and actual compensation, if the company is able to compensate the damage to the victim, However, if the company is not able to compensate the victim’s damage, the rule should be interpreted as protecting the interests of the victim, and not as releasing the direct tortfeasor from liability.  A contrary interpretation of art CC would contradict the general rule of tortious liability and the principle of restitutio in integrum.  Relied on the commentary of art PETL (liability for auxiliaries).

PETL art. 6:102  1. A person is liable for damage caused by his auxiliaries acting within the scope of their functions provided that they violated the required standard of conduct.  Commentary:  19. Regarding the auxiliary’s personal liability, the Group acknowledged the existence of the following two options, expressing a preference for the second:  (1) exemption from liability for a damage caused to a third party in case of slight or medium negligence, which seems to be the view of the majority legal systems  (2) liability of the auxiliary, making him a potential defendant in a tort suit, combined with a right of recourse against the employer in case of slight or medium negligence.

Commentary  A revolutionary decision in view of the previous particularly restrictive judicial practice  opens the gate to a wider application of art CC, allowing for a direct liability of the person who had inflicted damage, even though its scope remains rather narrow – a) the employer must be liquidated before compensating the damage owed to the employee, b) the damage must have been caused by conduct which was accepted as criminal by a court of law, and c) the compensation of the damage sought must be causally linked with the crime.  the first explicit LSC reference to the PETL and their commentary