Further amendments to the Draft Act on the Liability of Collective Entities – are they beneficial?

At the beginning of June, we reported the first Draft of the new Act on the Liability of Collective Entities for Punishable Offences and we described the main provisions of this new draft Act of the Ministry of Justice.

Since then, the draft Act has been subject to changes in connection with comments submitted within the framework of the Standing Committee of the Council of Ministers and public consultations. The draft Act created by the Ministry of Justice arouses great interest not only among entrepreneurs and managers, but also in other circles.

Among those who express their engagement in the draft Act is the Council of Entrepreneurs for Small and Medium-sized Entrepreneurs, whose member is Izabella Żyglicka, Vice-President of the Regional Chamber of Commerce in Katowice and the Spokesperson for the Entrepreneurs’ Rights at the Regional Chamber of Commerce. Izabella Żyglicka is also an initiator of establishing at the Council of Entrepreneurs a Team that would develop a common position of the Council with regard to the new law. This position was presented at the meeting of 21 December 2018.

One of the recent changes in the draft Law is the resignation from the idea of prosecuting members of supervisory boards and audit committees for even unintentional failure to perform official duties resulting in causing significant material damage to an economic entity, which was also reported by Gazeta Prawna daily.    

As confirmed by the Undersecretary of State Marcin Warchoł at the meeting of the Council of Entrepreneurs, it was decided that the idea of broad criminal liability of members of supervisory and control bodies for the crime of abuse of trust committed unintentionally as a result of negligence or recklessness will be abandoned.

It is said that it was the Central Anti-Corruption Bureau (CBA) that originally proposed that this idea becomes a part of the draft Act on the Liability of Collective Entities. At the same time, referring to the statement of the Ministry of Justice, Business Insider Polska informs that in the end, Minister Maciej Wąsik, the Secretary to the Secret Service Committee, withdrew the controversial proposal, having taken into account the criticism indicating the far-reaching adverse effects of such a solution.

Work on the draft Act is still in progress and Minister Marcin Warchoł invited the Team at the Council of Entrepreneurs, headed by Izabella Żyglicka, to cooperate with him, emphasising at the same time that in the opinion of the Ministry of Justice, a new law is necessary. However, the Team responsible for the draft Act points out the contradiction between the principles indicated by the draft Act and the principles introduced by the Constitution for Business, including in particular the principle that what is not prohibited by law is allowed, the principles implying the presumption of the entrepreneur’s honesty, the principle of proportionality and the principle of benign interpretation of legal regulations.

The draft Act, which is controversial from the point of view of entrepreneurs, is still evolving. The final content of the Act is not known and as of today, only basic assumptions can be indicated. Entrepreneurs are clearly in favour of introducing effective tools for fighting against economic and fiscal crimes because this kind of offences results in the necessity for them to compete with dishonest entities. However, in the economic environment, the Act is perceived as a way of influencing and attempting to harm the freedom of establishment.  

Attorney at law Michał Korszla