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28.05.2020 Roeland Lembrechts

DPO with a conflict of interest? That'll be € 50,000 ...

The GDPR has now been in force for almost two years. A regrettable observation is that a lot of companies are not yet or not sufficiently compliant.For companies that have done all that is necessary, one of the measures has often been the appointment of a DPO or Data Protection Officer. Precisely this role of DPO still causes a great deal of uncertainty for companies. A recent decision of the Belgian Data Protection Authority (DPA) provides some clarification. Make sure that your internal DPO does not have a conflict of interest! 

 

Internal or external DPO?

The GDPR provides the possibility to appoint a DPO both internally within your company and via an external consultant. Many companies opt for the internal version and appoint one of their staff members to take a DPO course. For example at the Data Protection Institute where our lawyers regularly act as instructors. These DPO classes are often a colourful mishmash of people from different sectors with diverse professional backgrounds. Everyone has his or her reason for attending such a training course: instructions from the employer, additional responsibility as security and/or risk manager, healthy curiosity or as a self-employed person checking what you need to do yourself, or what new opportunities lie ahead.

The advantage of having your own DPO within your company is in the first place the thorough knowledge of the organization. The choice to appoint someone internally is therefore often a no-brainer. After all, at first sight there do not seem to be many additional requirements. There are – at least for the time being – no official diplomas and de facto anyone can take up this position as long as this person meets a number of minimum requirements. The most important prerequisites are knowledge of national and European data protection laws and practices, knowledge of the company or of business processes and sufficient independence with regard to the company and with regard to data processing within the company.

But is it always a good decision to appoint one of your staff members as DPO or are there still reasons to hire an external professional?  

 

Everyone DPO…?

In a decision of 28 April 2020, the Dispute Settlement Chamber of the DPA reaffirmed the independence and essential role of the DPO. The decision helps us to better assess the role, tasks and responsibilities of a DPO.

In the concerned organization, the appointed internal DPO holds a responsible position in the Compliance department, the Risk department and the Internal Audit department. Since he was Head of Internal Audit, he also had the power of decision in that capacity. According to the Dispute Settlement Chamber, there was a conflict of interest here, stressing that there is a difference between merely analysing processes and assessing the functioning of employees through internal audit, which is at odds with the position of trust held by the Data Protection Officer within the company. 

In other words, the DPO (also) determines “the objectives of and the means for processing personal data” on the basis of his other functions. In this way, as DPO, he or she would not be able to independently monitor the handling of personal data and, moreover, the confidentiality and trustworthiness of his or her staff would not be sufficiently guaranteed.

The independence of the DPO and the absolute avoidance of conflicts of interest is reaffirmed by this decision with the reference to the WP29 guidelines (the former European Data Protection Advisory Body). In which is literally stated that the DPO should not hold any position that could determine the purposes and means of the processing of personal data. As a rule of thumb, positions within the organization that involve a conflict of interest are considered to be those of senior management (e.g. Chief Executive, Chief Operating, Chief Financial, Chief Medical Officer, Head of Marketing Department, Head of Human Resources or Head of IT Department). Also lower-level positions within the organizational structure if these persons are to determine the purposes and means of data processing.  

The WP29 states as a good practice that every organisation depending on its activities, size and structure should:

  • identify the functions that create a conflict of interest;
  • to draw up internal rules for this purpose;
  • include a more general explanation of conflicts of interest;
  • declare that their DPO does not have a conflict of interest, as a way to sensitise others to this requirement of independence;
  • include safeguards in the internal rules and ensure that the vacancy for the position of DPO or the service contract is sufficiently precise and detailed to avoid conflicts of interest.

 

The cost of a DPO conflict of interest: sanction by the DPA

As the DPO in question did have a conflict of interest, in addition to the corrective measure to bring itself back in line with the GDPR, an administrative fine of 50,000 euro was imposed on the organisation. 

For the calculation of the fine, the Dispute Settlement Chamber took into account the processing of personal data as a core activity on a very large scale. Including personal data that may have a high degree of sensitivity for data subjects, among other things because they allow for regular and systematic observation. The duration of the infringement was also taken into account, which has been at least from its entry into force until 14 February 2020 (date of the hearing).

 

So an external DPO is advised?

The appointment of an internal DPO can be very useful from an organizational and financial point of view, but is not without risk. It’s difficult to speak of sufficient independence in an internal relationship. Indepence in this sense is the exclusion of a conflict of interest. If you employ an employee, the employer-employee relationship of authority will continue to play a role anyway. A mere ‘paper’ DPO is contrary to the GDPR, given the essential tasks that the DPO must be able to perform. An independent DPO who dares to go radically against the policy lines of the employer, risks sanctions in the long run. Such as missing out on promotions or even dismissal. True enough, this dismissal is subject to social protection, but it can never be ruled out that in reality there will be creative ways of circumventing this. On the other hand, even if the appointment of an internal DPO is no longer subject to the relationship of authority, the usual positions are still in the business of being able to determine the objectives of and means for the personal data.

It is therefore recommended to appoint an external DPO or at least an external supporting DPO service. Independence will be better guaranteed and the risk of conflicts of interest can be minimised. Moreover, you have the possibility to address profiles that meet all the criteria for a DPO:

  • Level of expertise depending on the sensitivity and complexity of the data;
  • Professional qualities: thorough knowledge of data protection legislation and practices. This requires a strong legal profile for a correct analysis;
  • Ability to perform its duties: demonstrating integrity and professional ethics.

 

The DPO lawyer as an absolute guarantee

Not surprisingly, lawyers have the possibility to act (exclusively) as an external DPO. The professional requirements of a DPO are fully in line with the deontological obligations a lawyer has to follow. Article 1 of the Deontology Codex literally says: “An attorney at law practises his profession in an expert manner while respecting professional secrecy, the essential duties of independence and partiality, and avoiding conflicts of interest. He respects the principles of dignity, honesty and discretion that underlie the profession“.

Let it be precisely the DPO principles of expertise, integrity, confidentiality, independence and the avoidance of conflicts of interest which, moreover, are guaranteed by disciplinary rules. The Codex explicitly provides that the disciplinary rules continue to apply when the attorney at law acts as DPO. The DPO attorney at law is thus subject to his own supervisory body.

Moreover, lawyers are obliged to be insured for their liability, even when they act as DPO. 

 

Sirius Legal as DPO?

At Sirius Legal we have been acting as an external DPO for our clients since the GDPR came into force.

Sirius Legal gathers lawyers who have been dealing with data protection expertly for many years, acting as external DPOs as well as providing support to internal DPOs in writing independent and well-founded advice. 

Our team consists of several trained DPOs and we have been teaching future DPOs for more than 2 years through Data Protection Institute.

Feel free to take a look at our DPO services page.

In addition to ad hoc DPO assignments and assistance to internal DPOs you can also rely on Sirius Legal for a number of specific data protection services:

  • Crisis management for data breaches;
  • Data Protection Impact Assessments for new services or new processes;
  • Entire GDPR compliance trajectories;
  • Specific GDPR compliance exercises for marketing- or HR-departments or for webshops and webplatforms;
  • Aid for data exchange and export;
  • Fixed representation in the EU for non-EU responsible people;

Would you like to know more about the opportunities, feel free to contact us via roeland@siriuslegal.be

07.05.2020 Valeska De Pauw

Liability of online marketplaces for trademark infringements: the Court of Justice provides clarification (or not)

You might have read about counterfeit medication used to stop COVID-19. This proves once again that counterfeit goods are here to stay. As a trademark owner it is quite difficult to take action against these practices. Especially since online marketplaces such as Amazon and eBay make it quite easy to sell the counterfeit goods. Shouldn’t trademark owners be able to take action directly against the online marketplace? 

The recent Coty v. Amazon judgment of the European Court of Justice (ECJ) teaches us that it is difficult to hold online marketplaces accountable for such trademark infringements. Everything will depend on the facts and the exact role that the online marketplace fulfils.

 

Coty v. Amazon: what exactly happened?

Amazon is the world’s largest online marketplace for third-party vendors to offer their merchandise. It also allows vendors to outsource inventory management and fulfillment to Amazon through its ‘Shipping by Amazon’ program. The vendor’s inventory is then stored in Amazon’s logistics centers and dispatched from there by third party service providers.

In 2014, a test buyer from the German licensee of the brand DAVIDOFF -Coty Germany- bought a bottle of perfume “Davidoff Hot Water EdT 60 ml” through Amazon.de from a saleswoman who uses “Shipping by Amazon”. As suspected, the bottle turned out to be counterfeit.

Coty urged the saleswoman in question to stop selling the counterfeit perfume immediately. It also also took a stance against Amazon. According to Coty, Amazon is also guilty of counterfeiting because it manages and dispatches the counterfeited products and thus owns them. 

The courts didn’t agree with Coty both in the first and second instance. The judges argued that Amazon had only stored the counterfeit goods on behalf of the saleswoman. Therefore, they had not used -counterfeited- the Davidoff brand itself. Coty then lodged an appeal with the German Bundesgerichtshof, which decided to refer the question to the ECJ. In particular, the Bundesgerichtshof wanted to know whether an undertaking which stores counterfeit goods on behalf of a third party vendor, without being aware of this infringement, was using the trademark itself (and would therefore be complicit to the counterfeiting).

 

Amazon isn’t directly  liable, for the time being…

Both the European Community Trademark Regulation and the more recent Union Trademark Regulation state that as a trademark owner you can only take action against third parties if they use a sign that is identical or similar to your trademark.

The term “use” presupposes active conduct by the online marketplace (and by extension any third party) who has direct or indirect control over the action in which the use exists (see Daimler and Mitsubishi). The online marketplace must use the mark at the very minimum in the context of its own commercial communication and not only in that of the vendor (see Google France and Google). More specifically, this means for online marketplaces that they do not use the contested mark themselves when the mark is displayed on their platform in sales offers (see L’Oréal). Nor will an online marketplace ‘use’ the mark if it merely provides the technical facilities necessary for the use of the mark and is remunerated for that use (see Frisdranken Industrie Winters).

Fully in line with the above, the ECJ gave in the Coty t. Amazon case an interpretation of the more specific use that consists in “offering goods, placing them on the market, stocking them for that purpose or providing services under this sign”. The ECJ says that following this wording the storage of goods – as Amazon does – can only be qualified as “use” if the online marketplace itself intends to offer or market the goods. Since Amazon, based on the facts, did not itself have the intention to sell the perfume bottles or put them on the market, it does not use the Davidoff brand. So Coty cannot hold Amazon directly liable for a trademark infringement.

Is this a triumph for all online marketplaces and other intermediaries? Not really. The ruling is limited to the statement of facts as contained in the referral decision. The ECJ’s decision might have been different if the facts had shown that Amazon was more actively involved in marketing the goods. E.g. packing the goods, promoting them in the results on its search page, managing the returns, etc. The Advocate General seems to be of the opinion that an online marketplace in that case intends to sell or market the disputed goods and is therefore directly liable.

 

… but indirect liability remains possible

Fortunately, as a trademark owner you will not run out of ammunition yet. Because in addition to the trademark regulations, other legislation also remains important. In particular, the E-Commerce Directive and the Enforcement Directive make it possible to hold an intermediary liable when it enables another economic operator to unlawfully use a trademark.

As an information society service provider, an online marketplace may rely on the exemption from liability in Article 14(1) of the E-Commerce Directive in certain cases. However, this requires that the online marketplace has a purely passive role, ensuring only the technical process and access to the platform. Moreover, the exemption will only apply if the online marketplace (1) has no actual knowledge of the infringement and has no knowledge of facts and circumstances clearly establishing the infringement, or (2) acts promptly to remove the contested goods as soon as it becomes aware of the infringement. In order to assess whether an online marketplace is or should be aware of the infringement, one must ask oneself whether a diligent market participant should have detected the infringement (see L’Oréal). Therefore, if the online marketplace has or should have knowledge, or does not promptly remove the infringing goods after you have informed it, you can hold it indirectly liable for the infringement. You do so on the basis of the applicable legislation in the Member State concerned. 

On the other hand, if the online marketplace plays an active role in the sales process so that it can learn about or control the content it stores, it cannot claim exemption from liability (see L’Oréal). So, if it turns out that Amazon plays an active role in the marketing of the goods under the “Sending by Amazon” programme, Amazon would not be able to invoke the exemption and could be held directly liable.

Finally, as a trade mark proprietor, you can apply under Article 11 of the Enforcement Directive for an injunction against intermediaries whose services are used by a third party to infringe your intellectual property rights. 

 

To be continued

For the time being, the ECJ has ruled in favour of online marketplaces, but the scope of the ruling is limited. It has only been established that online marketplaces that merely stock goods on behalf of a third party, without knowledge of the infringement, cannot be held directly liable. Undoubtedly in the future there will be rulings that will deal with the direct liability of more active online marketplaces.

 

Questions about counterfeiting, trademark law or intellectual property?

Feel free to contact Bart Van den Brande (bart@siriuslegal.be) or Valeska De Pauw (valeska@siriuslegal.be).

04.05.2020 Jenny Cheung

Are.quotes.protected?

Everyone tries to do their part during the corona crisis, each in their own way. For example, RUMAG is a marketing company that focuses on young people and sells T-shirts with satirical quotes. They decided to offer a special corona collection. The profits would go to the Red Cross. In the collection were mouth masks with ‘krijg de corona’ (~ get the corona) or T-shirts with the text “IK.GELOOF.IN.JOU.EN.MIJ.” (~ I.BELIEVE.IN.YOU.AND.ME.). RUMAG received so much criticism it made the CEO resign.

The lyrics “ik geloof in jou en mij” (~ I believe in you and me) might not sound so familiar to our English readers. But it refers to the song ‘Avond’ (~ Evening) by the Dutch musician Boudewijn de Groot (written by Lennaert Nijgh). The quote on the T-shirts is a part of the lyrics: “maar ik geloof, ik geloof, ik geloof, ik geloof in jou en mij” (~ but I believe, I believe, I believe, I believe in you and me). This begs the question: is this text protected by copyright and are others allowed to (partly) reproduce it?

 

Criticism on RUMAG 

RUMAG makes T-shirts, coffee mugs, doormats, balloons, … with satirical quotes in its characteristic layout. White letters on a black background with the spaces replaced by dots. These quotes often do not originate from RUMAG, but from others or from a translation into Dutch of already existing statements in English. Can RUMAG do this or are quotes protected by copyright?

In the program “Zondag met Lubach” (a Dutch talk show) the presentator Arjen Lubach disapproves of this in every way possible. He accuses RUMAG of plagiarism and trying to profit from the Coronacrisis. A few years ago, RUMAG has also been criticised in Belgium for ‘stealing’ the “IK.WIL.NAAR.HUIS-slogan” (~ I.WANT.TO.GO.HOME) by Belgian designer Karen François (known for the quote “Aladdin zonder d is ook ook Alain” ~ Aladdin without the D is called Alain). 

 

Copyright and quotes

Quotes can be protected by copyright when two conditions are met:

1) the text has its own original character;

2) the text bears a personal stamp of the creator.

Ordinary or trivial works are not eligible for copyright protection. In the Infopaq judgment, the ECJ has long held that sentences may be protected by copyright as long as it is original and creative. Quotes can therefore be protected if they contain a certain amount of creativity on the part of the creator. 

Sentences are only protected if they are ‘exceptionally original’ or ‘distinctly creative’. In principle this boils down to: the more choices the author made, the more creativity there is. An author makes fewer choices for short sentences and therefore less creativity can arise. This does not mean that short sentences are ruled out without a doubt from copyright protection. It simply cannot be about sentences that everyone could have thought of. 

It will come as no surprise that short everyday sentences commonly used in certain situations do not show any form of creativity. Thus, they do not enjoy copyright protection. This seems to be the case for T-shirts with the text ”ik wil naar huis” (~ I want to go home). This is a short sentence that in itself is obvious to everyone and will not be protected by copyright.

With regard to RUMAG’s T-shirts with the text “IK.GELOOF.IN.JOU.EN.MIJ.” (~ I.BELIEVE.IN.YOU.AND.ME) printed upon them, it is both defensible and disputable that it is protected by copyright. It is defensible because in the past it was assumed that the song title “Hoe sterk is de eenzame fietser” (~ How strong is the lonely cyclist) (also written by Lennaert Nijgh) is protected by copyright. On the other hand, the copyright protection of “Ik geloof in jou en mij” (~ I believe in you and me) is questionable. It is only a part of the lyrics and it’s an everyday sentence that anyone could have thought of. 

Clearly, you’ll have to access each individual quote in order to know whether it is protected by copyright.

 

Is there an infringement by RUMAG?

A copyright infringement exists when a copyrighted work is made public by someone without the author’s consent. In the case of RUMAG, you have to check each quote whether it is protected by copyright. Then you’ll need to check whether the work has been reproduced without permission.

There are exceptions to the prohibition of reproducing existing copyrighted works. For example, it is permitted to copy copyrighted works, such as a quote, and to print them on a T-shirt, if they are intended for private use only. Of course, this exception did not apply to RUMAG who put the T-shirts up for sale via their website in support of the Red Cross. 

In addition, it is allowed to cite texts. However, it is only allowed if the copied text is used for criticism or review. This is because of the freedom of expression and the right to criticize. Furthermore, it must be in a serious context, such as an announcement, an assessment or a scholarly treatise. An acknowledgement of the source is also mandatory. It is clear that RUMAG’s satirical quotes do not fall under this exception. 

As a final observation, we mention the parody as an exception. (Our blog article on parody in the world of fashion might also be relevant to you, regrettably only available in Dutch for now) This boils down to the fact that a copy of a copyright-protected work is allowed when it has a humorous intention. It also has to take on a different meaning than the original work without creating any confusion. It seems very unlikely that the RUMAG case would fall under this exception. The mere copying of existing texts and shaping them in their characteristic layout (white letters against a black background with dots instead of spaces) seems to contain little humour and does not bring any new context. Certainly not when the quotes are linked to a commercial aspect, namely the sale of T-shirts and office supplies.

 

Some.quotes.are.protected.

It is not self-evident that quotes can benefit from copyright protection. It often contains a lack of creativity on the part of the creator and belongs to everyday phrases that anyone could have thought of. This is one of the reasons why RUMAG keeps getting away with using other people’s quotes. Their tactic is that they often don’t use the full quotes, but only part of them. 

If a quote is protected by copyright, the infringer will be able to defend himself by invoking the exception: the citation or the parody. Neither of these are easily accepted.

In the case of the T-shirts ‘IK.GELOOF.IN.JOU.EN.MIJ.’ (~ I.BELIEVE.IN.YOU.AND.ME) there might be some doubt whether this is copyright-protected. One thing is certain:  the corona collection is no longer available at RUMAG, perhaps because of the criticism they received in the Dutch talk show.

 

Any questions about copyright law or this article?

Feel free to contact Jenny Cheung (jenny@siriuslegal.be) or Bart Van den Brande (bart@siriuslegal.be). 

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26.04.2020 Bart Van den Brande

No e-commerce without analytics data

Without analytics there is no e-commerce. If you don’t know and understand your customer, you can’t sell your products in the best possible way. In a classic brick and mortar environment you can still gather a lot of insights about your customers by observing shopping behavior, tracking loyalty cards and monitoring inventory. In an online environment you can only do the same with a good analytics account.

That might seem self-evident, but unfortunately the government doesn’t share this view. Analytics accounts only function on the basis of cookies. The position of the Belgian Data Protection Authority (DPA) regarding the use of cookies – and in particular analytics cookies – has clearly been adjusted over the past few months. It used to be accepted that websites place analytics cookies without explicit permission. For several months now, the Belgian DPA communicates to the public that

placing analytics cookies always requires the prior opt-in of website visitors.

 

 

Without data analytics you’re  navigating blindly through e-commerce

Many entrepreneurs discovered e-commerce only in the past few weeks. The Covid-19 crisis caused restaurant owners to switch to takeaway or delivery. Small businesses started their own webshop or began selling via one of the many new online platforms that want to support local entrepreneurs and local producers in these difficult times. 

These new digital merchants quickly learn one thing: without visitors to your webshop, you don’t sell anything. So you have to be easily accessible to your customer and you have to ensure that your webshop is set up so that it yields optimal results. It is therefore crucial to be able to measure the traffic to your webshop and the behaviour of visitors on your website as accurately as possible. 

Analytics allows you to see exactly how visitors end up on your website: via a Google search, one of your Adwords campaigns, via links on other sites or via your newsletter. Furthermore, your analytics account allows you to monitor the reactions and behaviour of visitors to your website and to make adjustments based on that: is your SEO good, don’t you spend too much on that SEA campaign that doesn’t convert anyway, does last week’s price adjustment have the desired success, does the new layout of a certain page work, …?

You’re navigating blindly without a well-designed analytics account. You don’t know where visitors come from, what pages and products they visit, how long they hang around, which ads work and which ones don’t, which products are presented well or badly or are priced correctly, … In other words, e-commerce is guesswork without good analytics.

 

But analytics requires cookies

That analytics account – whether it is Google Analytics or any other tool – works on the basis of cookies. These are small text files placed on your device the first time you visit a website and which then map your surfing behaviour.  

That’s exactly where the problem starts. In order to be able to place such analytics cookies, you need the prior consent of the visitor to your website. The first time someone visits your website you have to show a pop-up or an overlay in which you explicitly inform the visitor that you want to place cookies, what they are used for and that you request their permission to do so.

 

No pre-ticked consent means no cookies and that’s a big problem in an e-commerce environment.

After all, no analytics cookies means no data you can use to organize your sales and marketing, no insight into the origin of your visitors, no insight into the success of your SEO, your page layout or your pricing strategy, …

As a webshop, you also risk being left behind with uncontrollable advertising campaigns: no cookies also means a drastic reduction of audiences for retargeting campaigns, for increased bids in Google Search, for cross device campaigns and so on. Performance campaigns are 30 to 60% uncontrollable and can therefore no longer be optimized. This is not only a disaster for the e-commerce sector, but for every advertiser and his media or marketing agency. The real ROI of online investments is no longer measurable and extrapolations threaten to be completely wrong because the remaining data is no longer sufficiently representative.

 

So we just ask permission, right?

Right now you might be thinking, okay not a problem. Then we’ll just ask for an opt-in the first time someone visits our website, right? Of course you can. However, various studies and our own a/b tests with some of our clients show that, depending on the exact circumstances, between 30 to 60% of your website visitors don’t provide an active opt-in if you ask for it. This means that as a webshop you lose between 30 to 60% of your data by dutifully complying with the law…

Dura lex, sed lex…?

The above is undoubtedly a disaster for webshops, but the rules are clear. The Belgian DPA repeatedly drew attention to these rules in recent months. Just recently it published a cookie information page (not available in English, we are sorry for that) where it explicitly reiterated that analytics cookies always require a prior opt-in. The only time you don’t need this prior opt-in is when you place strictly necessary cookies. Strictly necessary means in this case that your website will not work (from a visitor’s point of view) without that particular cookie.

The Belgian DPA took the same position in the much-discussed Jubel case, in which a fine of 15,000 EUR was imposed because – in addition to a few other infringements – analytics cookies were placed without a prior opt-in. This was confirmed by the DPA’s members in various public appearances in recent months. For example at the LaFeweb event in Gembloux earlier this year.

The Belgian DPA’s position on analytics cookies is difficult to grasp. We are always the first to welcome privacy protection, but in this case a correct application of the law threatens to cause very large financial damage to an entire sector. Obviously, this cannot be the intention.  Furthermore, the governments in our neighbouring countries appear to be dealing with this problem in a considerably more nuanced way. In France, the Netherlands or Germany analytic cookies can be placed without a prior opt-in under a number of conditions. This causes double damage to the Belgian e-commerce sector. Belgian websites suffer a considerable competitive disadvantage compared to webshops in neighbouring countries, as they have access to detailed visitor data without having to break the law.

It is crucial for the sector to make its voice heard in this context. Fortunately, some sector federations in the e-commerce and online marketing sector have woken up to address the problem to the Belgian government. They began to lobby for a more flexible interpretation similar to that existing in our neighbouring countries. With respect for the privacy of consumers, but also with an eye for the commercial interests of the e-commerce sector.

 

And in the meantime?

Caution is advised. Make sure you have a proper cookie opt-in, not only for analytics, but for all cookies on your website. For more information, simply contact us at info@siriuslegal.be.

24.04.2020 Bart Van den Brande

Liking or sharing a slanderous social media post is punishable

Caution is advised when you like a seemingly “funny” Facebook post about someone else or a negative review about a company or webshop. The Swiss Supreme Court ruled that you could be punished if the content turns out to be slanderous or insulting. So not only the posting of such content is punishable, but also simply liking it…

 

 

Slander, defamations and insults online

Slander and defamation are punishable. Anyone who tells harmful lies in public that might damage someone else’s honour or reputation commits a breach of article 442 of the Belgian Penal Code. This also applies to public insults, in that case article 448 is applicable.

Companies can also be the victim of slanderous or insulting statements. For example in false reviews by vindictive customers or angry competitors. The same applies to slander or insults on social media. After all, social media are usually considered as “generally accessible” or “public” places.

 

Even for a simple like

However, the recent Swiss judgement goes even further. The judge ruled that next to posting slanderous or insulting messages also liking these posts is possibly punishable.

Earlier this year, the Swiss Supreme Court issued a ruling about ‘likes’ and ‘shares’ on Facebook (Decision on defamation posts 6B_1114 / 2018 of 29 January 2020). It ruled that liking and sharing messages could possibly lead to a conviction for slander or insult (or at least their equivalents under Swiss law).

The whole dispute revolved around someone who had liked and shared several messages on Facebook accusing an association and one of its members of antisemitism, national socialism and racism.

The Supreme Court did not answer the question whether antisemitism or racism took place. That question must be dealt with by the competent court. The Supreme Court does rule that liking and sharing such messages can be punishable under article 173 of the Swiss Penal Code, which is the equivalent of the Belgian articles 445 and 448 on defamation, slander and public insults.

 

Why is liking or sharing punishable?

The Swiss Supreme Court finds that liking and sharing social media posts helps them reach a larger audience or even go viral. Therefore, anyone who shares or likes slanderous messages – deliberately – contributes to their distribution. Therefore he or she causes additional damage to the honour of the person whom the slanderous or insulting posts are aimed at. For this reason, the Supreme Court decided that liking and sharing slanderous posts in principle constitute slander under Swiss criminal law.

 

What about Belgian law?

To our best knowledge, there is no Belgian judgment so far ruling that liking or sharing slanderous or insulting posts on Facebook or other social media is punishable.

But in our opinion the logic of the Swiss Supreme Court is also valid in Belgium. Here it’s necessary to publicly, deliberately and maliciously make certain false statements in order for there to be slander and defamation. Insult occurs when someone makes a public accusation with the intention of “damaging that person’s honour”.

So in both cases it’s necessary that the act is done in public and that there is an intention to harm. It is perfectly conceivable under Belgian law that someone intentionally shares or likes a slanderous or insulting article or post. Fully aware that doing so will help spread the message to the public and cause harm to the person in question. After all, within most social media, the purpose of sharing and liking messages is precisely to further spread a message to the public. 

 

What can I do when my company or webshop is the victim of online slander, defamation or insults?

The great difficulty online often turns out to be that the perpetrators cannot be identified. After all, the Internet allows a high degree of anonymity for those who do not want to be identified. So the first task is to find out who the perpetrator is.

Afterward, there are a few steps you can take:

  • You could file a complaint with the social media platform in question. This might lead to the deletion of the message. Popular platforms such as Google and Facebook provide the possibility to report such abuse. Unfortunately they seldom remove content. Therefore, this is often not the most effective measure.
  • Your lawyer could send a notice of default and demand the removal under the threat of legal proceedings.
  • You could file a criminal complaint, after which a criminal investigation will take place and a conviction might follow (but slander and defamation are generally not a priority for our already overburdened criminal courts, so this type of complaint usually leads nowhere).
  • You could start a civil procedure in court yourself. Here you can claim compensation for damages, demand a rectification and/or demand the removal of the message with a penalty payment for every day or hour of delay. If necessary, you can try to obtain a provisional removal in interlocutory proceedings.
  • If you are a company or trader and the perpetrator is too, you might consider a “strike action”. This is a fast-track procedure which works as an interlocutory proceeding. The court can order the cessation of infringements that constitute unfair competition or that do not correspond to the normal behaviour you may expect from a competitor or trading partner.
  • Lastly, privacy law might provide a solution. Based on your “right to be forgotten”, you could demand that the social media platform and/or the major online search engines remove the harmful content.

 

Questions about harmful posts on social media or damaging reviews?

Feel free to call or email us on +32 486 901 931 or bart@siriuslegal.be for a first answer to your question.

23.04.2020 Sophie Vercraeye

World Book and Copyright Day: during this Coronacrisis flexibility is much needed

Today is ‘World Book and Copyright Day’. During this Coronacrisis, books not only help to prevent boredom, they can also provide a solution for the Coronavirus. After all, books, academic articles and other literary works contain an enormous amount of information that can make a difference in finding a vaccine. However, these works are stowed away in closed libraries, universities and learning centres. Despite the fact that much literature is available digitally, there are many pieces that can only be consulted on site. This is for copyright reasons. Consequently, libraries are looking for ways to get these works to their readers. This requires flexibility and possibly a reinterpretation of copyright law. 

 

Copyright law

Copyright has been created to stimulate new creations and their exploitation. It is an exclusive right the author has on his creations. These can take the form of computer programs, photographs and other audiovisual works, literary works, music, architecture, … It is logical that the copyright in principle belongs to the creator of the work, since it is a creative and personal work that originates from the human mind.

Certain conditions must be met in order to obtain the copyright. It must be a creative achievement, expressed in a concrete form (i.e. not an ‘idea’ or ‘theory’) and be original. If all three conditions are met, the right arises automatically without the need for registration.

The protection lasts from the creation up until 70 years following your untimely passing. As a consequence, everyone who wants to use or distribute your work should always ask for your permission first. In return, you may ask for a compensation. For example, someone wants to place your article on his or her website. He or she will first have to ask your permission and you can attach conditions to this (remuneration, mentioning the source, …). Belgian law provides for some cases in which users don’t have to ask the copyright holder for permission to reproduce or communicate protected works to the public. For example, exceptions for private use, education and scientific research and for libraries, museums and archives.

 

Are we in need of changes to copyright law?

In times like these, sharing knowledge is crucial, both for science and education. Worldwide initiatives arise that ask copyright holders and governments for adjustments and flexibility. 

The European Directive, which forms the basis of the Belgian Copyright Act, provides for four mandatory exceptions to copyright (see above). Be advised, this is not necessarily the case outside Europe. There are countries that aren’t obliged to allow exceptions for e.g. scientific research and education. Many interest groups want to change this. In Belgium, exceptions are allowed, but many of these works are not digitally available. These exceptions are insufficiently exploited today because of the closure of libraries due to the Coronavirus. As a result, there is call for digitalisation, provided that the necessary security measures are taken to prevent further distribution (see below).

Hundreds of interest groups are asking WIPO (World Intellectual Property Organization) to provide urgent advice to the Member States. This should ensure that researchers, archives, educational institutions and libraries during the Coronacrisis to fulfil their educational responsibilities and provide remote services using copyrighted works without fear of litigation.

Not only the government, but also the copyright holders are addressed. They are asked to remove all restrictions that make distance learning, research and access to culture more difficult. The interest groups strive for a worldwide exchange of knowledge, information and literature. Ideally, in addition to many more works becoming available online, the limit on the number of ‘loans’ of a work should also be removed. In reality, works can only be lent to two people at the same time and others are put on a waiting list. This is a waste of time. An efficient exchange of information is currently indispensable.

 

Our reflections

To realise these adaptations, a distinction should be made between recreational books (children’s books, gardening for dummies, thrillers, …) and educational books (such as biological, legal or economic themes). In our opinion, recreational books, which are not used in a ‘school setting’, belong outside the scope of these exceptions. The copyright holders can grant access to these types of literature as an act of kindness, although this cannot be expected or demanded of them. In spite of the entertainment and pleasures that recreational books offer us, this does not exceed the interest and exclusive right of the author.

In addition, it is essential to thoroughly examine how the release of these works would be handled from a technical perspective. The books and other works should not be downloadable with the result that they can be distributed uncontrollably. One can choose to use encrypted files that are automatically removed from the computer after a short period of time. Also, for educational purposes these documents may only be distributed on a secured online platform (e.g. blackboard, smartschool, toledo, …) instead of email.

 

Call for flexibility 

Copyright is undoubtedly tremendously important, but unfortunately it also causes a huge blockade of access to global information. During the Coronacrisis sharing information and knowledge is crucial to find a vaccine asap and to minimize the impact of the crisis.

The Coronacrisis has prompted a worldwide call for a flexible interpretation or reinterpretation of copyright law. Some countries should first of all incorporate copyright exceptions for scientific research and education. On this World Book Day, Sirius Legal wholeheartedly supports this battle.

 

Questions about copyright or this article?

Feel free to contact Sophie Vercraeye (sophie@siriuslegal.be) or Bart Van den Brande (bart@siriuslegal.be).

09.04.2020 Roeland Lembrechts

Measures against corona in the tourism sector: can the traveller refuse a voucher?

The tourism sector is one of the most affected sectors by the corona virus at the moment. Hotels, bars, restaurants, airlines, tour operators and travel agencies have to cancel their services in great numbers. Every country where the Coronavirus struck is announcing lockdown measures. Ski resorts are closed, hotels no longer allowed to receive guests, meetings become impossible, events banned, etc.

The law protects travellers who booked a so-called package holiday. In principle, they will be fully reimbursed for their paid trip as soon as possible and in any case within 14 days after the cancellation. However, tour operators cannot fulfil this obligation in reality due to the large number of cancellations.

 

Crisis management by the government

The Belgian government issued a ministerial decree on the 19th of March 2020 to provide the travel sector with more financial breathing space. This measure is in addition to the support measures for entrepreneurs and the nuisance allowance by the Flanders Innovation & Entrepreneurship Agency. Tour operators can enjoy these measures when exceptional circumstances could jeopardise, in whole or in part, the proper functioning of the economy. The Coronavirus is a typical example of these exceptional circumstances. After all, the travel sector is severely affected by the large number of cancellations for package holidays.

On the 19th of March 2020 they decided that if a package holiday is cancelled due to the corona crisis, either by the tour operator or by the traveller, the tour operator is entitled to give him a voucher worth the amount paid instead of a refund.

In order to apply this arrangement, this voucher must meet 4 conditions:

  • the voucher represents the full value of the amount paid by the traveller;
  • the delivery of the voucher is free of charge;
  • the voucher is valid for at least 1 year;
  • the voucher explicitly states that it was delivered as a result of the Coronacrisis.

According to the decision, the traveller can’t refuse this voucher.

 

Time will tell

So, are you as a tour operator saved by this measure and can you oblige travellers to accept such a voucher?

Unfortunately we are not so sure of this… The measure is temporary and limited to what is strictly necessary. It came into effect on the 20th of March 2020 and will apply for a renewable period of 3 months. Of course, it concerns current travel contracts and will apply immediately. As a result the general economic interest prevails over the legal certainty the traveller and the tour operator had at the conclusion of the package holiday.

The only question is whether this decision also covers package holidays cancelled before the 20th of as a result of the coronavirus (and there will be many of them already). In principle, the measure can’t be applied retroactively. So it is questionable whether these travellers are obliged to accept the voucher and consequently denied the right to claim a full refund. The measure does not go into this, so the verdict must be left to the courts.

In addition, please note that the scope of the measure is up for debate. It says that package holidays can be cancelled during this 3 month period by offering a voucher. Does this mean that cancellations can only be made for package holidays that are carried out during this period? Or is it also applicable to package holidays that need to be carried out after this period, but are already cancelled by the tour operator? Circumstances can vary sufficiently in these cases. In view of the strictly necessary nature of the measure, it would only concern package holidays that have to be carried out during this period. However, it’s clear that this could be a source of discussion.

The European Commission has already reacted to the Belgian measure. It holds the opinion that travellers should have the choice between a voucher or a refund. All other decisions are not in line with the European regulations that aim for strong consumer protection and oblige Member States to guarantee the reimbursement of package holidays. 

In the meantime, the Belgian government has taken note of this and amended its decision.

Concretely, the regulation is now as follows:

  • In addition to reimbursement, as a tour operator you can offer a voucher that is valid for at least 1 year;
  • The traveller is then free to use this voucher for a new package holiday. For the tour operator the voucher is regarded as a means of payment (So you can’t oblige the traveller to exclusively use the voucher and write out that voucher for 1 specific trip);
  • From the moment you have offered the voucher to the traveller, he has 1 year to ask for a refund if he doesn’t want to use the voucher;
  • In the event of a reimbursement request, the tour operator has a period of 6 months to refund the total amount.

However, the effect in time has not been changed so the scope of the measure is still up for debate.
Notwithstanding this regulation and the question of its temporal effect, we still can conclude that the Ministerial Decree is in conflict with the mandatory payment term in the Package Travel Directive and the Package Travel Act, so that this regulation should be considered null and void. In principle the traveler must always have the option to choose between a voucher scheme or a refund within the legally stipulated period.

 

Linked travel arrangements or travel services excluded

Keep in mind that this measure only applies to package holidays as defined by law. A package holiday is not the same as a linked travel arrangement. It’s easy to confuse the one with the other. So you have to look at the specific manner in which the ‘travel product’ was sold. The same applies for the sale of a travel service linked with a limited tourism service.
If it’s not a package holiday, you are not obliged to offer a voucher. In that case, please consult the general terms and conditions and any force majeure clauses. If this is not arranged contractually, we refer you to our article ‘The coronavirus and force majeure’.

 

Conclusion

The government has legitimately taken a Corona measure by allowing tour operators to offer their travellers a voucher instead of a refund. However, this measure raises a number of questions as to its correct application. Pay attention to when the agreement was terminated, what the date of the holiday is and whether you are actually talking about a package holiday.

Would you like to have a concrete legal reflex when handling your cancellations? Feel free to contact Roeland via roeland@siriuslegal.be.

This article was written on March 23 and updated on April 9 

06.04.2020 Bart Van den Brande

First GDPR fine for Belgian company reversed in appeal

The Belgian Data Protection Authority (DPA) has imposed very few fines over the past two years compared to its colleagues in neighbouring countries. Apart from two smaller fines in a non-commercial context, it imposed only one, hefty, fine on a commercial company. This one fine was recently reversed in appeal by the so-called “Market Court” (Judgment in dutch), a special department of the Court of Appeal in Brussels that is competent for appeal proceedings against the Belgian DPA, the BIPT (Belgian Institute for Postal Services and Telecommunications), the FSMA (Financial Services and Markets Authority) and other market regulators.

So back to square one for the Belgian DPA and a serious blow for GDPR compliance in Belgium. Even more than before, companies are getting a feeling of impunity. However, that would not be a wise conclusion after investigating this story…

 

 

Loyalty card created on the basis of identity card

In 2018, the Belgian DPA received a complaint from a customer about a liquor store. The plaintiff wanted a loyalty card from the store and in order to obtain it, she was obliged to have her electronic identity card read into the register of the liquor store. However, the lady did not wish to have her identity card read in electronically. She felt that this was an invasion of her privacy. Instead, she suggested that the personal data needed to create a loyalted card should simply be written down on paper. The liquor store refused this and then simply refused her the loyalty card stating that it could only be created electronically.

 

Why is this contrary to GDPR?

The Belgian DPA investigated the lady’s complaint in 2019 and identified three infringements of the GDPR for which it imposed a fine of EUR 10,000.

Firstly, according to the Belgian DPA, the principle of “minimum data processing” had not been respected. This simply states that you may not collect and process more data than you really need and that you may not keep it longer than is strictly necessary. In this case, in order to create the loyalty card, the liquor store entered all the data of the eID, such as surname, first name, address, etc., but also the photo and the barcode linked to the National Regististration number. In its decision, the Belgian DPA pointed out that the National Registration number is an item of information that is subject to strict rules for its consultation and use and that it may not be collected and processed systematically without justification.

The Belgian DPA also found that the liquor store did not obtain valid authorisation from its customers to collect all such data electronically. Data can only be processed on a very limited number of grounds. In this case, the liquor store relied on the consent of its customers (“may we collect your data as part of the management of your customer card?”). However, the problem was that such consent must be “free”, which means that customers must also be able to choose to refuse consent to read out their electronic ID card, but in that case they must not be penalised for this by not obtaining a loyalty card. In other words, even those who do not give consent to read out their ID card can obtain a loyalty card, and that was not the case here.

This decision of the Belgian DPA was, in our view, logical in all elements and a correct application of the basic principles of the GDPR. The systematic collection of so much detailed data about customers, including the National Registration number, solely for marketing purposes (in this case customer loyalty via a customer card) can in no way be justified under the GDPR.

 

Reversed in appeal

At the time, this was a sort of exemplary case for the Belgian DPA. The Chairman of the Disputes Chamber Hielke Hijmans, said on the Belgian DPA’s website at the time: “Companies or merchants need to handle personal data more consciously when they request all kinds of personal data for a service, especially if this is done without the customer’s valid consent. The GDPR provides principles and obligations that should serve as a guideline for processing personal data correctly”. The President of the Belgian DPA added: “This decision is an important new building block on the way to better protect the privacy of our citizens”.

It is therefore a serious step backwards for the Belgian DPA to now find that the Market Court has reversed this decision on appeal.

It is important to note that the Market Court does not actually refute the Belgian DPA’s reasoning in terms of content. The fact that the liquor store in question did not respect the principles of the GDPR is not disputed.

The entire decision of the Market Court revolves around the way in which the fine of the Belgian DPA was established and the procedures that were followed. For example, the Market Court found that the DPA’s decision was sloppy and that the description of the facts given in the decision did not always fully correspond to the documents in the file and to the facts.

The Market Court also ruled that the amount of the fine imposed (EUR 10,000) was insufficiently justified by the Belgian DPA. The Belgian DPA itself determines which sanction it imposes, but it must take a number of criteria into account, such as “the seriousness of the infringement; the duration of the infringement; the necessary deterrent effect to prevent further infringements” and it must motivate and substantiate its decision in the light of those criteria.

Furthermore, the Market Court states that “the offender must be informed, before a sanction is imposed, of the nature of the sanction envisaged and the extent of the sanction (where a fine is contemplated). The offender must be warned (in order to avoid unnecessary sanctioning) and given the opportunity to defend himself on the amounts of the fine proposed by the Chamber of Disputes before the sanction is effectively imposed and implemented”.

 

What should we learn from this?

Don’t be fooled by this decision. As said before, it does not make any judgment on the merits of the case, which is also not open to much discussion. Any data collection and processing under the GDPR must be proportionate and if you base yourself on consent, that consent must be “free”.

What does emerge from this decision is that the Belgian DPA may still be struggling with some -logical- growing pains. This was the first real fine under GDPR (with the exception of two rather anecdotal cases) and it is clear that the DPA’s Chamber of Disputes still has to grow into its role. Future decisions will undoubtedly be better and more precisely motivated and this also means that future offenders are less likely to get away with it.

In other words, what we need to remember above all is that there are effective checks on compliance with the GDPR and that, in the event of non-compliance, effective fines are imposed, fines that will be better motivated in the future and less easy to escape. In our view, this decision will strengthen rather than weaken the future functioning of the Belgian DPA.

So prepare your company in time by means of a thorough GDPR compliance exercise and certainly also ensure a thorough compliance exercise within your marketing department.

 

Questions about GDPR or in need of guidance?

Sirius Legal has been a true specialist in data protection and privacy for many years. Our team assists countless large and small companies and non-profit organisations from Belgium, the Netherlands, France and the rest of Europe with all possible questions concerning GDPR and data protection.

Among others, we offer the following services:

  • Full GDPR compliance audit trajectories;
  • Our Start2GDPR toolkit to get started yourself;
  • Specific subprojects for marketing departments, webshops, HR departments, etc…;
  • DPIA exercises for new apps, new websites, new tools such as CDP’s and marketing automation tools;
  • DPO-as-a-service;
  • Education, training and presentations;
  • Ad hoc questions;
  • Assistance with disputes, complaints and legal proceedings;
  • Advice on cyber risks and help and assistance with data breaches, hacking, data loss.

For all your GDPR related questions, you can always call or mail Bart Van den Brande: bart@siriuslegal.be or +32 486 901 931.

Popular article
16.03.2020 Sophie Vercraeye

Coronavirus: Force majeure event?

The Coronavirus or Covid-19 virus is spreading faster than we would like… In addition to the obvious impact on public health, we also see that companies are experiencing big difficulties. Up to now, we have heard stories of delayed deliveries, intermission of work, cancelled contracts and last-minute cancelled events. The prime question that arises in these situations: Who will pay for the costs already incurred or what about a compensation? What consequences does the Coronavirus have for the breach of contractual obligations?

Often we hear that the Coronavirus is “a clear case of force majeure” and that compensation for damages is not an issue here. Is this really the case? Don’t shoot the messenger, but the answer is no. Only if a number of strict conditions are met, a company will be able to invoke force majeure. This means everything depends on the specific situation, even in case of Corona.  

 

 

What is force majeure? 

According to Belgian law, force majeure is ‘an insurmountable obstacle to the fulfillment of a commitment’. It has to be about:

  1. an unforeseen circumstance 
  2. which is beyond the control of the party who is to carry out the contract
  3. and which renders the fulfillment of the obligation completely impossible.

Jurisprudence and legal doctrine have continued to shape these vague conditions. Unfortunately, opinions vary enormously, with the result that the court’s assessment is often very subjective, hence the grey area. Below we summarize for you the most common and generally accepted points of view. 

 

Condition 1: An unforeseeable situation 

The underlying principle of this condition is that the situation was not reasonably foreseeable at the time the agreement was concluded

In the context of the current crisis, the question arises to what extent a worldwide virus outbreak was reasonably foreseeable when a contract was concluded one, two or more years ago. It seems safe to us to say that no one saw or could see a virus attack coming on this scale, certainly not in otherwise safe Western Europe.  So there is little doubt that the current situation is an unforeseeable circumstance. It could be different in other parts of the world. After all, anyone who trades with Africa knows that diseases and viruses are more common there, just think of the Ebola crises that have occurred in the past.   

But at what point in the past few weeks did the impact of this crisis become “foreseeable”?  Subjectivity trumps, which makes pegging the moment of this an extremely difficult exercise. It seems reasonable to us to assume ‘foreseeability’ in the first week following spring break. Firstly, at that point the virus clearly started to spread in Belgium. Secondly, the economic difficulties that would follow could already be deduced from the situation in China and Italy and from the first predictions.  Anyone who concluded an agreement at that time that would require, for example, international travel in the near future, could have foreseen that this might cause difficulties.

 

Condition 2: Beyond the reasonable control of the affected party

This implies that the occurrence may not be due to the fault or fault of the person who is to provide the service or product.

It is very important to check what the exact cause is for the failure to honor the agreement. For example, a distinction must be made between a government-imposed measure related to the Coronavirus (e.g. ‘no specific goods may be transported by air’) and the shutdown of a factory due to illness of personnel (which can be prevented/avoided by deploying extra personnel) or a preventive shutdown. The question is whether or not the direct cause of non-compliance falls within the definition of force majeure.

The mere existence of the Coronavirus will therefore not be sufficient to invoke force majeure, nor will the fear or uncertainty about the virus be.  Likewise, the fact that many people work from home or become ill may not be sufficient as a cause. Everything depends on the context and the specific circumstances. What is possible, however, is that an unexpected travel ban or a sudden closure of all catering establishments constitutes a force majeure situation.  Therefore, Corona is certainly not a wild card to simply terminate or even temporarily suspend current agreements.

 

Condition 3: Absolute impossibility to carry out the commitments

As a result of the unforeseeable situation over which you have no control, there must also be an ‘insurmountable obstacle’.

Generally, it is said that the assessment of this condition must remain reasonable and humane, however, it should still be an actual impossibility. It is therefore insufficient to establish that fulfilling your contractual obligation would require much more effort than anticipated or would be much more expensive.  These are typical consequences that are part of your entrepreneurial risk. As long as, for example, you can call in an alternative subcontractor, find another supplier, free up extra staff, etc… regardless of the cost, there is no impossibility that allows you to say that there is force majeure.

Specifically, first of all you must check whether the Coronavirus is a temporary or permanent impediment to your situation. Usually, the force majeure will only be temporary, but Corona may make an agreement completely useless by delaying it (e.g. when delivering flowers for a wedding). 

Subsequently, and in connection with the above, it should be examined whether there are reasonable alternatives available to fulfill the obligations after all. For example, is another type of transport possible? Such factors make the difference in assessing whether or not it is a case of force majeure.

On the basis of these two criteria you can assess whether or not there is a temporary or permanent impossibility.

 

Agreement with a force majeure clause

The above mentioned theory does not excel in clarity. That is why it is important to always include a force majeure clause in contracts. After all, you yourself can determine what does and does not constitute force majeure and what steps should be followed if such an unforeseen situation ever occurs.

Is there an agreement with a force majeure clause?  If so, verify the following: 

  • What are the grounds for force majeure listed in the clause: The ‘Coronavirus’ probably won’t be included literally, but you may have included ‘epidemic’, ‘pandemic’ or ‘disease’ in the list of force majeure situations. Chances are that the court will accept this.
  • What wording is used: Should the execution be physically or legally prevented or is a hindrance or delay sufficient? This coincides with the legal ‘impossibility’ condition. With a clause, however, you have the opportunity to clarify its strictness.
  • Which conditions or procedure must be followed?  Do you have to send a notice of default first?  Within what time frame and how? Can you obtain supplies from a third party or not?  Do you have to give them one last chance to deliver? 

 

Suppose there is a case of force majeure, what are the consequences? 

If you have obligations of your own, but you believe that you cannot meet them due to force majeure, you must inform the other party immediately, together with proof of the force majeure situation. Your agreement may specify how this notification should be done, so be sure to check this. Furthermore, you will also have to limit the damages resulting from this situation as much as possible. This implies, for example, accepting an alternative delivery method or postponing an appointment/deadline. 

If you are faced with a contracting party claiming force majeure, respond quickly. A belated (or no) response can be considered as an acceptance of force majeure. When doing so, be sure to check whether all of the conditions are met. The Coronavirus does not in itself constitute a force majeure situation, so the other party will have to cite and prove concrete reasons.  

What are the actual consequences of force majeure for the contractual obligations and the costs already incurred? If there is a force majeure clause, first of all check whether the clause states anything about the implications of the force majeure. If there is no clause or it does not mention any implications, then you fall back on the general legal regulation. Here, a distinction is made between the consequences of a temporary and a definitive force majeure situation.  

If there is a permanent force majeure situation that makes it completely impossible to perform the agreement, the party invoking force majeure will be released from its obligations. Nor will she be liable for her “contractual breach of contract”. Consequently, she will also be exempt from paying damages. Please note; if the contract can still be partially executed, the execution of this part remains mandatory. This is the case, for example, in the case of a partial delivery.

A temporary situation of force majeure will only give rise to the suspension of the performance of the obligations during the period of force majeure. However, if the agreement loses any meaning as a result, force majeure will still lead to the exemption of the obligations. 

If you or your contracting party can invoke force majeure and nothing has been contractually agreed on the assignment of the costs already incurred in the event of force majeure, it is highly likely that the other party (the party in respect of which force majeure is invoked) will have to bear the costs. The party affected by force majeure will in fact be released from any liability for non-performance on the grounds of force majeure. 

 

Conclusion

There are already strong leads pushing the Coronavirus in the direction of an accepted force majeure situation. For example, the China Council for the Promotion of International Trade has identified the Coronavirus as a force majeure for Chinese contracting parties and the World Health Organisation has designated the Coronavirus outbreak as a pandemic (which is generally accepted to be beyond the control of contracting parties).

Nevertheless, it is not possible to give a general opinion on the matter, as everything depends on the specific situation. Its assessment may be influenced by factors such as:

  • the presence or absence of force majeure clauses
  • at which time the cooperation was entered into
  • to what extent the government imposes measures
  • the alternatives available
  • … 

What do you have to do now? First of all, check whether your agreement contains a force majeure clause, contractual penalties or information obligations. Based on this, or in the absence thereof based on the law, make a risk assessment. Indeed, the presence of a force majeure clause does not automatically exempt you from complying with your obligations. Then inform your contracting party and verify whether you are insured to cover any damage on your part. 

Last but not least: If you didn’t have a force majeure clause in your agreement, let this be a welcome wake up call to incorporate it in new agreements.

 

Need help in case of force majeure by Corona?

If you have any doubts as to whether you meet the conditions of force majeur or if you would like some help in drawing up an agreement to avoid such problems in the future, please contact us at sophie@siriuslegal.be or bart@siriuslegal.be

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