Corporate Sustainability Due Diligence Direktivet: Danske selskabers erstatningsansvar for datterselskabers og forretningsforbindelsers negative indvirkninger

Abstract

Following almost two years of negotiations between the European commission, the Council and the Parliament, The EU released the final draft of the Corporate Sustainability and Due Diligence Directive in January of 2024, which would be adopted with minor amendments in March of 2024. The directive aims to ensure that companies covered by the directive conducts human rights and environmental due diligence on their own operations and those of their subsidiaries and business partners and takes appropriate measures where necessary. Failing to do so will expose the companies to civil liability in accordance with the directives article 22. The purpose of this thesis has been to examine article 22 from a legal and a law and economics perspective. From a legal perspective the thesis seeks to determine under which conditions a company covered by the directive can be held liable for adverse impacts in its subsidiaries and business partners and how these conditions differ from existing Danish law. From a Law and Economics perspective the thesis examines how the possibility of facing civil liability for adverse impacts will influence the way companies’ contracts with their business partners to reach an optimal risk allocation between the parties. The thesis concludes that after the implementation of the directive in national law it will be significantly easier do hold companies liable for adverse impacts in its subsidiaries and business partners than is currently the case under Danish law. From a Law and Economics perspective the thesis concludes that businesses covered by the directive will face challenges in achieving an optimal risk allocation between them self and their business partners, primarily due to the possibility of the business partner not being able to pay the full amount of the civil liability, and the company being unable to observe the business partners behavior at no or little expense to the company. Lastly, based on the legal and the Law and Economics analysis the thesis proposes changes and adjustments to elements of the directive with the aim of lowering the costs associated with compliance, and to better enable companies and their business partners to achieve an optimal risk allocation in their business relationship.