Will a new director be responsible for mistakes made by predecessors?

You accept a directorship in a company with a long history. At least, that's what you thought, because after a short time the proverbial corpses fall out of the closet. Or even better: you will be brought in as the man or woman who will put the company back on the right track. Do you not run the risk of ultimately paying for the mistakes and debts of the past?

Directors' liability is generally personal

In principle, the liability of a director will only be invoked if he has made a mistake himself. In other words, the 'complainant' will have to demonstrate that the director has acted in violation of a law or the articles of association during his term of office, or that the director has violated the general duty of care.

If such proof is provided, the director who committed the error, infringement, ... is also effectively liable. But not the other directors.

The board of directors forms a college

This needs to be nuanced: if the board of directors forms a college (which is the case, for example, in NVs), the liability for errors is a so-called joint and several liability. In that case, one director will have to account for the mistakes of the other, even if the former has only an additional role or only bears the title pro forma. In fact, if a member of the board of directors has violated a provision of the Code of Companies and Associations (CAC) or if that member has committed an infringement of the articles of association of the legal person, then all members are automatically jointly and severally liable both towards the company itself, as well as towards third parties who have suffered damage.

The time aspect

What if your mandate had not yet started or, conversely, had already stopped at the time of the infringement or violation?
It is clear that as a director you cannot be held liable for errors that were committed before you started your Objective joint and several liability

There are some situations where the complainant does not have to demonstrate individual fault to invoke the driver's liability. The complainant is then the tax authorities or the RSZ.
It concerns the following situations:

the repeated non-payment of withholding tax and/or VAT;

the non-payment of social security debts if the director concerned was twice involved in bankruptcy or settlement with social security debts in the previous 5 years.

In those two cases, it doesn't matter whether you were involved from afar or close by: you pay for the damage.

Finally, there is article XX-227 of the Code of Economic Law (WER). Since 1 May 2018, this provision provides for liability for directors in the event of 'wrongful trading' (the manifestly unreasonable continuation of a loss-making activity). That is also a provision that you should keep an eye on if the company hires you as a crisis manager. Just as you cannot be held liable for damage caused by infringements committed after your mandate.
You can therefore only be held liable for errors (committed by yourself or in some cases by other members of the governing body) from the moment of your appointment and until the termination of your mandate (eg in case of resignation).

But beware: inaction can also be an infringement. If you determine that infringements were committed in the period before your mandate, and these are still ongoing, then by doing nothing you can also make a mistake and thus still become liable for that mistake.
A director who was not involved in an error and who also reports that error to the other members of the governing body escapes joint and several liability.
It is therefore important that you communicate with the other directors about what you think is going wrong or went wrong. If different opinions persist, it is important to have this noted in the minutes of the meeting and, in the event, to resign from your mandate.

Objective joint and several liability

There are some situations where the complainant does not have to demonstrate individual fault to invoke the director's liability. This is when complainant is the tax authorities or the social security authorities.
It concerns the following situations:

the repeated non-payment of withholding tax and/or VAT;

the non-payment of social security debts if the director concerned was twice involved in bankruptcy or settlement with social security debts in the previous 5 years.

In those two cases, it doesn't matter to what extent you were involved: you pay for the damage.

Finally, there is article XX-227 of the Code of Economic Law (WER). Since 1 May 2018, this provision provides for liability for directors in the event of 'wrongful trading' (the manifestly unreasonable continuation of a loss-making activity). That is also a provision that you should keep in mind if a company hires you as a crisis manager.