{"id":48635,"date":"2023-07-02T13:33:10","date_gmt":"2023-07-02T10:33:10","guid":{"rendered":"https:\/\/koumentakislaw.gr\/articles\/amesh-zhmia-triton\/"},"modified":"2026-08-28T09:56:06","modified_gmt":"2026-08-28T06:56:06","slug":"board-member-liability-direct-damage-third-parties","status":"publish","type":"post","link":"https:\/\/koumentakislaw.gr\/en\/articles\/board-member-liability-direct-damage-third-parties\/","title":{"rendered":"Liability of Board Members: Direct Damage to Third Parties"},"content":{"rendered":"

In a series of our previous articles, we addressed the “intra-corporate” (internal) liability of those managing a Societe Anonyme (SA) \u2013 toward the company itself \u2013 in the event of a breach of their duties. Within the framework of this liability, we examined the initiation of corporate legal action<\/a> (derivative action) at the Board\u2019s initiative, or, in cases of its inaction, refusal, or inability, at the initiative of the shareholders<\/a>. However, the other side of the same coin is of no lesser importance: the “external” liability of the SA\u2019s managers (this time) for direct damage caused to shareholders or third parties due to their (unlawful and culpable) actions. This is the subject of the present article.<\/p>\n

General Observations \u2013 Purpose of the Regulation<\/h2>\n

The filing of a corporate action serves (exclusively) the interest of the company in seeking indemnification for damages it sustained due to the fault of a corporate organ during the management of its corporate affairs.<\/p>\n

The provisions of the law on SAs relating to the company’s claims against managers liable for its financial loss (Articles 102 et seq. of Law 4548\/2018) in no way affect the liability of the latter in cases where direct damage is caused to shareholders or third parties (Art. 107). Furthermore, they do not affect their liability for causing or delaying bankruptcy (see Explanatory Report of Law 4548\/2018 on Art. 107).<\/p>\n

Therefore, regardless of the existence of intra-corporate liability of Board members (and any substitutes<\/a> – Art. 87), they are personally liable (also) for the restitution of “direct” damage they may have caused to shareholders or third parties. The term “third parties” includes persons with whom the company will typically have already entered into (or has not yet entered into) transactional relationships. Indicatively: employees, suppliers, customers, etc. Furthermore, corporate creditors are included, as well as competitors (particularly regarding violations of unfair competition law).<\/p>\n

Consequently, the SA does not have the power to exclude such liability (toward third parties) of its managers. Nor, naturally, can it preclude the filing of indemnity claims by third parties harmed by said individuals. Corporate resolutions regarding the exercise (or non-exercise) of a corporate action, as well as the approval (or non-approval) of the overall management of the Board<\/a> (the subject of our next article), would be of no legal value in this regard.<\/p>\n

It should be clarified here that the relevant legal provision regarding the liability of SA managers toward third parties (Art. 107) does not introduce a more specific\/special case of liability, nor does it constitute a legal basis establishing their liability. It clarifies the rather self-evident: in the event that the SA decides to turn (or not) against its managers, to approve their management, and\/or to “release them from all liability,” third parties who have suffered harm \u2013 even if they are its shareholders \u2013 are not affected at all.<\/p>\n

Liability of Managers & Liability of the SA: Legal Bases and Grounds<\/h2>\n

Based on the above, the liability of those managing the SA toward third parties (and shareholders) must be sought and established on legal bases outside the law on SAs. The most common case in practice is delictual liability (tort) under Articles 914-919 of the Civil Code (CC). Liability for damages also arises, at times, in cases of damage caused by the annulment of a legal act (Art. 145 CC), self-help (Art. 283 CC), or a state of necessity (Art. 286 CC).<\/p>\n

However, liability is not limited to the personally liable managers of the SA. Liability extends to the company itself (Art. 71 CC). Furthermore, based on the organic theory, while the administrative organs of the SA conduct its affairs on their own initiative, they simultaneously embody the will of the company (see Articles 65, 67, 68 CC).<\/p>\n

Nevertheless, in this case, there is no transfer of liability exclusively to the SA. Instead, an additional liability of the company is established alongside that of the culpable legal representative, depending on the case (Areopagus 25\/2000, Piraeus Court of Appeals 594\/2022, NOMOS Legal Database). The liability of the latter is always independent and autonomous (since, after all, it is based on different legal grounds). The extent of the liabilities of the SA and its culpable organ \u2013 and consequently the degree of satisfaction of the claims \u2013 may vary between them.<\/p>\n

Establishment of Joint and Several Liability of Managers & the SA: Requirements<\/h2>\n

To attribute liability for damages (also) to the company for harmful acts or omissions of its organs, a series of conditions must, in principle, be met (Areopagus 1885\/2014, NOMOS Legal Database). Specifically:<\/p>\n