Legal opinion: how the Omnibus creates uncertainty on civil liability for companies
"Legal opinion: how the Omnibus creates uncertainty on civil liability for companies"
Executive Summary: In July 2024 the Corporate Sustainability Due Diligence Directive (CS3D) entered into force. The CS3D establishes a new standard of responsible corporate conduct (Arts 5-16). This standard is also relevant when a person allegedly suffers damage and claims compensation before the courts of an EU member state. The current CS3D harmonizes the conditions for such claims across all Member States [Art 29(1)]. Very importantly article 29(7) – containing an ‘overriding mandatory provision’ - ensures that this standard of conduct is the applicable law and must be applied by all Member State courts. In February 2025 the European Commission tabled proposals to amend the CS3D ('Omnibus proposal'), including the deletion of article 29(1) and (7). This legal opinion analyses how complex the legal landscape would become for companies if the Omnibus proposal were adopted. In case the proposed deletion of article 29(7) were adopted by the Council and the European Parliament, companies would not be able to trust that their conduct is benchmarked against the CS3D obligations. Instead of having a single predicable, harmonized EUwide regime as provided under the adopted CS3D, the Omnibus proposal would expose companies to each of the different legal regimes worldwide. In theory, they would face 206 different regimes (number of States currently recognised by the United Nations) and any regional divergence that exists in many of them. In essence, regarding civil liability, the Omnibus proposal neither delivers on its declared overall aims of harmonisation nor simplification, but instead significantly increases divergence, complexity and uncertainty for companies by proposing to delete 29(1) and (7).