Is the civil liability of the managers extinguished by a criminal acquittal?

Overview

1. Introduction.
2. The civil director’s liability and the criminal process.
3. The criminal sentence and the civil responsibility.
4. Non-existence of facts, lack of participation and absence of proof.
5. Conclusion.

1.      Introduction

During a series of contributions, we have been addressing the manager’s responsibility. Responsibility derived from a social action or from an individual action of responsibility of the managers. However, we have always dealt with it, logically, within the civil scope. But what happens when an administration body’s conduct may constitute a crime? Can such civil liability be raised in the criminal process? And if the director is ultimately criminally acquitted, does this acquittal tie in and extinguish  the civil liability?

2.      The director’s civil  liability and the criminal process.

The Criminal Prosecution Act (LECrim) expressly empowers this civil action within the criminal process. Thus, the civil responsible will have to face the duty to restore the thing, or its compensation or indemnification. The exercise of this action is also presumed, unless otherwise expressly stated.

But in addition, there is the possibility of exercising such liability action in the corresponding civil process.  Therefore, a conduct carried out by the directors may be prosecuted in both jurisdictions at the same time. However, how does the criminal judgment affect the existence of civil liability?

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When does the prescription period of Directors´ liability elapse?

Liability actions against directors are in any case prescribed after 4 years. Thus, both social and individual actions, as well as liability for debts, will have the same limitation period. The difference lies in the dies a quo.

3.      The criminal sentence and the civil responsibility.

What does a possible criminal acquittal mean in terms of civil liability? We have seen the possibility of exercising these actions separately. Therefore, the criminal judgment would not rule on the existence or not of civil liability. Thus, we have to determine whether a possible criminal judgment of acquittal extinguishes the civil liability of the directors.

Our jurisprudence is quite clear on this point. In general, the facts considered proven in the criminal process are not binding in the corresponding civil process. This is so unless what has been proven is the non-existence of the facts on which the complaint or lawsuit was based. Alternatively, it may be proven that the defendant never participated in those events.

From the above we can extract several relevant statements:

• An acquittal in criminal matters does not carry the effect of res judicata in civil proceedings. That would be the general rule.
• But like any general rule, there are always exceptions. And in this case we find two:
  • Indeed, if the facts are proven to be non-existent, this will imply the extinction of the civil liability of the administrators. Facts that have been proven to be non-existent cannot, and should not, justify any liability.
  • The same is true if it is concluded that the accused never participated in the events that did exist. In such a case, once the non-participation is demonstrated, no responsibility can be attributed to the administrator.

4.      Non-existence of facts, lack of participation and absence of proof.

We must also take into account, in particular, how the acquittal should be. The extension of the effects of res judicata to civil liability is only produced by the proven non-existence of the facts. Or, for lack of proven participation in them by the administrators. However, this cannot be considered proven when the sentence acquits for lack of evidence to disprove innocence.

Therefore, it is crucial to keep in mind that not just any acquittal will extinguish director’s civil liability. The absence of evidence considered sufficient or categorical to undermine the principle of innocence is therefore insufficient. The need for a case-by-case analysis is clear. Observing the cause that motivates such an acquittal. Whether it is due to lack of evidence or discovery.

Because nothing prevents that evidence justifying this civil liability can be found in the civil process, therefore justifying this civil responsability. We must keep in mind that we are going to analyze the existence of facts and responsibility from two totally different levels: the civil and the criminal. Therefore, these facts could experience a reevaluation and appreciation in the civil sphere that would lead to the existence of responsibility.

5.      Conclusion

As we have seen, the attribution of civil liability to the directors can be requested in both criminal and civil proceedings. In the civil area, we must attend to the possible effects of the criminal acquittal. In the civil sphere, we must take into account the possible effects of a criminal judgment of acquittal. Thus, in the absence of sufficient discovery to rebut the presumption of innocence, civil liability will not be extinguished. However, if the criminal judgment considers the nonexistence of the facts or the lack of participation by the administrators to be proven, their civil liability will be extinguished.

If this article has been of interest, we also suggest you to read the following article published on our website:

Can liability action and director’s liability action be joined in the same lawsuit?

Is the administrator who is unaware of the injury that his or her actions generate responsible?

A Practical Guide to Directors Liability