Changing Paradigms: The Liability of Corporate Groups in Germany

33 Pages Posted: 17 Dec 2011 Last revised: 12 Apr 2013

See all articles by René Reich-Graefe

René Reich-Graefe

Western New England University School of Law

Date Written: December 16, 2011


The German law on affiliated companies and groups of companies ("Konzernrecht"), as embodied in the German Stock Corporation Act of 1965, as amended ("Aktiengesetz"), has often been credited for its innovative approach to the dichotomy of liability strategies relevant to corporate groups-viz., the traditional concept of entity liability based on the fundamental doctrine of the legal separateness of the corporate entity and, accordingly, resulting in a limitation of investor liability as the rule, and discrete and rare occurrences of what is almost poetically designated the "piercing of the corporate veil" ("DurchgriffshaJtung") as narrow and reluctantly crafted exceptions, and the more modern, revolutionary concept of group or enterprise liability ("KonzernhaJtung") in the law of corporate groups which-in its most radical form-will allow (and even mandate) a court to penetrate all horizontal and vertical "corporate separateness barriers" within a collective, polycorporate business enterprise as the rule and without exception. Indeed, one of the most prolific international scholars on the liability of corporate groups, Professor Jose Engracia Antunes, has repeatedly described such innovative German approach to the legal phenomenon of intragroup liability as a "third intermediate and differentiated regulatory strategy." Comparatively, he labels such intermediate strategy intermediate, since it is structurally situated somewhere between the traditional, well-established nineteenth century notions of entity law and the rather contemporary, yet often still embryonic formulations of enterprise liability-the "dualist approach." In this Article the Author analyzes and evaluates the various layers and characteristics of the diagnosed paradigm shift as well as its consequences for the liability concepts applicable to corporate groups under German law. The Author then argues that, because of the aggregate effect of the identified paradigm shift, a truly substantive dualist (or hybrid) approach addressing the parent-subsidiary liability conundrum under German law today, de lege lata, no longer exists in such jurisdiction.

Keywords: Germany, corporate law, liability, German law, corporation and enterprise law

Suggested Citation

Reich-Graefe, René, Changing Paradigms: The Liability of Corporate Groups in Germany (December 16, 2011). Connecticut Law Review, Vol. 37, p. 785, 2005. Available at SSRN:

René Reich-Graefe (Contact Author)

Western New England University School of Law ( email )

1215 Wilbraham Road
Springfield, MA 01119
United States
413.782.1451 (Phone)


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