GERMANY Law and Practice Contributed by: Rainer Wilke, Ingo Theusinger and Ralph Schilha, Noerr
4.6 Policies and Procedures Many companies implement specific policies for crisis preparation and prevention, establishing a crisis management framework that includes response procedures, communication plans, risk assessments and training for employees. These policies are formally documented and include procedures and measures for activation and communication. To ensure that the crisis management plan remains effective, companies must regularly review and update their policies to reflect chang- es in their operational landscape and emerging risks. When in crisis, companies face a plethora of legal challenges in Germany, not only caused by the crisis itself but by subsequent events such as internal investigations, criminal charges or third-party actions. The scope of potential legal challenges depends heavily on the nature and extent of the crisis. Overall, the following (potential) legal challenges can be identified. • Building trust – the management of a com- pany is obliged to build and protect the reputation of a company. This comprises the building of trust with relevant stakeholders. In crises, this might help to establish trust, which is relevant to overcome critical situa- tions. • Regulatory compliance and evolving legal frameworks – compliance with evolving laws, such as the LkSG, requires close monitor- ing to ensure compliance in complex sup- 5. Legal Strategy 5.1 Legal Challenges
ply chains. This is particularly important as German and European regulations might be applicable. Non-compliance may lead to fines, sanctions or business interruptions. • Civil liability and contractual obligations – defending against third-party legal actions, including collective redress, can lead to costly and time-consuming litigation. • Labour relations – facing issues in the work- force, including high absenteeism and union negotiations, can lead to litigation. • Financial distress – economic downturns increase the risk of insolvency, so companies must deal with German insolvency laws to avoid excessive debt and financial instability. • Data protection – compliance with strict data protection laws, such as the GDPR, is crucial, especially in the event of a crisis when data breaches or increased data processing may occur. Addressing these challenges requires proactive and proper legal risk management, continuous monitoring of regulatory changes, and effective communication with stakeholders to mitigate potential legal impacts during a crisis. 5.2 Dealing With Enforcement Authorities Companies must ensure that they comply with all relevant regulations in order to minimise liabil- ity risks. This often requires close co-operation with compliance and legal departments. The following main authorities can represent signifi- cant exposure to legal liability for companies and management: • the Public Prosecutor’s Office in the case of criminal offences, including corporate crimes; • civil courts in civil proceedings due to con- tractual breaches;
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