Non-contractual Liability

Abstract

This chapter deals with non-contractual (tort) liability, which offers an underutilised avenue of judicial enforcement of the MiFID and MiFID II conduct of business rules. Non-contractual liability is shown to provide an advantage over contractual liability by offering a gateway not only to the indirect effect, but also to a more direct effect of the conduct of business rules on a firm’s liability to pay damages. The direct effect is grounded in a tort category which establishes liability for breach of a statutory duty. The direct effect presents a more straightforward way of claiming damages with regard to a breach of the conduct of business rules as it does not depend on the existence of a duty of care implied in contract or a general duty to act. The chapter analyses the avenues of judicial enforcement of the MiFID and MiFID II conduct of business rules through non-contractual liability available in German, Dutch and English law. Although these legal systems contain mechanisms that establish liability for breach of a statutory duty in either a civil code or financial supervision legislation, several obstacles can restrict the extent to which investors can benefit from direct effect of the conduct of business rules on private law. Investors might however be able to invoke the conduct of business rules, and the underlying investor protection aim, in line with the complementarity approach to the relationship between these rules and private law norms governing private law liability in order to overcome such obstacles to redress.