And the government in all this?
As you may well know, today’s crisis might be longer than initially announced. While it is true that this government ordered lockdown is detrimental to your business activities, it is indispensable to save lives. Nevertheless, the government knows it, your business is as vital to the economy as, say, ventilators are to COVID-19 patients. That is why our temporary government in Belgium has been afforded very broad powers to address both the sanitary and economic issues that this unprecedented crisis brings to the fore. If, indeed, these measures will not suffice to keep you afloat very long, they will certainly give you some leeway in deciding the next steps for your company’s survival. But, as we very well know, navigating the Belgian administrative and legal net is not always as easy. So, in order to facilitate this task for you, we have put together a team that will help you with both the managerial and legal aspects of this uprooting crisis. Hereunder you will find 3 questions which address some of the legal concerns you might have. In any case, we invite you to contact us so as to benefit from free personal advice that suits your business more specifically.
Am I liable for towards my clients if I can’t fulfill a contract by reason of COVID-19 measures?
All non-essential businesses have been closed in Belgium since mid-March by order of the government. This might influence your ability to fulfill your contractual obligations and may lead your contractual counterpart to claim damages for untimely performance.
Rest assured! The Belgian Civil Code contains a “force majeure” clause. This means that, pursuant to articles 1147 and 1148, you will not be held liable if your performance is hindered by a situation that is out of your control and which does not result from your fault or negligence. A pandemic can definitely be considered such a situation, and the orders issued by government as a consequence of the pandemic also fall within that category. However, you will have to prove that they are the direct cause of your failure to perform the contract.
Additionally, some contracts contain a “force majeure” clause which specifically envisages this situation. In some instances, examples might be included in said clause. They are, however, not exhaustive, meaning that a pandemic can probably fall within the meaning of the clause.
Having said that, note that the hindrance to the performance must result in a real impossibility to do so. If alternative means exist to fulfill your contract, this possibility cannot be invoked. Furthermore, it is easier to benefit from a contractual force majeure clause than it is to benefit from the civil code’s clause for different reasons.
Moreover, you should be aware that hardship (i.e. also called imprévision/imprevisie, occurs when it has become considerably harder to fulfill your contract because of, for instance, increased costs) is not invokable under Belgian law.
What is the so-called “droit passerelle”?
This is also a measure that exists in normal times, but which has been adapted for this crisis. The droit passerelle is a government grant afforded to the independent worker in Belgium when he has to stop his activity by reason of an unexpected event. In principle, an entrepreneur can benefit from such help for 12 months on a whole career. However, because of COVID-19 entrepreneurs can get this droit notwithstanding the fact that he/she has already benefitted from the entire disbursement over 12 months.
This help amounts to €1,291.69 per month if you have no family. If you do, however, this help has been heightened to €1,614.10 per month. If your spouse works with you, he/she can also benefit from the droit passerelle. And, no worries, if you already have asked for temporary unemployment you will still be eligible for the droit passerelle.
This aid concerns all entrepreneurs in the catering business, or any other business in case of total or partial closure for more than 7 consecutive days. Here the link for the paperwork that you must fill in to benefit from it: https://www.infoucm.be/Demande-de-droit-passerelle-Covid-19/Demande-de-droit-passerelle- Covid-19
Without revenue, I cannot pay back my credit... What has been done in that regard?
Government has also done some work here. By negotiating with the banking sector, it has obtained a postponement, without charges, on all credit payments for all non-financial businesses and for all viable entrepreneurs until September 30th.
When it comes to your mortgage payment (i.e. hypothèque), it also is postponed. However, you will have to prove that you have suffered from a financial prejudice as a result of the ongoing pandemic. For example, if you have been fired or if your business does not bring you any revenues anymore, you will be able to postpone your mortgage payment. Written by Timothée Ceurremans, LL.M. (Master of Laws) Student at the University of Montreal