Responsibility of head of company, institution or organization under labour and civil law

The nature of legal liability of the manager as the sole managing body and employee of the company, institution or organization, is being analyzed in accordance with Lithuanian and foreign valid legal regulation, case law and doctrine. In the first part problematical aspects of the dualistic legal status of the manager are assessed. Such status leads to the application of legal liability under both - civil and labour law. Based on valid legal regulation, doctrine and case law, which Lithuanian courts have formed in a long term, due to legal form of a legal person, legal status of a manager differs and the grounds of such differences remain unclear. Nevertheless, it is believed that the common legal ground to treat the manager as a subject of civil legal relationship is the fiduciary relationship between the manager and the company, institution or organization. Yet application of such criteria should not be applied to all types of legal persons. The second part strives to answer under which - labour or civil - law rules the manager is found to be liable for the damage caused to the company, institution or organization. The scope of manager’s liability is also questioned as well as the possibility to limit the civil liability and expand the material liability under labour law on the grounds of the contract of full material liability. It is believed that regardless legal form of a legal person, liability of a manager should be based on the principle of full liability and imposed on the ordinary rules of law governing civil liability. In the third part, legal analysis of manager’s liability for the damage caused to the third person is presented. It should be noted that when the legal person becomes financially inefficient, while making the decisions the manager must take into account interests of creditors. It is believed that liability of the manager for the damage caused to third party arises out of delict. Further, the relation between direct manager’s liability and indirect liability of the company, institution or organization is analyzed (as indirect liability of an employer for damage caused by the fault of his employees). Cases when the manager should be found to be directly liable for the damages caused to third parties because of the breach of his duties under labour law are presented. It is concluded that in accordance with formulated case law, liability of the managers might be unreasonably expanded