On 2 February 2012, the Constitutional Court ruled that Article 1798 of the Belgian Civil Code, which grants subcontractors a direct action against the principal, applies to all subcontractors, no matter their position in the chain of subcontractors. The Constitutional Court thus ended a twenty-year old debate among legal commentators.
A contractor project generally involves a range of parties. For instance, when building a house, the principal often hires a general contractor who in turn retains the services of specialised sub-contractors, each responsible for different parts of the works. There is no direct contractual relationship between the principal ordering the works and the subcontractors carrying them out. Therefore, if a general contractor goes bankrupt, subcontractors may face difficulties in obtaining payment, even if the principal is solvent.
To remedy this situation, Article 1798 of the Civil Code provides that general contractors and subcontractors have a direct action for payment against the principal. Even though there is no contractual relationship, subcontractors can thus bypass the general contractor and claim their payment immediately from the principal. As such a direct action is an exception; the majority of legal commentators interpreted this rule restrictively: only the general contractor and its direct subcontractor(s) could bring a direct action against the principal. Subcontractors of subcontractors did not benefit from Article 1798 of the Civil Code.
In its judgment of 2 February 2012, the Constitutional Court declares this restrictive interpretation discriminatory and thus unlawful. The Constitutional Court considers that Article 1798 of the Civil Code intends to protect all subcontractors and does not distinguish between direct and indirect subcontractors. Even though Article 1798 does not explicitly state so, subcontractors of subcontractors should also benefit from a direct action against the principal.
