Why removing civil liability harmonization from the CSDDD is a step backward.
Simplification is a term that resonates strongly in Brussels since the Draghi report on EU competitiveness. The 25% reduction target should translate to € 37.5 billion in savings for businesses. In practice, however, simplification can simply mean deregulation, which may benefit specific business interests while harming others.
Recent simplification efforts have caused confusion and legal fragmentation between EU Member States, creating legal uncertainty for businesses and jeopardising the original aim of the simplified legislation.
A case in point, is the European Commission’s proposal to remove the harmonised civil liability clause from the Corporate Sustainability Due Diligence Directive (proposal February 2025), This basically requires Member States to apply the EU CSDDD law, instead of any other applicable law (in the world!) in case of civil liability claims. If this would be adopted by the Council and the European Parliamentcompanies would face a patchwork of national laws, raising legal uncertainty and compliance costs, which directly undermines the core purpose of European integration. Legal experts such as Professor Geert Van Calster have concluded that the proposal does not reduce complexity for companies but increases it significantly.
Worse, the Commission’s proposal contradicts its own claim that civil liability under the CSDDD – which has not even been implemented - is essential to maintain a level playing field. Now it claims that removing these harmonized rules still respects national regimes. Such hapsnap decision-making and inconsistencies greatly weakens legal coherence and the general trust in the EU regulatory process. Furthermore, business networks such as CSR Europe have warned that eliminating civil liability could actually distort competition. A JARO Institute and YouGov study found that nearly half of German companies fear this removal increases risk and complexity.
As challenges are ever more complex, this kind of over-simplification do not help and only puts people and planet at risk again and only hurts the EU’s economy and credibility. In a complex world facing profound challenges, the careless dismantling of key provisions under the banner of simplification is hardly the way forward. Simple policies do not automatically mean simplification for businessess and more competitiveness. Here, the removal of the EU-wide regime on civil liability would allow each Member State to protect its own national market and expose companies to over 200 different liability regimes worldwide. This is not simplification. This is over-simplification in the interest of some at the expense of others.
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