Constitutional Court decides: liberal professions remain excluded from the LCE

In a decision of 12 March 2015, the Constitutional Court ruled that it is not discriminatory for a liberal professional who is active as a civil company with commercial form to be excluded from the scope of application of the Law on the Continuity of Enterprises (hereafter "LCE").   

It is recalled that the LCE offers merchants, farmers (ever since an earlier Constitutional Court decision) and civil companies with a commercial purpose the possibility of trying to avert bankruptcy by using one of the mechanisms provided by the LCE. However, the LCE explicitly provides that civil companies with a commercial purpose that have the quality of a “liberal professional” are excluded from the law’s scope of application.

Despite the statutory exclusion, an accounting firm in the form of a limited liability company with commercial form petitioned the Commercial Court of Brussels for the opening of a judicial organisation proceeding. This petition was dismissed, on the basis of the statutory exclusion. The accounting firm then appealed, at which point the Court of Appeal decided to raise a prejudicial question to the Constitutional Court concerning the constitutionality of the exclusion.

As noted above, however, in its decision the Constitutional Court ruled that the exclusion is not unconstitutional, given that the difference in treatment is based on an objective criterion and is proportional. The objective of the LCE is to make it possible for merchants to avoid bankruptcy. Liberal professionals cannot be declared bankrupt, given that the actions they perform cannot be regarded as “acts of commerce”.

In its line of reasoning, the Court expressly invokes the deontological rules. For example, it points out that liberal professionals are under the financial supervision of their disciplinary authorities. The deontological rules could also cause problems, e.g. with regard to the duty of professional confidentiality, which is difficult to reconcile with the data collection (contained in articles 8 through 14 LCE) and the request for judicial reorganisation, under which an overview of all creditors must be submitted (article 17 LCE).

The decision once again highlights the difficult relationship between the concepts of "merchant" and "liberal professional". Although in other areas one strives to unify the two categories via use of the undertaking concept, such as in the case of the jurisdiction of the Commercial Court, this distinction is retained in the bankruptcy legislation. The Constitutional Court´s decision concerns only one of the many issues in a discussion that is going on in several branches of the law. The question is just how long this distinction will remain tenable, not only in bankruptcy law, but in other legal areas as well.

For more information on this specific subject, please contact Dave Mertens and Wout De Cock (the authors) and Gwen Bevers (head of department).