If your company runs into financial difficulties, you may initially focus on saving the business and securing jobs. This is, of course, commendable and understandable, but it carries the risk of personal criminal prosecution. If your company (or you as a private individual) is no longer able to settle all debts to creditors, taxes, employer contributions, etc., the state intervenes through insolvency law. The aim is to ensure that all creditors benefit equally from the remaining funds: no preferential treatment and no disadvantage.
Anyone who is an owner, shareholder, managing director, legal representative or member of the management board of a company may be liable to prosecution. The so-called de facto managing director may also be held criminally liable. Although not registered in the commercial register as a legal representative, they in fact run the business or have a significant influence on management.
As a rule, they are therefore subject to the same criminal liability as the duly appointed managing director.
If insolvency is filed in good time and the insolvency proceedings are conducted properly, the person concerned faces no criminal consequences. Only certain acts are punishable—those that lead to insolvency or are carried out during insolvency in order to prevent the fair distribution of the insolvency estate.
Stirnweiss | Brenner Rechtsanwälte is highly specialised in the field of insolvency criminal law. Our experienced criminal defence lawyers and specialist attorneys for criminal law have detailed knowledge of the criminal-law risks that may arise in the context of insolvency.
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Criminal law governs the state’s right to punish people for misconduct. Unlike administrative offences law, “punishment” here is not about warnings and fines or civil-law damages, but about monetary penalties, measures of rehabilitation and prevention such as psychiatric commitment, and up to custodial sentences (prison sentences). Criminal law is therefore the state’s sharpest instrument, the so-called ultima ratio, for maintaining order. Accordingly, high requirements of legitimacy and strict standards of application apply to criminal law. Arbitrary punishment must be prevented under all circumstances. Protective principles apply, such as the principle of culpability and the principle of legality, according to which an act may only be punished if its criminality was defined by law before the act was committed (“No punishment without law.”).
The Criminal Code (StGB) is the primary statutory source of criminal law. It contains the so-called core criminal law, i.e. the fundamental rules of criminal liability and the most important criminal offences (offences), such as murder (Section 211 StGB), bodily harm (Section 223 StGB), fraud (Section 263 StGB), robbery (Section 249 StGB) or extortion (Section 253 StGB). In addition, there are further specific criminal offences in other statutes as so-called ancillary criminal law, such as the Copyright Act (UrhG), the Fiscal Code (AO) or the Narcotics Act (BtMG).
The Code of Criminal Procedure (StPO) contains the rules governing the course and conduct of criminal proceedings. Among other things, it regulates the tasks, rights and duties of the police, the public prosecutor’s office and the court, as well as the rights and duties of suspects, witnesses, private prosecutors and private accessory prosecutors. The StPO also determines how appeals (Sections 312 et seq. StPO), revisions (Sections 333 et seq. StPO) or retrials of criminal proceedings (Sections 359 et seq. StPO) are to be conducted. It also contains, for example, provisions on the requirements under which criminal proceedings may be discontinued, such as in cases of absolute triviality of the offence (Section 153 StPO) or where the payment of a monetary condition is sufficient to satisfy the public interest in prosecution (Section 153a StPO), or under what conditions settlements and agreements, so-called deals, may be made between the parties involved (Section 257c StPO).
Criminal proceedings are the state’s procedural instrument for enforcing substantive criminal law. In principle, they consist of two parts: the trial proceedings on the merits and the enforcement proceedings. The trial proceedings on the merits are divided into the preliminary proceedings and the main proceedings.
The preliminary proceedings are also called the investigation proceedings. They are in the hands of the public prosecutor’s office. It is the so-called master of the investigation proceedings, and only particularly intrusive investigative measures—such as arrest warrants, searches of premises or interception of telecommunications—require an order by an investigating judge. In all investigative measures, the police are the public prosecutor’s “extended arm”. The police therefore not only receive criminal complaints from citizens, but also secure crime scenes and evidence, carry out arrests, searches and seizures, and question witnesses. The court only becomes involved in a criminal matter if and insofar as the public prosecutor’s office, after completing the investigations, does not discontinue the proceedings but instead brings charges. Any judicial involvement with a criminal offence is therefore conditional and limited by an indictment by the public prosecutor’s office (so-called monopoly on indictments). In this respect, the public prosecutor’s office has a powerful role in criminal proceedings, and the course of criminal proceedings is not infrequently set already during the prosecutorial investigation proceedings.
The main proceedings are the actual criminal trial before the court, i.e. the court hearing, which begins after completion of the preliminary/investigation proceedings and the filing of charges by the public prosecutor’s office, as well as a brief judicial review of the indictment (intermediate proceedings), and ends with a judicial judgment or acquittal. Procedural control is vested in the competent court. For smaller matters, the Local Court (Amtsgericht, AG) has jurisdiction; for larger matters, the Regional Court (Landgericht, LG). In homicide cases, the LG acts as the so-called Schwurgericht; today, however, this is merely the special designation of a large chamber at the LG and does not mean that a jury (as in the USA) decides on criminal liability. The LG also serves as the appellate instance for appeals against judgments of the local courts. The highest ordinary court in a federal state is the Higher Regional Court (Oberlandesgericht, OLG). However, it is only rarely a court of first instance, for example in state security matters. Rather, the OLG largely serves only as a court of revision when the remedy of revision is filed. The Federal Court of Justice (Bundesgerichtshof, BGH) is never a court of first instance; as the highest federal court of ordinary jurisdiction, it deals exclusively with revisions. The BGH is therefore also referred to as a “pure court of revision”.
Just as criminal law as a whole, criminal procedure in a constitutional state is subject to strict standards to prevent procedural arbitrariness. Above all, the so-called principle of legality applies, according to which the public prosecutor’s office and the police are not only entitled but also obliged to investigate any initial suspicion of a criminal offence (“sufficient factual indications”) and, after completion of the investigations, to bring charges before the court if there is sufficient suspicion. In addition, the so-called principle of objectivity applies, meaning that not only the courts but also the public prosecutor’s office and the police must be objective and neutral in their investigations and decisions and, unlike for example in US criminal proceedings, must not be partisan. Overall, not least, the presumption of innocence prevails, which is even enshrined in Article 6 of the European Convention on Human Rights (ECHR). This means that throughout the criminal trial proceedings on the merits, a suspect must be treated as innocent until their guilt and criminal liability have been established by a court judgment in a procedurally proper manner—taking into account all rights of the accused, including the principle “in case of doubt, for the accused” (“in dubio pro reo”)—and has become final and binding.
At any stage of criminal proceedings, including already in the preliminary proceedings (investigation proceedings), suspects have the right to consult a “defence counsel” (Section 137(1) StPO). This “defence counsel” is the suspect’s legal representative and, in criminal proceedings, is also called a “criminal defence lawyer”. As a rule, this is an admitted attorney who practises in the field of criminal law and is particularly experienced in this area. As an attorney, the criminal defence lawyer is, of course, also an “organ of the administration of justice”, but they advocate for the rights of the accused. They support the accused throughout the entire criminal proceedings, represent the accused and are their trusted adviser.
In principle, an accused person can freely choose whom they consult as criminal defence counsel, and up to three privately retained defence counsel at the same time are permitted (Section 137(2) StPO), for example in difficult, extensive proceedings. The privately retained criminal defence counsel are referred to as “Wahlverteidiger”, a term used in particular to distinguish them from “court-appointed defence counsel”, who in cases of so-called mandatory defence (Section 140 StPO) are not chosen by the accused but appointed by the court.
Section 140 StPO provides that there are certain proceedings in which an accused person must have legal counsel, i.e. may not be without a criminal defence lawyer, and therefore the competent court must appoint a criminal defence lawyer for the accused. This is primarily about protecting the accused. These are cases of so-called mandatory defence. These include, for example, cases where “it is to be expected that the main hearing at first instance will take place before the Higher Regional Court, the Regional Court or the lay judges’ court” (Section 140(1) No. 1 StPO), or where the accused is charged with a serious offence (“felony”) (Section 140(1) No. 2 StPO), or where the proceedings “may lead to a professional ban” (Section 140(1) No. 3 StPO), or where the accused is brought before a judge for a decision on pre-trial detention (Section 140(1) No. 4 StPO), or simply cases where “due to the seriousness of the offence, the severity of the expected legal consequence, or the difficulty of the facts or the law, the participation of defence counsel appears necessary” or “it is apparent that the accused cannot defend themselves” (Section 140(2) StPO).
Contrary to a widespread view, having court-appointed defence counsel does not mean that an accused person cannot afford privately retained defence counsel or cannot afford a good criminal defence lawyer. Rather, the court’s appointment of defence counsel is primarily about ensuring that, in the case of serious allegations and complicated cases, the constitutional state provides for the accused. Therefore, the court may also appoint privately retained defence counsel as court-appointed defence counsel upon the accused’s application, so that the accused ultimately has the defence counsel and trusted adviser of their choice at their side.
Not every criminal defence lawyer is also a “Specialist Lawyer for Criminal Law”. This official title, which may be awarded by the locally competent bar association, is granted only to those attorneys who can demonstrate “special theoretical knowledge and special practical experience” in the field of criminal law in accordance with Sections 2, 3, 5 and 13 of the Specialist Lawyers’ Regulations (FAO). Such knowledge and experience exist only if, in the specialist field of criminal law, they “significantly exceed the level” that would normally be expected on the basis of legal training and experience in the legal profession (Section 2(2) FAO). The specialist knowledge of a Specialist Lawyer for Criminal Law must also cover the constitutional, European and human-rights aspects of criminal law (Section 2(2) and (3) FAO), and to demonstrate special practical experience, the Specialist Lawyer for Criminal Law must have handled at least 60 criminal law cases independently and have defended clients on at least 40 main hearing days in major proceedings before the Local Court as a lay judges’ court, the Regional Court, the Higher Regional Court or the Federal Court of Justice (Section 5(1)(f) FAO). In addition, the Specialist Lawyer for Criminal Law must be able to show admission and practice as an attorney for at least three years (Section 3 FAO).
In short: criminal defence lawyers who are Specialist Lawyers for Criminal Law are experts and provide the assurance of high-quality, professionally sound advice and defence of clients in the field of criminal law and its specialist areas.
Suspects have the right to a fair trial. Precisely because suspects have this right from the moment they are treated as a suspect, the status of being a suspect can be advantageous. Suspects should be aware of this advantage and know and exercise their rights as suspects.
In particular, every suspect has the right not to incriminate themselves (nemo tenetur principle) and even—unlike witnesses, who generally must testify—the right to remain silent, without that silence being interpreted to the suspect’s detriment (right to remain silent). And: suspects have the right to be professionally represented by an attorney as criminal defence counsel (right to counsel).
The right to a fair trial is also enshrined and elaborated, for example, in Article 6 of the European Convention on Human Rights (ECHR). Article 6 ECHR specifies the rights of suspects as follows:
Suspects must be informed of the essential rights of suspects by the prosecuting authorities and later, for example, by the criminal courts. This instruction itself serves to protect the suspect and is therefore a fundamental right of the suspect. Not infrequently, police officers on the scene in particular violate these duties to inform and question suspects like a witness despite various allegations, so that a suspect initially has a “false sense of security”. As a witness—and all the more as a suspect—you should therefore insist early on on consulting an attorney. If the prosecuting authorities refuse to allow an attorney to be consulted, you should have this recorded immediately.
Suspects in investigation proceedings have the right to remain silent. No one is obliged to incriminate themselves by making a statement, and a suspect’s silence may not be interpreted to their detriment. This right to remain silent as a suspect, and to exercise it, has clear practical procedural advantages. Please consider the following:
Especially in criminal proceedings, a suspect is confronted with the state’s clear superiority and is often genuinely shocked by investigative measures taken by the prosecuting authorities. In such shock moments, careless remarks can quickly “slip out” (so-called spontaneous statements), and even seemingly considered statements can be disadvantageous from a procedural-strategic perspective. This should be avoided, because officers of the prosecuting authorities always make file notes and record every statement made by a suspect. These recorded statements then not infrequently determine the further course of the proceedings and can later be revised only with difficulty—or not at all.
In short:
Detentions, arrests, house searches, seizures or other intrusive investigative measures by the prosecuting authorities are often a shock moment for those affected. Nevertheless, it is important to keep a “cool head” and not to “fight tooth and nail”.
This is because, on the one hand, there is the criminal offence of “resisting enforcement officers” (Section 113 StGB), and officers of the prosecuting authorities may also file a complaint for insult or bodily harm. On the other hand, it is important to remember your rights as a suspect.
You should therefore behave as follows:
After completing the investigations, the public prosecutor’s office must decide whether the investigation result—i.e. the factual circumstances and evidence as well as their criminal-law assessment—allows the conclusion that a criminal court would likely convict the accused. If the public prosecutor’s office reaches this conclusion, i.e. believes that there is a so-called predominant likelihood of conviction, it speaks of a “sufficient suspicion” and is obliged to bring charges before the competent criminal court. If the public prosecutor’s office does not reach this conclusion, it has the opposite duty to discontinue the proceedings. This respective duty of the public prosecutor’s office is part of the so-called principle of legality.
In the event of an indictment, this decision by the public prosecutor’s office also means that it has decided against the various options for discontinuing the criminal proceedings, for example discontinuation subject to payment of a monetary condition, and against issuing a penal order. The public prosecutor’s office is therefore convinced that the criminal matter belongs before a criminal court, i.e. requires further criminal-law review in a court hearing and will most likely lead to a criminal judgment.
For the accused, the indictment by the public prosecutor’s office primarily means that procedural control passes to the competent criminal court. And: in court, the accused is referred to as the “defendant”.
From the moment the indictment is available, the criminal defence lawyer for the accused—now the defendant—is particularly challenged. It is “all or nothing”, and the defence strategy must be adapted to the course of the main hearing before the criminal court. More than ever, at this point it requires
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