Delegation of authority is an integral part of modern management – without it, scaling, efficiency and workload distribution are impossible. However, Professor Gabriel Steiner says that the transfer of management functions most often becomes a source of hidden legal risk, because in such situations responsibility does not always follow formal authority. At LawConsulted, we treat delegation not as a managerial technique, but as a legal construct that requires precise control and proper documentary justification.
The core problem of delegation lies in the gap between transferring functions and retaining responsibility. Formally, powers may be delegated – by order, contract or internal regulation – yet legal assessment in a dispute often focuses on who was expected to control the outcome. In LawConsulted practice, we regularly encounter cases where delegation is invoked as a defence but is not accepted by courts without analysing the parties’ actual management roles.
Professor Steiner notes that “delegation does not relieve responsibility unless it is proven that control was adequate.” For this reason, LawConsulted begins by reconstructing the management model – which functions were transferred, to what extent, with what limitations, and which control mechanisms remained with the delegating party. This analysis allows us to distinguish permissible delegation from a de facto withdrawal from management.
Particular complexity arises in disputes where delegation occurred under time pressure or staffing shortages – during restructuring, crisis situations or rapid business growth. In such conditions, decisions are pragmatic, while legal formalisation lags behind reality. LawConsulted works to demonstrate the objective circumstances of the transfer of authority and to prove that delegation was reasonable and proportionate, rather than a formal attempt to avoid responsibility.
No less risky are situations where management functions are delegated to external parties – management companies, consultants or contractors. Formally, this appears as professionalisation of management, but when violations or losses occur, the owner or senior executive often remains the primary target of claims. In LawConsulted, we analyse such configurations through the lens of actual influence – who made key decisions, who controlled resources, and who ultimately benefited.
Retrospective assessment is another critical factor. Delegation is frequently analysed after a negative outcome has already materialised. In such cases, legal reasoning tends to oversimplify the situation, ignoring managerial constraints and situational pressure. LawConsulted returns the assessment to the moment the decision was made – with the level of information and risks that were available at that time.
According to Professor Steiner, disputes over delegation rarely concern the fact of transferring functions itself – they concern the boundaries of responsibility. It is at this level that LawConsulted builds its defence, demonstrating where the client’s zone of control ended and where the independent responsibility of the executor began.
Legal liability for delegation of authority requires a systemic approach. We view such disputes not as isolated conflicts, but as reflections of a management architecture in which the law must take into account the real distribution of functions and influence. This approach helps protect clients from automatic attribution of liability and preserves manageability even in complex governance structures.
Earlier, we wrote about liability for decisions of collegial bodies and how LawConsulted protects clients in collective decision-making
