Tod’s under the Milan Prosecutor’s scrutiny: supply‑chain liability and the request for judicial administration

TOD’S UNDER THE SCRUTINY OF THE MILAN PUBLIC PROSECUTOR’S OFFICE: REQUEST FOR JUDICIAL ADMINISTRATION AND CORPORATE RESPONSIBILITY WITHIN THE SUPPLY CHAIN

Milan, October 2025 – The Milan Public Prosecutor’s Office, through Prosecutor Paolo Storari, has requested the judicial administration pursuant to Article 34, paragraph 3, of Legislative Decree No. 159/2011 (the Italian Anti-Mafia Code) against Tod’s S.p.A., arguing that the company allegedly facilitated – through inadequate oversight – exploitative labor practices within its production chain.

According to the allegations, certain subcontractors operating between Lombardy and the Marche region employed labor under degrading conditions, with meager wages and excessively long working hours. Although Tod’s is not formally under criminal investigation, the company is deemed culpably negligent in supervising its suppliers’ conduct, allegedly deriving a competitive advantage from reduced costs.

THE COURT AND THE ISSUE OF JURISDICTION

The Preventive Measures Section of the Milan Court rejected the request, raising both jurisdictional and substantive issues regarding whether the activities under investigation could be linked to the group’s core business. The Public Prosecutor appealed the decision, and the Court of Cassation has scheduled a hearing for November 19, 2025 — a decisive moment to determine whether preventive measures can be applied to companies not directly involved in criminally relevant conduct.

THE LEGAL CORE: ORGANIZATIONAL RESPONSIBILITY AND CULPA IN VIGILANDO

Article 34 of the Anti-Mafia Code allows judicial administration of companies that, while not criminally liable, benefit from illicit activities facilitated by structural or organizational deficiencies. In the Tod’s case, the central legal issue lies in the traceability of control:

• Commissioning companies must ensure a transparent and verifiable supply chain;
• Contractual “ethical responsibility” clauses are insufficient unless supported by tangible audits, inspections, and 231-compliance protocols.

In essence, an enterprise’s *culpa in vigilando* (failure to supervise) may evolve into a form of autonomous organizational liability with criminal-preventive significance.

IMPLICATIONS FOR CORPORATE CRIMINAL LAW

The Tod’s case marks a potentially groundbreaking development in corporate criminal law:

1. It reinforces the concept of preventive corporate liability, rooted not in intent (dolo), but in the absence of effective control systems;
2. It expands the rehabilitative function of judicial control, transforming it into a mechanism of compulsory compliance;
3. It redefines the operational scope of corporate criminal liability under Legislative Decree 231/2001, which must now integrate with new monitoring duties throughout the supply chain.

It is a clear signal: modern economic criminal law no longer merely punishes — it demands effective organizational models built upon due diligence, independent audits, and ESG-based governance.

REPUTATIONAL RISK AND THE NEW COMPLIANCE PARADIGM

The reputational impact of a judicial administration request is devastating for a publicly traded luxury brand. Even in the absence of convictions, media exposure alone can cause irreparable harm to corporate image.

For this reason, companies in the fashion and luxury sector – as well as SMEs with subcontracting networks – must now implement integrated compliance programs ensuring traceability, sustainability, and ethical responsibility across production chains. In today’s globalized economy, the greatest risk for a company is not committing an unlawful act — it is failing to control.