Risky Business: Enterprise Liability, Corporate Groups and Torts

2017 ◽  
Vol 8 (1) ◽  
pp. 54-77
Author(s):  
Glen Wright
Keyword(s):  
Common Law ◽  
Limited Liability ◽  
Corporate Law ◽  
Business Enterprise ◽  
Corporate Groups ◽  
Corporate Group ◽  
High Profile ◽  
Modern Era ◽  
Risky Business ◽  
Corporate Personality

AbstractCorporate personality and limited liability have been the foundations of corporate law for most of its modern history. While these concepts greatly contributed to the early development of corporations, their application in the modern era is outmoded. Nowhere is this clearer than in ‘risky business’ scenarios, where a subsidiary is constituted for the purpose of shielding the corporate group as a whole from tortious liability arising from risky or dangerous activities. Tort victims generally must rely on ineffective and inconsistent common law and tort law doctrines in order to seek redress for torts committed against them, and a number of high profile cases have highlighted the flaws in such approaches. Many corporate law and tort scholars have commented on these flaws and a literature has developed proposing rational alternatives. This paper presents the case for adopting ‘enterprise liability’ in risky business situations, that is, treating the companies within a corporate group as one unified enterprise for the purposes of compensating tort victims.

scholarly journals Application of the Principles of Business Judgment in the Authoritative Function of Directors of Limited Liability Company in Singaporean and Indonesian Legal Perspectives

2020 ◽  
Vol 9 (3) ◽  
pp. 93
Author(s):  
Daniel Hendrawan ◽  
Emilia Fitriana Dewi ◽  
Subiakto Sukarno ◽  
Isti Raafaldini Mirzanti
Keyword(s):  
Board Of Directors ◽  
Common Law ◽  
Civil Law ◽  
Limited Liability ◽  
Comparative Law ◽  
Corporate Law ◽  
Good Faith ◽  
Limited Liability Company ◽  
The Board Of Directors ◽  
The Difference

The purpose of this study is to analyze the functions and authority of the director of limited liability company in applying business judgment principles, by taking comparative law studies in Singapore's common law and in Indonesia's civil law. By taking emphasis on the authority of directors in representing limited companies both in and out, there are several authorities that are regulated in it. This study was conducted with a comparative law approach, with descriptive qualitative analysis. The results showed that sometimes directors act outside their authority and can harm a limited liability company. On the other hand, that there are actions of the board of directors that are in accordance with their authority but still harm the limited liability company. In this case, the shareholders often hold accountable. In corporate law there is a principle of business judgment where a director cannot be held accountable if the directors are proven to have good faith. The difference between Singapore law and Indonesian law in regulating the authority of directors is the good faith assessment held by directors.

3. Lifting the veil

2016 ◽  
Author(s):  
Alan Dignam ◽  
John Lowry
Keyword(s):  
Limited Liability ◽  
Parent Company ◽  
Personal Injury ◽  
Costs And Benefits ◽  
Corporate Group ◽  
The Core ◽  
The Subject ◽  
The Veil ◽  
Group Structures ◽  
Corporate Personality

Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter discusses ‘lifting the veil’, a phrase that refers to situations where the judiciary or the legislature have decided that the separation of corporate personality from the members must not be maintained. In this case, the veil of incorporation is said to be lifted. ‘Lifting’ is also known as ‘peeping’, ‘penetrating’, ‘piercing’, or ‘parting’. The chapter presents statutory examples of veil lifting, many of which involve corporate group structures and others involve straightforward shareholder limitation of liability issues. It also considers cases of veil lifting by the courts as well as classical veil lifting during the periods of 1897 to 1966, 1966 to 1989, and 1989 to the present. Three cases are highlighted: Creasey v Breachwood Motors Ltd (1993), Ord v Belhaven Pubs Ltd (1998), and Trustor AB v Smallbone (No 2) (2001). The chapter also examines claims of tortious liability, the liability of a parent company for personal injury, and commercial tort. Finally, it looks at the costs and benefits of limited liability.

Toward a Relational Corporate Law

2018 ◽  
Author(s):  
Abraham A. Singer
Keyword(s):  
20Th Century ◽  
Limited Liability ◽  
Normative Theory ◽  
Corporate Law ◽  
Fiduciary Duty ◽  
Relational Approach ◽  
Governance Theory ◽  
The Law ◽  
Corporate Personality ◽  
At Will

This chapter begins the presentation of a normative theory of the corporation, assessing corporate law in light of the argument in Part II. It argues that the relational approach to law, developed and pioneered by 20th-century feminist political and legal theorists, has a natural affinity with the norm-governance approach developed in previous chapters. While not always explicitly dealing with the specific questions that this book is concerned with, the framework and method of analysis that these scholars have developed for other branches of the law are useful for drawing out the implications of the norm-governance theory for questions of corporate law. Drawing on this tradition, this chapter sketches out what a relational approach to corporate law and business entails, the types of concerns it can help register, and some of the consequences this approach has for how firms and corporations are, and ought to be, structured. This includes a novel way of understanding corporate personality, fiduciary duty, limited liability, and at-will employment.

3. Lifting the veil

2018 ◽  
Author(s):  
Alan Dignam ◽  
John Lowry
Keyword(s):  
Limited Liability ◽  
Parent Company ◽  
Personal Injury ◽  
Costs And Benefits ◽  
Corporate Group ◽  
The Core ◽  
The Subject ◽  
The Veil ◽  
Group Structures ◽  
Corporate Personality

Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter discusses ‘lifting the veil’, a phrase that refers to situations where the judiciary or the legislature have decided that the separation of corporate personality from the members must not be maintained. In this case, the veil of incorporation is said to be lifted. ‘Lifting’ is also known as ‘peeping’, ‘penetrating’, ‘piercing’, or ‘parting’. The chapter presents statutory examples of veil lifting, many of which involve corporate group structures and others involve straightforward shareholder limitation of liability issues. It also considers cases of veil lifting by the courts as well as classical veil lifting during the periods of 1897 to 1966, 1966 to 1989, and 1989 to the present. Three cases are highlighted: Adams v Cape Industries (1990), Chandler v Cape Plc (2012), and Prest v Petrodel Industries Ltd (2013). The chapter also examines claims of tortious liability, the liability of a parent company for personal injury, and commercial tort. Finally, it looks at the costs and benefits of limited liability.

Is There Hope for the Global Environment? A Discussion of Prospective Parent Corporation Liability for a Subsidiary's Environmental Practices Abroad

2003 ◽  
Vol 13 (2) ◽  
pp. 173-189
Author(s):  
Amelia Tuminaro
Keyword(s):  
Common Law ◽  
Limited Liability ◽  
Transnational Corporations ◽  
Global Environment ◽  
Environmental Response ◽  
Foreign Subsidiaries ◽  
Environmental Standards ◽  
Environmental Practices ◽  
Prospective Parent ◽  
Forum Non Conveniens

U.S. parent corporations should be held liable for environmental pollution caused by their foreign subsidiaries. The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) already holds parent corporations liable in some ways for pollution caused by domestic subsidiaries. Regulations similar to CERCLA's could be applied extraterritorially and would be facilitated by abrogation of two common law principles: limited liability and forum non conveniens. Extraterritorial application of U.S. environmental regulations would greatly enhance transnational corporations' environmental behavior and facilitate just adjudication of plaintiffs' claims against irresponsible companies. Establishing the corporate parent's liability and upholding U.S. environmental standards in such cases would end many current hazardous practices that create pollution in developing countries.

An Economic and Jurisprudential Genealogy of Corporate Law. By Michael J. Whincop. [Aldershot: Ashgate. 2001. xviii, 222, (Bibliography) 20 and (Index) 5 pp. Hardback £45. ISBN 1–84014–773–3.]

2002 ◽  
Vol 61 (2) ◽  
pp. 463-492
Author(s):  
John Armour
Keyword(s):  
Corporate Law ◽  
Company Law ◽  
Economic Methodology ◽  
Evolutionary Account ◽  
High Profile ◽  
Intuitive Appeal ◽  
History Of ◽  
The Law

Economic analysis has recently gained a high profile in English company law scholarship, not least through its employment by the Law Commissions and its resonance with the Company Law Review. This approach has taught us much about how company law functions in relation to the marketplace. Whincop’s book is, however, the first attempt to use economic methodology not only to explain how the law functions, but also to provide an evolutionary account of why the history of English company law followed the path it did. The result is a thesis that, whilst complex, has a powerful intuitive appeal for those familiar with Victorian company law judgments.

Directors’ Duties

2018 ◽  
Author(s):  
Victor Joffe QC ◽  
David Drake ◽  
Giles Richardson ◽  
Daniel Lightman QC ◽  
Timothy Collingwood
Keyword(s):  
Common Law ◽  
Corporate Law ◽  
Legal Analysis ◽  
Legal Personality ◽  
Reasonable Care ◽  
A Company ◽  
Normative Role

The general duties imposed upon directors are the corollary of their powers; they spring from the directors’ functional and normative role in conducting the company’s affairs and affecting its legal relations. Corporate law and the constitution of the company repose in them powers to act, within certain bounds, in the company’s name. And in doing so, they necessarily affect all those interested in the company’s fortunes: most fundamentally, its members. The separate legal personality afforded to a company serves, for the purposes of legal analysis, as a nexus for its members’ interests, and makes it possible to describe directors in the exercise of their powers as agents for the company. These tenets explain the origin of some of the basic duties that apply to directors in relation to the exercise of their functions: to promote the interests of the company; to exercise reasonable care, skill, and diligence; not to exceed the limits of their powers; not to profit from their position; and not to place themselves in positions where their own interests or other duties conflict with their duties to the company. In doing so, they draw on equitable and common law principles of wider application, to agents, trustees, partners, and professionals.

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