Corporate Liability Towards Tort Victims in the Personal Injury Context

Abstract

This thesis examines approaches to establishing liability in corporate groups. It considers the problem that arises when an insolvent subsidiary’s tort creditors suffer personal injury, and try to pursue recourse against other group companies – especially the parent company. Courts have tried to provide answers regarding the parent company’s liability for the torts of their subsidiaries, but have had limited success. The thesis reveals difficulty in extending liability to the parent company by way of insolvency law provisions, and by piercing the corporate veil. It recounts the hesitation of the courts in broadening their perspective beyond individual companies, so as to take the group itself as the responsible entity. The thesis points, furthermore, to shortcomings in proposals for a new rule of unlimited pro rata liability. Motivated by the inadequacy of current solutions to this pressing group problem, the thesis explores alternative tort law remedies under an approach suggested by the Supreme Court in the leading cases of VTB Capital Plc v Nutritek International Corp and others and Prest v Petrodel Resources Ltd. Chapter III discusses the role of tort of negligence in establishing the parent company’s liability. The work analyses case law decisions on how to widen the application of negligence in the corporate group context, and compares UK law with relevant United States’ and Australian case law. Since this group problem involves multiple legal entities, Chapters IV and V evaluate the possibility of using the doctrine of joint tortfeasance and/or the theory of vicarious liability in establishing the parent company’s liability for its subsidiary company’s torts. These two doctrines’ extensions in corporate tort cases are seldom discussed in the literature. To conclude, tort law solutions, especially the doctrines of tort of negligence and joint tortfeasance based on participations are recommended to be further developed for corporate tort problems.