Piercing the Corporate Veil: Cape Industries and Multinational Corporate Liability for a Toxic Hazard, 1950-2004 |
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Authors: | Tweedale Geoffrey; Flynn Laurie |
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Institution: | Reader in business history at Manchester Metropolitan University. Contact information: Manchester Metropolitan University Business School, Aytoun Street, Manchester M1 3GH, U.K. |
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Abstract: | The corporate veil refers to the separation oflegal identity between parent firms and their subsidiaries,which gives the parent protection against the liabilities ofits subsidiaries. Fearing that such liability protection wouldfacilitate illicit activity, early twentieth century courts,especially in America, would sometimes piercethe corporate veil. This article explores Adams v. Cape (1990),in which American plaintiffs attempted to persuade the Englishcourts to lift the corporate veil and impose liability for industrialdisease on Cape Industries, a leading U.K. asbestos manufacturer.This landmark case shows how corporate strategy can be closelyintertwined with international corporate law and occupationalhealth and safety issues. It also highlights how limited liabilitylaw and separate legal personality can result in significantinjustice to claimants against multinational enterprises. |
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