Corporate Tort Liability and the Problem of Overcompliance

Southern California Law Review, Vol. 69, p. 1679, 1996

25 Pages Posted: 21 Aug 2008

See all articles by Bruce Chapman

Bruce Chapman

Faculty of Law, University of Toronto

Date Written: 1996

Abstract

It is tempting to think that the problem with corporate responsibility, and liability, is that there is not enough of it. However, rather than worry about a systematic deficiency of due care by corporations, the argument in Part II of this Article suggests that the real difficulty in the corporate liability context (a difficulty that we might not observe directly, but one that drives the phenomena that we do observe) is that tort law induces excessive levels of corporate care, particularly if the liability regime targets the individual employee for personal responsibility. This, I suggest, is problematic on either an efficiency analysis or a corrective justice theory of tort law. In Part III, the Article examines the present regime which allows for dual liability - that is, the liability of both the corporation and the employee - and finds that this is only a partial response to the problem. Thus, the proposed corporate liability solution in the Article becomes enterprise liability combined with an immunity in tort for corporate employees. Finally, after explaining why vicarious enterprise liability is properly restricted to the acts of an employee which are committed within the scope of employment ( a standard restriction that other theories of vicarious liability do not adequately explain), Part IV argues for one exception to the general rule of employee immunity for corporate torts: the case of gross personal negligence, or the sort of thing that often takes employees too far from the course of their employment in pursuit of some private profit that greatly exceeds the cost to the employee of losing his or her job.

Suggested Citation

Chapman, Bruce, Corporate Tort Liability and the Problem of Overcompliance (1996). Southern California Law Review, Vol. 69, p. 1679, 1996. Available at SSRN: https://ssrn.com/abstract=1238348

Bruce Chapman (Contact Author)

Faculty of Law, University of Toronto ( email )

78 and 84 Queen's Park
Toronto, Ontario M5S 2C5
Canada
416-978-6911 (Phone)
416 978 2648 (Fax)

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