U.S. Corporate Liability for Torts of (Foreign) Subsidiaries

Corporate Counsel Review, Vol. 23, No. 15, May 2004

28 Pages Posted: 10 Aug 2010

See all articles by Eric Engle

Eric Engle


Date Written: May 9, 2004


Abstract: This paper explores the liabilities of a parent corporation for the tortious acts of its overseas subsidiaries and explores the doctrinal confusion inherent in current tests for piercing the corporate veil. It explains these apparent incoherencies through a comprehensive theory of the historical development of tort law. It concludes that corporations can be held vicariously liable for the torts of their overseas subsidiares based on theories of agency such as respondeat superior. It examines European law briefly and notes that the legal system there follow similar rules. It concludes that the role of corporate governance in the globalising world presents challenges and opportunities for the corporation as legal person having rights and duties under international law: prudent corporate counsel will note these practical trends and theoretical explanations in order to capitalize on opportunities and avoid pitfalls of liability.

Keywords: Piercing the Corporate Veil, Veil Piercing, Lifting the Corporate Veil, Transparancy, Liability, Tort, Corporate Group, merger, acquisition, take over, fusion, subcontractor, tort, delict, filial, subsidiary

JEL Classification: k12, k13, k22, k33

Suggested Citation

Engle, Eric, U.S. Corporate Liability for Torts of (Foreign) Subsidiaries (May 9, 2004). Corporate Counsel Review, Vol. 23, No. 15, May 2004 . Available at SSRN: https://ssrn.com/abstract=1655983

Eric Engle (Contact Author)

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