U.S. Corporate Liability for Torts of (Foreign) Subsidiaries
Corporate Counsel Review, Vol. 23, No. 15, May 2004
28 Pages Posted: 10 Aug 2010
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: Suggested Citation