Disregarding the Salomon Principle: An Empirical Analysis, 1855-2014

37 Pages Posted: 7 Mar 2019

See all articles by Alan J. Dignam

Alan J. Dignam

Queen Mary University of London - School of Law

Peter B. Oh

University of Pittsburgh - School of Law

Date Written: March 5, 2019

Abstract

For over a century UK courts have struggled to negotiate a coherent approach to the circumstances in which the Salomon principle – that a corporation is a separate entity – will be disregarded. Empirical analysis can facilitate our understanding of this mercurial area of the law. Examining UK cases from 1885 to 2014, we created a final dataset of 213 cases coded for 15 different categories. Key findings confirm historical patterns of uncertainty and a low but overall fluctuating disregard rate, declining recently. Criminal/fraud/deception claims link strongly to disregard outcomes. Private law rates are low but tort claims have a higher disregard rate than contract. Individual shareholders are more susceptible to disregard than corporate shareholders. The English Court of Appeal plays a key role in successful disregard claims particularly in tort. In general, while disregard rates were very context specific, concerns about the diminished sanctity of the Salomon principle may be overblown.

Keywords: company law, corporate law, courts, empirical legal studies, veil piercing, veil lifting

JEL Classification: K10, K12, K13, K22, K41, K42, O52

Suggested Citation

Dignam, Alan J. and Oh, Peter B., Disregarding the Salomon Principle: An Empirical Analysis, 1855-2014 (March 5, 2019). 39 Oxford J. Legal Stud. 16 (2019); U. of Pittsburgh Legal Studies Research Paper No. 2019-04. Available at SSRN: https://ssrn.com/abstract=3347410

Alan J. Dignam

Queen Mary University of London - School of Law ( email )

67-69 Lincoln's Inn Fields
London, WC2A 3JB
United Kingdom
0207 8828123 (Phone)

HOME PAGE: http://www.law.qmul.ac.uk/staff/dignam.html

Peter B. Oh (Contact Author)

University of Pittsburgh - School of Law ( email )

3900 Forbes Avenue
Pittsburgh, PA 15260-6900
United States
412.648.1101 (Phone)
412.648.2648 (Fax)

HOME PAGE: http://www.law.pitt.edu/people/peter-b-oh

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
95
Abstract Views
402
rank
287,825
PlumX Metrics