Determining Secondary Liability: In Search of Legislative Coherence

Abstract

Australia is arguably in the midst of a legislative boom to improve recovery for creditors through the imposition of secondary liability. The aim is to overcome ‘sharp corporate practice’ by imposing liability on an outside party for the default of a primary debtor. However, recent reforms are noticeably dissimilar without apparent reason, and contribute to an incoherent approach to the law in this area. This paper makes the case for secondary liability laws which are consistent (as far as circumstances allow), intelligible, and informed by principle based on articulated policy objectives. This approach will produce benefits for both drafters and enforcers of the law.

Keywords: secondary liability, legislative, coherence

JEL Classification: K22