Dystopian Accessorial Liability’ or the End of ‘Stepping Stones’ As We Know It?

Abstract

In Australia a mode of liability that has been known as ‘stepping stones’ has attracted extensive debate and criticism, partly due to the corporate regulator’s propensity to employ it in actions against directors. Stepping stones liability has traditionally consisted of two elements – a breach of the law by the company and a breach of duty by the relevant director in allowing or not preventing the breach. However, the very recent judgment of the Full Federal Court in Cassimatis v Australian Securities and Investments Commission confirms that ‘stepping stones’ is really just a straightforward application of the statutory duty of care (or other duty) to the facts of each particular case.

Keywords: Company Law; Duty of Care; Directors’ Duties

JEL Classification: K10; K22