Piercing the Corporate Veil: Cape Industries and Multinational Corporate Liability for a Toxic Hazard, 1950–2004

• Published in: Enterprise & society Vol. 8; no. 2; pp. 268 - 296
• Main Authors: Tweedale, Geoffrey, Flynn, Laurie
• Format: Journal Article
• Language: English
• Published: Cambridge, UK Cambridge University Press 01-06-2007; OXFORD JOURNALS OXFORD UNIVERSITY PRESS
• Subjects: Archives; Asbestos; Business structures; Corporate regulation; Corporate veil; Corporations; Limited liability companies; Litigation; Subsidiary companies; Visual fixation
• ISSN: 1467-2227; 1467-2235
• DOI: 10.1017/S1467222700005863

The ‘corporate veil’ refers to the separation of legal identity between parent firms and their subsidiaries, which gives the parent protection against the liabilities of its subsidiaries. Fearing that such liability protection would facilitate illicit activity, early twentieth century courts, especially in America, would sometimes ‘pierce’ the corporate veil. This article explores Adams v. Cape (1990), in which American plaintiffs attempted to persuade the English courts to lift the corporate veil and impose liability for industrial disease on Cape Industries, a leading U.K. asbestos manufacturer. This landmark case shows how corporate strategy can be closely intertwined with international corporate law and occupational health and safety issues. It also highlights how limited liability law and separate legal personality can result in significant injustice to claimants against multinational enterprises.