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

Published online by Cambridge University Press:  18 February 2015

Geoffrey Tweedale  and
Laurie Flynn
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Abstract

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.

Type
Articles
Information
Enterprise & Society , Volume 8 , Issue 2: Business and Nature , June 2007 , pp. 268 - 296
Copyright
Copyright © The Author(s) 2007. Published by Cambridge University Press on behalf of the Business History Conference. All rights reserved.

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