Enterprise and Society Advance Access originally published online on May 29, 2007
Enterprise and Society 2007 8(2):268-296; doi:10.1093/es/khm023
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Piercing the Corporate Veil: Cape Industries and Multinational Corporate Liability for a Toxic Hazard, 1950–2004
Reader in business history at Manchester Metropolitan University. Contact information: Manchester Metropolitan University Business School, Aytoun Street, Manchester M1 3GH, U.K.
Freelance writer and documentary film producer
G.Tweedale{at}mmu.ac.uk
laurievincentflynn{at}mac.com
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.
This article draws on a large mass of business and legal papers that was generated by the Yandle and Adams litigation. The papers have been deposited at Manchester Metropolitan University Business School and document citations in the text are from this source. We are grateful to Nick Wikeley for advice in the writing of this article. David Bricknell, David Jeremy, Clive Bishop, Barry Castleman, Steve Tombs, and Jock McCulloch kindly offered comments and help at various times. Two anonymous referees and editors Steven Tolliday and Kenneth Lipartito provided some final sharpening. The responsibility for the text is our own.