The law of corporate responsibility must reflect the new corporate reality

Alexander Gay, National Magazine


The last few months have seen a great deal of activity before the courts on the issue of corporate responsibility. Plaintiffs are struggling to find different legal avenues to attribute legal responsibility between related companies. Two recent cases that have dealt with this issue are Yaiguaje v. Chevron Corporation and Garcia v. Tahoe Resources Inc. The former involves the piercing of the corporate veil, and the latter, the attribution of liability from a subsidiary to a parent company under tort law.

These cases are anchored on legal theories that are not responsive to a new modern corporate reality, where related companies act in concert as a group of companies, yet are allowed to enjoy limited liability. The challenge for the courts will be to find a legal theory that allows companies to act as legally distinct entities, and yet be accountable for the actions of related companies operating within a group of companies in certain circumstances.

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