Multinational Enterprises and Tort Liabilities

Multinational Enterprises and Tort Liabilities

An Interdisciplinary and Comparative Examination

Corporations, Globalisation and the Law series

Muzaffer Eroglu

This book conducts an interdisciplinary and comparative examination of tort liabilities of multinational enterprises (MNEs). In the first part, it examines the social, economic, managerial and legal characteristics of MNEs and compares the findings of this examination to the current understanding of MNEs in the way that tort liability is applied to them. In the second part, the book examines the existing laws and principles related to liability of MNEs from a variety of jurisdictions with the aim of assessing whether these laws are adequate for the challenges that modern MNEs create. In the final part, Muzaffer Eroglu proposes solutions to the problems of tort liability of MNEs.

Chapter 5: Tort Liability of Multinational Enterprises in Case Law

Muzaffer Eroglu

Subjects: law - academic, commercial law, company and insolvency law, law of obligations


Introduction For decades a call for the home countries to accept increased responsibility for regulating the unjust impacts of MNEs has been expressed through transnational and local litigation demanding fundamental action by the courts. These claims aim at holding MNEs legally accountable for the negative environmental, health and safety, labour or human rights problems generated by their operations.1 In contrast to demands for more advanced tort liability regimes, almost every legal system provides the direct liability for groups of companies for the acts of their subsidiaries only under special circumstances.2 Similarly, in case law, the situations in which the courts will ignore separate corporate personality and trace responsibility back to the underlying economic reality of groups of companies and MNEs are very rare and unsatisfactory.3 In this chapter, I will examine case law approaches to the problems of tort liabilities of MNEs. The English case law approach is examined as the main jurisdiction together with an examination of American and other jurisdictions for comparative purposes. The case law will be examined to find out whether they have created efficient theories and principles to solve the liability problems in the MNEs context. There will be a search to discover whether the case law has been sufficiently developed to meet the changes and challenges that MNEs’ business, managerial, social and economical features create. The apparent unfair effects of limited liability and corporate separate legal personality in a corporate group context have forced courts to search for alternative ways to reduce these unjust...

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