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 6: Comparative Laws and Principles Regarding Corporate Group Liability

Muzaffer Eroglu

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


Introduction One of the most important problems for regulation of groups of companies and MNEs is that only a few legal systems propose a unified approach towards groups of companies1 and none of them regulate liability issues in tort. Therefore national courts, with the lack of statutory provisions to trust in, use general legal principles of civil and commercial laws to obtain justice in a particular case. More importantly in contrast to expectations, there are new laws to extend limited liability to other business forms.2 For example, the UK recently enacted the Limited Liability Partnership Act 2000, which has extended the imperfections of limited liability to partnerships. On the international level, the more difficult question remains, how MNEs can be put under harmonized regulations: whether MNEs might be subject to one uniform regulatory structure or different regulations covering their various activities in different countries. The voluntary regulation of MNEs also appears as a part of the liability discussions.3 It may be argued, in the light of previous chapters, that an MNE should be subject to a single regulatory scheme because it has a private managerial structure capable of integrated global management over all its components. On the other hand, this type of uniform regulation, even if it could be achieved, would be problematic with regard to the sovereignty of independent states.4 However the fact that corporate groups have not been regulated in a way that is equivalent to that of other organizational forms, such as joint stock companies, should not...

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