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THE CORPORATE GROUP: SYSTEM, DESIGN AND RESPONSIBILITY

Published online by Cambridge University Press:  12 January 2022

Christian Witting
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Abstract

Lungowe v Vedanta Resources plc presages more liberal criteria for determining when a parent company owes a duty of care to third parties injured by subsidiary activities. It invokes systems language and points to potential parent company liability for omissions in managing the group. This article develops these ideas. It portrays the corporate group in systems-managerial terms. The parent creates group-wide structures and deploys management strategies and integrating mechanisms that facilitate achievement of its purposes. It has a substantial causal influence upon subsidiary acts and omissions. Prima facie the parent cannot avoid extended liability claims by hiding behind the “pure omissions” rule.

Keywords

corporate groupstortliabilitytheory
Type
Articles
Information
The Cambridge Law Journal , Volume 80 , Issue 3 , November 2021 , pp. 581 - 612
Copyright
Copyright © Cambridge Law Journal and Contributors 2022

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Footnotes

*

National University of Singapore.

Thanks to Ernest Lim, Martin Petrin, Tan Cheng Han, David Tan, Tan Zhong Xing and the two anonymous reviewers for feedback and suggestions. All errors are mine alone.

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36 See also Jennejohn, “Private Order”, 319.

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38 Ibid., at 1449–50, 1460–61.

39 See O. Williamson, “Transaction-Cost Economics: The Governance of Contractual Relations” in P. Buckley and J. Michie (eds.), Firms, Organizations and Contracts: A Reader in Industrial Organization (Oxford 1996), ch. 6.

40 But the make or buy choice includes considerations beyond transaction costs: H. Demsetz, “The Theory of the Firm Revisited” (1988) 4 Journal of Law, Economics & Organization 141, 150.

41 Whittington and Mayer, The European Corporation, 69.

42 Lacave and Urtiaga, “Corporate Groups”, 2.

43 Belenzon et al., “Towards a Legal Theory”, 5–7, 33. Of course, they might fear other things, such as reputational damage.

44 E.g. H. Hansmann and R. Kraakman, “Toward Unlimited Shareholder Liability for Corporate Torts” (1991) 100 Yale L.J. 1881, 1881, 1884.

45 L.M. LoPucki, “The Essential Structure of Judgment Proofing” (1998) 51 Stan. L. Rev. 147.

46 S. Belenzon, N. Hashai and A. Patacconi, “The Architecture of Attention: Group Structure and Subsidiary Autonomy” (2019) 40 Strategic Management Journal 1610, 1614.

47 J.E. Antunes, Liability of Corporate Groups: Autonomy and Control in Parent-subsidiary Relationships in US, German and EU Law (Deventer 1994), 271; M. Dearborn, “Enterprise Liability: Reviewing and Revitalizing Liability for Corporate Groups” (2009) 97 Calif L.R. 195, 198; M. Roe, “Corporate Strategic Reaction to Mass Tort” (1986) 72 Virginia. L. Rev. 1, 39–40.

48 J. Westbrook, “Transparency in Corporate Groups” (2018) 13 Brooklyn Journal of Corporate, Finance and Commercial Law 33, 36.

49 Differentiation is “segmentation of the organizational system into subsystems”: C. Weigelt and D. Miller, “Implications of Internal Organization Structure for Firm Boundaries” (2013) 34 Strategic Management Journal 1411, 1414.

50 Epitomised by F. Taylor, The Principles of Scientific Management (New York 1911).

51 J.F. Witt, “Speedy Fred Taylor and the Ironies of Enterprise Liability” (2003) 103 Colum. L. Rev. 1, 10–11.

52 E.g. US Steel's Central Committee on Safety: ibid., at 35.

53 E.g. Workmen's Compensation Act 1897; Workmen's Compensation Act 1911 (Wisconsin).

54 G. Keating, “The Idea of Fairness in the Law of Enterprise Liability” (1997) 95 Mich. L. Rev. 1266, 1279, citing Ira S Bushey & Sons, Inc. v United States 398 F. 2d 167, 171 (2d Cir. 1968).

55 Keating, “Idea of Fairness”, 1290.

56 E.g. G. Priest, “The Invention of Enterprise Liability: A Critical History of the Intellectual Foundations of Modern Tort Law” (1985) 14 J. Leg. Stud. 461, 466; F. James Jr., “Social Insurance and Tort Law: The Problem of Alternative Remedies” (1952) 27 N.Y.U.L.R. 537, 538.

57 Keating, “Idea of Fairness”, 1287, 1290.

58 E.g. D. Brodie, Enterprise Liability and the Common Law (Cambridge 2010).

59 E.g. Vandermark v Ford Motor Co. 391 P. 2d 169 (Cal. 1964).

60 E.g. P.I. Blumberg, The Multinational Challenge to Corporate Law: The Search for a New Corporate Personality (New York 1993).

61 Keating, “Idea of Fairness”, 1337.

62 E.g. I. Mevorach, “The Role of Enterprise Principles in Shaping Management Duties at Times of Crisis” (2013) 14 E.B.O.R. 471, 476; G. Keating, “The Theory of Enterprise Liability and Common Law Strict Liability” (2001) 54 Vand. L. Rev. 1285, 1320; C. Stone, “The Place of Enterprise Liability in the Control of Corporate Conduct” (1980) 90 Yale L.J. 1, 8.

63 I. Mevorach, Insolvency within Multinational Enterprise Groups (Oxford 2009), 39.

64 Blumberg, The Multinational Challenge, viii–ix.

65 Ibid., at 92, 232.

66 H. Hansmann and R. Squire, “External and Internal Asset Partitioning: Corporations and Their Subsidiaries” in J.N. Gordon and W.G. Ringe (eds.), Oxford Handbook of Corporate Law and Governance (Oxford 2018), 272.

67 Dearborn, “Enterprise Liability”, 252–53.

68 Ibid., at 205.

69 B. Choudhury and M. Petrin, Corporate Duties to the Public (Cambridge 2019), 121.

70 [1990] Ch. 433, at 538.

71 Mohamud v Wm Morrison Supermarkets plc [2016] UKSC 11, [2016] A.C. 677, at [40]; Cox v Ministry of Justice [2016] UKSC 10, [2016] A.C. 660, at [23].

72 E.g. Mevorach, Insolvency, 212.

73 See P. Muchlinski, “Limited Liability and Multinational Enterprises: A Case for Reform?” (2010) 34 Cambridge Journal of Economics 915, 920, 922.

74 Choudhury and Petrin, Corporate Duties to the Public, 122; J. Henderson Jr., “The Boundary Problems of Enterprise Liability” (1982) 41 Maryland. L. Rev. 659.

75 LoPucki, “Essential Structure”, 156–58.

76 J. Henderson Jr., “The Constitutive Dimensions of Tort: Promoting Private Solutions to Risk Management Problems” (2013) 40 Florida State U.L.R. 221, 246.

77 E.g. Blumberg, The Multinational Challenge, 241, 247; Dearborn, “Enterprise Liability”, 211.

78 LoPucki, “Essential Structure”, 157–58. This is enterprise liability as loss–spreading because the precision needed in identifying liability targets for deterrence is absent.

79 A. Muscat, The Liability of the Holding Company for the Debts of its Insolvent Subsidiaries (Abingdon 1996), 394–95.

80 Stone, “Place of Enterprise Liability”, 8, 77.

81 Noted in Dearborn, “Enterprise Liability”, 249.

82 M. Simkovic, “Limited Liability and the Known Unknowns” (2018) 68 Duke L.J. 275, 277, 305.

83 E.g. G. Skinner, “Rethinking Limited Liability of Parent Corporations for Foreign Subsidiaries’ Violations of International Human Rights Law” (2015) 72 Wash. & Lee L. Rev. 1769, 1823.

84 See e.g. Muscat, Liability of the Holding Company, 441.

85 S. Ghoshal and C. Bartlett, “The Multinational Corporation as an Interorganizational Network” (1990) 15 Academy of Management Review 603.

86 Ibid., at 609.

87 Ibid., at 616.

88 V. Harper Ho, “Theories of Corporate Groups: Corporate Identity Reconceived” (2012) 42 Seton Hall L. Rev. 879, 887.

89 Ibid., at 908.

90 V. Harper Ho, “Team Production and the Multinational Enterprise” (2015) 38 Seattle U.L. Rev. 499, 507.

91 Ibid., at 512–13, 522.

92 The major division is between power and authority-relations: R. Scott and G. Davis, Organizations and Organizing: Rational, Natural, and Open System Perspectives (Upper Saddle River 2007), 208.

93 Manufacturing Intellect, “Alfred P. Sloan Interview on Running a Successful Business” (1954), available at https://www.youtube.com/watch?v=w52SYCtG94 (last accessed 16 September 2021). See also Dairy Containers Ltd. v NZI Bank Ltd. [1995] 2 N.Z.L.R. 30, 91.

94 A. Grimes, “Authority, Power, Influence and Social Control: A Theoretical Synthesis” (1978) 3 Academy of Management Review 724. See also Scott and Davis, Organizations and Organizing, 208–09.

95 Scott and Davis, Organizations and Organizing, 212–13.

96 P. Nell and B. Ambos, “Parenting Advantage in the MNC: An Embeddedness Perspective on the Value Added by Headquarters” (2013) 34 Strategic Management Journal 1086, 1088.

97 S. Watson O'Donnell, “Managing Foreign Subsidiaries: Agents of Headquarters or an Interdependent Network?” (2000) 21 Strategic Management Journal 525, 532.

98 Ibid., at 531.

99 French, Collective and Corporate Responsibility, 41–51. See also T. Isaacs, Moral Responsibility in Collective Contexts (Oxford 2011); E. Bant, “Culpable Corp Minds” (2021) 48 U.W.A.L. Rev. 351.

100 Lungowe v Vedanta Resources [2019] UKSC 20, at [49].

101 Harper Ho, “Theories of Corporate Groups”, 886.

102 See e.g. Charterbridge Corporation Ltd. v Lloyds Bank Ltd. [1970] Ch. 62, 66; Sea-Land Services, Inc. v Pepper Source 941 F. 2d 519 (7th Cir. 1991).

103 Walker v Wimborne (1976) 137 C.L.R. 1, 6.

104 See S. Haddy, “A Comparative Analysis of Directors’ Duties in a Range of Corporate Group Structures” (2002) 20 Company & Securities Law Journal 138, 140.

105 See e.g. Companies Act 2006, s. 1159(1).

106 Belenzon et al., “Towards a Legal Theory”, 6.

107 R. Wieser, Liability within Corporate Groups (Bad Frankenhausen 2013), 9–10.

108 See e.g. Okpabi v Shell [2021] UKSC 3, at [147]; Muscat, Liability of the Holding Company, 149.

109 E.g. Companies Act 2006, sched. 3, reg. 4, Model Articles for Public Companies, arts. 20–21.

110 Companies Act 2005, s. 1159. They are common in large unlisted companies: Lacave and Urtiaga, “Corporate Groups”, 24.

111 Thompson v The Renwick Group plc [2014] EWCA Civ 635, [2014] P.I.Q.R. P18, at [24]–[26]; J. Dine, The Governance of Corporate Groups (Cambridge 2000), 43–44.

112 Y. Luo, “Corporate Governance and Accountability in Multinational Enterprises: Concepts and Agenda” (2005) 11 Journal of International Management 1, 3–5.

113 Ibid., at 5.

114 E.g. Chandler, Scale and Scope, 191; Muscat, Liability of the Holding Company, 58–59.

115 Y. Du, M. Deloof and A. Jorrinsen, “The Role of Subsidiary Boards in Multinational Enterprises” (2015) 21 Journal of International Management 169, 175.

116 Luo, “Corporate Governance”, 3.

117 Chandler, Visible Hand, 3; H. Mintzberg, The Structuring of Organizations (Englewood Cliffs 1979), 37, 42.

118 J. Galbraith, Designing Organizations: Strategy, Structure and Process at the Business Unit and Enterprise Levels, 3rd ed. (San Francisco 2014), 22–23; E. Penrose, The Theory of the Growth of the Firm, 4th ed. (Oxford 2009), 18; Mintzberg, Structuring of Organizations, 37; A.P. Sloan Jr., My Years with General Motors (New York 1963), 431.

119 D. Chakravarty et al., “Multinational Enterprise Regional Management Centers: Characteristics and Performance” (2017) 52 Journal of World Business 296, 296. See e.g. Iberdrola, Corporate Governance System (Iberdrola SA, 25 July 2019), 3.

120 See especially Mintzberg, Structuring of Organizations, 154–56.

121 Chandler, Strategy and Structure, 11.

122 E.g. Okpabi v Shell [2021] UKSC 3, at [156].

123 Mintzberg, Structuring of Organizations, 388–89; Chandler, Strategy and Structure, 13.

124 Okpabi v Royal Dutch Shell plc. [2018] EWCA Civ 191, [2018] Bus. L.R. 1022 (C.A.), at [40]. See also Mintzberg, Structuring of Organizations, 388–89.

125 Jones, Multinationals, 182.

126 Recognised e.g. in Okpabi v Shell [2021] UKSC 3, at [122], [124]–[125], [140]. This has been the case since A.P. Sloan brought together General Motor's disparate brands: Chandler, Strategy and Structure, 130–62.

127 Chandler, Scale and Scope, 623.

128 Belenzon et al., “Architecture of Attention”, 1612, 1616; E. Alfoldi, J. Clegg and S. McGaughey, “Coordination at the Edge of the Empire: The Delegation of Headquarters Functions through Regional Management Mandates” (2012) 18 Journal of International Management 276.

129 M. Kuntz, Conceptualising Transnational Corporate Groups for International Criminal Law (Baden-Baden 2017), 275.

130 E.g. Sloan Jr, My Years with General Motors, 433.

131 Chakravarty et al., “Multinational Enterprise”, 298.

132 Mintzberg, Structuring of Organizations, 133. See also Harper Ho, “Team Production”, 505, 518.

133 Australian Competition and Consumer Commission v April International Marketing Services Australia Pty Ltd. (No 6) [2010] FCA 704, at [42]; Antunes, Liability of Corporate Groups, 91, 103.

134 Harper Ho, “Team Production”, 528.

135 Chandler, Scale and Scope, 232. See e.g. Iberdrola, Corporate Governance System, 3.

136 See Muscat, Liability of the Holding Company, 58.

137 D. Collis, D. Young and M. Goold, “The Size and Composition of Corporate Headquarters in Multinational Companies: Empirical Evidence” (2012) 18 Journal of International Management 260, 263.

138 See Antunes, Liability of Corporate Groups, 159; Muscat, Liability of the Holding Company, 402.

139 R. Coase, The Firm, the Market and the Law (Chicago 1988), ch. 2.

140 Antunes, Liability of Corporate Groups, 101.

141 H. Collins (ed.), “Introduction to Networks as Connected Contracts” in G. Teubner (M. Everson trans.), Networks as Connected Contracts (Oxford 2011), 25.

142 R. Tuomela, The Philosophy of Sociality: The Shared Point of View (Oxford 2007), 27.

143 For qualified empirical support, see D. Vora et al., “Us and Them: Disentangling Forms of Identification in MNCs” (2021) 21 Journal of International Management 100805, 2, 12.

144 E.g. B. King, T. Felin and D. Whetten, “Finding the Organization in Organization Theory: A Meta-theory of the Organization as Social Actor” (2010) 21 Organization Science 290, 293–94.

145 E.g. C. Heckscher, “Defining the Post-Bureaucratic Type” in C. Heckscher and A. Donnellon (eds.), The Post-bureaucratic Organization: New Perspectives on Organizational Change (San Francisco 1994), 25.

146 E.g. Iberdrola, Corporate Governance System, 4.

147 See e.g. Volkswagen AG, Annual Report 2018: Structure and Business Activities (Stuttgart 2018), 56 et seq.

148 Antunes, Liability of Corporate Groups, 78.

149 E.g. Mintzberg, Structuring of Organizations, 83, 95, 191, 290, 384.

150 E.g. Okpabi v Shell [2021] UKSC 3, at [40].

151 See Tuomela, Philosophy of Sociality.

152 Scott and Davis, Organizations and Organizing, 185.

153 See e.g. Galbraith, Designing Organizations, 42; Sloan Jr, My Years with General Motors, 433–34.

154 M. Gilbert, A Theory of Political Obligation (Oxford 2006), 128.

155 Watson O'Donnell, “Managing Foreign Subsidiaries”, 532.

156 E.g. Blumberg, Multinational Challenge, 140; Mintzberg, Structuring of Organizations, 384.

157 Watson O'Donnell, “Managing Foreign Subsidiaries”, 532–33.

158 Weigelt and Miller, “Implications of Internal Organization Structure”, 1415–18.

159 Vora et al., “Us and Them”, 1–2.

160 Watson O'Donnell, “Managing Foreign Subsidiaries”, 542–43.

161 E.g. Ibarra-Caton and Mataloni, “Headquarters Services”, 96; Watson O'Donnell, “Managing Foreign Subsidiaries”, 534.

162 Ibarra-Caton and Mataloni, “Headquarters Services”, 95–96.

163 Gilbert, Theory of Political Obligation, 130.

164 Ibid., at 115.

165 Ibid. See also C. List and P. Pettit, Group Agency: The Possibility, Design, and Status of Corporate Agents (Oxford 2011), 173.

166 See also Mevorach, “Role of Enterprise Principles”, 475.

167 Galbraith, Designing Organizations, 198.

168 Chandler, Strategy and Structure, 303.

169 Galbraith, Designing Organizations, 195. The holding company is likely to be modest in size: ibid., at 204; Lungowe v Vedanta Resources plc [2017] EWCA Civ 1528, [2018] 1 W.L.R. 3575, at [12].

170 Galbraith, Designing Organizations, 198, 204.

171 Ibid., at 195.

172 Chandler, Strategy and Structure, 42, 99.

173 Galbraith, Designing Organizations, 213; Mintzberg, Structuring of Organizations, 151.

174 Chandler, Scale and Scope, 613–14; Chandler, Strategy and Structure, 2, 9.

175 A. Colpan and T. Hikino, “Foundations of Business Groups: Toward an Integrated Framework” in A. Colpan, T. Hikino and J. Lincoln (eds.), The Oxford Handbook of Business Groups (Oxford 2010), 26.

176 Volkswagen AG, Annual Report 2018, 51 et seq.

177 Galbraith, Designing Organizations, 186, 189.

178 J. Dunning, Multinational Enterprises and the Global Economy (Wokingham 1993), 217; V. Mahnke et al., “How Do Regional Headquarters Influence Corporate Decisions in Networked MNCs?” (2012) 18 Journal of International Management 293, 293–94.

179 Galbraith, Designing Organizations, 265.

180 See e.g. Okpabi v Shell [2021] UKSC 3, at [160].

181 Galbraith, Designing Organizations, 194.

182 Dunning, Multinational Enterprises, 224; Chandler, Strategy and Structure, 232.

183 Mintzberg, Structuring of Organizations, 381; Chandler, Strategy and Structure, 138.

184 Galbraith, Designing Organizations, 39–40.

185 Ibid., at 11.

186 “Mutual adjustment achieves the coordination of work by the simple process of informal communication”: Mintzberg, Structuring of Organizations, 3.

187 Galbraith, Designing Organizations, 101.

188 Mintzberg, Structuring of Organizations, 164.

189 Dunning, Multinational Enterprises, 216; Chandler, Strategy and Structure, 12.

190 E.g. Chandler v Cape plc [2012] EWCA Civ 525, at [8].

191 E.g. Dairy Containers Ltd. v NZI Bank Ltd. [1995] 2 N.Z.L.R. 30.

192 Muscat, Liability of the Holding Company, 57, 59. See also Re Hydrodan (Corby) Ltd. [1994] B.C.C. 161, 164.

193 See e.g. Galbraith, Designing Organizations, 201.

194 Okpabi v Shell [2021] UKSC 3, at [54].

195 Penrose, Theory of the Growth of the Firm, 46; Chandler, Strategy and Structure, 44, 297. See e.g. Iberdrola, Corporate Governance System, 51 et seq.

196 Okpabi v Shell [2021] UKSC 3, at [47]–[49].

197 See Muscat, Liability of the Holding Company, 55–56.

198 Ibid., at 93–95, 399.

199 Ibid., at 57.

200 Ibid., at 56.

201 Ibid., at 97–98, 312ff.

202 Von Bertalanffy, General System Theory, 11–12, 31, 44–45.

203 Ibid., at 19, 31; L. von Bertalanffy, “The History and Status of General Systems Theory” (1972) 15 Academy of Management Journal 407, 410–11.

204 Von Bertalanffy, General System Theory, 36–37.

205 T. Belinfanti and L. Stout, “Contested Visions: The Value of Systems Theory for Corporate Law” (2018) 166 U. Penn. L.R. 579, 599. See von Bertalanffy, General System Theory, 34–37.

206 A. Calnan, “Torts as Systems” (Unpublished, 2018), 11.

207 Von Bertalanffy, General System Theory, 27–28.

208 Ibid., at 5.

209 N. Luhmann, Introduction to Systems Theory (Cambridge 2002), 28; von Bertalanffy, General System Theory, 39.

210 Belinfanti and Stout, “Contested Visions”, 603–04.

211 Ibid., at 599–600.

212 L. LoPucki, “The Systems Approach to Law” (1997) 82 Cornell L.R. 479, 482–83, 487.

213 Von Bertalanffy, General System Theory, 27–28, 194–95, 198.

214 A. Montuori, “Systems Approach” in M. Runco and S. Pritzker (eds.), Encyclopedia of Creativity, vol. 2 (London, Burlington and San Diego 2011), 416.

215 [2019] UKCSC 20, at [52].

216 Antunes, Liability of Corporate Groups, 115–16; Blumberg, The Multinational Challenge, 73–75.

217 Belinfanti and Stout, “Contested Visions”, 605, 609; Scott and Davis, Organizations and Organizing, 17–18; F. Kast and J. Rosenzweig, “General Systems Theory: Applications for Organization and Management” (1972) 15 Academy of Management Journal 447, 455–56.

218 Chandler, The Visible Hand, 145, 147.

219 Ibid., chs. 6–11.

220 Scott and Davis, Organizations and Organizing, 152.

221 Chandler v Cape plc [2012] EWCA Civ 525, at [8], [75].

222 LoPucki, “Systems Approach to Law”, 489.

223 See e.g. I. Anabtawi and S. Schwarcz, “Regulating Systemic Risk: Towards an Analytical Framework” (2011) 86 Notre Dame L. Rev. 1349.

224 LoPucki, “Systems Approach to Law”, 499.

225 Chandler, The Visible Hand, 8–9.

226 Ibid.

227 Von Bertalanffy, General System Theory, 34, 200. See e.g. Anabtawi and Schwarcz, “Regulating Systemic Risk”, 1406ff.

228 E.g. Lungowe v Vedanta Resources [2019] UKSC 20, at [49]; Okpabi v Shell [2021] UKSC 3, at [141]–[142].

229 F. Gevurtz, “Groups of Companies” (2018) 88 Am. J. Comp. L. 181, 205.

230 See also Mevorach, “Role of Enterprise Principles”, 489.

231 E.g. Thompson v The Renwick Group [2014] EWCA Civ 635.

232 K. Strasser, “Piercing the Veil in Corporate Groups” (2005) 37 Conn. L. Rev. 637, 639–40.

233 E.g. M.E. Diamantis, “The Extended Corporate Mind: When Corporations Use AI to Break the Law” (2020) 98 N.C.L.R. 893, 895, 899.

234 R.A. Duff, “Who Is Responsible, for What, to Whom?” (2005) 2 Ohio State J. Crim. L. 441, 456.

235 Dunnage v Randall [2015] EWCA Civ 673, [2016] Q.B. 639; P. Cane, Responsibility in Law and Morality (Oxford 2002), 67.

236 E.g. Lister v Hesley Hall Ltd. [2002] 1 A.C. 215.

237 See Cane, Responsibility in Law and Morality, 30–33.

238 B. Ewing, “The Structure of Tort Law, Revisited: The Problem of Corporate Responsibility” (2015) 8 J. Tort L. 1, 24.

239 Empirical evidence demonstrates that regulatory/tort law has its greatest deterrent effect among medium- and large-size organisations: L. Friedman, Impact: How Law Affects Behavior (Cambridge, MA 2016), 137.

240 Roe, “Corporate Strategic Reaction”, 10, 13.

241 Prest v Petrodel Resources [2013] UKSC 34. Veil piercing might be abolished completely in the UK: Hurstwood Properties (A) Ltd. v Rossendale BC [2021] UKSC 16, [2021] 2 W.L.R. 1125, at [71]–[72].

242 [2013] UKSC 34.

243 [1990] Ch. 433.

244 Ibid., at 539–40.

245 Ibid., at 544.

246 J. Arlen and R. Kraakman, “Controlling Corporate Misconduct: An Analysis of Corporate Liability Regimes” (1997) 72 N.Y.U.L. Rev. 687; D. DeMott, “Organizational Incentives to Care About Law” (1997) 60 Law & Contemp. Probs. 39, 54.

247 M. Caulfield and W. Laufer, “Corporate Moral Agency at the Convenience of Ethics and Law” (2019) 17 Georgetown J.L. & Public. Pol'y. 953, 965; M. Geistfeld, “The Coherence of Compensation-Deterrence Theory in Tort Law” (2012) 61 DePaul L. Rev. 383, 406–07.

248 E.g. C.A. Witting, Liability of Corporate Groups and Networks (Cambridge 2018), ch. 9; Hansmann and Kraakman, “Toward Unlimited Shareholder Liability”.

249 Luo, “Corporate Governance”, 10.

250 See e.g. In re Caremark International Inc. Derivative Litigation 698 A. 2d 959 (Del. Ch. 1996).

251 See R. Van Loo, “The New Gatekeepers – Private Firms as Public Enforcers” (2020) 106 Viriginia. L. Rev. 467.

252 [2012] EWCA Civ 525.

253 Ibid., at [18]–[26].

254 Ibid., at [7]–[8].

255 Lungowe v Vedanta Resources [2019] UKSC 20, at [56].

256 Ibid.

257 Noted in Choudhury and Petrin, Corporate Duties to the Public, 95.

258 Lungowe v Vedanta Resources [2019] UKSC 20, at [49], [51]–[53].

259 Ibid., at [53].

260 Ibid. See also Okpabi v Shell [2021] UKSC 3, at [153]; Chandler v Cape plc [2012] EWCA Civ 525, at [65].

261 [1970] A.C. 70.

262 Ibid., at 1037–39, 1055.

263 Choudhury and Petrin, Corporate Duties to the Public, 113.

264 Okpabi v Shell [2021] UKSC 3, at [7], [26].

265 Cf. B. Walker Smith, “Proximity-driven Liability” (2014) 102 Geo. L.J. 1777.

266 C. Witting, Street on Torts, 16th ed. (Oxford 2021), 43.

267 R. Burton and B. Obel, “The Science of Organizational Design: Fit Between Structure and Coordination” (2018) 7 Journal of Organization Design 5, 3.

268 Chandler v Cape plc [2012] EWCA Civ 525, at [75]; Okpabi v Shell [2021] UKSC 3, at [45].

269 Okpabi v Shell [2021] UKSC 3, at [46].

270 Antunes, Liability of Corporate Groups, 76.

271 Chandler v Cape plc [2012] EWCA Civ 525, at [75].

272 Okpabi v Shell [2021] UKSC 3, at [51].

273 [2021] UKSC 3.

274 Chandler v Cape plc [2012] EWCA Civ 525, at [77]–[78].

275 Okpabi v Shell [2021] UKSC 3, at [33].

276 See P. Smith, “Omission and Responsibility in Legal Theory” (2003) 9 Legal Theory 221.

277 Ibid., at 234–40; S. Steel, “Rationalising Omissions Liability in Negligence” (2019) 135 L.Q.R. 484, 503–07.

278 G.R. Sullivan and A.P. Simester, “Omissions, Duties, Causation and Time” (2021) 137 L.Q.R. 358, 362.

279 Kalma v African Minerals Ltd. [2020] EWCA Civ 144, at [128].

280 M.M. Mello and D.M. Studdert, “Deconstructing Negligence: The Role of Individual and System Factors in Causing Medical Injuries” (2008) 96 Geo. L.J. 599, 609.

281 See also ibid.

282 Such positive acts might create a relevant “source of danger”: Maran (UK) Ltd. v Begum [2021] EWCA Civ 326, at [62]–[64], [124].

283 Lungowe v Vedanta Resources [2019] UKSC 20, at [53].

284 In more egregious cases, judgment proofing happens after liabilities arise: e.g. S. Lo, In Search of Corporate Accountability: Liabilities of Corporate Participants (Newcastle 2015), ch. 2; Chemours Company, The v DowDuPont, Inc. (Ch. Del. 30 March 2020) (affd., Supr. Ct. Del. 15 Dec 2020).

285 Forsythe v Clark USA, Inc. 864 N.E. 2d 227 (Ill. 2007).

286 [1996] A.C. 923, 943–44.

287 Hill v Chief Constable of West Yorkshire [1989] A.C. 53.

288 Cf. Loi no. 2017-399 du 27 Mars 2017 relative au devoir de vigilance des sociétés mères et des entreprises donneuses d'ordre; Muchlinski, Multinational Enterprises, 320–22; Choudhury and Petrin, Corporate Duties to the Public, 113–14.

289 See K.E. Sørensen, “The Legal Position of Parent Companies: A Top-down Focus on Group Governance” (2021) 22 E.B.O.R.

290 Civil Liability (Contribution) Act 1978, s. 1(1).

291 J. Dietrich and P. Ridge, Accessories in Private Law (Cambridge 2015), 133, citing Schumann v Abbott and Davis [1961] S.A.S.R. 149, 155. See also Glaxo Wellcome UK Ltd. v Sandoz Group [2017] EWCA Civ 227, [2017] F.S.R. 32, at [31].

292 Unilever plc v Gillette (UK) Ltd. [1989] R.P.C. 583, 609.

293 Fish & Fish Ltd. v Sea Shepherd UK [2015] UKSC 10, [2015] A.C. 1229.

294 Ibid., at [21], [23], [37], [49], [57], [58].

295 Ibid., at [23], [37], [55].

296 Davies, P., Accessory Liability (Oxford 2015), 12–13Google Scholar; Dietrich and Ridge, Accessories in Private Law, 38

297 Fish & Fish Ltd. v Sea Shepherd UK [2015] UKSC 10, at [44]. See also Kalma v African Minerals Ltd. [2020] EWCA Civ 144, at [99] (intent can be inferred).

298 Ibid., at [27], [60], respectively.

299 Dietrich and Ridge, Accessories in Private Law, 4, 12–13, 29, 43–60, 93–4, 116–17, 127–30.

300 Glaxo Wellcome UK Ltd. v Sandoz Group [2017] EWCA Civ 227, [2017] F.S.R. 32.

301 Ibid., at [30].

302 Dietrich and Ridge, Accessories in Private Law, 37, 122.

303 Ibid., at 15–16.

304 Ibid., at 16.

305 Ibid., at 17.

306 Davies, Accessory Liability, 16.

307 Fish & Fish Ltd. v Sea Shepherd UK [2015] UKSC 10, at [57].