the courts should take a stricter when asked to lift the corporate veil. explain and support with reasons.<\/p>\n
It could be argued the judicial approach to lifting the corporate veil could not be much stricter. The corporate veil, or the doctrine \u201cdistinguishing a company as a legal person separate from its shareholders,\u201d is rarely lifted in the UK. Developed in Salomon v Salomon, traditionally courts have been unwilling to hold shareholders personally liable for a company\u2019s failings and only lift the corporate veil if the company is a fa\u00e7ade or sham. Controversially, judges in the chancery division have even placed the maintenance of the corporate veil over justice. The rarity of judges lifting the veil led to the belief \u201cexisted more as a matter of legal theory than it did a feature of legal practice.\u201d<\/p>\n
However, it cannot be disputed in some cases the veil has been lifted. For instance, in Gencor ACP Ltd v Dalby, Mr Dalby\u2019s dishonest divesting of assets in the British Virgin Islands was seen to lift the veil. Yet, in many other cases the veil remained, purely because of the \u201cprotean\u201d conditions (sham\/fraud\/fa\u00e7ade) required to lift it. It is in these areas where judicial certainty, as opposed to judicial strictness, would be advantageous.<\/p>\n
This certainty has been delivered in the judgement of Lord Sumpton in Prest v Petrodel Resources Ltd. Lord Sumpton reviewed corporate veil jurisprudence, arguing that in most cases the corporate veil was not lifted. He restricted the doctrine and clarified the two principles\u2013 concealment and evasion- that were necessary to lifting the veil. This clarification coupled with judicial flexibility in ancillary relief, to ensure justice reigns, is the appropriate level of intervention.<\/p>\n
Table of Cases<\/p>\n
Gencor ACP Ltd v Dalby [2000] 2 BCLC 734<\/p>\n
Lazarus Estates Ltd v Beasley [1956] 1 QB 702<\/p>\n
Prest v Petrodel Resources Ltd [2013] UKSC 34<\/p>\n
Salomon v A Salomon and Co Ltd [1897] AC 22<\/p>\n
Bibliography<\/p>\n
Wibberley J. and Di Gioia M. [2014], \u2018lifting, piercing and sidestepping the corporate veil,\u2019 Guildhall Chambers Available at: http:\/\/www.guildhallchambers.co.uk\/uploadedFiles\/PiercingtheCorporate%20Veil.JW,MDG.pdf. Accessed 24 Oct. 16<\/p>\n
The Business Dictionary, \u2018Corporate Veil,\u2019 (N.d) Available at: http:\/\/www.businessdictionary.com\/definition\/corporate-veil.html. Accessed 24 Oct. 16<\/p>\n
Richards D., [2013] \u2018Piercing the corporate veil: Supreme Court clarifies the English law position,\u2019 Ince & Co, Available at: http:\/\/www.incelaw.com\/en\/knowledge-bank\/publications\/piercing-the-corporate-veil-supreme-court-clarifies-the-english-law-position. Accessed 24 Oct. 16<\/p>\n","protected":false},"excerpt":{"rendered":"
Is the Courts’ current approach to the Salomon doctrine appropriate. Or is it in fact too lenient on when a decision is made to pierce the veil.<\/p>\n","protected":false},"author":1,"featured_media":1938,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28],"tags":[],"yoast_head":"\n