Into Reverse

Résumé du livre

This article is about the circumstances in which the corporate veil has been pierced for the purpose of holding the company liable for its controllers' acts, debts, or obligations - also known as “reverse” veil piercing” (RVP). This variant of veil piercing was considered by the UK Supreme Court in Hurstwood Properties (A) Ltd and Ors v Rossendale Borough Council. Although, there were hopes Hurstwood would provide some clarity in a notoriously confused area of law, the Supreme Court conspired to disappoint, leaving only further doubt as to the framework that should be applied to veil piercing. However, Hurstwood does contain an important moment in veil lifting historical analysis in that it explicitly recognises reverse veil piercing (RVP) for the first time. This is significant because there is a general judicial consensus in the historical case law that RVP is justified in certain circumstances while FVP has been systematically narrowed if not eliminated. RVP is not though without issues, and we propose that the law in this area should be developed by a framework balancing the equities of preventing abuses of the corporate form with ensuring that the interests of non-culpable corporate constituents, such as the creditors, employees and minority shareholders of a company, are not prejudiced by a reverse piercing claim.