Individual and Collective Corporate Liability in the European Union and the United States

Anna Wennäkoski, Senior Specialist , Ministry of Transport and Communications , Finland

Especially within the current networked society, with long chains of production and distribution, and holding chains, it is easy to conceive corporations more as faceless fiction. Yet, liability cannot be avoided, but rather, remains a major issue. From a public policy standpoint, the issue can be crystallized into the question of whether the chase of the “rotten apple” comes down to tracking down the individual or the unhealthy corporation, and who finally remains the one paying the bill ? This article evaluates the dichotomy between different forms of liability in corporate contexts, by focusing on some essential predicaments to individual and collective liability; and to parent and subsidiary liability in the European Union (“EU”) and the United States (“US”) by analysing them from the perspective of company law, with complementary notes from competition law and consumer law. Given the limited space, the article cannot examine different national regimes in depth. The article concludes that traditionally, liability has often been channelled to individuals, although variations per country exist. Yet, today, more and more legislation also provides possibilities to hold the company itself liable. From a more plaintiff-oriented standpoint, some new initiatives, such as group claims, can incite towards more collective approaches to liability.