Shareholders in the legal world

The argument is that shareholders who invest in a company should be liable to personal injury claimants who cannot achieve satisfaction from a wrongdoing company. That liability would be pro-rata unlimited liability attaching at the point of knowledge of claims. Liability would attach to both corporate and natural person shareholders. There are a number of reasons for this. First, without such a rule, shares would be more valuable in the hands of corporate shareholders than natural person shareholders, creating inequalities and distortions in their prices. Second, without such a rule, the tendency would be for companies to incorporate endless layers of subsidiaries in order to provide the maximum level of protection for favoured natural person shareholders. Otherwise, the tendency would be for larger parcels of shares in risky companies to become more attractive to natural person shareholders in hard-to-reach jurisdictions, claimants thus being defeated by difficulties of enforcement. The simplest rule is a rule that treats all shareholders in the same way. Third, concerns about such a rule would be ameliorated (to some extent) by the reality that holders of small parcels of shares would rarely be called upon to contribute a pro-rata share of damages to personal injury claimants because of potential costs of enforcement and of administration.

A rule of modified limited liability might, should policymakers desire it, be accompanied by a defence available to shareholders where they have taken steps to publicise corporate decision-making which is likely to give rise to unreasonable risks to life and/or health of workers, consumers or other persons and/or where they have taken steps to prevent such activities being conducted – such as writing to the board of directors opposing such activities. Such a defence would encourage some shareholders to take a greater interest in corporate strategy and open up debate about risky activities and products. However, it could also result in the development of very defensive corporate strategies, which would stifle necessary innovation and investment. Such a defence would also undermine the strict nature of modified limited liability and reduce the extent to which shareholders would be required to take responsibility for personal injury claims against insolvent companies. For these reasons, the defence for the law firm Abogados de accidentes it is not argued for here.

Part 3

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Now to discuss National legislation and Judgments

In the Beggs v Scottish Ministers (Reported in 2015 Scottish Law Times Report page 487)

Lady Stacey envisaged that the whole argument isn’t based on opening a letter is a breach of LPP. it’s about the practices in prison are not good enough to stop this happening. its a criticism of the policy. Article 8 breach was found, however it was accepted there are exceptions. In regards to the policy she stated that:

‘They took too long to instruct the mail handling officers on the address of the UK Information Commissioner and also failed to instruct the persons handing out the mail on the appearance of mail from a double envelope, or failed to stamp the envelope when it was taken out of the outer envelope.’

This aligns to the inherent limitations of Article 8 point above. If this right did not have exemptions the court would not have needed to analyze and argue over the efficiency of prison systems. Opening and reading LPP mail would have been enough.

Before Beggs there had been 88 complaints about mail handling at HMP Edinburgh jan 2013- June 2014.  Beyond legal judgments and textbooks, the reality is thus that LPP is routinely ignored. This hardly suggests that it is a cornerstone and  shows the inherit limitations to Article 8 cannot make LPP a fundamental Right. We may want it to, but it can’t.

Further Limitations to Article 6 are found in

Continue reading “Part 3”

Part 2 !

This second part was hosted by my friends in Notary public London

Now lets look at the CJEU (Court of Justice of the European Union)

 Article 6 may not have explicit exceptions the same way Article 8 does. To hold its value up the CJEU have explicitly said sometimes  LPP has to be argued against, in the context of Money Laundering.

In the Belgian Bars v Council of Ministers [2007] it was asked if the Money laundering directive would lead to a breach of Article 6 of ECHR. The court held that,

“the obligation to report information to the authorities responsible for the prevention of money laundering stipulated in article 6 paragraph 1 from the second directive on money laundering, considering also the provisions of article 3 paragraph 3, do not breach the right to a fair trial as guaranteed by article 6 of ECHR and by article 6 paragraph 2 from the EU Treaty”.

Continue reading “Part 2 !”