The models of attribution in the establishment of corporate liability revisited

Heese, Francisca Alida (2019-04)

Thesis (LLM)--Stellenbosch University, 2019.

Thesis

ENGLISH ABSTRACT : The separate legal personality of a company is one of the cornerstones of modern corporate law. Nevertheless, due to the artificial nature of a company it has no inherent moral blameworthiness necessary to impose corporate liability. With a rise in corporate wrongdoing, there is a need to hold companies liable. Therefore, certain models of attribution have developed whereby the conduct and will of a corporate actor can be imputed to the company to establish corporate liability. Especially in the realm of corporate criminal liability, these models of attribution have played a pivotal role to establish corporate wrongdoing. The two broad theories underlying the models of attribution are the fiction and realist theories respectively. The directing minds doctrine or identification doctrine and the vicarious liability model are traditionally associated with the fiction theory, which is rooted in the abstract nature of a company. Whether the traditional models of attribution are suited for complex modern organisational structures, is explored in this thesis, whilst a more functional and realistic approach to corporate liability is proposed. Often the question of “what is a corporation” has overshadowed the determination of corporate liability, thus a more contextual analysis based on law and economics is proposed to ensure corporate liability. The development of the rules of attribution through case law illustrate the importance of a purposive approach to establishing corporate liability. Furthermore, the underlying relationship between the rules of attribution and the rules of agency indicate that the interests of risk-bearers and managers are not always aligned and should be redressed. Moreover, a realist approach as opposed to the fictional approach to attribution has been developed in English and Australian law. This approach focuses on the overarching corporate culture and identity when determining corporate fault, instead of individual corporate actors. These regulatory frameworks provide an alternative approach to the current South African model, which is based on the fiction theory. Lastly, the economic considerations, such as the separation of ownership and control and the agency problem, are evaluated to determine whether the current models of attribution create an economically efficient outcome or an unsustainable a risk-taking environment.

AFRIKAANSE OPSOMMING : Die afsonderlike regspersoonlikheid van ‘n maatskappy is een van die hoekstene van korporatiewe reg. Nogtans belemmer die abstrakte aard van maatskappye die oplegging van aanspreeklikheid, aangesien ‘n maatskappy nie oor die nodige afkeurenswaardigheid beskik nie. Ten einde die probleem te oorbrug, is sekere aanspreeklikheidsmodelle ontwikkel waarvolgens die handeling en wil van sekere individue aan die maatskappy toegereken word. Ten opsigte van die strafregtelike aanspreeklikheid van regspersone, speel die aanspreeklikheidsmodelle ‘n kern rol om aanspreeklikheid te vestig. Die fiksie-teorie en orgaan-teorie word as die twee noemenswaardige teorieë rakende die aanspreeklikheidsmodelle beskou. Die identifikasie-leerstuk en die middellike aanspreeklikheidsmodel word tradisioneel met die fiksie-teorie geassosieer, wat op die abstrakte aard van ‘n maatskappy gegrond is. Die vraag ontstaan of die tradisionele aanspreeklikheidsmodelle geskik is vir komplekse moderne organisatoriese strukture. Die oorsprong van die aard van ‘n regspersoon word dikwels as ‘n struikelblok tot aanspreeklikheid beskou, aangesien daar op die abstrakte aard van die regspersoon gefokus word. Gevolglik word ‘n doelmatige benadering voorgestel, wat op ‘n realistiese opvatting van regspersone geskoei is. Hierdie kontekstuele benadering spruit uit ‘n reg en ekonomiese analise tot die aard van die regspersoon. Die onderliggende doel van korporatiewe aanspreeklikheid word deurgaans in die ontwikkeling van die aanspreeklikheidsreëls beklemtoon. Weens die onderlinge verhouding tussen die aanspreeklikheidsreëls en verteenwoordiging is die belange van aandeelhouers en bestuur binne ‘n maatskappy nie noodwendig belyn nie. ‘n Alternatiewe benadering tot aanspreeklikheid gebaseer op realisme is onlangs in die Engelse en Australiese reg ontwikkel. Hierdie modelle fokus op die oorkoepelende korporatiewe kultuur en identiteit ten einde korporatiewe skuld te vestig, in plaas van die wilsvorming van bepaalde individue. Hierdie breër raamwerk word as alternatief tot die huidige Suid-Afrikaanse model voorgestel, wat op die fiksie-teorie gebaseer is. Laastens word ekonomiese oorwegings, soos die verdeling tussen eienaarskap en beheer en die agentskap probleem, geëvalueer ten einde te bepaal of die huidige aanspreeklikheidsmodelle ‘n ekonomies doeltreffende uitkoms verseker of ‘n nievolhoubare riskante omgewing daarstel.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/105874
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