5) introduce the idea of “piercing the corporate veil”. What does this mean? How would it function in the private law model proposed by Neyers?

Piercing the corporate veil refers to the process of legally regulating and scrutinizing the actions of individuals near the top of the corporate hierarchy, in an attempt to establish personal liability for their actions. Neyers' model seems to be focused on the idea of reasserting liberal contract theory on an absolute basis. He wants to hone in on the individuals responsible for crimes or negligence and ensure that they properly compensate those who need it. The legal fiction of corporate personhood has at times made this difficult, providing a safe haven for guilty or negligent individuals to hide behind.

While he claims that corporate law is incoherent, his proposals are no more coherent. Is it not well understood that the socialization of production makes individual responsibility impossible? Not one person within the corporate hierarchy can look at a decision and say "this is my decision". Everything happens through a complex chain. The idea of separating all interactions into contracts as he is proposing, then, is literally impossible, as no individual can take responsibility for any specific action or inaction. It would lead to complex chains of co-workers suing each other, cripple the court system with cases and ultimately negate the viability of socialized production altogether. While we're at it, would Neyers like us to uninvent the steam engine?

Neyers claims he does not understand why the corporation should be treated as a single entity, rather than a collection of parts; the reason for this is the socialization of production. As the socialization of production renders individual production impossible and necessitates collective ownership of the means of production, so too does it render individual liability impossible and collective ownership of all contracts.

In practice, this is not effectively enforced due to the legal protections that the bourgeoisie has constructed for itself. However, the solution cannot be in pre-industrial social relations; this proposal is simply absurd. We must look to the future for solutions, not the past.

LAWS 2201

Feb, 2013