Company Law Free Essays

Abstract Companies and corporations exist as single entities with the capacity to sue and be sued. The premise of lawful ways under which a company may be sued for acts or omissions ensuing to injuries or demise of individuals lies in the personality of the company as a single entity. The law recognizes companies as solitary entities that have a detached personality from the individuals that comprise the company. We will write a custom essay sample on Company Law or any similar topic only for you Order Now This means that a company can transact as a solitary entity with the capacity to make claims against another company. Concomitantly, it is possible that the company becomes the subject of a legal suit falling under civil or criminal liability as deemed applicable. The determinants that establish whether to affix legal responsibility to the company for acts or omissions vary based on the legal jurisdiction pertinent to the circumstances. For instance, corporate law makes provisions for regulating the relationship of a company with that of its employees and other staff within the company. This law does not apply to third parties that operate or affect the company externally. On the other hand, criminal and civil laws have jurisdiction over the affiliations of the company with external parties. 1.0. Introduction The process of holding a company legally responsible for acts or omissions resulting in injuries or death of individuals is a multifaceted tool. Since companies exist as solitary entities under law, responsibility falls on the company depending on the situation applicable. For situations that fall within the company, corporate laws have provisions for holding the company liable. In cases where external parties exist, then the jurisdiction shifts to civil and criminal laws. However, it is imperative to acknowledge that civil laws that cover aspects of tort, contracts and compensation apply to companies, as well as individuals’.[1] The provenance encompassing legal responsibility for corporations is rather challenging, as the legal provisions under this jurisdiction of law do not obligate contemplation of a liability. This is usually the case in negligence, which falls under tort laws because the evaluation of liability is objective on supporting legal responsibility of a compan y. On the contrary, criminal law entirely depends on appraisal of moral liability in support legal responsibility on the side of the company. Holding a company criminally liable is not easy because legal responsibility is not via reimbursement, but through penalties that look into intent, negligence and premeditation. This research shall discuss grounds on which a company can be sued for acts or omissions resulting in death or injuries based on provisions of laws such as the Corporate Manslaughter Act 2007, and Health and Safety at Work Act of 1974. Three principles provide for reasons to hold a company liable. One is the agency principle where the company must own up responsibility for acts or omissions of its employees or staff working as agents to the company, hence be sued for damages. The blame acknowledgment principle establishes that the company’s top executives assume responsibility for acts or omissions perpetrated by the company, implying that such executives whose decisions lead to acts or omissions that result in death or injuries can make the company be held liable. However, acts or omissions by junior staff in the company do not fall under this jurisdiction.[2] The third principle is the company culpability based on its way of transacting business, its systems, as well as culture. While the agency and the blame acknowledgement principles attach individuals to company liability, the company culpability based on its procedure and culture isolates individuals from the company. This implies that companies cannot be held liable for acts or omissions perpetrated by individuals, but rather the culture and procedure of the company. All these principles provide grounds for criminal and civil charge against companies. 2.0. Civil Liability Tort law attaches a civil liability to companies as long as it can be proven that the company perpetrated the act or omissions that resulted in serious injuries or death. A claimant could also file a criminal suit against the company based on the provisions of deliberate acts, negligence or omissions. Under civil laws, parties involved exist as private individuals, and the courts have the ultimate prerogative to determine whether the parties’ perpetrated injury or death based on evidence provided. The rights and obligation existing between the parties, in this case between the company and the plaintiff form the basis for a legal suit. Similarly, remedies for civil suits are damages that could be financial on non-financial, and the burden of proof depends on tangible evidence indicating that the act or omission was committed. Tort law attributes the legal responsibility of a company to acts or omissions that fall under civil wrong. Acts or omissions committed by the employee di rectly fall under the responsibility of the employer as discussed under the agency principle.[3] This means that vicarious liability shifts to the employer while personal liability rests on the shoulders of the employee. Under civil law, the claimant must provide proof that the defendant (the company) perpetrated the act or omission deliberately or negligently. The claimant must also provide proof that they suffered injuries or damage. For the claimant to attach a liability to the company the injury must be adjoining to the act or omission and the series of events must be continuous. In Rylands vs. Fletcher (1868), the contractor ignored vertical shafts in the course of construction of a dam.[4] As they later filled the dam with water, the shafts gave way to water that flooded a nearby mine. The court ruled that the corporation was legally responsible for damages caused due to negligence even if it was not intentional. As such, filing a civil suit against a company works best for claims on damages because they attribute direct liability to the company. 3.0. Criminal Liability Health and Safety at Work Act, the Corporate Manslaughter and the Corporate Homicide Act of 2007 provide avenues of filing a criminal suit against a company. These Acts have the same scope of jurisdiction for attributing a company to criminal liability and can be used simultaneously used. Section 37(1) of Health and Safety at Work Act has provisions that cover personal injuries at the work place.[5] The Act lays down measures requiring companies to incorporate policies and measures to avert personal damages or injuries at the work place. This Act does not make provisions for holding companies liable for deaths or personal injuries, but rather criminalizing acts or omissions that result in injuries and deaths. Section 37(2) of the Act prohibits companies from engaging in negligent and deliberate activities that may lead to personal injuries and deaths of its employees. This section attaches liability to the company’s management in cases where their decisions are connected to ac ts or omissions that result in death. However, the Corporate Manslaughter Act has stringent legislation on cases where a company’s activities lead to death due to gross negligence. As such, the Corporate Manslaughter Act provides exclusive provisions for attaching a criminal liability to companies for their acts or omission that result in death due to outright negligence. If the evidence presented before the court proves that negligence on the part of the company resulted in death, then the company can be held criminally liable for the act or omission that led to death. Section 1(1) of this Act reveals that the company is liable when the act or omission amounting to a criminal offence resulted in death.[6] However, there must be evidence of gross misconduct and violation of duty of care on the part of the company. In case of a successful claim in court by parties representing the deceased, which leads to the indictment of the company, Section 1(6) of the Act establishes a limitless fine as the punishment toward th e company. The duty of care for employees is the sole responsibility of the company. In situations where there is negligence of duty of care resulting in death, the plaintiff representing the deceased party can invoke sections of the Corporate Manslaughter Act to claim justice. Various cases have elucidated what duty of care means. Caparo Industries Plc vs. Dickman (1990) identified three elements that clarify what duty of care far as attaching a criminal liability to a company is concerned.[7] The elements include imposing reasonable duty of care on the plaintiff, foreseeing injury and establishing a close link between the plaintiff and the defendant. Determination of criminal intent (mens rea) also forms as a basis for holding a company criminally liable. The claimant must establish criminal intent as it was the case in Salomon vs. Salomon (1897) where the court had to identify the company’s officers responsible for the acts or omissions that resulted in death.[8] However, it was quite a challenge, which explains the reason why it is difficult to file a criminal suit against a company under the Corporate Manslaughter Act. 4.0.Conclusion Civil and criminal laws present suitable avenues for suing companies for acts or omissions that lead to injuries or death. Strict or vicarious liabilities apply in civil suits and could be direct in through the actions of the company’s agents or direct through the actions of the company regardless of culpability. Under criminal liability, Health and Safety at Work Act provides avenues for suing a company for negligence or failure to prevent personal injuries. The Corporate Manslaughter Act and the Corporate Homicide Act provide avenues for suing a company in situations where acts or omissions result in demise of an individual. 5.0. Bibliography Glazebook, P. R., A Better Way of Convicting Business of Avoidable Deaths and Injuries. The Cambridge Law Journal, 16(2), (2002) pp 405-422. Barrett, B., Liability for safety offences: Is the law still fatally flawedIndustrial Law Journal,37(1), (2007) pp 100-118. 5.1. Legislations Corporate Manslaughter and Corporate Homicide Act 2007 Health and Safety at Work Act 1974 5.2. Court cases Salomon v. Salomon Co Ltd, AC., Law Review, 2, (1897), pp 22 Rylands v. Fletcher, Law ReviewL. 3, (1868), pp 330 Caparo Industries plc v. Dickman, Law Review AC, 2, (1990), pp 605 How to cite Company Law, Essay examples