Piercing the corporate veil post-Prest

Abstract

ABSTRACT The doctrine of corporate personality, and from it, the entailment of the corporate veil, has promoted market activities by limiting the liability of corporate owners representing their companies in business transactions. However, the corporate veil is prone to exploitation by those same corporate owners for fraudulent purposes or to avoid fulfilling existing liabilities. In light of this, the law has developed to grant discretionary jurisdiction to courts in piercing the corporate veil. Yet, in 2013, the UK Supreme Court handed down the judgment of Prest v Petrodel Resources Limited, which redefined the scope of veil-piercing through Sumption SJC’s formulation of the concealment-evasion dichotomy. This essay observes that the purpose of the veil-piercing doctrine, which traditionally protects injured parties against losses when transacting with fraudulent or liability-evading companies, was severely limited by Prest due to its restricted applicability.