Understanding the Corporate Identity Effect: An Examination of How Legal Standards are Applied to the Behavior of Corporate versus Individual Defendants in a Civil Lawsuit Scenario

Abstract

Despite the ongoing struggle to achieve a consistent definition of corporate personhood in jurisprudence, the doctrine is applied in brief and unequivocal terms in the realm of jury decision making. And yet the few empirical studies on jurors' perceptions of corporate litigants suggest that jurors do not treat individuals and corporations as functional equivalents under the law. Rather, prior studies suggest that a “corporate identity effect” renders corporate defendants more liable, more negligent, and owing higher damages than individual defendants sued for identical claims. In light of the many questions regarding the underpinnings of the “corporate identity effect” (and our interest in further examining the roles of anti-corporate bias and emotions in producing the effect), the present study aimed to examine how jurors’ perceptions of defendants shape their verdict decisions and their applications of strictly defined legal standards for behavior. Although our manipulation of corporate identity did not produce reliable effects on the dependent measures of interest, there were interesting hints that a “faceless corporate defendant” suffered greater damage awards than those assessed against individual defendants, and that the subjective standard at which behavior was judged negligent tended to be somewhat lower for a corporation than for an individual. Moreover, the Anti-Corporate Bias Scale (developed by the consulting firm Persuasion Strategies) proved to be a significant, reliable predictor of plaintiff verdicts.