Skinning the Pantomime Horse: Two Early Cases on Limited Liability

E-ISSN： 1469-2139|34|2|308-321

ISSN： 0008-1973

Source： Cambridge Law Journal, Vol.34, Iss.2, 1975-11, pp. : 308-321

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Abstract

The practice of “lifting the veil” from the modern company seems at times to be regarded as a sign that corporate personality is a ficition. This view is hardly logical: if the personality of the company were a ficition, there would be no veil to lift, the liability of the company must be the liability of the members, and limited liability must be an illusion. It is precisely because the legal personality of the company is real that special arrangements must be made for lifting the veil of this personality when it conceals the wrongdoing of a member or director. To use a more florid metaphor, when the powerful hoofs of the pantomime horse are used for improper kicking. Back Legs will be stripped of his protective covering, and made to account for his use of an engine of destruction more powerful than his own boots—on exactly the same principle as if he were made to account for his use of a natural horse's to cause damage. It makes no difference whether he sits on the horse's back or stands inside its skin; and it makes no difference to the man's liability for wrongful use of the horse whether the horse has a legal personality or not. (It may of course make a difference to what the victim does about it, since he may have good reasons for choosing to sue the horse rather than the man.)