The corporate veil

Since the 19th century ruling in Salomon v Salomon [1874] AC 22 which stated companies were legal entities and a court had no business peering beneath the veil of incorporation to see what was happening there, the rule has been revisited and reinforced over the decades in cases such as Adams v Cape Industries plc [1990] 1 Ch 443, [1991] 1 All ER 929 and in the more recent past. However, the sanctity of the legal integrity and identity of companies has been protected with vigour by the courts which have a strong disinclination for anyone, let alone them, peering under the skirts of a company to examine its linen (dirty or otherwise). In Adams the Court of Appeal expressly declined to “pierce the veil of incorporation” even when it was alleged that the corporate structures with respect to a subsidiary had been created purely to place liability most advantageously for the parent company.

In Allen v Amalgamated Construction Co Ltd: C-234/98 [1999] ECR I-8643, [2000] All ER (EC)