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Title: Corporate structures and environmental liability under EU law
Author: Mackie, Colin P. N.
ISNI:       0000 0004 2740 1672
Awarding Body: University of Aberdeen
Current Institution: University of Aberdeen
Date of Award: 2013
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Within the context of UK company law, this thesis proffers a robust solution to the problem of: (1) corporate shareholders utilising the limited liability attained from their shareholding in a subsidiary; and (2) group companies utilising the separate legal personality of an affiliated company, to avoid financial liability under EU environmental law. Analysis is confined to the framework of environmental liability implemented by the Environmental Liability Directive (the ‘ELD’). The ELD is based on the polluter-pays principle. This principle seeks, inter alia, to ensure that the person(s) responsible for environmental damage or the imminent threat of such damage bear the costs of remedying and preventing it. Perversely, two doctrines of UK company law may hinder this and may even incentivise UK companies to externalise their ELD-related costs to society. First, each company is treated as a separate legal person with its own rights and obligations, distinct from those of its shareholder(s). Secondly, under the doctrine of limited liability, when the assets of a company are exhausted, generally, the liability of the shareholder(s) is limited to the amount, if any, unpaid on the share(s) in the company held by them. It is concluded that UK group companies engaged in the most environmentally dangerous activities could be prevented from avoiding financial liabilities arising under the ELD by mandating that they deposit unencumbered assets into an Environmental Damage Trust Fund in favour of the relevant competent authority as security and where funds remained insufficient, attributing the remaining costs to any entity within the corporate group which participated in, or constrained the decision-making of the polluter in relation to the environmentally damaging activity. It is contended that the proposed framework may establish a network of: (1) self-monitoring companies within the corporate group; (2) companies from which funds may be obtained for the satisfaction of the financial liability. This may have two self-perpetuating effects: first, it may promote the prevention of environmental damage by incentivising potentially responsible group members, through the threat of financial liability, to monitor the activity of a high-risk group entity so as to ensure that the activity is conducted in a safe manner. Secondly, it may aid the private remediation of environmental damage by expanding the pool of funds available to meet the financial liability.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: Corporations ; Liability for environmental damages ; Environmental law