CCLFR research seminar with Dr. David Gibbs-Kneller (University of East Anglia)

Event time: 12:00 - 13:00

Title: ‘Dysfunction in Company Law Doctrine’

Abstract

Company law doctrine is dysfunctional. First, it is incoherent due to mixing inconsistent contract principle in company law cases. Salomon v A Salomon Co Ltd was decided 128 years ago, holding the company was a person in law, not a contract. Today, inconsistencies remain in case law as a result of failing to appreciate this and the company law principles that flow from legal personhood. Those principles are autonomy and self-determination through majority rule the company, which are not frictionless with the contract principle of consent. This paper identifies seven examples that evidence incoherency in company law doctrine from mixing inconsistent contract principle into them. This incoherency means doctrine is dysfunctional because resolving like cases on inconsistent principles is contrary to the rule of law. Coherency is needed to treat like cases alike and company law principle is the simpler solution than reconciling cases on contract principle. Finally, mixing inconsistent principles means doctrine does not function to meet company law’s normative aim. Consent principle focuses on what parties expect rather than what is in the best interests of the company.