Corporate Tort Liability and the Problem of Overcompliance

It is tempting to think that the problem with corporate responsibility, and liability, is that there is not enough of it. However, rather than worry about a systematic deficiency of due care by corporations, the argument in Part II of this Article suggests that the real difficulty in the corporate liability context (a difficulty that we might not observe directly, but one that drives the phenomena that we do observe) is that tort law induces excessive levels of corporate care, particularly if the liability regime targets the individual employee for personal responsibility. This, I suggest, is problematic on either an efficiency analysis or a corrective justice theory of tort law. In Part III, the Article examines the present regime which allows for dual liability - that is, the liability of both the corporation and the employee - and finds that this is only a partial response to the problem. Thus, the proposed corporate liability solution in the Article becomes enterprise liability combined with an immunity in tort for corporate employees. Finally, after explaining why vicarious enterprise liability is properly restricted to the acts of an employee which are committed within the scope of employment ( a standard restriction that other theories of vicarious liability do not adequately explain), Part IV argues for one exception to the general rule of employee immunity for corporate torts: the case of gross personal negligence, or the sort of thing that often takes employees too far from the course of their employment in pursuit of some private profit that greatly exceeds the cost to the employee of losing his or her job