Corporate groups, common officers and the relevance of ‘capacity’ in questions of knowledge attribution

ABSTRACT This article advances a new approach to questions of knowledge attribution concerning determination of legal liability. It does so within the setting of a corporate group, specifically where a director, manager or secretary of a parent company is appointed to a subsidiary's board and acquires pertinent knowledge in the latter capacity. Under the common law of England and Wales, that knowledge cannot be attributed to the parent unless an exception exists. These are narrow and difficult to establish. However, common officers are often deployed to facilitate information flow between two companies. This creates a troubling paradox which has not previously been identified in the literature. Whilst the parent may benefit from useful intelligence gathered by these individuals, it is largely immune from legal liability if information relating to malfeasance or neglect in the subsidiary is discovered. The proposed approach redresses this imbalance, enabling information concerning the parent's ‘affairs’ to be attributed to it.