Kristinn Már Reynisson’s
Ph.D. defence
Aarhus University, Denmark
Department of Law, Aarhus BSS
Tuesday 1 December 2015, at 13:00
Professor, dr. jur.
ERIK WERLAUFF
Aalborg University, Denmark
(c) Professor, dr. jur. Erik Werlauff 1

Please define/explain.
•
– you cannot expect everyone to have read your entire manuscript…
•
– what is the PPP – ’pollutor pays’ principle?
– what is the ’LLP’ – ’limited liability’ principle?
– when and why can a conflict between PPP and LLP occur?
– what is ’lifting/piercing the veil’?
(c) Professor, dr. jur. Erik Werlauff 2

Please define/explain.
•
– lifting/piercing the veil (common law / equity)
– Haftungsdurchgriff (German)
– Ansvarsgenombrott (Swedish)
– Hæftelsesgennembrud (Danish).
(c) Professor, dr. jur. Erik Werlauff 3

Please define/explain.
•
– the judge (legal practice, case law) – judge-made law
– legislator – statutory law
• on national level (Iceland, Denmark etc.)
• on ’federal level’ (EU)
– which level do you prefer in your thesis for the best solution of the PPP/LLP conflict?
(c) Professor, dr. jur. Erik Werlauff 4

Various legal instruments.
• More fields of law where the conflict is relevant
– environment law (including the PPP) is not the only field of law where the ’LLP’ (limited liability principle) may be felt problematic
• More legal instruments apt to solve the conflict
– and ’lifting the veil’ is not the only solution to the ’LLP’
(limited liability principle)
• Question
– you have probably guessed…
– why we chose the topic for your lecture - on the
European Court’s antitrust practice?
(c) Professor, dr. jur. Erik Werlauff 5

Types/classes of creditors?
•
– contractual creditor (aftalekreditor)
• could have taken the risk into consideration when entering the contract
– forced creditor (tvangskreditor)
• either: tort creditor (retsbrudskreditor)
• or: public creditor (offentligretlig kreditor), i.e. IRS
• could not have taken the risk into consideration.
(c) Professor, dr. jur. Erik Werlauff 6

Types/classes of creditors?
• Question
– is it fair and reasonable (i.e.: ’equity’) to distinguish between types and ranks of creditors?
• please consider the Danish UfR 1997.1642 H, Midtfyn
• Børge Dahl & Jørgen Nørgaard in UfR 2000 B p. 399 ff.
– is it economically efficient to distinguish?
• Eva Aaen Skovbo in Advokaten (Da.) 2001/1 p. 6, fn. 6
• Carl Martin Roos in TfR 1993 p. 227 et subs.
• Olav Kolstad in TfR 2008 p. 393 et subs.
– if so, which impact does this distinction hold for your argumentation?
(c) Professor, dr. jur. Erik Werlauff 7

Sweden, and SOU 1987:59.
• Sweden – what was suggested in SOU 1987:59 on
’ansvarsgenombrott’ (’piercing the veil’)
• ABL § 1 a. (1) ”Kan ett aktiebolag inte uppfylla sina förpliktelser mot borgenärerna och beror detta på att en delägare begagnat sitt inflytande över bolaget på ett gentemot borgenärerna otillbörligt sätt, svarar delägaren solidariskt med bolaget för vad som brister .”
• ABL § 1 a. ”If a public limited company cannot fulfil its obligations towards its creditors, and this is due to an owner’s exercising his influence on the company in an improper manner, such owner is jointly and severally liable with the company for the lacking amount .”
(c) Professor, dr. jur. Erik Werlauff 8

Sweden, and SOU 1987:59.
• Sweden – what was suggested in SOU 1987:59 on
’ansvarsgenombrott’ (’piercing the veil’)
• ABL § 1 a (2). ”Ansvar inträder dock inte i annat fall än då bolagets ekonomiska underlag varit uppenbart otillräckligt i förhållande till verksamhetens art och omfattning samt till förutsebara risker.”
• ”However, there is only liability if the economic foundation of the company has been apparently insufficient , compared to the magnitude of the business, and to foreseeable risks.”
(c) Professor, dr. jur. Erik Werlauff 9

Sweden, and SOU 1987:59.
• Sweden – what was suggested in SOU 1987:59 on
’ansvarsgenombrott’ (’piercing the veil’)
• ABL § 1 a (3). ”För förpliktelser på grund av avtal med viss borgenär inträder ej ansvar för delägare, som gjort vad som på honom skäligen ankommit för att upplysa borgenären om bolagets ekonomiska förhållanden .”
• ”As to obligations based on contract with a creditor, an owner is not liable provided that he had done what was appropriate to inform the creditor about the economic situation of the company ”.
(c) Professor, dr. jur. Erik Werlauff 10

Sweden, and SOU 1987:59.
• Sweden – how did it all end?
– Kap. 25, § 19 ”En aktieägare som med vetskap om att bolaget är skyldigt att gå i likvidation enligt 17 § första stycket deltar i ett beslut att fortsätta bolagets verksamhet ansvarar solidariskt med dem som svarar enligt 18 § för de förpliktelser som uppkommer för bolaget efter den tidpunkt som anges i 17 § andra stycket.”
– ”A shareholder who, in spite of knowledge that the company was obliged to wind up according to § 17, 1st para, takes part in a decision to continue the company’s business , is jointly and severally liable with those persons liable according to § 18 for debt that has arisen after the point of time indicated in § 17, 2nd para”.
(c) Professor, dr. jur. Erik Werlauff 11

Sweden, and SOU 1987:59.
•
• whatever became of the good intentions from
SOU 1987:59?
• in your opinion, is this satisfactory?
• what happened?
(c) Professor, dr. jur. Erik Werlauff 12

Article 191(2) TFEU, and the PPP.
•
– what is it?
• a general legal principle? (no, probably not)
• a principle (or rather: tool) merely for interpretation?
(yes, probably ’only’ this)
(c) Professor, dr. jur. Erik Werlauff 13

Article 191(2) TFEU, and the PPP.
• Article 191(2)
– Union policy on the environment shall aim at a high level of protection taking into account the diversity of situations in the various regions of the Union. It shall be based on the precautionary principle and on the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay.
– Unionens politik på miljøområdet tager sigte på et højt beskyttelsesniveau under hensyntagen til de forskelligartede forhold, der gør sig gældende i de forskellige områder i Unionen.
Den bygger på forsigtighedsprincippet og princippet om forebyggende indsats, princippet om indgreb over for miljøskader fortrinsvis ved kilden og princippet om, at forureneren betaler.
(c) Professor, dr. jur. Erik Werlauff 14

Article 191(2) TFEU, and the PPP.
•
– in your opinion, can we deduct anything from the words emphasized here (’at source’, ’ved kilden’), when it comes to the possibility of ’piercing the veil’?
– or are they just ’words’ in this connection?
(c) Professor, dr. jur. Erik Werlauff 15

•
– i.e.: what should be allowed for the parent company to do
• the right to submit its subsidiaries (”daughters”) to a common group interest
• see e.g. a report by ”le Club des juristes”: ”Towards recognition of the group interest in the European
Union ?
” (June 2015) (please observe the question mark!)
(c) Professor, dr. jur. Erik Werlauff 16

•
– that when eventually codifying a right for the parent…
• a right to submit its subsidiaries (”daughters”) to a common group interest……
– one should at the same time also aim for codifying a duty for the parent…
• to hold ’forced creditors’ (tvangskreditorer) harmless…
• under ’certain conditions’?
– If so: under which ’certain conditions’?
(c) Professor, dr. jur. Erik Werlauff 17

Conclusions.
•
• combining environmental law and company law
• choosing a terrifying subject like ’piercing the veil’…
• (completely death-defying)…
• and having made a good job of it!
• taking your starting point in the ’federal’ aspect:
EU law
(c) Professor, dr. jur. Erik Werlauff 18

Conclusions.
•
• applying comparative methods (”foreign law”)
• however, not as a länderbericht (country-by-country report)…
• which is often felt as being trampled to death by geese…
• but rather through an ’analytic method’…
• where solutions from chosen countries are compared…
• here e.g. US and Norway
(c) Professor, dr. jur. Erik Werlauff 19

Conclusions.
• and you also deserve applause for…
• writing…
• de lege lata (on the law as it is), and
• de lege ferenda (on the law as it ought to be), but…
• de sententia ferenda (on the judgment that should be pronounced in any specific situation) it will be very difficult to say anything certain.
• writing in English…
• (which is not your native language)…
• thereby giving your thesis a wider spread than if it had been in Icelandic (or even worse: in Danish)…
• a spread which it certainly deserves!
(c) Professor, dr. jur. Erik Werlauff 20