Email Our Firm

Business Common Actor Liability Claims Can Be Expensive

Aid and assistance liability can be a dangerous trap for Portland business lawyers, Seattle business attorneys and their clients on either side of the Northwest border.

Corporate officers and directors usually consider themselves shielded from legal liability for corporate acts. After all, that's the whole point of the corporate shield -- that shareholders and corporate actors are, in general, shielded from individual liability.

But that's not always the case.  And not surprisingly, corporate executives who find themselves unexpectedly having to defend a lawsuit seeking to hold them individually liable for a corporate action can often feel quite the financial squeeze.

In general, corporate owners can be found individually liable only if a plaintiff can pierce the corporate veil. This is a very complicated legal doctrine, but it usually occurs when the actor failed to observe corporate formalities, failed to properly capitalize the company, commingled his own funds with company funds or generally used the corporation as an alter ego.

Corporate executives are also individually liable for any fraud they participate in. The key question is what that really means.

My Portland business fraud defense clients are often surprised at the allegations that come flying at them. Among other things, creative plaintiffs can allege what is called aiding and assistance or civil conspiracy liability. Essentially, if you have knowledge of wrongdoing within the corporation, a plaintiff can argue that you knew of the fraud and helped carry it out. It is a very loose type of allegation and it can cost executives significant money defending it, even if you are completely innocent of any wrongdoing.

There are a host of questions that come along with aid and assist or civil conspiracy liability, but if established, you can be held liable for all of the bad actors' conduct, whether or not you actually did anything wrong.

Such allegations can be scary stuff, and unfortunately they are usually rather costly to defend. 

No Comments

Leave a comment
Comment Information

Client Testimonials

  1. “Your business model is such a fresh approach to the way legal services are typically delivered.”

    President, Manufacturing
  2. “Phil will help you understand the process you are going through, and is very passionate about your needs and situation.”

  3. “Phil, responded to my numerous questions promptly and completely. Very reasonable rates, no overbilling. Kept me informed of progress.”

  4. “Ben legally clarified the language in my contracts without turning them into super verbose mumbo-jumbo.”

    Kevin L.
  5. “Everyone, that I've interacted with is professional, knowledgeable, forthcoming with information and educating and caring.”

    Alanna C.

425 NW 10th Avenue
Suite 200
Portland, OR 97209

Toll Free: 866-280-7562
Phone: 360-258-1268
Fax: 503-417-4250
Map & Directions