economic justice
Should Multinationals Be Legally Accountable for Overseas Harm?
LNAT Section B · Model essay
The essay prompt
Multinational companies increasingly operate through subsidiaries and supply chains in poorer states where workers are injured, communities polluted and rights abused. Should a parent company be legally liable in its home courts for harm done abroad, or should responsibility rest only with the local subsidiary and host state? Argue a case and reach a reasoned conclusion.
The stance
Yes, but with discipline. A parent company that holds itself out as controlling, or in fact controls, the activity that causes harm abroad should face legal liability at home, and the gravest abuses (forced labour, slavery) should ground a claim regardless of corporate form. The right model is fault-based parent liability and mandatory due diligence, not vicarious liability for everything a subsidiary does; that distinction is what separates a coherent rule of law from either impunity or corporate over-reach.
The case for
Power has outgrown the law that governs it, and accountability must follow control.
A multinational that sets group-wide safety, labour and environmental policy is exercising real control over how people far away live and work. Where the parent in substance directs the harmful activity, allowing it to hide behind a subsidiary's separate personality lets the entity that holds the power escape the duty that should accompany it. Liability that tracks actual control, rather than mere ownership, simply matches responsibility to reality.
The case against
Separate legal personality is a deliberate, valuable feature, not a loophole.
Limited liability and the corporate veil (Salomon v Salomon) exist to encourage investment by ring-fencing risk. Piercing it whenever a subsidiary causes harm abroad would expose every parent to liabilities it cannot realistically monitor across thousands of suppliers, chilling exactly the foreign investment that developing economies need.
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