8.5.1 Identification

In cases of identification an exception is made to the principle of section 2:5 DCC by assimilating two or more (legal) persons. Thereby, one legal subject is equated with one or more other legal subjects and is considered as one (under property law). The author first characterizes the protection that directors derive from this provision and the limitation of shareholders’ liability as a privilege, and concludes that this protection or limitation of liability can be regarded as a socially accepted phenomenon based on the joint benefit to society as a result of economic prosperity. Subsequently, it is established that legal personality and the limitation of liability preclude that those who act consciously, or who at least should reasonably have been aware of an damaging act, can be sued by the company’s creditors, while the foreseeability of damage justifies looking beyond the company itself for liability. On the basis of the doctrine of identification, it can be determined when the aforementioned privilege must give way in favour of aggrieved creditors. Subsequently, the author discusses the case law in which the doctrine of identification has developed. It follows from this that the identification-cases and the abuse of legal personality in that regard are preferably tackled with the application of section 6:162 DCC, because in such cases the accusation to be made (frustrating of recourse) and the extent of the compensation obligation (assigning the underlying claim instead of compensating the damage as a result of frustrating recourse) often do not match up.

Although the author is of the opinion that the doctrine of identification should in principle be applied with restraint, he nevertheless advocates a wider applicability of this doctrine as a means to compensate creditor’s damages. Finally, the author puts forward several viewpoints that could give more substance to the doctrine of identification. These are, on the one hand, derived from insights from case law and literature on misuse of power, sham actions and evasion of the law. On the other hand, the author refers to insights that can be derived from case law and literature on attributing actual acts and legal acts to legal persons, as well as the knowledge of officers of legal persons. It is concluded that the common denominator is always the perspective of the injured party and thus the extent to which the injured party has legitimately relied on the identity of its opposing party.