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Business Who Are Liable For Accidents But Cannot Pay

September 18, 2017

Georgia Personal Injury Attorneys Address Concerns That Business Who Are Liable For Accidents But Cannot Pay 

Some businesses must run on a shoestring budget just to get by. That can mean cutting corners on many expenses such as appropriate insurance coverage. Hopefully for these businesses, success is right around the corner, and they can take steps to protect themselves and others from economic harm. Regrettably, that does not happen all of the time. Some smaller companies never make it "into the black" and have to scrape by day-to-day. Problems arise if the proprietor of the company is shielding his or her assets from judgment creditors, that is, people who have won lawsuits against the business, by taking advantage of Georgia corporate law while damaging others. Fortunately, the personal injury attorneys with Montlick & Associates, Attorneys at Law understand this reality and have the experience to know when they must ask a judge to "pierce the corporate veil."

"Piercing the corporate veil" is a legal term that has great significance in Georgia law. Under Georgia law, a corporation is responsible for the debts of the corporation and the shareholders' personal assets are off-limits to those who wish to collect a debt against the corporation. A corporation is what is known as a "legal fiction" because a corporation, assuming the founders of the corporation followed Georgia law to incorporate the business, is treated as a person under the law. The primary benefit of incorporating a business is that the shareholders are shielded from personal liability for the torts or other wrongs committed by the corporation. That is until a judgment creditor can convince a judge to discard the corporate shield.  

Piercing the corporate veil is not easy. Georgia courts are slow and circumspect when asked to disregard the corporate form and all of its protections to allow a person to sue the owners or shareholders personally. Piercing the corporate veil is an equitable doctrine of holding a person responsible. The doctrine is premised on fairness. In other words, if a person treats the corporation as his or her "alter ego" then it would be unfair for the injured person to suffer an injustice and not be able to collect from the at-fault individual. In such circumstance, then a judge could allow the plaintiff to pursue the corporate a person individually.

As a plaintiff, you have an obligation, with the help of your Georgia personal injury attorney, to show that the corporation is a sham and the court should disregard it. There are two elements a plaintiff has to satisfy for the judge to allow the corporate veil to be pierced. The first is that corporation is a "mere instrumentality" of a parent corporation or individual shareholders. Next, the plaintiff must prove that allowing the parent company or shareholders to hide behind the protections afforded to corporations would be unjust to the injured party.

Georgia courts will not allow plaintiffs to pierce corporate veils on a whim. The plaintiff must exhaust all other options available to him or her to satisfy their claim before asking a judge to pierce the corporate veil. Additionally, the corporate veil can be pierced if and only if the corporation is insolvent or does not have adequate funding to satisfy the judgment claimed by the plaintiff.

Understanding this doctrine is vitally important for personal injury lawyers. Winning the judgment is one thing but collecting the judgment is a different story entirely. However, normally companies are protected by adequate commercial liability coverage to compensate injured victims.

Put Our Law Firm's Over 38 Years Of Legal Experience To Work For Your Case!

If you have been involved in any type of accident caused by someone else's negligence, contact Montlick & Associates today for your free consultation. Montlick & Associates has been representing those who suffer serious injuries throughout all of Georgia and in the Southeast for over 38 years, including but not limited to Albany, Athens, Atlanta, Augusta, Columbus, Gainesville, Macon, Marietta, Rome, Roswell, Savannah, Smyrna, Valdosta, Warner Robins and all smaller cities and rural areas in the state. Our Georgia Traffic Accident and Injury Attorneys have been representing those who suffer serious injuries throughout all of Georgia and the Southeast for over 38 years.

No matter where you are located our attorneys are just a phone call away, and we will even come to you. Call us 24 hours a day/7 days a week for your Free Consultation at 1-800-LAW-NEED (1-800-529-6333). You can also visit us online at and use our Free Case Evaluation Form or 24-hour Live Online Chat.

Sources: Brewton v. LIBERTY MUTUAL HOLDING COMPANY, INC., Dist. Court, MD Georgia 2016

Montlick & Associates, Attorneys at Law
17 Executive Park Dr NE
Atlanta, GA 30329
Telephone: 1 (800) LAW-NEED
Telephone: 1 (404) 529-6333

Category: Auto Accidents

Please Note:
Many of our blog articles discuss the law. All information provided about the law is very general in nature and should not be relied upon as legal advice. Every situation is different, and should be analyzed by a lawyer who can provide individualized advice based on the facts involved in your unique situation, and a consideration of all of the nuances of the statutes and case law that apply at the time.