Against this background, the Honorable Justice Arbel ruled that "there are weighty policy considerations that support the limitation of the imposition of a duty of care on officers and directors of a company. The imposition of the duty is liable to undermine the definition of the company's separate legal personality, by imposing liability on an individual who was not a party to the contractual engagement between the creditor and the company" (Civil Appeal 2792/03 Yitzhari v. Import (published in the [Nevo]] databases; 2006) at paragraph 12 of its opinion). In addition, "imposing a broad duty of care on members of the company may create an over-deterrence against the company taking reasonable business risks. which may ultimately lead to the increase in the company's profits" (ibid.).
- On the other hand, the incorporation veil is not a veil of immunity. It's not just companies that can impose damages and breach obligations. After all, they operate through organs and officers. And in various cases, these human characters can take part in acts or be responsible for omissions for which they will have to be held personally accountable, and in appropriate cases, bear personal responsibility. It is clear that the power of a third party's status should not be swept away from filing a lawsuit attributing personal liability to the company's officers, and establishing a direct rivalry between him and them.
- The considerations are complex. They pull in opposite directions. Against this background, it is not surprising that the general law, including contract law and tort law, places an obstacle in the way of those who wish to attribute personal liability to the company's organs when they operated within the framework of its areas of activity and promoted its interests. The laws of class and rivalry in this area reflect the balance between the conflicting considerations - the lack of immunity on the one hand, but the need not to breach the principle of legal personality that is separate from the other.
- Before I turn to examine the matter in more detail, it will be important to mention the distinction between imposing personal responsibility on the officers and lifting the corporate veil. And this is not the same as the other mountains.
As the Honorable Justice Mintz ruled, "the imposition of personal liability does not mean lifting the corporate veil of the company, whereas in imposing personal liability on an officer of the company, the rule regarding the separate legal personality of the company is preserved" (Civil Appeal 8553/19 Alexander Oren in Tax Appeal v. Cohen (published in the databases [Nevo]; 2020 in paragraph 21 of his opinion; It should be noted that the members of the panel disagreed on the same case, but not on this matter).