Trucking Company Corporate Structure Liability

When a truck accident occurs, a lot of effort goes into deciphering each driver’s actions. Did they stay in their own lane and leave enough distance? Did they signal early enough and change lanes without cutting off the other vehicle? What about speed? The issue is that liability doesn’t always come down to the drivers’ actions—especially in cases involving commercial trucks. In these cases, a truck driver’s actions often fall on the shoulders of the company employing them.

But if the company is part of a complex web of companies designed to avoid financial losses after accidents, getting the compensation you deserve isn’t always easy. That’s why it’s important to work with a truck accident lawyer who understands how far companies will go to protect their profit margins, how to untangle complex corporate webs, and what it takes to demand justice for clients. Call Soroka & Associates to discuss your case with a legal team that’s up to this task.

Understanding corporate structures in the trucking industry

The trucking industry is not just a group of single companies that each operate their own fleet of vehicles. In fact, quite a few of the trucking companies you see on the road every day use a range of corporate structures to spread out their operations, protect their assets, and minimize risks. These structures may include:

• Parent companies: Large entities that own multiple subsidiary trucking companies are quite common. They may have subsidiary companies to specialize in different niches or industries, but an added benefit of this structure is that it can be very difficult to figure out which company is responsible for a particular accident.
• Shell companies: Shell companies are sometimes used to shield assets, both in the trucking industry and in other fields. A shell company is a legal entity that may not have any real operations and may exist to hold assets. For example, a shell company may own the trucks that a company uses, but not employ the drivers or have a direct role in the business’s actual operations. While having a shell company is not inherently illegal, courts may look closely at such arrangements when a company’s corporate structure appears to serve illegitimate purposes.
• Leasing arrangements: Trucking companies may lease their vehicles and drivers from other entities. Leasing arrangements may influence liability issues in trucking accidents; however, in Ohio, courts examine which entity exercised control over the driver and vehicle to determine liability rather than automatically assigning it based on the lease.

Why do trucking companies use these corporate structures?

This can seem very counterintuitive to those outside the trucking industry. It takes time, money, and careful planning to manage a network of trucking companies, so why would owners do that instead of simply running one company well? There are many motivations at play here, including:

• Shielding assets: While parent companies are generally protected from liability through subsidiaries and shell companies, Ohio courts may pierce the corporate veil if the subsidiary is undercapitalized, lacks independence, or is being used to perpetrate fraud or injustice.
• Avoiding liability: Some corporate structures may result in liability being placed on subsidiaries or shell entities that lack sufficient assets, making recovery more difficult for accident victims. When a victim goes to fight for compensation, they find that the company accepting liability doesn’t have the assets needed to cover a fair settlement—even if the parent company obviously does.
• Lower insurance costs: Insurance is a massive expense in the trucking industry. Separate entities can negotiate lower premiums, shift accident claims to other entities, or otherwise optimize policies for their own benefit.

Uncovering ownership webs

Holding the right company accountable after a trucking accident is key if you want a fair shot at compensation. Your truck accident lawyer may start their search by looking into public records. Corporate records, business registration documents, and business licenses can provide important ownership details and start to point you in the direction of links between different entities.

Corporate filings are another excellent source of information. These documents often list parent companies, subsidiaries, and officers involved in operations. By following these connections and digging deeper into each piece of information, you can get a better understanding of the entire corporate structure.

Your attorney may examine leasing agreements to determine whether a company is using leased vehicles or drivers, which may impact liability assessments. Leasing agreements specify which companies are responsible for different aspects of a trucking operation, making it easier to sue the appropriate party for your accident.

Finally, tracing financial assets is an essential part of untangling these company webs. If you follow the money, you eventually get back to the root of a company and figure out who the smaller subsidiaries are trying to protect. Following these assets can also uncover hidden assets that a company is trying to protect from lawsuits like yours.

Challenges in exposing complex corporate structures

Determining liability and figuring out the connections between different trucking companies is a time-consuming task, which is why many personal injury attorneys don’t take on these types of cases. To start, companies that rely on this type of scheme to protect their profits aren’t known for their transparency. By hiding behind shell entities and false fronts, companies make it very difficult to see their real financial resources. Attorneys are also likely to run into jurisdictional challenges if the parent company is in a different state or even in another country. Shell companies may lack substantial assets, which can complicate efforts to recover damages after a trucking accident involving a corporate entity. The result: victims who attempt to seek compensation go up against a company with (apparently) no money to pay them.

Demand justice after a truck accident with Soroka & Associates

With the right legal team, you may have a chance to pierce the corporate veil and hold parent companies accountable for the actions of their subsidiaries and shell companies. But you’ll need an attorney who is committed to uncovering the truth for you. That’s where we shine. Call us or reach out online to schedule a consultation now.