The judgment of 18 February 2016, issued by the Civil Chamber of the Supreme Court, teaches us that this doctrine “as a general rule, in accordance with the STS of 22 February 2007 (no. 159/2007), (…) finds its primary basis at the normative level in good faith as an expression or material content of its configuration as an inspiring principle of our system of property law (Article 7.1 of the Civil Code). In this context, the close connection between the doctrine of piercing the corporate veil and the notion of abuse of rights and of fraud of law (Articles 7.2 and 6.4 of the Civil Code) serves to highlight the stated primary basis insofar as both figures are typical forms of an overreaching exercise of a right contrary to the principle of good faith; that is, either to the values inherent in the subjective right exercised, or to those that configure the purpose of the social institution in which the subjective right in question is functionally exercised. In our case, the defence of the principle of good faith that must govern commercial relations in order to prevent the abuse of legal personality, as a fraudulent instrument, from being used to circumvent the rights of others.”
The Chamber explains that “along these lines, and in accordance with the background described, it is clear that the rule or normative specification revealed by the doctrine of piercing the veil is referenced to the protection of the right of credit and its necessary link with the debtor’s liability with their assets, since the aim is to prevent the abuse of legal personality from prejudicing the legitimate payment of the existing debt. Having made these delimitations, and for present purposes, it must be specified that the markedly strict or literal interpretation of the exceptional and restrictive nature with which the former case-law doctrine characterised the application of this figure has evolved towards a prudent and moderate assessment of the requirements for application, in line with the practical functionality of this remedy. In this sense, from the discursive course of the judgments cited by the appellant but, above all, from the judgments of this Chamber of 22 February 2007 (no. 159/2007) and of 9 March 2015 (no. 226/2015), it follows that the use of corporate legal personality as a fraudulent means or instrument, or for a fraudulent purpose, can no longer be conceived exclusively in terms of a “consilium fraudis” or animus nocendi of the agents involved, that is, from the subjective plane of a deliberate purpose or scheme to cause clear harm, as the contested judgment does, but rather, in line with the functionality indicated, the notion of fraud is also objectifiable in those cases where the parties have or ought to have had knowledge of the damage caused that determines the evasion of their own personal responsibilities and, among these, the payment of debts.”
And the highest Court adds that “this progressive objectification of the subjective element embedded in the concept of fraud is already a constant in the traditional doctrine of this Chamber with respect to those actions that contain a clear subjective component of reproachability. Such is the case, among others, of the paradigmatic action for rescission for fraud of creditors (Article 1111 of the Civil Code), where the doctrine of this Chamber has already evolved in the indicated sense, that is, in favouring the objective element of the action, reflected in the injury to the right of credit (eventus damni, as a driving element for bringing the action) and, in turn, in weighing, but not suppressing, the subjective element of the rescission mechanism, that is, the bad faith of the debtor and the third party, no longer as a strictly intentional component (consilium fraudis), but as an action of necessary knowledge of the harm caused (scientia fraudis); among others, STS of 7 September 2012 (no. 510/2012). In the present case, given the interpretation of the case-law doctrine developed by the contested judgment, it is observed that the non-application of the doctrine of piercing the veil was based on this strictly wilful and intentional conception of the subjective element of fraud. Hence, despite the relevance of the indications established by the judgment of first instance (family relationship, material confusion of both companies, timing of the relations established and materiality of the management carried out by Mr Jesus Miguel, among others), the judgment of the Audiencia nevertheless considers that these indications are by themselves insufficient to evidence the fraudulent and deliberate purpose of causing harm to a third party. An assessment that this Chamber does not share given the case-law doctrine set out, and which leads to the conviction that the aforementioned indications, confirmed by the judgment of the Audiencia, while they do not reveal a deliberate and intentional purpose to cause harm – which, moreover, is always very difficult to prove – do project, in an objectifiable manner, that the companies involved in the present case had or should have had knowledge both of the harm caused and of the breach of their own responsibilities in this regard. Lastly, and also relevantly in accordance with the above, it must be borne in mind that the correct interpretation of Article 12.2 of Law 26/2006 on private insurance and reinsurance mediation does not require for its application the strictly wilful participation of the third party, but rather its cooperation for the damage (eventus damni) to occur, which is why professional diligence is required of it when contracting, in accordance with the “ratio” or purpose of the rule, that is, that agency contracts conform to the principles of contractual good faith.”
Taken from: http://www.whitmanabogados.com/que-es-la-doctrina-del-levantamiento-del-velo/