Under what condition are courts more likely to pierce the corporate veil?

Courts are more inclined to pierce the corporate veil to protect tort victims primarily because these individuals typically seek restitution for injuries or damages that arise from the misuse of the corporate form. The rationale centers on the idea that corporations can be used as a shield for wrongful acts, potentially allowing individuals to evade responsibility for their actions.

In cases involving torts, especially where the corporation may be a mere instrumentality or if there's evidence of wrongdoing such as fraud or injustice perpetrated by the corporation, courts are motivated to ensure that victims receive compensation. The veil is pierced to prevent the corporation from being a barrier to recovery for these individuals, especially when following the legal principle that corporate entities should not be used as a cover for unethical or illegal business practices.

This rationale contrasts with other scenarios involving contract claimants or shareholders; while there are circumstances where corporate liability is adjusted in these contexts, tort claims often bring a higher urgency and public policy basis for protecting injured parties, making courts more willing to hold individuals accountable despite the protections usually afforded by the corporate entity.