Court of Appeal: parent companies are accountable for the activities of their subsidiaries
Parent companies are accountable for the activities of their subsidiaries, the Court of Appeal has held in a ground-breaking judgment.
David Chandler brought a claim after he contracted asbestosis as a result of a short period of employment more than 50 years ago with Cape Building Products Ltd, which is no longer in existence. Its parent company, Cape Plc, still exists. For Chandler’s claim to succeed, his lawyers needed to show Cape Plc owed a direct duty of care to the employees of its subsidiary to provide a safe system of work.
Giving judgment in Chandler v Cape Plc [2012] EWCA Civ 525, Lady Justice Arden said: “We understand that this is one of the first cases in which an employee has established at trial liability to him on the part of his employer’s parent company, and thus this appeal is of some importance not only to the parties but to other cases.”
Vijay Ganapathy, senior solicitor at Leigh Day & Co, who represented Chandler, says: “It’s no longer an excuse for parent companies to hide behind an aged legal principle in circumstances where they know that workers are at risk, but still choose to do nothing to help them.
“This is of particular relevance in asbestos disease cases, as many sufferers face insurmountable challenges in identifying and locating insurers for their former employers. As parent companies are much more likely to survive over the decades it takes for asbestos disease to develop, it should give hope to those now suffering that past negligence will not go unpunished.”
