Rob Weir QC & Vijay Ganapathy examine a parent company’s liability to an employee of its subsidiary
In Chandler v Cape plc [2012] EWCA Civ 525, the Court of Appeal held that a parent company can owe a direct duty of care to its subsidiary’s employees in appropriate circumstances and gave valuable guidance on what those circumstances might be. It upheld the decision at first instance that Cape plc owed and breached its duty to Mr Chandler, an employee of its subsidiary. This is the first case in which a parent company has been found liable to one of its subsidiary’s employees in negligence and opens the way for other cases in which a similar duty might be imposed.
Mr Chandler worked for Cape Products for a short period in the late 1950s and early 1960s. His work in a yard exposed him to substantial quantities of asbestos dust, which emanated from a factory on-site. When he subsequently contracted asbestosis as a result of this work,
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