Chandler v Cape Plc [2012] EWCA 525
Summary
The court outlined the circumstances in which it could impose responsibility on a parent company for the health and safety of employees of a subsidiary company which was no longer in existence. In the instant case, the parent company owed a duty of care to the subsidiary's employee, who had developed asbestosis after exposure to asbestos dust.
Facts of the case
The appellant, Cape Plc, appealed against a decision ([2011] EWHC 951 (QB)) that it owed a duty of care to the respondent Chandler. Chandler had been employed by Cape Products between 1959 and 1962. Cape Products was a wholly owned subsidiary of Cape Plc and was in the business of manufacturing incombustible asbestos. In 2007 Chandler discovered he had contracted asbestosis as a consequence of exposure to asbestos dust whilst employed by Cape Products. By that time Cape Products no longer existed and had had no policy of insurance that would indemnify it against claims for asbestosis. Chandler issued proceedings against Cape Plc on the basis that Cape Plc and Cape Products were joint tortfeasors who were jointly and severally liable to pay him damages. The judge held that Cape Products owed a duty of care to Chandler on the basis of the common law concept of assumption of responsibility.
Appeal dismissed. Cape Plc owed a direct duty of care to the employees of Cape Products and it had omitted to advise on precautionary measures given its state of knowledge about the nature and management of asbestos risks.
Impact of the case
In appropriate circumstances the law could impose on a parent company responsibility for the health and safety of its subsidiary's employees. Those circumstances included a situation such as the instant case where (a) the businesses of the parent and subsidiary were in a relevant respect the same; (b) the parent had, or ought to have had, superior knowledge on some relevant aspect of health and safety in the particular industry; (c) the subsidiary's system of work was unsafe as the parent company knew, or ought to have known; (d) the parent knew, or ought to have foreseen, that the subsidiary, or its employees, would rely on it using that superior knowledge for the employees' protection although it was not necessary to show that the parent was in the practice of intervening in the health and safety policies of the subsidiary. The court had to look at the relationship between the companies more widely and could find that the element of reliance on it using superior knowledge was established where the evidence showed that the parent had a practice of intervening in the trading operations of the subsidiary.
