Legal Matters Personal Injury and Insurance
Issue 24 Quarter 2 2012
Our quarterly newsletter aims to highlight developments and recent case law in the areas of personal injury and insurance in a concise and readable style. We hope that you find it informative and useful.
Parent company owes duty of care to Inside: Plexus Law success in employee of subsidiary company manual handling cases The Claimant was employed by Cape Products (CP) between 1959 - 1962. He was exposed to asbestos dust and developed asbestosis. CP had been dissolved some years previously and in any event did not have EL cover for asbestosis. CP was a wholly owned subsidiary of Cape (C). This case is not concerned with piercing the corporate veil which treats parent and subsidiary companies as separate entities. The issue was whether a duty of care was owed by a parent company to the employees of a subsidiary. The 3 stage test established in Caparo Industries v Dickman [1990] UKHL 2 for determining whether there was a duty of care was considered. The 3 ingredients are that the damage should be foreseeable; there should be proximity between the parties and it should be fair, just and reasonable for a duty to be imposed. The Court of Appeal rejected the submission by C that a duty of care could only exist in cases where the parent company had absolute control of the subsidiary. It was held that a duty of care may be imposed on a parent company in certain circumstances which would include where:
the parent company knew or ought to have foreseen, that the subsidiary or its employees would rely on it using that superior knowledge for the employees’ protection.
C was not responsible for the implementation of health and safety at CP but it did maintain a certain level of control over its asbestos business. C did have superior knowledge about the nature and management of asbestos risks and advised CP on what steps it had to take to provide employees with a safe system of work. In these circumstances a direct duty of care was owed by C to the employees of CP. This is the first case in which a parent company has been found to owe a duty of care to an employee of a subsidiary. It will be of particular relevance to disease claims where it is often difficult for claimants to trace the EL insurers of their past employers. The way is not open for claims against any parent company but the Judgment confirms that in certain circumstances a duty of care could be established. In the future a parent company may be sued instead of a subsidiary if the subsidiary is in a different jurisdiction and it is easier for the claimant to claim against the UK based parent company. The courts may also be asked to find that parent companies owe a duty of care to third parties not just employees who are injured by the negligence of their subsidiaries.
the businesses of the 2 companies are in a relevant respect, the same;
the parent company had or should have had, superior knowledge of a relevant aspect of health and safety For further information contact Lynn in the particular industry; Watts - details on page 8
the parent company knew or ought to have known, that the system of work at the subsidiary was unsafe;
Chandler v Cape PLC [2012] EWCA Civ 525
Causation not proved by chambermaid
2
Employer’s training prevails
2
Claimant unable to vary costs order
3
Shotgun appeal
3
Highway maintenance and motor vehicles - a different perspective?
4
Boots unsuitable for riding off road
4
A commonsense approach to ‘reasonable care’
5
Contraction of Legionnaire’s Disease on holiday not an accident
5
Limitation hope for defendants
6
Mother negligent for using booster seat
7
No damages for Claimant injured in getaway
7
Partner Perspective
8