Chandler v Cape plc
A parent company can owe a direct duty of care to the employees of its subsidiary, where it has assumed responsibility for their health and safety.
Facts
Mr Chandler worked for a subsidiary of Cape plc, making asbestos products, in the 1950s and 1960s. He developed asbestosis as a result of his exposure to asbestos at work. The subsidiary no longer existed and had no insurance. He sued Cape, the parent company, arguing that it owed him a direct duty of care, because it had knowledge of the risks of asbestos and controlled the health and safety policies of the group.
Legal principle
The Court of Appeal held that Cape owed Mr Chandler a duty of care. Arden LJ said that this was not a case of piercing the corporate veil, but of a direct duty owed by the parent company. In appropriate circumstances, the law may impose on a parent company responsibility for the health and safety of its subsidiary's employees, for example where the businesses are in a relevant respect the same, the parent has superior knowledge on some aspect of health and safety, the subsidiary's system of work is unsafe as the parent knew or ought to have known, and the parent knew or ought to have foreseen that the subsidiary or its employees would rely on its using that superior knowledge for their protection.
Related cases on separate legal personality and the corporate veil
- Adams v Cape Industries plc [1990] Ch 433
- Re Darby, ex p Brougham [1911] 1 KB 95
- DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 1 WLR 852
- Gilford Motor Co Ltd v Horne [1933] Ch 935
- Jones v Lipman [1962] 1 WLR 832
- Lee v Lee's Air Farming Ltd [1961] AC 12
- Macaura v Northern Assurance Co Ltd [1925] AC 619
- Okpabi v Royal Dutch Shell plc [2021] UKSC 3, [2021] 1 WLR 1294
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This summary is for study and revision and is not legal advice. Although our case summaries are checked for accuracy, we do not guarantee that they are free from errors or omissions. Always read the full judgment for the court's reasoning.
