A decision in 2011 which held a parent company liable for the activities of its subsidiary following a former employees exposure to asbestos has been upheld by the Court of Appeal.
The employee was diagnosed with asbestosis in 2007 and was unable to pursue a claim owing to the ‘asbestos exclusion’ clause in its insurance policy. The employees lawyer instead decided to pursue the claim against the parent company. Based on the evidence available the Court found that Cape plc assumed a duty of care to:
- advise the subsidiary company on what steps it had to take in light of the knowledge then available
- provide those employees with a safe system of work
- ensure that those steps were taken
In summary, this case demonstrates that in appropriate circumstances the law may impose on a parent company responsibility for the health and safety of its subsidiary employees.
The court goes on to say “Those circumstances include a situation where, as in the present case, the business of the parent and subsidiary are in a relevant respect the same; the parent has, or ought to have, superior knowledge on some relevant aspect of health and safety in the particular industry.”
This judgement could have far reaching implications for UK companies with subsidiaries, whether domestic-based subsidiaries as well as multi-national companies who have their headquarters in the UK with subsidiaries in developing countries.
For further health and safety advice call Cardinus Consultancy on 0207 469 0200 or email [email protected].