Journal of Personal Injury Law 249
20 Pages Posted: 23 Mar 2013
Date Written: November 2, 2011
Chandler v. Cape plc decided that a parent company was liable for asbestos injuries of an insolvent subsidiary’s employee, because the parent could exercise control over the subsidiary. This article recounts the case’s facts, assesses the reasoning and elaborates the potential implications. It posits that this decision, aside from being based on sound authority, is consistent both with limited liability as a restricted exception to the law of obligations, only justified so far as creditors may truly and freely opt out, and with the general law of tort, which holds people liable for the actions of third parties when they may exercise control. Four main questions over the implications are raised: can controlling parties be liable for any torts? Can any directors or shareholders be liable? What possibilities are there for tort claimants abroad to sue UK multinational parent companies? And how far beyond shareholding might a controlling relationship extend?
Keywords: Corporate veil, tort, limited liability
JEL Classification: K12, K13, K22, K31, K32, K33
Suggested Citation: Suggested Citation
McGaughey, Ewan, Donoghue v. Salomon in the High Court (November 2, 2011).  Journal of Personal Injury Law 249. Available at SSRN: https://ssrn.com/abstract=2237965 or http://dx.doi.org/10.2139/ssrn.2237965