Duties of Care and Corporate Groups

Law Quarterly Review, Vol. 133, 2017

Oxford Legal Studies Research Paper No. 54/2017

Posted: 1 May 2017  

James Goudkamp

University of Oxford - Faculty of Law

Date Written: April 29, 2017

Abstract

Recent years have witnessed a surge of litigation involving the following structure: (1) a subsidiary company tortiously injures a claimant, who may or may not be its employee; (2) for one reason or another, the claimant is unable to obtain redress (or unable conveniently to obtain full redress) from the subsidiary; (3) accordingly, the claimant seeks relief from another company that is within the same corporate group as the subsidiary, usually the ultimate parent company. Although it is not the first case in Britain to involve this pattern, the landmark decision in Chandler v Cape plc [2012] EWCA Civ 525; [2012] 1 W.L.R. 3111 is widely recognised as having opened the door to such claims. The claimant in Chandler had contracted mesothelioma due to the negligence of his employer, a subsidiary company. The employer had been wound up by the time that the disease manifested itself and so the claimant sought relief from his erstwhile employer’s parent company, which was still in existence. The case turned on whether the parent owed the employee a duty of care. The Court of Appeal unanimously held that the parent owed a duty owed the claimant a duty of care on the basis of the Caparo test. Chandler precipitated a stream of claims with essentially the same structure as Chandler, which claims have met with varying degrees of success (see, e.g., Thompson v The Renwick Group plc [2014] EWCA Civ 635; [2015] B.C.C. 855; Lungowe v Vedanta Resources plc [2016] EWHC 975 (TCC); [2016] B.C.C. 774; AAA v Unilever [2017] EWHC 371 (QB)). These decisions triggered a deluge of academic commentary (see, e.g., Sanger (2012) 71 C.L.J. 478; Petrin (2013) 76 M.L.R. 603; Day [2014] L.M.C.L.Q. 545; Witting and Rankin (2014) 22 Tort L. Rev. 91; Turner (2015) 33 C.&S.L.J. 45). The latest case of this stripe, and the subject of this note, is HRH Emere Godwin Bebe Okpabi v Royal Dutch Shell plc [2017] EWHC 89 (TCC), which is a significant development in this nascent area of the law.

Keywords: Tort; Duty of Care; Corporate Liability; Subsidiary Companies; Corporate Veil

JEL Classification: K13

Suggested Citation

Goudkamp, James, Duties of Care and Corporate Groups (April 29, 2017). Law Quarterly Review, Vol. 133, 2017; Oxford Legal Studies Research Paper No. 54/2017. Available at SSRN: https://ssrn.com/abstract=2960622

James Goudkamp (Contact Author)

University of Oxford - Faculty of Law ( email )

St Cross Building
St Cross Road
Oxford, OX1 3UL
United Kingdom

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