Duties of Care and Corporate Groups
Law Quarterly Review, Vol. 133, 2017
Posted: 1 May 2017
Date Written: April 29, 2017
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  EWCA Civ 525;  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  EWCA Civ 635;  B.C.C. 855; Lungowe v Vedanta Resources plc  EWHC 975 (TCC);  B.C.C. 774; AAA v Unilever  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  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  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: Suggested Citation