Businesses with subsidiaries should be notified of the first reported case in which a parent company was found liable to an employee of its subsidiary on tort law principles. The Court of Appeal held that the parent company owed a direct duty of care to an employee of a subsidiary who had contracted asbestosis through exposure to asbestos dust. It seems likely that the reasoning could be extended to other tort claims and other claimants, and that shareholders and other company controllers could be found similarly liable.
Parent companies may wish to review how their health and safety policies are organised throughout the group, to try to insulate parent companies from liability. Our checklist sets out the potential implications for a business that a conviction for a breach of health and safety legislation can have on its operations and also highlights when a parent company may be held responsible for the health and safety of its subsidiary’s employees.