view

A PARENT COMPANY’S TORT LIABILITY TO EMPLOYEES OF A SUBSIDIARY

A PARENT COMPANY’S TORT LIABILITY TO EMPLOYEES OF A SUBSIDIARY

Click here to read the article

Chandler v Cape plc appears to be the fi rst reported case in the UK dealing squarely with the question of a parent company’s tort law duty of care to an employee of its subsidiary company. Where an employee of a subsidiary company suffers injury as a result of an unsafe workplace, liability in negligence under the common law prima facie rests with the subsidiary company and not with a parent company because each company in a corporate group is a separate legal entity even if the group operates as a single economic unit.2 However, a shareholder can be held liable in tort where he is personally involved in the conduct constituting a tort.3 It is on this basis that the Court of Appeal in Chandler v Cape considered that a parent company can be liable in negligence in respect of its own acts or omissions in its involvement in the activities of its subsidiary.

This article will examine some relevant Australian judicial decisions which were not referred to by the Court of Appeal in Chandler v Cape. The Australian decisions and Chandler v Cape diverge in certain respects, and it is not clear whether the UK Court of Appeal would have been swayed by the reasoning of the Australian judges had the Australian cases been considered. Through a comparison of the UK and Australian cases, this article assesses whether Chandler v Cape provides a welcome development in the law. Some concerns have been raised by commentators as to the appropriateness of imposing a duty of care on parent companies in light of the company law doctrines of limited liability and separate entity.4 However, the present writer’s view is that Chandler v Cape is to be lauded as it seeks to ensure that corporate controllers who are responsible for wrongful or negligent conduct do not escape liability.

While the present writer disagrees with the narrow basis on which the Australian courts imposed a duty of care on a parent company for torts of its subsidiaries, an analysis of the Australian reasoning is helpful in isolating the relevant legal issues and identifying the doctrinal basis for such liability.

Click here to read the article

View PDF file

View PDF file

View PDF file

View PDF file

Login/Register

Submissions

JICL welcomes full length articles (generally not exceeding 13,000 words inclusive of footnotes), shorter contributions in the form of notes and comments (generally not exceeding 8,000 words inclusive of footnotes) and book review articles of not more than 6,000 words.

We accept contributions for consideration on an exclusive submission basis. When submitting an article please certify that it is an unpublished article (that is, it has not been previously published in substantially similar form or with substantially similar content) and that it is not under consideration by any other journal.

To facilitate anonymous review, please give the names of authors and their short biographical information and acknowledgments in a separate page.

Authors retain copyright in the words used, but upon submission of material for publication, grant Sweet & Maxwell a licence to publish the submission in print and/or digital formats. Sweet & Maxwell retains copyright in the design, format and layout of all material published in JICL.

Once submissions are published, authors are entitled to one copy of the issue, 10 offprint copies and a PDF version of the submission.

Authors who send articles published in JICL to other publishers or media must include a reference to the publication of the article by JICL and Sweet & Maxwell.

Contributions and book reviews should be submitted in Microsoft Word format by way of email attachment to Professor Anton Cooray at Anton.cooray.1@city.ac.uk.

Style Guide

Authors should follow the OSCOLA citation system (http://www.law.ox.ac.uk/publications/oscola.php), except that we prefer authors to use indenting sparingly.

JICL uses the following heading levels: Main headings are in bold and preceded by a Roman numeral; second-level headings are in bold and italics and preceded by an uppercase alphabet; third-level headings are preceded by an Arabic numeral; and fourth-level headings are in italics and preceded by a lowercase alphabet.