Thanks Steve, very interesting decision. It is worth noting that there is in fact an Australian decision holding that a parent company can owe a duty of care to the employee of a subsidiary, in
CSR Ltd v Wren (1998) 44 NSWLR 436, discussed in a piece in the Torts Law Journal by Edmundson & Stewart (1998) 6 TLJ 123. That was also an asbestos case, but was slightly different as it was held that there was a high degree of overall control by the parent. But a similar result.
I think the
Cape decision is correct. It also incidentally supports my somewhat more radical thesis in an article from 2008, "Personal civil liability of company officers for company workplace torts" (2008) 16 TLJ 20
http://works.bepress.com/neil_foster/9/ , that in some cases there may also be personal liability of company officers (the same factors that count towards finding a duty of a parent company can count towards finding a duty owed by a board member.) And, of course, the
Salomon principle of the "corporate shield" only applies to shareholders
qua shareholders, not company officers, who remain personally liable for their own torts.
Regards
Neil
On 25/05/2012, at 4:09 AM, Hedley, Steve wrote:
From The Economist 26 May 2012:
"The limited-liability company is the building-block of capitalism, mobilising resources for investment. But its central tenet, that investors are not generally responsible for the liabilities of the firms they invest in, faces growing challenge. A decision by the Court of Appeal stretches almost to breaking point the 'corporate veil' that has protected parent companies from the sins of their subsidiaries ..."
commenting on Chandler v Cape Plc [2012] EWCA Civ 525 (25 April 2012).
http://www.economist.com/node/21555967http://www.bailii.org/ew/cases/EWCA/Civ/2012/525.html
Steve Hedley
University College Cork
Neil Foster
Senior Lecturer
Newcastle Law School Faculty of Business & Law
MC158, McMullin Building
University of Newcastle Callaghan NSW 2308 AUSTRALIA
ph 02 4921 7430 fax 02 4921 6931