UPDATE 29 April 2012: The Court of Appeal has agreed with the High Court and confirmed that a parent company may owe a duty of care to an employee of a subsidiary, as we discuss in this post.
In Chandler v Cape, the High Court found that a holding company had, and had breached, a duty of care (in this case, in relation to health and safety) to an employee of a subsidiary company. The three-step test in Caparo v Dickman – foreseeability of risk, proximity and that it be fair and just to impose a liability – was found to be satisfied. The case did not involve piercing the corporate veil; rather, the holding company was found liable on the basis that it has assumed responsibility due to its control of the health and safety policies of its subsidiary. More in this note from Kennedys. Contrast with the Court of Appeal’s decision in Adams v Cape Industries.