Chandler v Cape plc EWCA Civ 525 is a decision of the Court of Appeal which addresses the availability of damages for a tort victim from a parent company, in circumstances where the victim suffered industrial injury during employment by a subsidiary company. Indeed, all the people concerned in the management of Cape Products are now deceased. Eversheds Sutherland Entities are constituted and regulated in accordance with relevant local regulatory and legal requirements and operate in accordance with their locally registered names. In that way, their cases can be seen, as they need to be seen, in the round. The judge also relied on the evidence of Mr Hodgson. Mr Chandler was diagnosed with asbestosis in 2007. The … In 2007 he discovered that he had asbestosis as a result of exposure to asbestos dust whilst employed by the subsidiary company who no longer existed. Whether or not smoking cannabis prior to commencing work constitutes a dismissible offence, Eversheds Sutherland Financial Services: A new transatlantic gold standard? 74. However, Mr Sim's evidence states that Cape took considerable steps to ensure that the method of working with asbestos was as safe as possible. If the civil principles of Chandler v Case plc from the first instance judgment had been transposed into health and safety law, the likely impact could be to extend the duty of care of parent companies or organisations (established from section 3 of the HSWA 1974) beyond merely contractors or sub-contractors so that they could be responsible for employees of subsidiary companies or organisations provided it could be shown they were affected by the parent’s “undertaking”, ie. Chandler v Cape plc [2012] EWCA Civ 525 is a decision of the Court of Appeal which addresses the availability of damages for a tort victim from a parent company, in circumstances where the victim suffered industrial injury during employment by a subsidiary company. 53. The letter stated: 26. Between 1959 and 1962, Mr Chandler was an employee of a subsidiary of Cape plc and was involved in the manufacture of asbestos. There is nothing wrong in that but it suggests that the company policy of Cape on subsidiaries was that there were certain matters in respect of which they were subject to parent company direction. 58. The more a parent company or organisation directs what a subsidiary should do (in health and safety terms), the more it potentially attracts additional Section 3 HSWA responsibilities. In October 2011 we reported on the England and Wales High Court decision in Chandler v Cape plc.The Court of Appeal has now upheld the High Court decision confirming that the holding company owes a direct duty of care to the employees of its subsidiary.. Facts To briefly recapture the facts of the case, the claimant was an employee of Cape Building Products Ltd (Cape … Although it appears that there is no reported case of a direct duty of care on the part of a parent company, Mr Weir cites the passage from the speech of Lord Bingham in Lubbe v Cape Plc [2000] 1 WLR 1545. Such documentation as exists demonstrates the absence of control or advice at any significant level. Chandler v Cape PLC relationship between the Defendant and Cape Productsat the time relevant to these proceedings. Interact directly with CaseMine users looking for advocates in your area of specialization. It is convenient to deal with this ground first, since Mr Owen QC, for the appellant, realistically accepts iv) Reliance on subsequent events: Mr Stuart-Smith criticises the judge for taking into account evidence as to events subsequent to the relevant period. Mr Chandler had been employed in the late 1950s and early 1960s as a brick loader by a company called Cape Products. Adams v Cape Industries plc [1990] … 3. (Chandler v Cape plc, supra at 1, at [2]). With respect to the evidence to the Advisory Committee on Asbestos submitted by Cape in l976 and 1977, Mr Stuart-Smith submits that this should largely be discounted as it was written long after the relevant period and referred loosely to the past. 10 Martin Petrin, ‘Assumption of Responsibility in Corporate Groups: Chandler v Cape Plc’ (2013) 76(3) Modern Law Review 603. They were interested in these things and their research was a continuation of the same theme. The marketing subsidiary in the United States of America was a wholly owned subsidiary, N.A.A.C., incorporated in Illinois in 1953. Chandler v Cape plc [2012] EWCA Civ 525 Practical Law Resource ID 9-519-3697 (Approx. However, Mr Stuart-Smith submits that this was only an application to strike out a pleading and therefore all Wright J had to find was that the point was arguable. Likewise, the fact that Cape Products sought to acquire a machine from the Barking factory merely went to group planning and said nothing about health and safety of employees. Mr Stuart-Smith submits that in any event the judge fails to identify the scope of the duty of care owed by Cape for the health and safety of employees. Whether or not he was formally appointed group medical adviser in the relevant period, it is clear that he was engaged on research, based on empirical research done at Cape and its asbestos-producing subsidiaries, about the relationship between asbestos production and asbestosis. 59. Cape therefore knew that the Uxbridge asbestos business was carried on in a way which risked the health and safety of others at Uxbridge, most particularly the employees engaged in the brick making business. Finally, I must deal with Mr Stuart-Smith's submission that the judge had gone beyond Cape's concession in the pleadings (above, paragraph 34). The court may find that element (4) is established where the evidence shows that the parent has a practice of intervening in the trading operations of the subsidiary, for example production and funding issues. 65. The grounds of appeal are (1) that the judge applied the wrong test for the imposition of liability on a parent company; (2) that the judge failed to identify the scope of the duty of care which he found; (3) that the judge wrongly made specific findings of fact and on occasions wrongly reversed the onus of proof and (4) that the judge misunderstood a concession made in the pleadings. 38. 41. Cape’s subsidiary did owe a duty to protect Chandler; induced reliance; A v Home Secretary [2004] A v Roman Catholic Diocese of Wellington [2008, New Zealand] A v … In the present case, Cape exercised financial control over expenditure in just the same sort of way that one would normally expect to see a subsidiary looking to a parent for approval. On 28 December 1893 The Cape Asbestos Company Ltd was incorporated in London. It is also common ground that the fact that Cape is the parent does not preclude the existence of the duty. The relevant conclusions are in paragraph 61 of the judge's judgment: 31. It was in a substantial way of business and its resources far exceeded those of Cape Products. Who controls the content and form of risk assessments and ultimately reviews these and determines when and how health and safety audits are done – the parent or subsidiary? 1 Facts; 2 Judgment; 3 See also; 4 Notes; 5 References; 6 External links; Facts. In doing so, the court laid out a new four‐part test for ascertaining a parent company's responsibility for the health and safety of individuals employed by group companies. He was located at Barking and was engaged in research on health and safety issues for those involved in the production of asbestos. For example, if it could be shown that the parent company or organisation retained effective control over the health and safety policies, procedure, and expenditure of the subsidiary (i.e. Dr Smither attended a meeting on behalf of Cape at Cape's premises on 11 September 1957 and became its chairman in due course. In this case it was alleged, and postulated by the House of Lords, that in principle it is possible to show that a parent company owes a direct duty of care in tort to anybody injured by a subsidiary company in a group. 46. In-text: (D.H.N. 51. Chandler v Cape: Piercing the Corporate Veil: Lessons in Corporate Governance; Authors. The evidence also showed that as at the date of its evidence it had a group manual which provided for regular medical checkups for employees having regular contact with asbestos and asbestos products, and other employees at the discretion of the manager. 73. As Lord Goff pointed out in Smith v Littlewoods Ltd [1987] AC 241 at 270, there is in general no duty to prevent third parties causing damage to another. The relationship could have remained one of landlord and tenant on arm's length terms but that did not happen. In Chandler v Cape plc [2012] EWCA Civ 525, the claimant contracted asbestosis through exposure to asbestos dust during the course of his employment with Cape Building Products Ltd. Chandler alleged that Cape PLC and Cape Products were joint tortfeasors, that they owed him a duty of care and that they were jointly and severally liable to pay him damages. Chandler v. Cape: An Alternative to Piercing the Corporate Veil Beyond Kiobel v. Royal Dutch Shell. 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