In the recent case of Chandler v Cape Plc [2012] EWCA Civ 525, the UK Court of Appeal confirmed the High Court's ruling that a parent company owed a duty of care to an employee of a subsidiary company, who developed asbestosis after being exposed to asbestos dust, in circumstances where the subsidiary company was no longer in existence.

In this case a key consideration for the High Court, in determining the parent's potential liability for the actions of its subsidiary, was the degree of knowledge and control exercised by the parent in respect of the subsidiary's health and safety policy.

In order to reduce the risk of being held liable for its subsidiary's actions, a parent company, when drawing up group rules and procedures, may wish to ensure that ultimate responsibility and control for compliance with group rules and procedures rests with officers of the individual subsidiary companies, rather than with the parent company.

To read more about the original High Court decision, click here for our Client Bulletin of 20 September 2011.