29 June 2012
sufferer from London who won a historic case against one of the world’s former largest asbestos manufacturers, in a landmark judgment at the Court of Appeal last month, has expressed his delight after learning that the company, Cape PLC, will not be challenging the decision
The judgment, which sets a new legal precedent for holding parent companies accountable, was handed down in April 2012 with the Court of Appeal upholding an earlier decision by the High Court to find Cape PLC, as the parent company, responsible for the activities of its subsidiary, Cape Building Products Limited.
In her judgment Lady Justice Arden said:
“We understand that this is one of the first cases in which an employee has established at trial liability to him on the part of his employer’s parent company, and thus this appeal is of some importance not only to the parties but to other cases.”
David Chandler, 71, now lives near Melbourne Australia with his wife Marjorie. He was employed by Cape Building Products Limited (previously Uxbridge Flint Brick Company), a subsidiary of Cape PLC, between 1959 and 1961 where he suffered heavy asbestos exposure from the dust escaping from a factory at the Iver Lane site in Uxbridge.
Mr Chandler was diagnosed with asbestosis in 2007. Unable to pursue a claim against Cape Building Products, due to an 'asbestosis exclusion clause' in its insurance policy, Mr Chandler’s lawyers, Leigh Day & Co, pursued the claim instead against Cape PLC.
Historically parent companies have been able to avoid any liabilities arising from work undertaken at its subsidiaries by hiding behind what is known as the 'corporate veil'. This treats both parent and subsidiary as separate entities where one company cannot be found responsible for the actions of another.
However, today’s decision means that parent companies can be held liable for the practices of their subsidiaries irrespective of the ‘corporate veil’.
The judgment will not only have far reaching ramifications for companies in this country with subsidiaries in the UK but also multinational companies headquartered in the UK with subsidiaries in developing countries where their operations have greater potential to cause direct harm to workers, the local environment and consumers.
In the past many factors have made it virtually impossible for victims overseas to sue the subsidiaries of multinational companies in their local courts, these include corruption, insolvency, fear of persecution and lack of legal funding.
In this ground breaking case Leigh Day & Co provided evidence that Cape PLC were directly involved in, and knew about, the health & safety effects on the workers at Cape Building Products Limited from asbestos exposure.
This included the fact that Cape PLC employed group medical and safety officers who oversaw health & safety matters of the asbestos workers of its subsidiaries and that it had close involvement with governmental organisations concerned with asbestos safety.
The Judge also found it significant that the boards of both parent and subsidiary companies shared directors showing Cape PLC were aware of what was going on at its subsidiaries factories.
, senior asbestos solicitor in Leigh Day's industrial disease department, who represented Mr Chandler, said:
“We are glad that this legal battle is now over for Mr Chandler who has had to wait for a number of years for it to be resolved. We are also glad that the High Court’s decision remains intact ensuring that there is no longer an excuse for parent companies to hide behind an aged legal principle in circumstances where they know that workers are at risk, but still chose to do nothing to help them.”
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