Removing straitjackets, and widening the potential scope of
parent company liability for a subsidiary's actions
Can the parent company of a multinational group owe a duty of
care to a third party for the actions of a foreign operating
subsidiary? There remains no definitive answer at the time of
writing. However, the UK Supreme Court
("UKSC") recently found that, in certain
circumstances, it would be reasonable for UK courts to determine
the question at trial.
This post concerns the UKSC's recent decision in
Vedanta Resources PLC v
Lungowe,1 a group action under Part 19
of the UK's Civil Procedure Rules.2 The decision
ends a long jurisdictional challenge to the pursuit of a
transnational tort claim in the UK. It matters in Canada because,
at the time of writing, at least two transnational tort claims are
before our courts too.3 While the decision in
Vedanta is not binding in Canada, UK precedents,
particularly decisions of the UK Supreme Court, continue to be
