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ARTICLE · 27 MAY 2014

Corporate Veil Will Not Be Pierced

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A recent Court of Appeal judgment held that a parent company should not be held responsible for Heath & Safety failing in its subsidiaries.

United KingdomEmployment and HR
Anne Davies
Anne Davies
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A recent Court of Appeal judgment held that a parent company should not be held responsible for Heath & Safety failing in its subsidiaries.

Background

David Thompson v Renwick Group Plc [2014] EWCA Civ 635 considers Chandler v Cape plc [2012] EWCA Civ 525, a Court of Appeal case which caused immense concern to companies. In Chandler, it was held that a parent company owed a direct duty of care to an employee of one of its subsidiaries contrary to the basic principle that parent companies have a separate legal personality and it should not be possible to 'pierce the corporate veil'. In Thompson the Court of Appeal took a different view based on the facts.

Mr Thompson had been employed by two companies between 1969 and 1970. His work involved the handling of raw asbestos. In 1975, the two companies were acquired by a subsidiary of Renwick Group plc and a new director took over the running of the depot where Mr Thompson worked. As a result of his exposure to

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