Parent firm liable for work-related disease

An asbestosis sufferer from London has won an historic case at the Court of Appeal against former global asbestos giant Cape plc. Law firm Leigh Day & Co says the 'landmark' judgment sets a new legal precedent for holding parent companies accountable for work-related health problems in employees of their subsidiaries. On 25 April this year, the Court of Appeal upheld an April 2011 decision by the High Court to find Cape plc, as the parent company, responsible for the activities of its its now defunct 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.' The case involved David Chandler, 71, now lives in Australia with his wife Marjorie. He was employed at the Uxbridge site of Cape Building Products Limited (previously Uxbridge Flint Brick Company), a subsidiary of Cape plc, between 1959 and 1961. Mr Chandler was diagnosed with asbestosis, a disabling scarring of the lung, 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. The law firm says 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. The Court of Appeal decision means that parent companies can be held liable for the practices of their subsidiaries irrespective of the 'corporate veil'. Vijay Ganapathy of Leigh Day's industrial disease department, who represented Mr Chandler, said: 'This historic judgment gives hope to thousands of victims not just of industrial disease but also those injured or who have been denied justice in the past through the complexity and sometimes cruelly contrived nature of corporate structuring.' He added: 'It's 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.'

Leigh Day & Co news release. Uxbridge Gazette.