Parent Company Liable in Landmark Asbestos Case

A worker who developed asbestosis after being exposed to high levels of asbestos between 1959 and 1961 was unable to pursue a personal injury claim against his former employer, which was dissolved some years ago, owing to an ‘asbestos exclusion clause’ in its insurance policy. He therefore pursued a claim against its parent company.



The Court of Appeal has upheld a ruling of the High Court that in this case the parent company was liable for the activities of its subsidiary company ‘on the basis not of any form of vicarious liability or agency or enterprise liability, but on the basis of the common law concept of assumption of responsibility’.



The Court of Appeal stressed that there is no imposition or assumption of responsibility by reason only that a company is the parent of another company. Whether or not the parent company bears liability for providing a safe system of work to employees of a subsidiary will depend on the individual facts. The question is whether the actions of the parent company amounted to taking on a direct duty to the subsidiary’s employees.