Cape Products carried employer's liability insurance. Dr Smither began working for Cape as works doctor at Barking before he took up employment with Cape on 1 June 1962. The letter stated: Although none of these letters bear any statement as to the capacity in which Dr Smither was acting, they demonstrate that he visited Cape Products' factory to discuss a particular case of asbestosis (it is not clear whether the employee was employed in the asbestos production or brick making side of Cape Products' business). 2 pages) However, its parent company, Cape, formerly the well-known asbestos producer Cape Asbestos plc, is still in existence. It follows from my reasoning that Mr Weir's submission is correct. The concession made by Cape (paragraph 34 below) means that we can assume that by the start of the relevant period there was some recognition of the health dangers of asbestos production. (Chandler v Cape plc, supra at 1, at ). The scope of the duty can be defined in either way. Cape acquired at least a majority of the share capital of Cape Products in 1945, and the outstanding shares in about 1953. There is very little information that has come from Cape itself. In due course, it required Cape to purchase this business. The background to this application can be found in Weekly Updates 14/12, 18/16, 26/16 and 30/17 (Chandler v Cape Plc and Cape Distribution v Cape International). The subsidiary went into liquidation. Cape Products modified the empty factory for Cape's use in the production of Asbestolux (board minutes of 20 November 1954). Dr Smither is shown as a medical officer and as a representative of Cape. At a board meeting on 1 November 1966 the board discussed a problem that had arisen in Northern Ireland over sales there. at ) The case is also important in connection with the issue of lifting of the corporate veil. For the better protection of its employees across the group, Cape appointed a group medical adviser in the 1950s, Dr Wyers. Cape started out as a tenant of Cape Products' site. The judge inevitably found as a fact -and there is no appeal from this that Cape was fully aware of the "systemic failure" which resulted from the escape of dust from a factory with no sides. He was also (if this label makes any difference) the group medical adviser of Cape. Such documentation as exists demonstrates the absence of control or advice at any significant level. [Help], IN THE COURT OF APPEAL (CIVIL DIVISION)ON APPEAL FROM THE HIGH COURT OF JUSTICE (QUEENS BENCH DIVISION)WYN WILLIAMS J
Moreover, as Mr Weir submits, the judge's findings regarding Dr Smither are not disputed. The board resolution suggests that, where the grant of a licence affected the interests of the group, Cape Products was making corporate decisions with regard to those interests, as well as those of itself as a separate legal entity. The judge found that he was appointed group chief chemist (Judgment, paragraph 61). There was a works safety committee. In the present case, Cape was clearly in the practice of issuing instructions about the products of the company, for instance, about product mixes. Mr Weir submits that, once Cape has been found to have overall responsibility, it must follow that they caused or permitted the breach of duty to Mr Chandler. The court has first to say what the duty was before there can be any "causing or permitting" of any breach. Contract lawyers from Linklaters. The form of the concession was as follows: Counsel did not address the same points in the same depth. v) Cape's board minutes for 25 April 1961 and 16 May 1961 confirm Cape Products' status as a member of the group. Accordingly, the judge was able to draw inferences from the fact that Dr Gaze was chief chemist scientist. However, none of this evidence in fact takes matters much further. Lady Hale. These were attended by representatives of a number of companies in this field, including Cape. It is convenient to deal with this ground first, since Mr Owen QC, for the appellant, realistically accepts Product development, with a group chief chemist, was carried out in the Central Laboratory at Barking. The case of Chandler v Cape7 provides four descriptive factors that may indicate the presence of a duty of care owed by the parent company, which The Cape board stressed the elimination of dust. 2d 780 (1982) Brief Fact Summary. He died suddenly on 12 December 1956. Justices. Cape were collecting data and they must have done something with it. 10 Martin Petrin, ‘Assumption of Responsibility in Corporate Groups: Chandler v Cape Plc’ (2013) 76(3) Modern Law Review 603. However, in the case of Cape plc, the Court of Appeal identified parallel duties of care between the parent company and subsidiary employees and the subsidiary company and its employees. Cape concedes that the system of work at Cape Products was defective. Mr Stuart-Smith contends for a threshold test, namely that, in determining whether there has been an assumption of responsibility, the court is restricted to matters which might be described as not being normal incidents of the relationship between a parent and subsidiary company. There is no evidence that what went wrong here was that Cape Products failed to maintain some dust extraction machines in the asbestos factory and in any event it is difficult to see how such machines could have avoided the escape of dust given the open sides of the factory. There was also a report on health and safety produced by Dr Smither in 1962 following a visit to South Africa. There is nothing wrong in that but it suggests that the company policy of Cape on subsidiaries was that there were certain matters in respect of which they were subject to parent company direction. For the purposes of (4) it is not necessary to show that the parent is in the practice of intervening in the health and safety policies of the subsidiary. Cape gave evidence to the Health and Safety Executive for the purposes of an inquiry into asbestos in the 1976-7 that it had had a group medical adviser since at least 1946 and that, in addition to complying with statutory requirements for health and safety enacted in 1946: As to the nature of this surveillance, it is clear that from 1945 Cape had kept statistics for asbestosis, lung cancer and mesothelioma among employees or former employees at Uxbridge. 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. Mr Robert Weir QC, Mr Simon Levene & Mr Sudhanshu Swaroop (instructed by Leigh Day & Co.) for the Respondent
According to the judge, he was succeeded in 1957 by Dr W. H. Smither, but that date is challenged on this appeal.
(Ibid. There is an important exchange of letters between Dr Smither and Dr R Owen of HM Factory Inspectorate at the Ministry of Labour. Mr Browne said later that he was chief safety officer. The court does not have to find that the relevant party has voluntarily assumed responsibility (see also on this point, Likewise, it has been held on two occasions that it is arguable that a parent company may owe a duty of care to employees of subsidiaries: see. There was however a group policy of surveillance. This falls within the second and third parts of the three-part, The development of the law of negligence has to be incremental and the judge was in my judgment correct to hold that the analogous line of cases in negligence to the instant case is the line of authority on the duty of a person to intervene to prevent damage to another. (Asbestolux appears to have been a generic product, not one protected by intellectual property rights). 3 (B) Depending on the facts, a parent company may be liable for the operations of its subsidiary. Facts. Mr Weir also relies on the evidence of Mr Sim, another employee of Cape, who gave evidence on behalf of Cape about working conditions at Uxbridge in an action brought by the widow of an employee. To help you navigate regulatory requirements across regions, we have collated a range of key cross-border content. The threads may for convenience be labelled as follows: Cape was involved in the production of asbestos from the nineteenth century and had several factories in the UK. There was no finding that any policy was suggested by Cape, still less that it was inadequate. Mr Chandler’s estate brought a claim against Cape plc alleging it had owed (and breached) a duty of care to Mr Chandler. He became an international authority in this field. There is evidence that it was indeed shared. Dr Smither's letter and the inspector's reply both show that there was some understanding even in 1961 of a connection or potential connection between dust exposure and the development of asbestosis. It is convenient to deal with this ground first, since Mr Owen QC, for the appellant, realistically accepts Mr Chandler's case did not, however, stand on that alone, but on the responsibility exercised by Cape for protecting employees from harm from the asbestos atmosphere. Explore our blogs for the latest news and insights across a range of key legal topics. He submits that the second part of the concession comes into play only if Cape is held to be under the relevant duty. I disagree. As the judge held, working on past performance and viewing the matter realistically, Cape could, and did on other matters, give Cape Products instructions as to how it was to operate with which, so far as we know, it duly complied. As stated at paragraph 10 of the witness statement, the laboratory had to be moved. A manager was appointed "to manage this plant as a branch of Cape" (see. Cape moreover had superior knowledge about the asbestos business. The evidence at trial was sparse and consisted mainly of documentary evidence. Chandler was injured by breathing asbestos dust while being employed by a subsidiary of Cape. Mr Stuart-Smith did not produce any case establishing this proposition and I would reject it. It was however the duty of the management on site to provide proper ventilation under the l937 Act. I accept Mr Stuart-Smith's submission that Cape was not responsible for the actual implementation of health and safety measures at Cape Products. Cape paid a rent and a share of the rates, and there is nothing to suggest that the rent was not fixed at the market rate. 9 Thompson v Renwick Group Plc  EWCA Civ 635,  BCC 855. This is indeed confirmed by an extract from a letter written by Dr Smither in November 1962 quoted by Silber J, sitting in the Manchester District Registry, in. This court is required to be satisfied for itself that the facts justified the imposition of liability. The Court of Appeal has upheld a decision of the High Court which found that a parent company owed a direct duty of care to an employee of one of its subsidiaries, in Chandler v Cape EWCA (Civ) 525. . Cape Products operated independently of Cape. Chafiq Ayadi, v European Commission,  EUECJ C-183/12 (06 June 2013) Chaggar v Chaggar & Anor  EWHC 1203 (QB) (18 May 2018) Chagger v Abbey National Plc & Anor  EWCA Civ 1202 (13 November 2009) Chagos Islanders v Attorney General Her Majesty's British Indian Ocean Territory Commissioner  EWHC 2222 (QB) (09 October 2003) In the present case, Cape exercised financial control over expenditure in just the same sort of way that one would normally expect to see a subsidiary looking to a parent for approval. As an occupier of the premises, Cape Products was subject to the obligations imposed by the Asbestos Regulations 1931 and the Factories Act 1937 ("the 1937 Act"). iv) Reliance on subsequent events: Mr Stuart-Smith criticises the judge for taking into account evidence as to events subsequent to the relevant period. Moreover, the way in which groups of companies operate is very varied. It is clear that Dr Smither was involved in discussion over the safe installation of asbestos products by the consumer, the Northern Ireland Hospital Authority. By installing its business there, it must have implicitly undertaken a duty of care to ensure that its business was carried on without risk to the employees in the other business of Cape Products carried on at the Cowley Works. Such a claim is more likely to succeed if advanced by former employees, but claims made by residents are still arguable (eg Lubbe v Cape). iii) Reversal of the onus of proof: Mr Stuart-Smith complained that the judge had reversed the onus of proof in paragraph 44 of his judgment (the material passage is set out in paragraph 50 above). The respondent, Mr Chandler, has recently contracted asbestosis as a result of a short period of employment over fifty years ago with Cape Building Products Ltd ("Cape Products"). There was no evidence that Cape took control of Cape Products' operational procedures for the health and safety of its employees. He died of mesothelioma in 1982. The conclusion to which the judge came on the facts was that Cape controlled at least some aspects of the business of Cape Products (Judgment, paragraph 46). Cape's board minutes show that Cape approved the separate administration of Cape Products' operations "in accordance with company policy" of Cape. The Supreme Court of Alabama ruled that if a grantor gives a deed to a third party to complete delivery and the grantor later dies before delivery is finalized, then the deed will be deemed validly delivered despite surrendering all rights to retrieve it. Adams v Cape Industries plc  Ch 433 is a UK company law case on separate legal personality and limited liability of shareholders. Some people are claiming this is an attack on the separate legal personality principles, fundamental … The Court of Appeal has upheld a decision of the High Court which found that a parent company owed a direct duty of care to an employee of one of its subsidiaries. In Chandler v Cape plc  EWCA Civ 525, the claimant contracted asbestosis through exposure to asbestos dust during the course of his employment with Cape Building Products Ltd. Mr Weir submits that the letters to and from Dr Smither have to be seen in the context of all the other evidence. This was because: (i) the parent company and subsidiary had relatively similar businesses; (ii) the parent company knew (or ought to have known) that the subsidiary’s system of work was unsafe; and (iii) the parent company knew (or ought to have foreseen) that the subsidiary or its employees would rely on its using that superior knowledge the employee’s protection. More about our Environment & Climate Change capabilities. By 1959 reference is made in the minutes of Cape Products Limited to a "Group Central Laboratory" helping to resolve problems due to the rejection of certain goods produced at Uxbridge. For these reasons I would dismiss the appeal. The same was true of the licensing of know-how to Nippon. Asbestos was produced on the same site in a factory with open sides, and dust from that factory migrated into the area where Mr Chandler worked. Mr Stuart-Smith accepts that if the parent company were to take over the entirety of the subsidiary's operations, then a duty of care would be owed. 7 Prest v Petrodel Resources Ltd  UKSC 34,  2 AC 415. The Court of Appeal stated that Cape plc assumed responsibility to Mr Chandler and owed a direct duty of care to Mr Chandler which it breached. Cape therefore knew that the Uxbridge asbestos business was carried on in a way which risked the health and safety of others at Uxbridge, most particularly the employees engaged in the brick making business. On 14 April 2011, Wyn Williams J held that Cape was liable to Mr Chandler 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 case results in case law catching up with the group/subsidiary corporate structures that are now relatively common. It is likely that courts will look at group structures holistically. In this case, submits Mr Weir, Cape Products as a subsidiary of Cape acquired assets from Cape. Lord Wilson, Lord Hodge, Lady Black, Lord Briggs. There are no documents evidencing communications because there were no such communications and there should have been. It was not possible to call a number of witnesses but this is not a case where an adverse inference should be drawn because of that. Thus Cape was taking active steps to protect employees of Cape Products and those steps were under the influence of Cape. Mr Chandler worked for an asbestos manufacturer Cape Building Products Ltd which was a wholly owned subsidiary of Cape PLC between 1959 and 1962. This, on Cape's admission, was a case of blatant exposure. Explore the legal landscape via our range of videos, podcasts and webinar recordings. In Chandler v Cape the claimant had also contracted an asbestos-related disease while working for a subsidiary of the parent company. Dr Smither was also a member of an industry-led expert body, the Asbestos Research Council, set up in the 1950s to lead research into the health and safety issues arising from asbestos. Therefore Cape had knowledge of the system of work in force at the Uxbridge factory. Nonetheless, despite the sale, it maintained a certain level of control over the asbestos business carried on at Uxbridge. He became a director also. They refer to discussions taking place at Uxbridge for the expansion of Asbestolux production. Mr Chandler's employment with Cape Products ran from 24 April to 9 October 1959 and from 24 January 1961 to 9 February 1962 (together "the relevant period"). Health and safety issues were dealt with at company and parent company level. There was no evidence produced by Cape Products. This was not a case where the subsidiary was just under the control of the parent. It is also common ground that the fact that Cape is the parent does not preclude the existence of the duty. There were also common directors but every director has an independent responsibility for running the company and so the mere fact that there were common directors does not, on Mr Stuart-Smith's submission, imply a watering down of the subsidiary's obligations to its employees. Cited – Mundy v Hook CA 18-Jul-1997 The court was asked whether an agreement was an assured shorthold tenancy agreement with the 1988 Act. He found that there had been an assumption of responsibility for the reasons set out in paragraphs 72 to 77 of this judgment: The grounds of appeal are (1) that the judge applied the wrong test for the imposition of liability on a parent company; (2) that the judge failed to identify the scope of the duty of care which he found; (3) that the judge wrongly made specific findings of fact and on occasions wrongly reversed the onus of proof and (4) that the judge misunderstood a concession made in the pleadings. The judge says that there was systemic failure. On Mr Stuart-Smith's submission, the judge should have concluded that responsibility for health and safety at Uxbridge remained with the management at Uxbridge. The decision made in Lubbe v Cape Plc  UKHL 41 by the House of Lords and the historic choice in Chandler v Cape plc  EWCA Civ 525 holds that, an immediate obligation might be owed in tort by a primary business to that of the person injured. Vedanta Resources PLC and another (Appellants) v Lungowe and others (Respondents) Judgment date. But there is a live issue as to the adequacy of the judge’s direction on this aspect. There is no issue about whether the system of work in this case was unsafe. Those circumstances include a situation where, as in the present case, (1) the businesses of the parent and subsidiary are in a relevant respect the same; (2) the parent has, or ought to have, superior knowledge on some relevant aspect of health and safety in the particular industry; (3) the subsidiary's system of work is unsafe as the parent company knew, or ought to have known; and (4) the parent knew or ought to have foreseen that the subsidiary or its employees would rely on its using that superior knowledge for the employees' protection. While working for Cape, Dr Smither carried out research into the link between asbestos and lung disease. Slowly but surely, Cape Products became a part of an integrated group of companies headed by Cape: The judge noted that Cape Products continued to be a separate company, and thus inferentially that the intention disclosed in. Cape Products carried on its own research and development of its products. The principal issue is whether Cape owed a direct duty of care to the employees of its subsidiary to advise on, or ensure, a safe system of work for them. As Dr Browne had explained in his evidence in the 1994 proceedings, a person removed from dust exposure had a better prognosis. However, in this context, the judge observed that Cape: In that passage, submits Mr Stuart-Smith, the judge wrongly reversed the burden of proof. Judgment (PDF) Press summary (PDF) Accessible versions. Finally, I must deal with Mr Stuart-Smith's submission that the judge had gone beyond Cape's concession in the pleadings (above, paragraph 34). To briefly recapture the facts of the case (see for further detail our It would not necessarily have to be a comprehensive policy of protecting employees from all risks. It was a centre of activities on asbestos production issues. _____ Submitted May 23, 2006 - Decided June 8, 2006. In my judgment, what Cape accepted was that Cape Products had breached its duty to its employee and that if it, Cape, had assumed a duty to Cape Products' employees to advise on, or to ensure, that they had a safe system of work, that system of work was in fact rendered an unsafe one in a way which triggered its liability by reason of the migration of asbestos dust. See Chandler v Cape  EWCA (Civ) 525. Products were for instance to be manufactured in accordance with its product specification. Nonetheless, events occurring after the relevant period in my judgment are relevant to confirm or explain the cogency of events before or during the relevant period. 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