Court of Appeal rule in favour of man diagnosed with asbestosis… A recent judgement by the Court of Appeal could have significant consequences for British businesses with subsidiaries. The Court ruled in favour of a man who was suffering from an asbestos-related illness who was seeking damages against the parent company of his former employer.
The Court of Appeal decision is significant because it upholds a judgement made in April 2011 in the High Court. Companies based in the UK with domestic subsidiaries as well as multinational companies based in the UK with subsidiaries in overseas countries could now be made liable if their subsidiary company is found to be responsible for causing an asbestos-related illness in employees.
The case that the Court of Appeal ruled on centred around a man who worked for a building firm in the UK between 1959 and 1961. During his term of employment with the firm he freq uently came into contact with asbestos. He was subsequently diagnosed with asbestosis in 2007 but discovered he couldn’t pursue a claim against the building firm as they had a inserted an asbestosis exclusion clause in their insurance policy. So the man’s lawyers decided to go after the parent company instead.
The Appeal Court judges explained their ruling:
“In summary, this case demonstrates that in appropriate circumstances the law may impose on a parent company responsibility for the health and safety of its subsidiary’s employees.
“Those circumstances include a situation where, as in the present case, the businesses of the parent and subsidiary are in a relevant respect the same; the parent has, or ought to have, superior knowledge on some relevant aspect of health and safety in the particular industry; the subsidiary’s system of work is unsafe as the parent company knew, or ought to have known; and 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.”
The senior solicitor who represented the man with asbestosis also commented:
“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.
“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. This is of particular relevance in asbestos-disease cases, as many sufferers face insurmountable challenges in identifying and locating insurers for their former employers.”
Businesses that lack an asbestos awareness policy are strongly advised to examine the risks associated with not taking every possible measure to deal with the asbestos threat.