The following Environment guidance note provides comprehensive and up to date legal information covering:
A parent company is not responsible for the acts or omissions of its subsidiary simply by virtue of its status as parent. Each subsidiary has separate corporate responsibility and any intention to pierce the corporate veil must be clearly and unequivocally expressed in the statute.
However, a parent company can be fixed with liability if its knowledge of, and ability to, intervene in the affairs of the subsidiary are sufficient to create a duty of care towards any person suffering damage or injury due to the subsidiary's acts or omissions. Crucially, if a parent company has 'superior knowledge' about the nature and management of particular risks, and is aware of a 'systemic failure' on the part of its subsidiary, then the court may be willing to find a duty of care. It is more likely to do so if the subsidiary:
has been dissolved
has limited financial strength, and/or
does not have insurance cover in relation to the relevant type of damage or injury
Such circumstances may arise where the parent company:
has taken direct responsibility for devising a health and safety policy the adequacy of which is the subject of the claim
controls the operations which give rise to the claim, or
promotes in its annual reports that it is responsible for the activities of a subsidiary’s operations
However issuing of mandatory policies,
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234