Thompson v The Renwick Group Plc

Factual and Procedural Background

The Respondent, a man seriously incapacitated by diffuse pleural thickening likely caused by asbestos exposure during his employment, brought a claim seeking damages for injuries suffered in the course of his work. His former employers were insolvent and lacked liability insurance, prompting the Respondent to sue the Appellant, a holding company that was the parent of both employers at the relevant times.

The parties agreed to determine as a preliminary issue whether the parent holding company owed a direct duty of care to the Respondent. This issue was tried in the Manchester County Court before Judge Platts, who found in favour of the Respondent, holding that the parent company had assumed such a duty. The Appellant appealed this decision.

The Respondent’s employment history involved working at two subsidiary companies of the Appellant group, with significant exposure to raw asbestos through manual unloading and handling processes. The Appellant was a holding company owning subsidiaries engaged in haulage and warehousing businesses, among other activities. Evidence indicated some operational integration among the subsidiaries and involvement of personnel linked to the Appellant group, including a director appointed to one of the subsidiaries.

Legal Issues Presented

1. Whether a parent holding company can be held to owe a direct duty of care to employees of its subsidiary companies in respect of health and safety matters arising from the subsidiary's operations.
2. Whether the appointment by the parent company of an individual as director of its subsidiary with responsibility for health and safety matters gives rise to a duty of care owed by the parent company to the subsidiary’s employees.
3. Whether the totality of the evidence justifies imposing a duty of care on the parent company to protect the subsidiary’s employees from injury caused by asbestos exposure.

Arguments of the Parties

Appellant's Arguments

• The appointment of a director by the parent company to the subsidiary does not create any duty of care owed by the parent company to the subsidiary’s employees.
• The director acted pursuant to fiduciary duties owed to the subsidiary, not on behalf of the parent company.
• The evidence of operational integration and shared resources among subsidiaries does not demonstrate the parent company assumed control sufficient to impose a duty of care.
• The parent company was a holding company only and did not carry on any business involving asbestos handling or hazardous substances.
• The factors relied upon by the Respondent (e.g., shared paperwork, livery, coordinated operations) do not establish the proximity or assumption of responsibility required to impose a duty.

Respondent's Arguments

• The parent company assumed a duty of care through the appointment of a director responsible for health and safety at the subsidiary.
• The operational integration and shared management demonstrated sufficient proximity to justify imposing a duty of care on the parent company.
• The parent company’s involvement in the subsidiary’s day-to-day operations and control over health and safety matters supports the finding of a duty of care.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by addressing whether the parent company owed a duty of care to the Respondent by virtue of appointing a director to the subsidiary with health and safety responsibilities. It held that the director’s duties are owed to the subsidiary company alone, not to the parent holding company or its employees, citing established authorities confirming that nomination alone does not impose such duties.

The court then considered whether the totality of evidence demonstrated sufficient proximity and assumption of responsibility by the parent company to justify imposing a duty of care. Applying the threefold Caparo test, the court examined the degree of operational integration, control, and superior knowledge held by the parent company.

While the judge below found various indicia of integration such as shared paperwork, livery, coordination of loads, and consolidated depots, the appellate court found these factors insufficient to establish the parent company’s assumption of a duty. The parent was a holding company without direct involvement in asbestos handling or hazardous activities, lacking superior knowledge or control over health and safety in the relevant industry.

The court distinguished Chandler v Cape plc, emphasizing that the facts of that case involved a parent company with direct involvement, superior knowledge, and active management of health and safety, which were absent here. The limited evidence and the nature of the parent company’s role did not meet the threshold for imposing a direct duty of care.

The court concluded that the findings of the trial judge were unsupported by the evidence and that the legal basis for imposing a duty on the parent company was unsound.

Holding and Implications

The court ALLOWED THE APPEAL, overturning the trial judge’s decision that the parent holding company owed a direct duty of care to the Respondent.

The direct effect is that the Respondent’s claim against the parent company on the basis of a duty of care fails. No new precedent was established by this ruling; rather, it reaffirms the principle that a parent company’s nomination of directors to subsidiaries does not itself create duties owed to subsidiary employees absent clear assumption of responsibility and sufficient proximity under established legal tests.