Parent company not liable for failings of locally-managed subsidiary

In a case with truly atrocious facts, the Court of Appeal has found that Unilever plc did not owe a duty of care to the staff of a Kenyan subsidiary. The main reason was that the subsidiary was managed locally, with no reference to the parent company on key matters. 

The subsidiary ran a tea plantation which was invaded by rioters following a presidential election. Rioters murdered, raped and assaulted staff and their families who lived on site. The case was brought on the basis that there was a duty of care failure because plans for dealing with such an incident were inadequate. However, the crisis policies were set up by the subsidiary with no advice sought from the parent. As such there was a lack of the proximity necessary to establish a duty of care from the parent company to the staff (there must be a relationship of proximity between the parties, foreseeability of harm and it must be just, fair and reasonable to impose a duty of care in tort, known as the Caparo factors). 

This is the latest in a flurry of tort cases that have considered parent company duty of care in recent years. See here for a discussion of Okpabi v Royal Dutch Shell, the leading case (available to subscribers on the Linklaters Knowledge Portal).