One of the most vexed issues that is vigorously contested in a mesothelioma compensation hearing concerns who is ultimately responsible for a mesothelioma sufferer’s condition, especially in cases when an employer’s company structure is not straightforward.
While the work of an asbestosis lawyer primarily involves tracing an original employer and / or their insurers, in many instances, companies are created as subsidiaries of a parent company – a legal set up, which can often prove a challenge to an acceptance of liability.
However, a recent Court of Appeal has ruled in favour of a 71 year old former construction industry employee who contracted asbestosis disease as a consequence of working at a parent company’s UK subsidiary between 1959 and 1961. The peak period of asbestos use in UK construction, manufacture, engineering and shipbuilding occurred from the 1940s to the 1970s and through to the mid-1980s when the most dangerous types of asbestos were finally banned.
The case involved the pursuance of an asbestosis claim, which was denied on the grounds of an ‘asbestosis exclusion’ clause contained in the original insurance policy of the subsidiary company employer, and a claim against the parent company was made instead.
A ruling at the High Court 12 months previously, which stated that the parent company was liable for the activities of its subsidiary, was upheld at the appeal hearing. The decision was based not on a presumption that by “reason only a company is the parent company of another company” but, instead, found that “ what the parent company did amounted to taking on a direct duty to the subsidiary’s employees”.
The case had revealed that in this particular instance, both parent and subsidiary companies shared the same board directors and evidence was provided to show that the parent company was directly involved in, and knew about, the health and safety effects from asbestos exposure on workers at their subsidiary company. Furthermore, the parent company employed group medical and safety officers, who oversaw health and safety at its subsidiaries, and also maintained close involvement with governmental organisations concerned with asbestos safety.
The judge concluded his remarks by saying that, “… the 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… as in the present case, the businesses of the parent and subsidiary are in a relevant respect, the same…”
The judgement is likely to have a future influence on those cases where former employers suffering industrial injury or disease, such as mesothelioma or asbestosis, but have been denied justice simply because of the way a company has been structured in a bid to legally protect themselves against litigation.
According to the Health and Safety Executive (HSE) there are an estimated 4,000 deaths each year as a result of past exposure to asbestos and the number of asbestosis claim cases had more than doubled in three years to over 1,160 by 2010.