Subsidiary Conduct: When to Blame the Parent?   

The question of when a parent company will be held liable for the actions of its subsidiary was considered recently by the UK Court of Appeal1. The court examined a key consideration, namely the extent to which the subsidiary was implementing group policies set by the parent and, if it was, whether that created a potential liability of the parent to a third party that was injured by the subsidiary. The court concluded that a requirement on the subsidiary to implement group policies would not, in itself, be sufficient to establish a duty of care between the parent and those affected by the subsidiary’s actions. This briefing looks at some of the issues considered.

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