When can a wronged party pursue a parent company for the actions of its subsidiary in tort? Alex Fox & Charlotte Hill provide an update
- It is a well-established principle that a company has its own legal personality that is separate from those of its shareholders, directors, parent and/or subsidiary companies.
- However, while a company will not be liable for the acts of its subsidiary by reason only of its shareholding, it may owe its own duty of care towards the employees of the subsidiaries.
- There has been a recent raft of English case law which explores whether a wronged party can pursue a parent company for the actions of its subsidiary in tort.
Since Saloman v Saloman & Co Limited [1896] UKHL 1, [1897] AC 22 it has been a well-established principle that a company has its own legal personality that is separate from those of its shareholders, directors, parent and/or subsidiary companies. The court is usually unwilling to look beyond that separate personality to hold the shareholders responsible for the company’s liability unless there are exceptional circumstances
