Part II: Parent Company Liability and the Idea of Statutory Due Diligence

Abstract

Recent case law in the UK courts has established the possibility for the parent companies of multi-national corporations to hold liability in tort negligence for harms caused by their foreign based subsidiaries. The UK’s approach – a general duty of care for cross-border torts – is noteworthy in that it has developed organically through the common law. One possible tension this duty raises, may be with established principles of company law, affirmed at common law. By comparison, European neighbours such as France, Switzerland and Germany, have addressed the same issue of corporate accountability by developing statutory regulatory regimes which utilize due diligence obligations reflective of the recent trend toward international accountability standards, such as the UN Guiding Principles for Business and Human Rights (UNGPs) of the late John Ruggie. This work serves as an in-depth investigation for scholars of tort law, company law, private international law, and human rights, who are interested in understanding this rapidly developing area of practice from an English perspective. This work is offered in two parts. This second part offers an overview of UK statutory and case law as it may relate to parent company liability. A critical analysis of recent case law, seeks to understand the characteristics of parent company liability, as developed by the Courts in securing fair remedy for corporate misfeasance. With reference to comparative regimes observed in the aforementioned neighbouring European countries, this work further considers what limitations the current law has, and what benefits could be realized through the introduction of reporting requirements. Parent Company, Corporate Groups, English Company Law, Human Rights Due Diligence, UNGPs, Okpabi, Vedanta, Mass Torts, Supply Chain Liability, Limited Liability