Parent Company Liability - When does parental control become too much?
UK-headquartered multinational companies face the increased risk that non-UK claimants may be able to bring claims against them in the English courts for the overseas acts of their non-UK subsidiaries. There is an increasing trend for these claims, particularly in relation to environmental and human rights issues.
This article was originally published by the Board Leadership journal who agreed to it being made available on elexica.
The English Supreme Court recently gave judgment in Vedanta Resources PLC and another v Lungowe and others  UKSC 20. The case confirmed that a duty of care can exist between a parent company and third parties affected by the operations of its subsidiaries. The case adds pressure to multinationals to manage risks effectively across their corporate groups and supply chains. A failure to mitigate these risks could create legal liability for multinational parent companies, result in litigation and cause significant harm to the reputation and brand of the wider corporate group.
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