AAA & Ors v Unilever Plc & Anor

A parent company has no special tortious responsibility for persons affected by its subsidiary’s activities. A duty of care arises only where ordinary tort principles are satisfied.

Proximity may exist where the parent has taken over or jointly managed the relevant activity, or has given the subsidiary relevant advice about managing the particular risk. Group-wide governance, risk-management policies and reporting arrangements do not themselves establish proximity where the subsidiary retains local responsibility and receives no relevant advice from the parent.

Employees, former employees and residents of a Kenyan tea plantation claimed damages for murders, rapes, assaults and property damage committed by mobs during post-election violence. They alleged that the Kenyan operating company and its English parent owed duties to protect them.

The High Court dismissed the claims in [2017] EWHC 371 (QB), holding that the violence was not foreseeable and that imposing a duty on the parent would not be fair, just and reasonable. It nevertheless found arguable proximity between the parent and the claimants.

The claimants appealed. The parent challenged the proximity finding by respondent’s notice. The central issue determined was whether there was a good arguable claim that the parent was sufficiently proximate to the claimants to serve as an anchor defendant in England.

1. Appeal dismissed. The claimants had no good arguable claim that the parent company owed them a duty of care. There was therefore no anchor defendant through which the Kenyan subsidiary could be sued in England.

2. There is no special doctrine imposing tortious responsibility on a parent company for its subsidiary’s activities. Parent and subsidiary are separate legal persons. A parent owes a duty only where the ordinary principles governing a duty of care would impose one upon a third party in the same position. Chandler v Cape Plc provided helpful guidance but did not create a separate parent-company test.

3. Cases capable of establishing the necessary proximity will usually fall into two types: the parent has substantially taken over or jointly managed the subsidiary’s relevant activity; or the parent has given relevant advice about managing the particular risk. A parent’s greater capacity to intervene does not itself establish a duty.

4. The first type did not arise. The Kenyan subsidiary managed its own affairs. Its separate management structure tended against the inference that the parent had assumed responsibility for its operations.

5. The second type was also not arguable. Although the group maintained mandatory governance and crisis-management frameworks, the subsidiary devised its own local risk-management policy, trained its staff and managed the crisis. The parent neither dictated those arrangements nor supplied relevant advice about Kenyan political violence. General national risk information and group reporting arrangements did not establish proximity.

6. The court expressed no opinion on foreseeability, whether imposing duties would be fair, just and reasonable, the effect of the Kenyan Occupiers Liability Act, forum, limitation or the case-management cross-appeal. Any trial would have to occur in Kenya, whose courts were better placed to determine those matters.

1. Court of Appeal (Civil Division): In [2018] EWCA Civ 1532, the court unanimously dismissed the claimants’ appeal on the parent-company proximity ground advanced by respondent’s notice. It did not determine the remaining issues or cross-appeal.
2. High Court, Queen’s Bench Division: In [2017] EWHC 371 (QB), Elisabeth Laing J held that neither company arguably owed a duty of care. She found no foreseeability and held that a duty upon the parent would not be fair, just and reasonable, while finding arguable proximity and conditionally regarding England as the proper forum.