"Parent Company Liability for Human Rights Abuses in the UK? We Need Clarity", 24 Jul 2018

The liability of parent companies for the extraterritorial human rights abuses committed by their subsidiaries has increasingly become a critical topic for both corporate and human rights litigators.  The absence of...laws comprehensively addressing this issue created a space for...arguments for and against holding parent companies...accountable for the human rights abuses committed by their subsidiaries in host States.  It became increasingly clear that States need to create a legal space to regulate the liability of multinational companies for human rights abuses.  Some States have taken substantive steps in this direction...

In the UK, the Court of Appeal and the High Court have produced substantial jurisprudence on this point....This jurisprudence is based on an application of the...concept of duty of care...that parent companies owe directly towards the victims on the basis of the control they exercise over their subsidiaries...[T]he absence of any clear law...has resulted in an inconsistent jurisprudence.  One of the main issues...is what exactly the relationship between the parent company and the victim needs to be for the former to owe a duty of care towards the latter.  Another critical question is what level of control the parent company should exercise over its subsidiary...[W]hile in Lungowe v Vedanta the Court of Appeal found enough evidence to assert jurisdiction over the case, in Okpabi v Royal Dutch Shell Plc it did not...[T]he Supreme Court has not yet had the chance to decide any significant business and human rights cases...