[2] Cape plc had had actual knowledge of the subsidiary employees' working conditions, and the asbestos risk was obvious.

48 In the light of the contemporaneous and later documents discussed above there can be little doubt that the Defendant exercised control over some of the activities of Cape Products from the time that it came into existence and through the period during which the Claimant was one of its employees.

A glance at the minutes of the meetings of the directors of Cape Products in the period 1956 to 1962 shows that many decisions about its activities, some of them important, were taken without reference to the Defendant.

It is enough, in my judgment, if he can establish that the Defendant either controlled or took overall responsibility for the measures adopted by Cape Products to protect its employees against harm from asbestos exposure.

Equally, the fact that Cape Products was a separate legal entity from the Defendant cannot preclude the duty arising.

Mr Weir QC submits that if it is necessary to show that special or exceptional circumstances exist in the instant case that can be done.

The Defendant retained responsibility for ensuring that its own employees and those of its subsidiaries were not exposed to the risk of harm through exposure to asbestos.

76 No argument was advanced to me by Mr Feeny that if foreseeability and proximity were established nonetheless it was not fair, just and reasonable for a duty to exist.

By the late 1950s it was clear to the Defendant that exposure to asbestos brought with it very significant risk of very damaging and life threatening illness.

Arden LJ (with whom the other judges agreed) concluded that Cape plc had assumed responsibility to Mr Chandler and was answerable for the injury which he had suffered.

Although it appears that there is no reported case of a direct duty of care on the part of a parent company, Mr Weir cites the passage from the speech of Lord Bingham in Lubbe v Cape Plc [2000] 1 WLR 1545.

However, at page 1555 Lord Bingham expressly contemplated that it might involve as in this case a detailed examination of the relationship between the parties based on the surviving documentary material.... [...] 62.

This falls within the second and third parts of the three-part Caparo test for determining whether there is a duty of care, namely proximity and the further requirement that it be fair, just and reasonable to impose liability.

As Lord Oliver pointed out in Caparo: "'Proximity' is, no doubt a convenient expression so long as it is realised that it is no more than a label which embraces not a definable concept but merely a description of circumstances in which, pragmatically, the courts conclude that a duty of care exists."

As Lord Goff pointed out in Smith v Littlewoods Ltd [1987] AC 241 at 270, there is in general no duty to prevent third parties causing damage to another.

But Lord Goff recognised that there were exceptions to this principle, for example where there was "a relationship between the parties which gives rise to an imposition or assumption of responsibility" on the part of the defendant (page 272D).

The court does not have to find that the relevant party has voluntarily assumed responsibility (see also on this point Customs and Excise Commissioners v Barclays Bank [2007] 1 AC 181, cited by Mr Weir).

An assumption of a duty of care has also been found to exist as between an independent contractor and employees of the employer: see, for example, Gray v Fire Alarm Fabrication Services Ltd [2007] ICR 247; Clay v AJ Crump Ltd [1964] 1 QB 533.

Likewise, it has been held on two occasions that it is arguable that a parent company may owe a duty of care to employees of subsidiaries: see Connelly v Rio Tino Zinc Corporation and Ngcobo v Thor Chemicals Holdings Ltd, January 1996, per Maurice Kay J, unreported.

There is nothing in either judgment or the general law to support the submission advanced by Mr Stuart-Smith that the duty of care can only exist in these cases if the parent company has absolute control of the subsidiary.

The parent company is not likely to accept responsibility towards its subsidiary's employees in all respects but only for example in relation to what might be called high level advice or strategy.

In summary, this case demonstrates that in appropriate circumstances the law may impose on a parent company responsibility for the health and safety of its subsidiary's employees.

The court may find that element (4) is established where the evidence shows that the parent has a practice of intervening in the trading operations of the subsidiary, for example production and funding issues.The decision is significant because it represents the first time that an injured employee of a subsidiary company has established that his employer's parent company owed him a duty of care.