Lubbe v Cape Plc
Encyclopedia
Lubbe v Cape Plc [2000] UKHL 41 is a conflict of laws
case, which is also highly significant for the question of lifting the corporate veil in relation to tort victims. In this case it was alleged, and postulated by the House of Lords, that in principle it is possible to show that a parent company owes a direct duty of care in tort to anybody injured by a subsidiary company in a group.
for a South African subsidiary company of the UK parent company, Cape plc
. The South African subsidiary had no money left and Cape Plc had no assets in South Africa. His case was one of 3000 claims. He alleged that the parent, Cape Plc, owed a direct duty of care in tort to him as a worker in the company group. Cape Plc was applying to stay the actions on the basis of forum non conveniens
, submitting that they were an abuse of process on grounds that intention to launch a multi party action was not disclosed to the court. Mr Lubbe argued that the claims should not be stayed since, in South Africa, the legal aid
necessary to continue the claim had been withdrawn, no contingency fee arrangement was available and no other source of funding would be available. The Court of Appeal refused Mr Lubbe's arguments and continued the stay, and Mr Lubbe appealed to the House of Lords.
was the more appropriate forum for hearing the claim, it was highly likely that legal representation for the claimants would be unavailable. The expert evidence suggested a denial of justice would result, exacerbated by the lack of procedures in South Africa to accommodate multi-party actions. This meant that lifting the stay was appropriate and the action continued in the English courts.
Lord Bingham made the following remark about the tort issue,
On a side issue, however, matters of public interest and policy were not relevant to determining which forum was best, and only private interests would be taken into account.
Conflict of laws
Conflict of laws is a set of procedural rules that determines which legal system and which jurisdiction's applies to a given dispute...
case, which is also highly significant for the question of lifting the corporate veil in relation to tort victims. In this case it was alleged, and postulated by the House of Lords, that in principle it is possible to show that a parent company owes a direct duty of care in tort to anybody injured by a subsidiary company in a group.
Facts
Mr Lubbe was injured at work while manufacturing asbestosAsbestos
Asbestos is a set of six naturally occurring silicate minerals used commercially for their desirable physical properties. They all have in common their eponymous, asbestiform habit: long, thin fibrous crystals...
for a South African subsidiary company of the UK parent company, Cape plc
Cape plc
Cape plc is a United Kingdom energy services company based in Uxbridge, West London. It is a constituent of the FTSE 250 Index.- History :The company was founded in 1893 as the Cape Asbestos Company with the objective of mining asbestos in the Orange Free State and importing it into European...
. The South African subsidiary had no money left and Cape Plc had no assets in South Africa. His case was one of 3000 claims. He alleged that the parent, Cape Plc, owed a direct duty of care in tort to him as a worker in the company group. Cape Plc was applying to stay the actions on the basis of forum non conveniens
Forum non conveniens
Forum non conveniens is a common law legal doctrine whereby courts may refuse to take jurisdiction over matters where there is a more appropriate forum available to the parties...
, submitting that they were an abuse of process on grounds that intention to launch a multi party action was not disclosed to the court. Mr Lubbe argued that the claims should not be stayed since, in South Africa, the legal aid
Legal aid
Legal aid is the provision of assistance to people otherwise unable to afford legal representation and access to the court system. Legal aid is regarded as central in providing access to justice by ensuring equality before the law, the right to counsel and the right to a fair trial.A number of...
necessary to continue the claim had been withdrawn, no contingency fee arrangement was available and no other source of funding would be available. The Court of Appeal refused Mr Lubbe's arguments and continued the stay, and Mr Lubbe appealed to the House of Lords.
Judgment
The House of Lords held unanimously that although South AfricaSouth Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
was the more appropriate forum for hearing the claim, it was highly likely that legal representation for the claimants would be unavailable. The expert evidence suggested a denial of justice would result, exacerbated by the lack of procedures in South Africa to accommodate multi-party actions. This meant that lifting the stay was appropriate and the action continued in the English courts.
Lord Bingham made the following remark about the tort issue,
On a side issue, however, matters of public interest and policy were not relevant to determining which forum was best, and only private interests would be taken into account.
See also
- UK company law
- English tort lawEnglish tort lawEnglish tort law concerns civil wrongs, as distinguished from criminal wrongs, in the law of England and Wales. Some wrongs are the concern of the state, and so the police can enforce the law on the wrongdoers in court – in a criminal case...
- Conflict of lawsConflict of lawsConflict of laws is a set of procedural rules that determines which legal system and which jurisdiction's applies to a given dispute...
- Adams v Cape Industries plcAdams v Cape Industries plcAdams v Cape Industries plc [1990] Ch 433 is the leading UK company law case on separate legal personality and limited liability of shareholders...
- Donoghue v Stevenson