In recent years, English courts have clarified that UK-based companies can, in certain circumstances, be held liable for wrongdoing by their overseas subsidiaries or business partners. This trend is particularly pronounced in cases involving environmental, social, and governance (ESG) concerns and human rights abuses abroad. Key decisions, particularly since Vedanta Resources Plc v Lungowe [2019] UKSC 20, have affirmed that a UK parent company may owe a duty of care to people harmed by the operations of its foreign affiliates—even though those affiliates are separate legal entities. Crucially, this liability is based on common law negligence principles and does not depend on European Union jurisdictional rules, meaning that post-Brexit, claimants can still bring such cases in UK courts.

Parent Company Liability After Vedanta

The landmark Vedanta case in 2019 set the stage for holding parent companies to account. In Vedanta v Lungowe, Zambian villagers sued a UK-based mining company (Vedanta) for pollution caused by its Zambian subsidiary’s copper mine. The UK Supreme Court confirmed that a parent company’s liability for its subsidiary’s activities is not a new category of law—it follows established negligence principles. In other words, if a parent company has sufficiently close involvement in, or control over, the relevant operations, it can owe a duty of care to those harmed by those operations. In Vedanta, the evidence suggested that the parent had taken responsibility for environmental safety at the mine, making it “well arguable” that Vedanta owed a duty to the affected villagers. The Supreme Court allowed the claims to proceed in England.

Landmark Cases Illustrating Overseas Liability

Several high-profile cases since Vedanta have reinforced the potential for UK companies to be held accountable for operational failures abroad. Each case highlights how English courts approach these issues:

• Okpabi v Royal Dutch Shell (2021 UKSC) – Communities in Nigeria sued Shell’s UK parent over oil pollution. The Supreme Court overturned a lower court ruling and allowed the case to proceed. The Court emphasised that there is no “reliable limiting principle” preventing a parent company from owing a duty of care for a subsidiary’s actions simply because it issued group-wide policies. Control is a starting point; what matters is whether the parent took over or shared management of the relevant operations. The Court reaffirmed that parent company liability is assessed under ordinary negligence principles—there is no special legal rule.

• Municipio de Mariana v BHP (2022 EWCA) – Over 200,000 Brazilian claimants sought to sue mining giant BHP in England for a catastrophic dam collapse in Brazil. The Court of Appeal rejected an attempt to strike out the claims as an abuse of process, despite parallel proceedings in Brazil. It held that the sheer scale or complexity of a case does not make it “unmanageable” or pointless. The English court asserted jurisdiction, finding that the case was properly advanced and should not be stayed on forum non conveniens (appropriate forum) grounds.

• Limbu v Dyson (2024 EWCA) – A group of migrant workers from South Asia alleged forced labour and abuse in Malaysian factories supplying the British technology company Dyson. They sued Dyson entities in the UK. The Court of Appeal ruled that England was the appropriate forum for these claims, even though the mistreatment occurred in Malaysia. A key factor was the huge imbalance of power: impoverished, vulnerable workers versus a well-resourced multinational. The court emphasized the need to ensure “equality of arms”—i.e., a fair opportunity for the claimants to pursue justice. Status:

• Josiya v British American Tobacco (2021 EWHC) – Tobacco farmers in Malawi brought a group claim in England against BAT, alleging exploitative and dangerous working conditions on farms supplying tobacco to the company and claiming for negligence and/or unjust enrichment. The High Court refused to strike out the case, finding the claim was plausibly pleaded. Josiya is significant because it suggests that a company can be held to account for supply chain labour abuses if it was aware of, encouraged, or benefited from those abuses.

• Begum v Maran (UK) Ltd (2021 EWCA) – A Bangladeshi shipyard worker died while dismantling an oil tanker. His widow sued a UK-based agent company that had arranged the sale of the ship to the Bangladeshi yard for scrapping. The Court of Appeal held that it was arguable the UK company owed a duty of care to the deceased worker. The court noted that the claim could fit within the “creation of danger” principle in negligence law—essentially, if a company’s actions set in motion a dangerous chain of events (e.g., sending a hazardous ship to an unsafe facility), it can be responsible for resulting harm.

While none of the above cases have a final ruling as to liability, they collectively demonstrate an emerging readiness of English courts to hold parent companies and connected businesses to account for overseas operational failures. Each case turns on its specific facts, but the overarching theme is clear: a UK company that directs, benefits from, or fails to prevent wrongful conduct in its global operations may face legal consequences at home.

Practical Implications for Companies

For companies with international operations or supply chains, these legal developments carry important lessons and risks. Here are some key practical points:

• Group-Wide Risk Management: Ensure robust oversight of operations across the group. It’s not enough to have a high-level policy; you need active implementation and monitoring.

• Careful Communication: Be mindful of how you portray your oversight of subsidiaries and partners. Public reports, sustainability statements, or modern slavery disclosures often proclaim that the group maintains certain standards abroad. Such statements can later be used as evidence that the parent assumed responsibility.

• Due Diligence on Partners: When engaging overseas contractors, suppliers, or joint venture partners, conduct thorough due diligence on their ESG and safety practices.

• Local Solutions to Local Risks: Address risks at the source, such as assisting subsidiaries in mitigating environmental hazards.

• Legal and Insurance Preparations: Review insurance coverage for group-wide negligence or human rights claims and include cross-border litigation arising from operational failures in risk registers.

• Monitoring Legal Developments: Keep an eye on emerging cases and legislative changes to anticipate new duties or higher standards imposed on companies.

Conclusion

UK companies with global footprints must take ESG and human rights matters seriously—not just as a matter of ethics but as a matter of legal accountability. Cases like Vedanta, Okpabi, and Dyson have shown that distance and corporate structure are not sufficient shields against liability. A parent company that exercises control, benefits from, or contributes to wrongful conditions abroad can be held accountable in English courts under common law principles of negligence.

By proactively enforcing strong standards and responding swiftly to problems, companies can reduce the risk of harm and better position themselves in the face of potential litigation.

For further information or to discuss the issues raised within this case , please contact us to speak to a member of our Dispute Resolution Team.