Adams v Cape Industries plc

Facts

Claimants who had won judgments in Texas for asbestos injuries tried to enforce them in England against Cape, the English parent of a group with a US marketing subsidiary.

Issue

Was Cape present in the United States through its subsidiary, so the judgments could be enforced?

Held

No. The Court of Appeal refused to treat the group as a single economic unit, found no agency, and held the structure was not a mere facade. Using a group so that future liabilities fall on a subsidiary is legitimate.

Principle

The court will not lift the veil merely because justice seems to require it or because companies form a group.

Why it matters

It is the leading authority against the single economic unit argument.

For study only. By lanbuk.com. Always check current sources and consult a qualified professional.