Charities with subsidiaries should beware excessive control leading to unexpected liabilities, write David Browne and Chris Knight in this Winter’s Charities Appeals Supplement for New Law Journal.
Subsidiaries are usually used by charities to ring-fence liability, undertake non-primary purpose trading or for strategic reasons. Control for the parent charity is important to ensure group consistency and manage risk. However a Court of Appeal case this year has shown a parent can be liable for the faults of its subsidiary if it assumes responsibility for the circumstances which lead to the liability. The case concerned health and safety of employees but it could also apply more widely. David and Chris consider a number of points of particular relevance for charities with subsidiaries and you can read their article here.