10 REMEDY: THE RIGHT TO A REMEDY
The problem
288. The final strand of Professor Ruggie's framework
recognises that where individual rights are breached, individual
victims are entitled to an effective remedy. Many of our witnesses
stressed that it is often extremely difficult for alleged victims
of human rights abuses in which UK companies are alleged to be
complicit to secure a remedy either in the host state or in the
UK. Richard Meeran of Leigh Day Solicitors told us that it was
"invariably impossible" to bring many claims against
companies locally. He explained that many claimants who seek
a remedy in the UK will already have tried unsuccessfully to do
so overseas.[368]
A number of reasons are highlighted in the evidence:
- An inability to access justice locally due to
poverty, inadequate legal protection or corruption;[369]
- Substantive and procedural barriers in civil
and criminal law that make it difficult to bring cases against
UK companies in the UK (see below). These include:
- funding difficulties;
- complex corporate structures, involving distinct
corporate legal personalities of parent companies and subsidiaries,
protected by the "corporate veil" created by domestic
company law;
- legal and evidential difficulties in connecting
behaviour of UK companies to subsidiaries or those within their
'sphere of influence' in third countries;
- lack of awareness on the part of alleged victims;
- unduly restrictive domestic rules on bringing
representative or group actions; and
- difficulties with limitation periods in relation
to group claims.[370]
289. The International Commission of Jurists and
JUSTICE (ICJ/JUSTICE) told us that these problems may exist in
respect of claims against corporate bodies anywhere, but that
the problems were exacerbated where victims did not have access
to justice in their own country due to reasons ranging from "instability
of the system, lack of solid institutions to the lack of independence
of the judiciary, lack of enforcement of decisions in practice
or insecurity for the plaintiffs and their families".[371]
290. Richard Meeran accepted that while redress in
the country where any alleged abuse took place would be preferable,
in most of the cases he had been involved in, this had proved
impossible. The cases which he had litigated in the civil courts
in England and Wales had posed difficulties in bringing a case
against a parent company. This was a very expensive exercise.
The claimants were often faced by corporate lawyers with substantial
resources to make the litigation more difficult. Running these
cases on conditional fee agreements was a substantial burden for
any firm willing to take a case. The inability to bring a class
action in the UK often created limitation difficulties for individual
members of a group, who may be awaiting the outcome of an initial
case. Each case would need to be separately lodged in order to
avoid the expiry of limitation. He recommended Australia as providing
an example of a class action system which could work, by allowing
individuals to bring a class action on a representative basis,
with an opt-out for those not wishing to be treated as part of
the "class".[372]
291. The UK Civil Justice Council has recently published
recommendations to the Government on group litigation. After
over two years of investigation, the Council made a number of
recommendations on collective and representative litigation, including
recommending a change to allow an opt-out option for group litigation
where it would be in the "interests of justice". The
Council recommended that the court should maintain discretion
over opt-out cases as "gate-keeper" for the litigation,
to prevent abuse of the system.[373]
The Government has rejected a number of the recommendations
made by the Civil Justice Council, but accepts that representative
actions may be appropriate for certain types of litigation.
The Government now intends to take a "sector-by-sector"
approach to collective action. It plans to produce a framework
under which individual departments may determine whether collective
action would be appropriate.[374]
292. Lord Justice Jackson is currently undertaking
a review of civil litigation costs in England and Wales (the Jackson
Review). This will consider the availability of funding for civil
litigation in England and Wales, including for group litigation,
and will consider the operation of conditional fee arrangements
and the no-costs rule. The final conclusions of the Jackson Review
are expected in late 2009.[375]
293. Many of the substantive and procedural barriers
to litigation against businesses in the UK are generic problems
with the domestic civil legal system, which are exacerbated in
these cases because they generally involve multiple claimants
who are far away and from whom it is difficult to take instructions,
a complex series of facts and an uncertain legal background.
These problems are not unique to the United Kingdom. Recommending
a change would involve trailblazing in order to make it simpler
for overseas claimants to pursue a remedy in the UK. We are not
persuaded that we have enough evidence to reach a conclusion on
whether changes to the law would be appropriate.
294. Recent recommendations of the UK Civil Justice
Council on opt-out group litigation would meet at least some of
the concerns raised about the current complexity of pursuing litigation
in the courts in England and Wales. We did not have the opportunity
to consider with witnesses the Government's response to these
recommendations, which rejects the proposal for a generic approach
to opt-out actions, because these were published after the close
of our inquiry. The Government intends to examine representative
actions on a case-by-case basis and to develop a framework for
this purpose. We recommend that the Ministry of Justice considers
the evidence provided to this inquiry about barriers to litigation
against UK companies, when deciding which types of action may
be suitable for representative action.
295. We recommend that, in its response to the
Jackson Review of Civil Litigation Costs, the Government consider
the evidence we received that current costs rules and funding
limitations undermine the ability to seek redress of alleged victims
of breaches of human rights standards as a result of actions or
omissions by UK companies.
296. Very few alternative solutions were suggested
in the evidence we received. We consider two potential solutions,
below.
EXTRATERRITORIAL JURISDICTION: THE
ALIEN TORTS CLAIMS ACT MODEL
297. A number of witnesses highlighted the operation
of the US Alien Torts Statute or the Alien Torts Claims Act (ATCA)
as an example of a mechanism which provided a potential source
of action for victims of alleged human rights abuses in host states.
298. Earth Rights International (ERI) told us that
the ATCA is not without similar procedural and substantive barriers
and reiterated that "to date, not a single suit has resulted
in a jury verdict against a corporate defendant on human rights
claims". However, they told us that the existence of the
statute and the litigation surrounding it has led to valuable
settlements in favour of individual victims. US courts had asserted
the authority to hold corporations liable for their direct participation
or complicity in a number of fundamental human rights abuses such
as torture or forced labour. The litigation has allowed victims
to tell their story and to confront the businesses which they
allege have caused them harm. ERI argued that the potential financial
and reputational cost to companies of ATCA litigation has had
a significant and positive impact on many companies, who have
introduced improved mechanisms for due diligence on human rights
in order to remedy potential human rights problems before they
lead to US judicial intervention.[376]
ERI acknowledged that an ATCA model would be difficult to operate
within the existing civil justice system in England and Wales.
They outlined many of the same substantive and procedural difficulties
highlighted by the UK lawyers.[377]
We met with a number of attorneys during our visit to the US
who broadly confirmed these arguments about the impact of the
ATCA.
299. For reasons which we explained above, in Chapter
7, the Government, businesses and CBI caution against any form
of extended extraterritorial jurisdiction for UK courts.[378]
300. The high-profile operation of the Alien Torts
Claims Act and the ensuing corporate fear of US litigation have
helped to drive forward the debate on business and human rights.
While the creation of a similar cause of action in the UK is
superficially attractive, we consider that ATCA style cases would
be beset by many of the same substantive and procedural difficulties
outlined above. We were not persuaded at this stage of the
debate that our inquiry should focus on new judicial remedies.
In our view, the highest priority is for the Government to make
clear to UK business the human rights standards which businesses
should meet to avoid human rights abuses arising.
A UK COMMISSION FOR BUSINESS, HUMAN
RIGHTS AND THE ENVIRONMENT
301. The Corporate Responsibility Coalition (CORE)
working together with the London School of Economics, has recommended
the establishment of a UK Commission for Business, Human Rights
and the Environment, "to ensure greater coherence and effectiveness
of government initiatives to improve the conduct of UK companies
operating abroad". It recommends that the Commission should
have a number of powers, including coordination, capacity building
and policy guidance. It would also operate as a dispute resolution
body with a mandate to receive, investigate and settle complaints
against UK parent companies.[379]
The proposal had the support of a significant number of other
witnesses to the inquiry.
302. Peter Frankental, of Amnesty International,
explained that the existence of such a Commission would not preclude
the existing UK NHRIs playing an important role on business and
human rights issues. The Institute for Employment Rights expressed
scepticism about whether a Commission could work without binding
legal standards for business.[380]
Business in the Community expressed similar concerns about introducing
a body which applied standards only to UK businesses, as it would
endanger the competitiveness of UK companies. It argued that
a global or European solution would be more appropriate:
BITC agrees that accountability for serious human
rights abuses overseas needs to be increased. However, BITC considers
that research is needed into the economic impact of limiting such
a body to UK companies and the potential benefits for business
and society. A European or global body would ensure a level playing
field was maintained and would remove the risk of divestment from
the UK.[381]
303. The CBI told us that it was unable to support
this proposal because it was concerned about an extraterritorial
reach where the body would "judge standards of behaviour
in other jurisdictions". It was also concerned that the
activities of the Commission would be counterproductive, would
"drive the wrong-doer away from any influence that good practice
UK companies can seek to deploy" and could undermine the
further development of the OECD Guidelines and the NCP process.[382]
304. In oral evidence, the Minister for Human Rights,
Michael Wills MP, told us that the Government could not support
the proposal either. In a supplementary submission, the Government
explained that it thought the EHRC could become more active in
its work in the private sector and any new body was unnecessary:
The Government is confident that there exists
in the UK the correct framework to protect the rights of individuals,
and therefore does not consider that the creation of any additional
bodies is necessary.[383]
305. We are sympathetic to the argument that there
should be a Commission for Business, Human Rights and the Environment.
We have already identified gaps in the current approach of the
Government - - including providing guidance and promoting best
practice - which are activities which it is proposed that the
Commission could undertake. Without a clear Government strategy
on business and human rights, or any clear legal framework or
defined boundaries for the responsibility of business to respect
human rights, we are concerned that such a Commission would have
an impossible task. However, for the reasons outlined in the
rest of this Report, we do not agree with the Government that
the existing UK framework currently provides adequate protection
for the rights of individuals against the potential impact of
activities of UK companies. We recommend that the Government
works with NGOs, business and business organisations to explore
the proposal for a UK Commission for Business, Human Rights and
the Environment; in order to consider whether some of the tasks
which it might adopt can be performed by Government, the UK NCP
or the existing NHRIs.
306. ICJ and JUSTICE told us that the need to provide
an effective remedy is "one of the central challenges raised
by the issue of business and human rights". They called
on the UK to give serious consideration to improve the legal framework
relating to claims in and accessibility of UK courts. It also
recommended that the UK look to the international level and "new
bodies and new legal mechanisms" to fill existing gaps.[384]
This echoes recent calls by Professor Manfred Nowak, the UN Special
Rapporteur on Torture, for the creation of a UN World Court on
Human Rights, which would go beyond traditional boundaries and
notions of state responsibility and would offer remedies based
on the breach of individual rights by states, inter-governmental
organisations and transnational corporations. Professor Nowak
and the members of the Eminent Persons panel who recommended the
goal of a World Court, recognise that this goal is unlikely to
be achieved within the next decade.[385]
307. We agree that securing a remedy for individuals
whose rights are breached is one of the central challenges in
the business and human rights debate. In our view, this is also
likely to prove the most difficult part of Professor Ruggie's
work on which to find a consensus. Witnesses agreed that an international
solution would be unlikely in the short-term. We recommend that
the UK Government should help develop an international consensus
and consider options in the UK for enhancing access to a remedy.
In the meantime, the OECD should be encouraged to consider how
the OECD Guidelines and the National Contact Point system can
be strengthened to give greater specificity on the responsibility
of business to respect human rights, greater independence from
Government, and the capacity for individuals to secure an effective
remedy.
368 Q 67 Back
369
Ev 144, Ev 301, Back
370
Ev 143, Ev 144, Ev 294-296 Back
371
Ev 301 Back
372
QQ67 - 71 Back
373
Civil Justice Council, 'Improving Access to Justice through Collective
Actions', December 2008. Back
374
Ministry of Justice, Government Response to the Civil Justice
Council's Report: 'Improving Access to Justice through Collective
Actions', July 2009, paras 51 - 54. Back
375
Review of Civil Litigation Costs, Review of Civil Litigation Costs
Preliminary Report, May 2009.For further information see: http://www.judiciary.gov.uk/about_judiciary/cost-review/preliminary-report.htm
Back
376
Ev 202 Back
377
Ev 202 Back
378
Ev 319 Back
379
Ev 170 Back
380
Q117 Back
381
Ev 306 Back
382
Ev 321 Back
383
Ev 101 Back
384
Ev 301 Back
385
See, Panel of Eminent Persons, Protecting Dignity: An Agenda for
Human Rights, December 2008.For further information, see: http://www.udhr60.ch/agenda.html.See
also Manfred Nowak and Julia Kazma, A World Court of Human Rights,
June 2009; Dr Martin Scheinin, Towards a World Court of Human
Rights, June 2009.Dr Scheinin has said "Multinational corporations,
international organisations [as well as] armed groups and terrorists
now have powers to negate or destruct human rights…we need
a formal procedure in respect of them."Commonwealth Secretariat
Press Release We need a World Court of Human Rights - UN Expert
tells Commonwealth, 3 June 2009. Back
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