Any of our business? Human Rights and the UK private sector - Human Rights Joint Committee Contents


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.


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.


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:  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: 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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Prepared 16 December 2009