About the author: Titiksha Mohanty is a DPhil candidate in Law at the University of Oxford and is a Graduate Research Resident at the Bonavero Institute of Human Rights. 

On 11 November 2021, the Bonavero Institute of Human Rights and Leigh Day collaborated to host a round table discussion and online book launch for ‘Human Rights Litigation against Multinationals in Practice’ on 11 November 2021. Chaired by Richard Meeran, [Partner and Head of International Department at Leigh Day], and Ekaterina Aristova, [Post-Doctoral Fellow at the Bonavero Institute of Human Rights], the discussants of the round table involved the contributors to the book across jurisdictions, along with Anita Ramasastry, [Professor of Law at the University of Washington and Vice-Chair of the UN Working Group on Business and Human Rights], who has written the foreword to the book. Edited by Richard Meeran, the book provides a thorough review of transnational human rights litigation commenced by victims of business-related human rights abuses from the Global South across Western jurisdictions. Meeran reflected that the idea behind the book was to offer a first-hand practitioners’ perspective on issues that impacted civil litigation against multinational corporations (MNCs) for human rights abuse. In many ways, it sought to go beyond a doctrinal analysis of judgements and instead steer the discussion towards the practical components of transnational civil litigation of such nature. The video recording of the launch is available here. This blog focuses on the insights and key points discussed by the experts.

The Role of Transnational Human Rights Litigation in Holding MNCs Accountable

The accountability of MNCs remains an issue of global concern. Could transnational litigation make businesses take their human rights responsibilities more seriously? Ramasastry noted that there was no precise answer. While civil claims, in particular, have been a powerful tool in the hands of victims of human rights abuse, the measure of the justice that has been delivered through civil litigation remains to be seen. Rae Lindsay, [Partner and Co-Head of Public International Law, ESG Risk and Business and Human Rights Practices at Clifford Chance, London], offered a differing perspective to the issue. Lindsay noted that the level of accountability expected from corporations would be contingent on how the business is structured, the forum where the claim is brought, and the litigation model pursued. To that end, while the nature of transnational litigation is such that it serves as a wake-up call for the parties involved in the human rights abuse, the prospects of establishing liability remain slim. However, civil litigation is not the only avenue of ensuring corporate accountability. Lindsay remarked that corporations are routinely in the process of implementation and compliance with the UN Guiding Principles on Business and Human Rights (UNGPs) and working within a state’s framework where business entities can be held to account.

The Choice of Litigation Route: Criminal versus Civil Claims

Another thematic point discussed at the roundtable was juxtaposing criminal litigation as an alternative to civil litigation. Ramasastry noted a need for complementary avenues, including non-judicial mechanisms that offered an alternative venue for claimants to seek relief for human rights abuses, such as criminal remedies. Robert McCorquodale, [Professor of International Law and Human Rights at the University of Nottingham; Barrister and Mediator at Brick Court Chambers in London and Founder of Inclusive Law], pointed out the parallel development of criminal law remedies in holding businesses accountable. For instance, in September 2021, France’s highest court, the Cour de cassation, approved the indictments of the French multinational cement company LafargeHolcim SA for complicity in crimes against humanity and financing of terrorism committed by the Islamic State of Iraq and Syria and other armed groups in Syria. In addition, senior Lafarge executives, including its former CEO, were also indicted on terror financing charges. This decision also comes soon after the June 2021 decision of the investigating judges to indict the four executives of French surveillance companies Amesys and Nexa Technologies for their complicity in torture over the sale of surveillance technology to governments in Libya and Egypt.

McCorquodale has also outlined the differences between criminal and civil litigation in the business and human rights field. Most of the successful jurisprudence of criminal litigation against MNCs has emerged from European civil law states. In contrast, the common law prosecutors have not garnered the same response. Moreover, within the criminal route of litigation, a prosecutor can force the production of documents from the defendant MNC in a way that it cannot be done for civil claims. On the negatives, however, the requisite threshold of proof in criminal litigation for establishing corporate criminal liability is also considerably higher than civil litigation. Finally, there is an inherent limitation to the extent to which a human rights violation can concurrently exist as a crime, to be tried solely for criminal liability. McCorquodale reflected that victims do not have the opportunity to receive individualised remedies in criminal litigation.

Jurisdictional Features in Transnational Human Rights Litigation

A recurring theme for the discussants was to reflect upon the jurisdiction’s features and innovations in transnational human rights litigation against MNCs. Speaking of the English experience, Meeran observed that in the mid-nineties, the court’s predominant question was that of piercing the corporate veil, that would allow a parent company domiciled in England to be held liable for the acts of its subsidiary in another jurisdiction. There was also a substantial resistance to the idea of viewing human rights cases from the perspective of tort claims through allegations of negligence against businesses. Nevertheless, a considerable amount of strategic thinking, risk taking and creativity, along with other features of the English legal system such as legal aid, gave the impetus for the field to grow into what it now represents. Daniel Leader, [Partner at Leigh Day], added that MNCs have engaged in concerted efforts to challenge parent company liability over the past four to five years but had met with spectacular backlash at the Supreme Court of England and Wales. In both Vedanta v Lungowe [2019] UKSC 20 and Okpabi v Shell [2021] UKSC 3, the Supreme Court expanded the scope of parent company liability to flawed group-wide policy frameworks and standards for which the parent company is responsible. Leader reflected that such a broadened scope of liability regime might also well be pushed to address issues of supply chain liability, especially when the relationship between the supplier and the purchaser are interpreted in light of the Vedanta analysis.

Channa Samkalden, [Partner at Prakken d’ Oliveira Human Rights Lawyers in the Netherlands], speaking of her experience in the Netherlands, reflected upon the impact that the developments in the English jurisprudence had on the Dutch courts. In many ways, the simultaneous and often parallel developments in the two jurisdictions could signal a methodological shift in how the Dutch courts approached similar issues. Nevertheless, the practical challenges of transnational human rights litigation in the Dutch courts remained sui generis to the Netherlands. Samkalden remarked that one of the most significant differences between litigation in a civil law jurisdiction and a common law jurisdiction is the absence of a pre-trial phase of discovery of documents. The fundamental principle is that the claimant must prove their case and is not automatically entitled to access the documents that may be considered relevant for the defendant MNC. By not allowing access to any internal documentation that could, in turn, establish the critical tenets of the ‘control and supervision’ test, the claimant is left in a vicious circle to prove their case. Although the Hague Court of Appeal in Milieudefensie v Royal Dutch Shell ordered the MNC to disclose the documents, Samkalden noted that the process was not as straightforward as it would have been in the common law jurisdictions.

Reflecting on the Canadian experience, Bruce Johnston, [Founding Partner at Trudel Johnston and Lespérance in Quebec], remarked that the Supreme Court of Canada’s judgement in Nevsun v Araya 2020 SCC 5 was a landmark decision that persuasively articulated the necessity of holding Canadian corporations in Canada for the overseas abuses. The conceptual impetus behind the Court’s decision remained that common law should evolve to deal with violations of customary international law that constitute a civil fault. Johnston also suggested that since the strong and persuasive language of Nevsun, the future of linking private law remedies for human rights violations remained a task for the lower courts to take up, especially in the form of establishing new torts based on breach of customary international law.

Paul Hoffman, [Partner at Schonbrun Seplow Harris Hoffman & Zeldes in the USA], speaking of the US experience, remarked that the future of transnational human rights litigation under the Alien Tort Statute remains limited in growth. However, he noted that there are other avenues of litigation, such as the Torture Victim Protection Act. An ongoing case in point is Doe v Chiquita Brands International, where claims were brought against individual corporate executives for their alleged complicity in financing torture, war crimes and other human rights abuses by making regular payments to the United Self-Defense Groups of Colombia, a brutal paramilitary organisation known for mass killings. In addition, Hoffman added that another strategy for litigation against MNCs is bringing tort claims based on foreign law against MNCs to state courts. Importantly, Hoffman also reflected a tremendous corporate accountability movement around the world and specifically within the USA that is only getting stronger. In many ways, the language of international human rights norms and the UNGPs will continue to inform tort litigation in the state courts in the USA.

Miriam Saage-Maaß, [Legal Director and Director of Business Human Rights Programme, European Center for Constitutional and Human Rights, Germany], commenting on the German experience, noted that Germany had evidenced only a few cases of corporate accountability. The low numbers were a direct result of the features of the German legal system. For instance, civil law jurisdiction is not favourable for tort litigation due to restrictive pre-trial discovery rules. Moreover, once the case is in the trial, the onus is on the claimants to substantiate all aspects of their claim, working within the limited documents expected from the defendants. However, one of the most pressing issues is the restricted cost regime in Germany. Since costs are governed by statutory law, the number of costs that can be recovered is limited and scarce, even if the claimant were to win the case.

Furthermore, the compensation paid to the claimants is restrictive and only based on material loss. Saage-Maaß observed that the only costs that can be recovered are the lawyers’ fees incurred. Extra-judicial costs are not recoverable, and there is no basis for contingency fee agreements. This not only makes transnational human rights litigation unfavourable for law firms, but it also makes it contingent upon securing external funding.

In describing the South African experience, Jason Brickhill, [Advocate, Johannesburg Bar and Honorary Research Associate, University of Cape Town, South Africa] noted the strengths of litigation environment, including institutional features, in South Africa that make it a favourable home state jurisdiction for business and human rights claims. One of the primary features is a strong, independent judiciary, a sophisticated legal profession capable of undertaking litigation of such nature and a remarkable public interest sector. Standing costs, elaborate compensation mechanisms, and a flexible test for causation also aid in creating a conducive environment for the claimant. However, even then, the most critical factor that bolsters such an environment is the South African Constitution. Brickhill reflects that having such an expansive, generous and far-reaching Constitution replete with a Bill of Rights that applies horizontally imposes obligations on private actors, including corporations. Moreover, it is a Constitution with a historical perspective and is conceptually concerned with social injustice and redistribution issues. In many ways, the legal culture in South Africa mirrors the fundamental tenets that underpin the Constitution and strive to provide accountability for historic injustice.

Zanele Mbuyisa, [Director of Mbuyisa Moleele Attorneys in South Africa], reflecting on the South African experience in litigating the lawsuit against Anglo American for its devastating lead poisoning in Kabwe, Zambia, noted that transnational litigation is a critical tool in the hands of the victims in ensuring that corporations are not merely paying lip service to human rights. By simply announcing their commitment to business and human rights, it becomes convenient for corporations to absolve themselves from acknowledging their role in the human rights violation and enables them to escape accountability. Mbuyisa also reflected that there is a political dimension to this as well; the extent of damage in Kabwe, its location in Zambia, in the Global South and the response of Anglo American to that damage is in stark contrast to what has been witnessed in Flint, Michigan, in the Global North.

Future of Transnational Human Rights Litigation against MNCs?

What, then, does the future of transnational litigation against MNCs look like? One of the recurrent themes of the discussion was that of the costs attached to the sheer volume of expenditure incurred in lawsuits against MNCs. Susan Dunn, [Founder of Harbour Litigation Funding in the UK], noted that the road ahead for litigation of this nature is critically tied to the availability of external funding. In turn, this was contingent upon numerous economic factors, including, for example, the paying ability of the corporation being sued; the potential universe of claimants; the jurisdiction that the case is brought in; and the legal merits of the case.

Conclusively, in answering for the UK, and especially in light of Brexit, Leader noted that it might not be entirely out of the picture that the UK re-joins the Lugano Convention. However, Leader reflected that things might not be as cynical, given the extent to which jurisprudence has developed on the issue of forum non conveniens. While, until thus far, the battle that was fought in the English courts was one of expanding the scope of parent company liability, the battleground will now move on to facing the jurisdictional battle and the forum non conveniens arguments. While it may take a little longer to do so, Leader reflected that claimants would eventually prevail.