International litigation. When home rule is right
17 October 1995
11 October 2013
7 January 2014
28 March 2014
10 June 2013
31 March 2014
THE Accountability of UK-based multi-national companies to the UK courts for damage caused by subsidiaries in developing countries is both necessary and fair.
It is necessary because developing countries do not often have the legal machinery nor the political will to prosecute multi-nationals in civil or criminal law. Furthermore, funding in the form of legal aid or a contingency system is rarely available for individuals to pursue claims there. In practice, there is often no means of obtaining justice in the country where the damage arose.
Home accountability is fair because the obstacles to justice are not present or are present to a far lesser extent in the UK and also because the company's control centre is based in the UK and profits will have been channelled back to it.
Foreign plaintiffs' attempts to litigate here and in the US have invariably been met with applications to stay proceedings on the grounds of forum non conveniens. The courts have become increasingly tough on plaintiffs who they think are 'forum shopping' for higher damages.
However, it is a quest for justice rather than higher damages that motivates these plaintiffs to litigate in the defendants' domicile. Nowhere is this more obvious than in claims arising from defective processes, the most notorious of which was the claim by the Bhopal victims against Union Carbide.
The US court declined jurisdiction and the subsequent action in India has resulted in virtually no compensation for the individual victims.
In English law, forum applications are determined by reference to criteria laid down in Spiliada Maritime Corporation v Cansulex (1985). These include domicile of the parties, and the location of documents and witnesses.
The criteria are designed to establish the appropriate "natural forum" - the one with the "most real and substantial connection" to the claim.
Underlying this exercise is supposed to be the principle that a stay should not be granted unless it is in the interests of justice.
In a recent action on behalf of injured South African mercury workers, we managed to persuade the court, at first instance, that the UK was the natural forum.
However, in an action brought against RTZ by a Scottish throat cancer victim formerly employed at a Namibian Uranium mine (Connelly v RTZ Corporation and anor: ILR 29/9/95) Namibia was held to be the natural forum.
In the Court of Appeal we argued that because the plaintiff had legal aid in England but no means of funding an action in Namibia, it would be unjust to stay the action.
The appeal was rejected by virtue of the provisions of Section 31 (1) (b) of the Legal Aid Act 1988. The court construed the section as precluding it from taking account of the legal aid position. The consequence for the plaintiff is that he has effectively been denied a hearing anywhere in the world.
While the decision is perhaps unsurprising from a policy perspective, it would be interesting to see how it squares with the "access to justice" provision in Article 6 of the European Human Rights Convention.
In the present context, this fixation with the natural forum is artificial and naive.
The defendants' objective in seeking a stay is not to transfer a claim to a more convenient forum but rather to prevent a claim being pursued altogether. Research has demonstrated this is the invariable consequence of a stay being granted.
What flows from this denial of justice is a lack of accountability on the part of the company. This is especially serious where subsidiaries are operating free from stringent local regulations or in free trade zones.
Actions involving parties domiciled in states contracted to the Brussels Convention 1968 must be brought in the country of the defendant's domicile. Forum non conveniens has no relevance.
The House of Lords recently referred the European Court to the issue of whether the same rule applied to situations where one party was domiciled in a contracting state and the other was not. Unfortunately the case in which the issue arose settled and the issue was never addressed.
The Brussels Convention rule is based on reasons of convenience. I would argue that for reasons of justice the same rule ought to apply to other cases.