The prime minister said in a speech last Thursday, that the Conservatives have always believed in social responsibility. He spoke of ushering in a new age, in which morals would govern markets, and transparency and accountability would permeate every aspect of trade, business and commerce.
In this utopian new age, one might expect the willingness of the government to hold UK multinationals to account for their actions overseas to be a linchpin of this new era. Similarly, when these companies harm people and the environment, responsible capitalism should enable them to gain access to justice.
Not so. Indeed, quite the reverse. Changes to the Legal Aid, Sentencing and Punishment of Offenders Bill that are due to be debated this week will place justice beyond the reach of individuals and communities who are the victims of human rights abuses, and who wish to take on these goliath corporations. In essence, the government is proposing changes that will tip the civil litigation scales against victims and in favour of companies to the extent that they are being handed a carte blanche to operate with impunity around the world.
The government is proposing to take lawyers' success fees from claimants' damages, instead of from defendants and to make claimants' insurance premiums non-recoverable. This will have the effect of making cases financially unviable for both the law firm and - more importantly - the victim. The ability of the law firm to take on such cases will be significantly reduced, and the victims' compensation will be whittled away on legal expenses that should be borne by the company.
We are not talking about reams of cases, as there have been very few over the last decade - ten altogether - all of which were settled out of court. Under the proposed reforms, the structure of costs between the complainant and the defendant is changing in favour of the defendant, which will make it even less likely that complainants will find affordable legal representation to take on well-resourced multinational corporations. These moves will serve to tip the balance in favour of huge companies and away from the victims. This seems to run entirely contrary to what the Prime Minister is promising - fairness and a level playing field. This unfair bias, will come at no saving to the public purse. We are not talking about publically subsidised legal representation, but the ability to obtain costs from the defendant if the case is won. On every level it is hard to fathom how such a move can be justified, or cast as progressive.
Victims of harm committed by UK multinational corporations while operating overseas, are one group of complainants that have been completely disregarded in Lord Jackson's proposals for reform of civil litigation costs. We are talking about victims such as those of illegal toxic waste-dumping in Ivory Coast, who sought justice through the UK courts. The company concerned, Trafigura, eventually agreed to settle with the victims out of court. Or the 69,000 people living in Bodo, Nigeria, who would not have been able to pursue a case against Shell, who recently admitted full culpability for two massive oil spills in the region that have caused livelihoods to be devastated, food and water sources to be contaminated, and widespread health problems.
Before the case was pursued through the UK courts, Shell offered the Bodo community "£3,500 together with 50 bags of rice, 50 bags of beans and a few cartons of sugar, tomatoes and groundnut oil", a pitiful remedy in light of the company's profits of £11.5 billion in 2010. It is vitally important that the victims of such abuses are able to access justice and obtain redress. A failure to ensure this would not only deny these victims a remedy but would fuel a cycle of impunity, as the risk of civil litigation currently acts as a deterrent.
If the Prime Minister is serious about 'responsible capitalism', then it would be completely counter-intuitive to constrain access to justice in this way. Not only would it fly in the face of his stated aspirations, but it would create every encouragement for companies to abuse human rights and the environment in their overseas operations, safe in the knowledge that their victims will be unable to pursue legal action against them. This Parliamentary Bill has become the litmus test of the government's true intentions.
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