Dear Colleagues,

Two interesting decisions, one from England, one from Canada. In the English High Court there is Kalma v African Minerals Ltd just before Christmas. https://www.bailii.org/ew/cases/EWHC/QB/2018/3506.html

 I believe this is the first of the numerous transnational tort claims against UK parent companies, brought by solicitors Leigh Day since the 1990s, actually to go to trial. The claim arose out of protests against the creation of a mine in Sierra Leone and their violent suppression by the local police. No less than seven possible grounds of liability on the part of the UK parent and its local subsidiaries were canvassed. Vicarious liability for acts of employees – fine in theory but no tortious acts committed by the employees. Vicarious liability for acts of a third party, the Sierra Leone police. No dice. No joint liability for participation in a common design or for procuring a tort by the police. Similarly no duty of care in relation to acts of the police, no liability for malicious prosecution by the police, no potential liability for extra hazardous work undertaken by independent contractors – police not independent contractors, work not inherently hazardous.

 The claim has some similarities with the Rana Plaza suit in Das v George Weston where an attempt was made to establish a duty of care on the part of a Canadian garment retailer in respect of the conduct of its sub-supplier based in the Rana Plaza building, on the basis of its CSR policies in its contract with its supplier which led to inspection of the sub-supplier’s workshop sometime prior to the collapse of Rana Plaza. Two days after the Kalma decision the Court of Appeal of Ontario upheld the first instance decision that as Bangladesh law applied most of the claims were out of time and for those that weren’t there was no possible duty of care owed by the Canadian retailer or its surveyor. The remit of the survey was compliance with the CSR policy and did not extend to looking at the condition of the building, so no duty based on an assumption of responsibility. Nor could it be argued that the Canadian retailer controlled the sub-sub supplier so no possibility of a Dorset Yacht liability.https://www.canlii.org/en/on/onca/doc/2018/2018onca1053/2018onca1053.html

 

Two hearings before the Supreme Court, in Canada and in the UK in January, should produce interesting further clarification of the potential liability of home state parent companies for the acts of their overseas subsidiaries. In Canada there is the appeal in Nevsun v Araya on two jurisdictional issues – Is the claim barred by act of state in that the liability alleged against the Canadian mining company, Nevsun, is entirely secondary and depends on a finding of unlawful conduct by Eritrean state entities? Is the claim based on aiding and abetting violations of jus cogens norms of international law (forced labour, crimes against humanity, torture) bound to fail and should be struck out?

In the UK, there is Vedanta v Lungowe where the issues are less exotic but no less important for this type of litigation, principally: Is there an arguable case that the parent company owes a duty of care to those who have suffered harm as a result of the activities of its Zambian subsidiary? What is the proper approach to the exercise of discretion under CPR r.6.37(3) in mass tort claims, particularly the weight to be given to the prospect of parallel foreign proceedings as against the prejudice caused to a foreign defendant in defending mass tort claims in England and Wales?

I have warned my corporate governance students to expect the judgments shortly before their exam

(as was the case with the US Supreme Court decision on corporate liability under the ATS in Jesner last year).

Best wishes,

Simon