As the Legal Aid and Punishment of Offenders Bill passes through Parliament, the aid agency CAFOD has warned that the Bill threatens to make it harder for people in poor countries to seek justice in British courts for human rights breaches by UK multinationals.
The Government claims its new Bill will prevent ‘ambulance chasing’ by legal firms using ‘no win-no fee’ arrangements to claim large success fees from defendants.
However, ministers have already admitted there is no wave of spurious human rights cases from overseas. In fact only 11 such cases were brought in the last decade. But a consequence of the Bill’s sweeping provisions will be to also remove the ‘success fee’ paid to specialist law firms that bring human rights abuse cases against UK multinationals operating overseas, substantially reducing the economic viability of these cases for those firms.
These provisions could therefore prevent many claimants in poor countries seeking justice in the UK, even though they are not currently eligible for legal aid and the legislation will therefore provide no savings to the taxpayer, say development experts.
Next week, in the middle of hundreds of amendments to the Bill, the House of Lords will finally vote on amendments designed to make sure these overseas victims of abuses committed by UK-based companies will still be able to bring cases in the English courts.
CAFOD’s lead private sector analyst Anne Lindsay said: “This is a crucial moment for justice and for Britain’s reputation as a bastion of legal integrity. We don’t understand why the Government has still not addressed this aspect of the Bill. Our amendments would not cost the UK taxpayer a penny because these costs would continue to be paid by the losing company. CAFOD is concerned that if the Bill goes into law in its present form it will deny justice to the poorest and most vulnerable in our world and send a message to irresponsible companies that they can act with impunity.”
The amendments were first proposed by cross-bencher Baroness Jean Coussins. Conservative, Liberal Democrat and Labour peers have all spoken in support of creating this exception which would apply to a small number of significant public interest cases.
NGOs such as CAFOD and Oxfam have highlighted the consequences of the Coalition’s reforms for the poorest communities but so far the Government has refused to budge.
Anne Lindsay added: “Foreign victims do not of course have any access to Legal Aid so these claims already depend on ‘no win, no fee’ agreements with lawyers and claimants being able to get insurance to cover the costs and risks of such lengthy, complicated cases."
She continued: “The Government is proposing to change this system so that lawyers’ success fees and the insurance premiums would be paid out of the damages awarded to the victim instead of being paid by the losing company. In practice this would make bringing a court case financially impossible for many victims from developing countries.”
With other Catholic development agencies, CAFOD has been part of the UN discussions on business and human rights for many years.
Ms Lindsay added: “It is clear that access to justice is already heavily loaded against poor people from the developing world who try to bring cases against multi-national companies. The new UN Guiding Principles on Human Rights and Business are about recognising the obstacles and thinking about the implications of new laws, rather than making this situation worse.
"The UK has committed its support for the UN Protect, Respect, Remedy Framework and is due to unveil its strategy for putting the Guiding Principles into practice in June this year. Many other countries will be looking to learn from our approach. The first test of how seriously the UK Government takes that commitment will be whether it amends the Legal Aid bill,” she concluded.
In July 2011, some 33 poor Peruvian farmers represented by a UK law firm received an out-of-court settlement from UK mining company Monterrico Metals, three months before their allegations of torture were due to be heard in the High Court. While not admitting liability, Monterrico agreed to make payments to the farmers, who alleged that they had been variously beaten, threatened, hooded, held captive, shot, sexually assaulted and threatened with rape by the Peruvian police when trying to protest against the construction of a new Monterrico mine.
One protester was shot and bled to death the following day. Witnesses reported that the police were being directed by the managers of the mine, a claim that Monterrico strenuously denies.
Without the prospect of a success fee payment recoverable from the defendant, and legal costs fixed below the level of compensation, the Monterrico case could never have been pursued, and the farmers would never have received compensation.
CAFOD (www.cafod.org.uk) is the Catholic Fund for Overseas Development, a charity officially recognised by the Catholic Bishops' Conference of England and Wales.
* CAFOD media officer Pascale Palmer blogs regularly on Ekklesia here: ekklesia.co.uk/PascalePalmer