New laws will make it impossible for people in poor countries to seek justice in British courts for human rights breaches by UK multinationals, say campaigners.
The UK government’s new Legal Aid Bill seeks to prevent ‘ambulance chasing’ by legal firms using ‘no win-no fee’ arrangements to claim large success fees from defendants.
However, its sweeping provisions will 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 will 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 legal justice activists.
Analyst for Catholic aid agency CAFOD, Karen Luyckx, commented: “This is an unintended casualty of the Legal Aid Bill, and the Government must wake up to it. If the bill is adopted in its current form, it will become too costly for UK lawyers to defend poor people against human rights abuses committed by British multinationals. If a company knows that the prospect of action in the UK courts is limited, the deterrents that often curb their behaviour overseas will disappear."
She continued: “We are hearing of more and more human rights abuses related to the presence of multinationals as developing countries base their economic strategies around the extraction of resources, and weaken the enforcement of regulations to attract new investment.There are hundreds of poor people every year who cannot get justice in their own countries and look to the UK courts as their last resort. We cannot turn our back on them, and in doing so, turn a blind eye to the abuses committed by British companies abroad."
"If the bill is not amended, the significant recent gains made with the passing and implementation of the UK Bribery Act will be undone: what we gain by shining a spotlight on bribery by multinationals will be lost if we end legal protection for poor people suffering human rights abuses,” said Ms Luyckx.
Recently, 33 poor Peruvian farmers represented by a UK law firm (Leigh Day) 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 protestor 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.
CAFOD's Karen Luyckx added: “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. If the purpose of this legislation was to save taxpayers’ money, it might be understandable, but in the case of foreign nationals bringing human rights cases, no legal aid is paid. These legal changes will therefore penalise vulnerable people in some of the poorest countries, but with no saving for the taxpayer."
“This legislation is called the Legal Aid, Sentencing and Punishment of Offenders Bill. But the provisions affecting human rights cases against multinationals have nothing to do with legal aid, nothing to do with sentencing, and will only serve to allow unscrupulous British companies to avoid punishment for their offences overseas. The Government must see that is wrong,” she declared.
In a new report scrutinising the Foreign and Commonwealth Office’s Annual Report, the Foreign Affairs Committee has highlighted the conflict for the Foreign Office between the promotion of British commercial interests abroad, while ensuring protection for human rights abroad.
CAFOD and other NGOs have written to the Foreign Office urging them to press for amendments to the Legal Aid Bill as a vital first step to ensure that its efforts to improve human rights are not undone by the unintended consequences of the new legislation.
CAFOD is calling for two specific measures:
* Human rights legal teams to be exempt from the abolition of the success fee. If found guilty of human rights abuses, a company should have to pay both the claimants’ lawyers’ normal fees and success fees. The latter recognise the enormous financial risk human rights’ legal teams take on in these kinds of cases. These fees should not be taken out of the compensation paid to the victims.
* Human rights legal teams to be exempt from the proportionality principle with regard to legal costs and disbursements. If found guilty of human rights abuses, a company should pay all costs deemed necessary by the human rights’ legal team to prepare a credible base of evidence for the court case. None of these costs should come out of the compensation paid to victims.