Decent Work and Economic Growth

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| Editors: Walter Leal Filho, Anabela Marisa Azul, Luciana Brandli, Amanda Lange Salvia, Tony Wall

Supply Chain Accountability Through Extraterritorial Tortious Litigation

  • Nina de Puy KampEmail author
Living reference work entry
DOI: https://doi.org/10.1007/978-3-319-71058-7_117-1

Definitions

Tortious litigation involves a civil wrong (a tort) that causes a claimant to suffer harm, resulting in legal liability. Extraterritorial tortious litigation occurs where the legal proceedings are pursued in a different jurisdiction from where the tort occurred.

Introduction

Despite increasing pressure by the international community to improve supply chain accountability, corporate supply chains remain largely unregulated and rife with human rights abuse. This entry is premised on the argument that change can be achieved where states, corporations, and civil society work together to achieve accountability and alter practice (Ruggie 2013). The UN Sustainable Development Goals (UNSDGs) emphasize the importance of collaboration between the corporate sector and governments to realize the objectives. Agenda 30 calls on “all businesses to apply their creativity and innovation to solving sustainable development challenges” and commits States to “foster a dynamic and well-functioning business sector, while protecting labour rights and environmental and health standards” (A/RES/70/1, 67). While the UNSDGs are not legally binding, the UN Office of the High Commissioner for Human Rights has stated that as “the targets link directly to States’ existing binding human rights obligations…there is a need to establish prompt and effective mechanisms of redress for cases where the obligations are not met” (UN Human Rights Office of the High Commissioner 2013).

The UN Guiding Principles on Business and Human Rights (UNGPs) shed further light on the obligations of states and corporations to protect human rights. Intended to “elaborat[e] [on] existing standards and practices for States and businesses,” the UNGPs were unanimously adopted by the UN Human Rights Committee in 2011 (A/HRC/17/31, 14). The UNGPs are founded on three pillars: first, governments have a duty to protect against human rights abuse by corporations by implementing the necessary policies and regulations; second, corporations have a responsibility to respect human rights by exercising due diligence and addressing human rights violations within their supply chains; and third, victims must have access to effective judicial and nonjudicial remedies (A/HRC/17/31, 6).

The primary aim of the UNGPs is to establish an obligation on states to regulate their corporations with extraterritorial effect (see Holly 2018; Simons and Macklin 2014). International law obliges states to “refrain from engaging in behaviour that would violate human rights, to proactively take action to protect [human rights] through legislative and other measures and to exercise due diligence to ensure that private actors do not violate human rights” (Holly 2018, 56). There are some examples of states introducing legislative instruments to hold corporations accountable and establish effective mechanisms of redress. For example, France introduced the Duty of Vigilance Law in 2017 which establishes a binding obligation on parent companies to identify and prevent adverse human rights and environmental impacts resulting from their activities (Loi no 2017-399, Art 1). Other states have been reluctant to introduce similar legislative instruments to hold corporations accountable for extraterritorial human rights abuse. The UK Modern Slavery Act and the US Dodd-Frank Act are examples of weaker instruments which require states to disclose and report on potential risks within their supply chains without establishing civil liability in case of harm.

The reluctance by states to implement effective legislative instruments to regulate extraterritorial corporate human rights abuse creates a “governance gap” (Gagnon et al. 2003, 12). Considering this regulatory void, this entry traces the attempts made by UK and Canadian courts to nevertheless establish a duty on parent companies for extraterritorial human rights abuse in their supply chains. Section “Circumventing the Corporate Veil” sets out the doctrine of separate legal personality and traces the avenues deployed by UK and Canadian courts to circumvent the corporate veil in extraterritorial tortious litigation. Considering the inability of tort law to capture the gravity of human rights abuse, section “Adopting Customary International Law into the Common Law” traces the adoption of customary international law (CIL) into the common law in a recent Canadian decision. Finally, section “The Ability of Tort Law to Bridge the Governance Gap” considers the ability of tort law to effectively bridge the governance gap left by legislatures. Ultimately, this entry demonstrates that pursuing extraterritorial tortious litigation offers an alternative to a state-driven realization of the UNSDGs and UNGPs.

Circumventing the Corporate Veil

Victims of multinational corporations face several procedural and substantive hurdles in pursuing claims against parent companies domiciled in a different jurisdiction. This entry will not provide an overview of jurisdictional hurdles (egg forum non conveniens). Rather, the focus lies on the utility of the common law of negligence in circumventing the corporate veil and holding parent companies liable for extraterritorial human rights abuses in their supply chain.

The Corporate Veil

The corporate structure enables parent companies to avoid liability for the activities of their subsidiaries. The doctrine of separate legal personality means that shareholders (including parent companies) investing in limited liability companies (subsidiaries) are in principle only liable for the value of the shares owned in such a company. Through this doctrine, a corporation can shield the personal assets of shareholders from liability for debts and torts of its subsidiaries (Mohanty and Bhandari 2011).

The doctrine of separate legal personality was established in England in the nineteenth century in the case of Salomon v A Salomon & Co Ltd. In 1862, Mr. Salomon transferred his business, a leather shop, into a limited liability company, establishing himself as a preferred creditor. At the expense of other creditors, Mr. Salomon’s new position granted him a preferential right to repayment when his company became insolvent. The remaining creditors sued Mr. Salomon, wanting to hold him personally liable. Mr. Salomon argued that the company was a separate legal person from its shareholder and that the creditors could only hold the company liable. Agreeing with Mr. Salomon, the House of Lords established the principle of separate legal personality, now accepted as the foundation of company law worldwide (Palombo 2019, 79).

By transferring potential losses from the parent company to a foreign subsidiary, multinational corporations can avoid liability for extraterritorial torts by hiding behind the so-called corporate veil. Courts across jurisdictions are reluctant to pierce the corporate veil to hold parent companies directly liable for the actions of their subsidiaries (Palombo 2019, 18). This creates a significant hurdle for victims of corporate torts, as the subsidiary directly liable for the tort often lacks the necessary funds to remedy the tort, while the parent company avoids liability through the doctrine of separate legal personality.

Developments in English Common Law

Legal Imposition of Responsibility

Chandler v Cape plc [2012] expanded the common law doctrine of responsibility by establishing that notwithstanding the doctrine of separate personality, a parent company has a duty of care to the employees of its subsidiary. Chandler was an employee of Cape Building Products (CBP), a subsidiary of Cape Asbestos plc (CA). He produced bricks in a factory that also produced asbestos and was diagnosed with asbestosis after working for CBP for nearly 50 years. Chandler was unable to bring a claim against CBP because it had gone out of business, and therefore sued its parent company, arguing that CA owed Chandler a direct duty of care.

In the Court of Appeal, Arden LJ considered “…simply whether what the parent company did amounted to taking on a direct duty to the subsidiary’s employees” (Chandler 2012 at 78). The case expanded the conditions under which a person assumes responsibility, giving rise to a duty of care. Applying the Caparo test to establish a duty of care (Martin 1990) Arden LJ considered the conditions under which the relationship between a parent company and the employees of its subsidiary may be sufficiently proximate to give rise to an assumption of responsibility. She set out four conditions for this:

(1) the businesses of the parent and subsidiary are in a relevant respect the same; (2) the parent has, or ought to have, superior knowledge on some relevant aspect of health and safety in the particular industry; (3) the subsidiary’s system of work is unsafe as the parent company knew or ought to have known; and (4) the parent knew or ought to have foreseen that the subsidiary or its employees would rely on its using that superior knowledge for the employees’ protection. (Chandler 2012 at 80)

By finding that responsibility need not be voluntarily assumed, the court established a “legal imposition of responsibility” (Palombo 2015, 465) where the parent company “knew or ought to have known…that the subsidiary or its employees would rely on its…superior knowledge” (Chandler 2012 at 80). A duty of care thus arises where a parent company exercises a degree of control over the subsidiary. If the parent and subsidiary have similar knowledge and expertise and jointly make decisions about health and safety, which the subsidiary implements, both companies may owe a direct duty of care to those affected by the decisions. Considering CA’s “state of knowledge” about the factory, and “its superior knowledge about the nature and management of asbestos risks,” Arden LJ found there was “no doubt” that it was appropriate to render CA liable for the claimant’s loss (Chandler 2012 at 78).

In Chandler, the parent company owned its subsidiary in full. However, the court emphasized that this is not necessary; it is sufficient that the parent company “has a practice of intervening in the trading operations of its subsidiary” (Chandler 2012 at 80). Tomlinson LJ clarified in the subsequent case of Thompson v The Renwick Group Plc that the conditions are not exhaustive: “it is clear that Arden LJ intended this formulation to be descriptive of circumstances in which a duty might be imposed rather than an exhaustive list…” (Thompson 2014 at 33).

Chandler circumvents the corporate veil by establishing that a parent company owes a direct duty of care to the employees of its subsidiary. McGaughey argues that by imposing a duty of care whenever someone ought to have been in our reasonable contemplation, Chandler is a principled development of the law of civil responsibility (McGaughey 2011, 249). In other words, the case applies the principle set out in the landmark decision of Donoghue v Stevenson [1932]. Palombo argues that the case is nevertheless “revolutionary...because it places tort law at the service of the human rights cause” (Palombo 2015, 463). As demonstrated by the case of Vedanta (see below), Chandler indeed paves the way for victims of human rights abuses to bring tortious claims.

Assuming Responsibility Through Corporate Social Responsibility Statements

Chandler involved a defunct UK-based subsidiary. However, another case, Vedanta, suggests that the principle will apply beyond this narrow fact matrix. In Vedanta, Zambian citizens of the Chingola region of the Copperbelt Province in Zambia pursued a civil action against Zambian-based Konkola Copper Mines Plc (KCM) and its UK-based parent company Vedanta plc (Vedanta). The claimants alleged personal injury, damage to property, and loss of income, amenity, and enjoyment of land, due to alleged environmental damage caused by the copper mine (Vedanta 2019 at 1). To determine whether the court had jurisdiction to hear the claim, the court had to determine whether the claimants had an arguable case against Vedanta.

Applying the Chandler test, the court considered that Vedanta’s corporate social responsibility (CSR) statements amounted to an assumption of responsibility over KCM’s environmental impact. The Court considered Vedanta’s report entitled “Embedding Sustainability” which explicitly referenced the problem of discharges into water, noting that “we have a governance framework to ensure that surface and groundwater do not get contaminated by our operations” (Vedanta 2019 at 58). Through its “governance framework” Vedanta demonstrated that it had superior knowledge.

The Court also considered various public statements regarding Vedanta’s commitment to addressing environmental risks and technical shortcomings in KCM’s mining infrastructure to demonstrate that Vedanta ought to have known that KCM would rely on Vedanta’s superior knowledge (Vedanta 2019 at 55). In considering the extent to which statements may give rise to a duty of care, the Court states that “the parent may incur the relevant responsibility to third parties if, in published materials, it holds itself out as exercising that degree of supervision and control of its subsidiaries, even if it does not in fact do so. In such circumstances its very omission may constitute the abdication of a responsibility which it has publicly undertaken” (Vedanta 2019 at 53).

Vedanta extends beyond Chandler’s factual matrix in four important ways. First, while the claimants in Chandler were employees of a subsidiary, Vedanta concerns a possible duty of care owed to a third-party community affected by the subsidiary’s business. Second, while Chandler concerned a domestic subsidiary, Vedanta concerns a foreign subsidiary. Third, while the subsidiary in Chandler was wholly owned by the parent company, the subsidiary in Vedanta was only part-owned by the parent company, and part-owned by the Zambian government. Fourth, while Chandler concerned a defunct subsidiary, Vedanta concerned an active subsidiary.

The differences between Chandler and Vedanta demonstrate that the court is not necessarily concerned with the formal relationship between the parent and its subsidiary, or even with between the subsidiary and the claimants. Rather, the court is concerned with the degree of effective control the parent company has over its subsidiary’s operations. A parent company only escapes liability if it lacks effective control over the relevant aspect of its subsidiary’s business. Consequently, the relevance of the corporate veil diminishes the room for impunity opened by separate legal personality narrows.

The common law imposition of a duty of care where corporations assume responsibility through their CSR statements has been described as a “much overdue development” and offers an enforcement mechanism to realize Agenda 2030 (Blanco 2019, 4).

Developments in Canadian Common Law

The Canadian courts have also developed an avenue to circumvent the corporate veil. In Choc v Hudbay Minerals Inc. [2013], Ontario’s Superior Court of Justice found that a claim against Hudbay Mineral, a Canadian parent company of a Guatemalan mining project, could be admissible. The claimants alleged several abuses including rape and extrajudicial killings. While the court held that the circumstances of a parent company being held liable for the torts of its foreign subsidiary did not give rise to a duty of care already recognized in law, it relied on a previous Canadian Supreme Court decision (Odhavji Estate v Woodhouse [2003]) to argue that a duty of care may arise when three conditions are met:
  1. 1.

    the harm complained of is a reasonably foreseeable consequence of the alleged breach;

     
  2. 2.

    there is sufficient proximity between the parties that it would not be unjust or unfair to impose a duty of care on the defendants; and

     
  3. 3.

    there exist no policy reasons to negative or otherwise restrict that duty (Choc 2013).

     

On the facts, the court found that the harm was foreseeable because the parent company knew or should have known that the security forces used violence. It was relevant that Hudbay’s executives knew that the security personnel had illegal firearms and were not adequately trained (Choc 2013 at 59). The court further held that there was sufficient proximity between Hudbay and the claimants because the parent company was directly in charge of the operations and exercised direct control over the security forces. Finally, the court found that there was no policy reason why a duty of care should not arise in these circumstances.

Finding that it was not plain and obvious that Hudbay did not owe a duty of care, the Ontario Superior Court refused Hudbay’s application for strikeout and permitted the claims to proceed. As of April 2020 this litigation is ongoing (Choc v Hudbay 2020). Much like in Vedanta, the case suggests that a duty of care could arise, without definitively ruling that a duty in fact arises. Since Choc was handed down by a lower court, it is not authoritative.

No Duty of Care Toward Victims of Subcontractors

Subsequent case law suggests that while the three elements of the Woodhouse test (above) may circumvent the corporate veil by rendering parent companies liable for the torts of their subsidiaries, the test does not establish a duty of care for the torts of supplier companies. Das v George Weston Limited [2018] concerned the Rana Plaza disaster caused by the collapse of a factory building in Bangladesh. On April 24, 2013, the Rana Plaza factory collapsed killing and injuring thousands of workers. Most victims were factory workers making garments for international export. Loblaws was the parent company of Joe Fresh Apparel Canada, which in turn contracted with a company in the Rana Plaza factory for its garments (Das 2018 at 2). The claimants alleged that Loblaws owed them a duty of care because the loss was foreseeable, and the relationship sufficiently proximate because Loblaws assumed responsibility over the Rana Plaza workers through its CSR statements and standards.

The Ontario Superior Court of Appeal found that even where the harm was foreseeable, Loblaws did not owe a duty of care to the workers of Loblaws’ subcontractors (Das 2018 at 180). By arguing that negligence law should develop incrementally “rather than by ‘giant steps’” (Das 2018 at 144), the court adopts a cautious approach. Doorey argues that this is evidence of the inherent conservatism of the common law (Doorey 2019, 107). Even where a parent company explicitly assumed responsibility over the working conditions of its subcontractor’s workers, no duty of care should be imposed.

Both the English and Canadian courts developed an avenue to circumvent the corporate veil. The courts are willing to impose a duty of care where there is sufficient evidence of foresight and effective control. While Vedanta does not definitely exclude the possibility of a parent company assuming responsibility of the torts of a supplier, Das suggests that liability in those circumstances is unlikely (Sanger 2019, 489).

Adopting Customary International Law into the Common Law

As demonstrated above, tort law can effectively hold parent companies liable for human rights abuse by their subsidiaries. However, tort law may not sufficiently articulate the severity of human rights abuse. In Nevsun Resources Ltd v Araya [2020] (discussed below) the claimants argued that “torture is more than battery [and] slavery is more than an amalgam of unlawful confinement, assault and unjust enrichment” (Nevsun 2020 at 126). Ashworth argues that offenses should be “subdivided and labelled so as to represent fairly the nature and magnitude of the law-breaking” (Ashworth 2006, 88). Labeling has an important symbolic function; it is declaratory and signals the degree of condemnation that should be attributed to the offender. Accurately naming the offense clarifies how the public should view the offense.

In recent years victims of corporate human rights abuse have therefore sought to hold corporations liable for violations of CIL. This raises two possible difficulties. First, claimants must argue that the relevant violation is recognized as a norm of CIL. There are two requirements for a norm of CIL to be recognized: firstly, a general but not necessarily universal practice, and secondly, opinio juris, or the belief that such practice amounts to a legal obligation (A/73/10, 2018, 124).

Second, claimants must evidence that CIL is legally binding on nonstate actors, including corporations. This has been the subject of much debate (Bekker 2004; Koh 2004; Dodge 2019). Nevertheless, it is increasingly accepted that while there are certain norms of CIL which exclusively apply to state actors (e.g., treaty making), the proliferation of international human rights has shifted the priority of CIL from the regulation of states to the protection of rights. Consequently, many norms of CIL are simply prohibitions regardless of whether the perpetrator is a state or nonstate actor (Koh 2004). This interpretation is consistent with the Human Rights Council’s Framework for Business and Human Rights and Agenda 2030 (A/HRC/8/5; A/RES/70/1, 67).

CIL and the Canadian Common Law

A recent Canadian Supreme Court authority suggests CIL is automatically adopted into the Canadian common law. In Nevsun, the claimants alleged that through Eritrea’s military conscription, they had been forced to work on the Bisha mine in conditions amounting to forced labor, slavery, and inhuman and degrading treatment. The claimants, Eritrean refugees living in Canada, brought a civil claim against Nevsun (which owned, and was found to have effective control of, 60% of the Bisha mine) for their violation of CIL’s prohibitions against forced labor, slavery, cruel, inhuman, or degrading treatment and crimes against humanity (Nevsun 2020 at 17). Nevsun applied for the case to be struck out. Among other claims, Nevsun argued that there was no Canadian cause of action for violations of CIL.

Justice Abella, writing for the majority, found that CIL was automatically adopted into the Canadian common law (Nevsun 2020 at 116). She considered the Canadian doctrine of adoption which states that CIL forms a part of the Canadian common law unless it is explicitly contrary to legislation. To determine whether a norm has significantly crystallized into CIL, Justice Abella applied the well-established two-tiered test: that it is both general practice and opinio juris (Nevsun 2020 at 94).

The doctrine of adoption, recognized across common law jurisdictions, ensures that international law not only “percolates down” from the international community, but “also bubbles up” (Roberts 2011, 69). The doctrine is also consistent with earlier understandings of international law: the former president of the ICJ noted that “International law is part of that which comprises the common law on any given subject” (Higgins 1992, 1273).

Significantly, the court went on to consider whether CIL could be binding on nonstate actors, namely, corporations. Justice Abella considered the shift in international law since the end of World War II and found that the proliferation of human rights law has altered the state-centric international order. Citing Koh, Justice Abella found that much of international law today directly addresses nonstate actors. She accordingly concluded that “it is…not plain and obvious that corporations today enjoy a blanket exclusion under [CIL] from direct liability for violations of obligatory, definable, and universal norms of international law” (Nevsun 2020 at 113).

In contrast to Nevsun, the US Supreme Court held that there was no norm of corporate liability at international law 2 years earlier. In Jesner et al. v. Arab Bank, PLC [2018], the claimants were victims of terrorist attacks. They alleged the attacks were financed by the Arab Bank in violation of international law under the Alien Tort Status –a provision of the Judiciary Act of 1789 which gives federal courts jurisdiction over lawsuits by non-citizens for torts in “violation of the law of nations” (Judiciary Act 1789, S1350). In its analysis the court found that the norm of corporate liability lacked general acceptance and specificity (Jesner 2018 at 38). The court thereby confounded the substantive question of whether a norm of CIL exists with the procedural question of which actors are bound by the norm (Dodge 2019). In her dissenting opinion, Justice Sotomayor criticized the plurality’s position. She argued instead that international law establishes substantive prohibitions (e.g. against slavery, torture, and genocide) and does not determine the mechanisms of enforcement (Jesner 2018, Sotomayor 1).

The different approaches adopted in Nevsun and Jesner highlight the risk posed by the domestic adjudication of CIL. While domestic courts can effectively establish a mechanism of redress for victims of corporate human rights abuse, deploying CIL may lead to inconsistent and even erroneous outcomes (Doyle 2018, 229). Nevertheless, by explicitly articulating the obligations of corporations under international law, reliance on CIL in extraterritorial tortious litigation may more effectively advance adherence to the UNGPs and Agenda 2030.

The Ability of Tort Law to Bridge the Governance Gap

This entry has traced recent cases of UK and Canadian courts deploying tort law to hold corporations accountable for human rights abuse in their supply chains. The above-discussed decisions have demonstrable ramifications beyond their individual cases. In Chandler, Arden LJ states that “[t]his is one of the first cases in which an employee has established at trial liability to him on the part of his employer’s parent company…this appeal is of some importance not only to the parties but to other cases” (Chandler 2012 at 2). Accepting that tort law decisions have broader ramifications, this section considers the extent to which tort law can effectively bridge the governance gap left by legislatures.

There has been some discussion about the extent to which tort law can effectively replace legislation. Traditionally, tort law’s justification “rest[s] on its role as a mechanism for imposing obligations of repair on the basis…of personal responsibility” (Cane 2002, 466). Where a victim suffers injury and it was reasonably foreseeable to the defendant that their actions would inflict the specific injury on the victim, the defendant will be liable for compensation to place the victim in the position they would have been in but for the injury. Traditionally, tort law is therefore “reactive rather than regulatory” (Rühmkorf 2015, 170) and essentially concerned with compensation (Gillaerts 2019).

Kysar argues that tort law can nevertheless have an indirect regulatory effect as it deters future wrongdoing. He argues that tort law has public ramifications. In addition to airing grievances, tortious litigation can instigate public dialogue. Shear judicial engagement, regardless of the success of the claim, “helps frame [the claimant’s] suffering as a legible subject of public attention and governance” (Kysar 2018, 49).

Kysar further argues that tortious litigation can lead to a public unearthing of social facts. As an example, Kysar considers tobacco litigation in the USA in the 1990s. In addition to winning the claim, the State of Minnesota requested document disclosure of over 40,000 pages setting out the adverse effects of tobacco and evidencing an alleged conspiracy on the part of tobacco companies to defraud Americans about the health hazards of smoking. The impact of the litigation transcended the courtroom. The 40,000 pages were made public and led to hundreds of academic articles, government reports, and media responses. Ultimately, the litigation achieved more than a remedy for victims; it achieved a nation-wide conversation that sparked an overhaul of public health policies (Kysar 2018, 55).

Kysar goes on to argue that tort law may be more effective at achieving human rights protection than legislative instruments. While politicians can ignore individual demands, “common law judges must provide an answer to citizens’ demands for relief” (Kysar 2018, 54). While legislation is dependent on political will, the courts are always open to the public, and citizens have a right to a remedy. Even if a claimant loses in court, they will receive a reason. In this way, “common law tort actions can offer a decentralised and citizen-empowering means of formulating and addressing regulatory goals” (Kysar 2018, 54).

Gillaert recognizes the regulatory potential of tort law through its enforcement mechanisms and preventative effects (Gillaerts 2019, 36). However, he argues that because tort law decisions are essentially a posteriori, rulings are fact specific and do not establish general rules. Tort law can therefore not effectively regulate future wrongdoing as a court’s finding of subsequent wrongdoing is unpredictable. He argues that tort law does not establish an “a priori determined rule of conduct on the basis of which the tortfeasor could preventively alter his/her behaviour” (Gillaerts 2019, 35).

Kortmann identifies “a modest but discernable shift of focus towards the wrongdoer” and argues that tort law has developed into a punitive tool to prevent future wrongs, rather than compensate past wrongs (Kortmann 2009, 6). However, Gillaerts argues that the regulatory and preventative effects of tort law are limited by tort law’s primary compensatory function. Gillaerts considers a judgment by the Brussels Court of Appeal to demonstrate “how a non-compensatory goal has to be engrafted onto the primary compensatory function” (Gillaerts 2019, 41). Sabam (a company that manages royalties) claimed that Bulex (a nonprofit organization) owed Sabam royalties. On the facts, Sabam did not argue it had suffered damage and instead “asserted that the compensation that it sought was necessary to avoid systematic copyright violations” (Gillaerts 2019, 41). Sabam sought to use tort law to regulate future wrongdoing rather than to compensate past wrongdoing. The court found that Sabam’s claim was limited to the loss it had actually suffered. Accordingly, Gillaerts argues that the instrumentalization of tort law to change the social order is limited by its primary function of compensation.

This section has provided a brief overview of ongoing discussions in the literature as to the ability of tort law to effectively bridge the governance gap left by legislatures. Kysar argues that tort law’s regulatory effect can replace legislation and may additionally be more responsive to claimants’ needs. Nevertheless, Gillaerts argues that there are limits to tort law’s ability to regulate future wrongdoing. He argues that tort law cannot be severed from its primary compensatory function.

Conclusion

This entry has set out recent developments in extraterritorial tortious litigation. By circumventing the corporate veil, UK and Canadian courts have introduced mechanisms for enforcing greater supply chain accountability. As demonstrated in the above discussion, there are limitations to the utility of the common law. Courts are unlikely to impose a duty of care on parent companies where there is insufficient evidence of knowledge and effective control over the operations of a foreign subsidiary.

The recent Canadian Supreme Court decision marks a significant development for corporate accountability for violations of customary international law. While the adjudication of international law by domestic courts may lead to inconsistencies, the case importantly recognizes that nonstate actors and state actors are bound by international law.

There is some discussion as to the ability of tort law to effectively bridge the governance gap. However, this entry demonstrates that where states fail to implement the necessary regulatory frameworks, courts may nevertheless develop the common law to improve corporate accountability for human rights abuse. Through these developments, courts are beginning to realize the objectives of the UNSDGs and UNGPs, paving the way toward human rights compliant corporate supply chains.

Cross-References

Notes

Acknowledgements

This publication was written in the author’s personal capacity.

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Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.Leigh DayLondonUK

Section editors and affiliations

  • Dmitry Kurochkin

There are no affiliations available