Our key takeaway: The deck is stacked against people who bring transboundary human rights lawsuits against EU-based companies. The upcoming EU directive on corporate due diligence offers an opportunity to level the playing field by including components that remove barriers to justice.
The European Coalition for Corporate Justice (ECCJ) published Suing Goliath, “an analysis of civil proceedings brought against EU companies for human rights abuses and environmental harm in their global operations and value chains, and key recommendations to improve access to judicial remedy”:
- “Access to courts is a fundamental right”: Per the report, this right should be extended not only to EU citizens but also to non-EU citizens who are harmed by EU-based companies—notwithstanding “fears of frivolous litigation” from abroad. The EU needs to address existing barriers to access to remedy (detailed in the report through a number of recent cases) “so that affected people are given a last-resort avenue for remedy and companies have an incentive to comply with their human rights and environmental due diligence obligations.”
- Strengthen applicability of liability: The cases outlined in the report “lay bare a number of barriers to justice that the EU needs to remove to enable private enforcement of future corporate due diligence requirements.” One of the top barriers is the issue of parent company and value chain civil liability, since this type of liability is not often provided for in national legal systems. EECJ argues that the EU’s due diligence directive should address this gap by specifically including “a parent company and value chain liability regime that allows victims to claim damages as well as injunctive relief before EU courts.” Further, the due diligence duty must be “defined not as a narrow and superficial compliance-orientated process, but as a standard of conduct which includes taking all necessary, adequate and effective measures to ensure respect for human rights and the environment throughout value chains.”
- Break down “insurmountable barriers to justice”: These barriers include the following: (1) Complexities of applying foreign laws to the home State’s legal system, which can be contradictory; ECCJ advises that the EU directive “must clarify that its provisions shall be considered overriding mandatory and therefore apply in any case.” (2) Determining the competent jurisdiction when the business is not domiciled in the EU, as EU Members take different approaches to this; ECCJ recommends modifying the Brussels I Regulation to allow EU courts to more freely assert their jurisdiction. (3) In some legal systems, an inability for a collective group to seek redress for a collective harm (e.g. river pollution, a factory collapse) means that individuals need to bear the costs of bringing a case on their own; ECCJ recommends the EU directive explicitly allow for collective redress “making affected people automatically eligible to join a claim without complex registration procedures.” (4) Expiry of the statute of limitations is inconsistently applied across foreign and EU Member States’ laws; ECCJ recommends establishing a harmonized statute of limitations for all cases brought under the directive. (5) Burden of proof falls on the claimant, which can be prohibitively time-consuming and costly—if the evidence is even accessible to them; ECCJ recommends that the EU directive “order that further evidence be presented by the defendant to determine the breach and the causal link.” (6) The financial risk of bringing a case is imbalanced, as claimants bear significant costs and higher risks than corporate defendants; ECCJ advises that legal costs be recoverable from the defendant where the suit is successful, and where the claimant loses the case “costs incurred [should] be balanced by the court” and/or paid for by dedicated legal aid funds.
For more, see European Coalition for Corporate Justice, Suing Goliath (September 2021)
