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Corporate Harm (Overseas Victims)

Volume 532: debated on Tuesday 13 September 2011

3. What his policy is on the right of overseas victims of alleged human rights abuses by UK multinational companies to access justice in the UK. (71308)

7. What recent discussions he has had with the Secretary of State for Foreign and Commonwealth Affairs on his proposed reform of access to justice for overseas victims of corporate harm. (71312)

Overseas victims of alleged corporate harm by UK international companies are, where appropriate, able to bring civil claims in the UK now, and that will continue to be the case following implementation of our reforms to civil litigation funding and costs. My officials and I are in contact with the Foreign and Colonial Office—[Laughter]the Foreign and Commonwealth Office as and when necessary to discuss the impact of our proposed reforms to legal costs in this class of case in this country, the Commonwealth or the colonies.

I thank the Secretary of State for that interesting reply. Notwithstanding his response, he will be aware that the United Nations Special Representative on Business and Human Rights has said that clauses 41 to 43 of the Legal Aid, Sentencing and Punishment of Offenders Bill will present a major barrier to justice for overseas victims of human rights abuses by UK multinationals, not least because of the significant increased cost burdens. Will he therefore withdraw those clauses from the Bill?

We are not changing the jurisdiction in this country, which certainly does entertain claims in personal injury cases and so on against multinational companies that have some footing in this country. All we are arguing about is how much is paid in legal costs. The reforms to the no win, no fee arrangements that we are proposing would ensure that the costs would be fairer, more balanced and not out of proportion to the claim. We are not making any change at all to the jurisdiction. Most of the cases against multinational companies are not human rights cases; they are personal injury cases. Many of those cases might be attracted here because our present system of rewarding lawyers is far more generous than can be found in any other jurisdiction in the world.

The Secretary of State will be aware that the UN Committee on the Elimination of Racial Discrimination has also criticised the reforms, which would remove access to justice for the victims of corporate abuse overseas. Does he not recognise that the reforms could result in there being no disincentive to environmental and other abuse? Will he not look at this again?

As I suggested a moment ago, I regard it as just a little disingenuous—I hate to say that about UN agencies—to suggest that we are in any way undermining the jurisdiction here for dealing with racial discrimination or serious personal injury cases involving British companies. What we are talking about is how much the lawyers are paid by way of success fees and other costs. The Trafigura case was a classic scandalous personal injury case involving a British company and an incident in Côte d’Ivoire, in which £30 million in compensation was awarded by the British courts to the plaintiffs and £100 million was paid in legal costs to those who brought the action. All we are doing is going back to where no win, no fee used to be—in getting the costs and the claims back in proportion to each other.

What we are talking about is whether such cases will get into court at all under the regime that the Government are proposing. It appears they will not listen to Her Majesty’s Revenue and Customs on insolvency, or to Amnesty International, Oxfam or the United Nations on multinational cases. Now, Admiral, the leading specialist motor insurer, is saying that premiums will go up as a result of the proposals. Is it not time to think again, and to stop favouring insurance companies, crooks and multinationals over their victims?

If the hon. Gentleman wants to widen this argument, which is perfectly legitimate, to include a general proposition as well as multinational company cases, the questions must be: how much is proportionate to the claim when it comes to paying costs, and what effect does no win, no fee, since it was changed, have on the judgment on both sides? We do not want such cases to be such a high earner for the plaintiffs’ lawyers that they are prepared to bring more speculative cases, which is happening at the moment. Nor do we want pressure to be put on defendants who have a perfectly sound defence, forcing them to say, “We cannot defend ourselves, because it will cost us less to pay a nuisance fee by way of settlement.” Justice involves striking a balance between what the lawyers are paid and what the plaintiffs get by way of compensation.