Unthinkable even five years ago, a number of transnational human rights claims against companies are proceeding on the merits in Canadian courts. These include claims made by overseas plaintiffs alleging slavery, rape, murder and battery. None of the allegations made are yet proven and this blog in no way is intended to comment on the merits of any of the cases.
However, the mere presence of transnational human rights claims in Canadian courts, and the likelihood of many more to come, raises a question: when is it appropriate for parties to settle transnational claims out of court?
Settlements are common in domestic legal context: in Canada, between 95 – 97% of statements of claim filed do not ever get to trial and a large proportion of these are settled. This blog will briefly consider lessons from domestic claims that could be applicable to transnational claims.
First the traditional adversarial culture of civil litigation is antithetical to a settlement process aimed at achieving a reasonable and just resolution. A “defensive approach” employed by defendant counsel would routinely deny wrongdoing, defend actions aggressively, and calculate “bottom line” risks, including the likelihood of losing and probable damages ordered. This approach created risks for reputational harm, and is gradually being overtaken by a more constructive approach. The old-fashioned defensive strategy in the transnational context risks creating longstanding claims that go unresolved for many years, and unconscionable settlements that will come back to haunt the parties.
It should be noted that the classic domestic settlement process is itself evolving. In the past, settlement agreements typically:
- Removed in perpetuity legal rights of the claimants;
- Included non-disclosure clauses; and
- Defendants did not publicly acknowledge any wrongdoing.
More recent domestic human rights cases such as the Indian Residential Schools Settlement Agreement (IRSSA) demonstrate the extent to which settlements can be tailored to fit the scale and types of harms. The IRSSA includes collective remedies such as the creation of a truth and reconciliation commission, as well as individual damages. The Government of Canada acknowledged the harm it caused and offered apologies to the victims.
Second, there are many reasons that parties agree to settle and these may apply in the international context. Settlements save all parties time, stress and expense of legal proceedings. They can help preserve ongoing relationships better than the adversarial model. Legal process can be alienating for most people, let alone plaintiffs in other jurisdictions. Transnational human rights claimants:
- might not speak English or French – with translation an expensive and time-consuming hurdle;
- might be poor, marginalized;
- might find the adversarial process stressful on top of traumatizing or stressful events;
- might find Legal proceedings to be incomprehensible; and
- might discover that the result might not provide the justice they were seeking.
In these cases, a reasonable and just settlement may save all the parties significant time, stress and financial resources and leave the relationship in better shape.
Third, some authors have raised risks about settlements, even in the domestic context. In particular, is justice done? The result might be more expeditious and cost-effective, but at what cost?
In the transnational context, these concerns are elevated. In the absence of a third party involvement and oversight, such as a judicially-approved settlement process, many companies have tried to resolve issues with communities and individuals in less formal contexts out of court. However, these have not always succeeded in bringing finality and closure to claims. The David-versus-Goliath nature of some relationships between the parties makes informal processes more challenging and subject to outside scrutiny. Companies acting in good faith might be accused of providing “hush money.” Some civil society organizations have objected to claimants signing away legal rights in return for settling claims, even though that is a very standard procedure in domestic judicially-approved settlements. Unfortunately, disparities between the parties have resulted in some unconscionable settlements, in which parties sign away legal rights in return for a very poor deal. Confidentiality clauses and no admission of wrongdoing may be not in keeping with what victims want in human rights cases.
Another downside with settlements is the potential in hindering the development of substantive law. Formal judgments would create greater certainty around legal principles such as duties of care and standards of care as they relate to human rights.
Settlements in the transnational context
The legal, business and human rights communities should encourage discussions on principles and processes that could inform reasonable and just settlements for transnational human rights claims. Such principles could guide best practices and foster safeguards in settlement negotiations. Some thoughts on principles and processes that could form part of such a discussion include the following:
- Good faith engagement by all parties when a prima facie case is made out. This principle would abandon a traditional adversarial defensive approach in favour of accepting the responsibility to remediate human rights violations in the UNGPs
- A process which ensures an inclusive engagement of parties in settlement negotiations. For example, is there a discernable “class” of plaintiffs? Can group leaders, appropriate stakeholders be identified? Can marginalized groups, e.g. women, children, minorities be identified and effectively engaged? Just settlements will be a challenge if a discernable class cannot be identified.
- Involvement of credible third parties in the development of a negotiation process and through to completion can add legitimacy to both process and outcome. These could include locally-respected authorities and experts.
- A predictable and transparent negotiation process that respects the rules of procedural fairness.
- Expansive and open consideration of remedies, encompassing remediation, compensation, mitigation of human rights and other measures as sought by the community. These might, as appropriate, include apologies, acknowledgement that the harm occurred, access to sacred lands, memorials, etc.
- Equal access to impartial scientific and technical information e.g. water quality tests and other environmental impacts.
- Protection of witnesses/claimants and their information as appropriate. Confidentiality of those cooperating.
These are merely some examples of possible broad processes and principles around settlements of transnational human rights claims that could be the basis for discussion. Learning and improving could evolve through dialogue and shared lessons learned.
Mora Johnson, January 2018. www.morajohnsonlaw.ca
Please share with me your thoughts and reactions to this blog.