Legal Aid, Sentencing and Punishment of Offenders Bill

Lisa Nandy Excerpts

Wednesday 29th June 2011 Commons Chamber

[Lisa Nandy (Wigan) (Lab)]

I want to discuss a problem that the Bill creates for the victims of human rights abuses committed by UK-based multinationals operating overseas.

In the wake of the financial crisis there is near-universal recognition that the moral code that binds individuals and states also binds business, that nobody is above the law and that multinational corporations cannot be allowed to put profit before people by committing crimes against them and the environment. That is why I am deeply concerned about the proposals on civil litigation costs, which will make it virtually impossible to bring cases against multinationals.

Members will know that such cases are lengthy, taking several years, if not decades, to bring to court. Teams of lawyers are required to work overseas, often in group actions, and, as in the South African miners’ case against Cape plc, companies seek to cover the impact of their actions, creating significant difficulties for lawyers gathering evidence to put before courts.

Such cases are not eligible for legal aid. They are brought under a conditional fee agreement or a no win, no fee basis. Given the costs and risk incurred, law firms rely on the success fee to cushion them and to future-fund other cases. As the success fee will no longer be recoverable, the ability to take a case will be severely restricted. The success fee costs us nothing: it is paid by the defendant, but it is vital.

Taken with the proposal to prevent claimants from recovering after-the-event insurance, that will be absolutely devastating. The Government accept that, because of the high costs, this approach is not appropriate for clinical negligence cases. I urge them to think again about these cases, which are similar in terms of the high costs incurred in taking cases to court.

Proposals outside the Bill make the situation worse. The Government intend to introduce a proportionality rule so that costs awarded do not exceed compensation in successful cases. In the cases I have mentioned there is a particular problem with that. Since 2009, the Rome II regulation has meant that compensation awarded to victims is based on the country where the harm was done, but the costs in the UK are considerably higher and will outstrip the compensation. That is why there is a particular issue in this case. Taken together, the three measures will mean that it will be impossible for victims of human rights abuses to get redress.

There are countless examples of where harm has been done. Many Members on both sides of the House fought hard on the Trafigura case in Ivory Coast. There is also Cape plc in South Africa and Rio Blanco in Peru. Victims cannot usually get redress at home, which is why it falls to the UK to act. That is no surprise when we consider that the power of such companies often outstrips the power of the states in which they operate. Wal-Mart has a turnover of $414 billion, which would make it the 26th biggest economy in the world, ranking just behind Norway. It is no wonder that people cannot get redress in their home states.

Last week, the Lord Chancellor told me in answer to a question that he would stand up for the small man. One cannot get much smaller or more voiceless than the people I am describing but his proposals will make the situation much worse, not better. That is not just my view but that of Amnesty International and Friends of the Earth. It is also the view of Professor John Ruggie, the UN special representative on business and human rights, and of Michael Mansfield QC. On this specific issue, he said that the proposals were a

“flagrant violation of the coalition’s own commitment to human rights.”

That is why I am asking for exemption in these particular cases.

Speaking at a packed meeting for MPs that I hosted last week, the US Assistant Secretary of State for Democracy, Human Rights and Labour, Mike Posner, said that the impact of business will be the defining human rights issue of the 21st century. He said that in the wake of a landmark resolution passed unanimously by the UN this month. It was a landmark in that it was the first time in the 65-year history of the UN that a resolution that was not negotiated by the UN has been passed unanimously.

The UK should be leading the way on this issue. It will cost absolutely nothing, but the cost will be devastating for some of the most vulnerable people in the world if we fail to act.