Crossing the Atlantic? the Political and Legal Feasibility of European Foreign Direct Liability Cases

Article excerpt

I. INTRODUCTION

Over the past decade, the much-debated U.S. phenomenon called the Alien Tort Claims Act (ATCA)1 has provided the basis for numerous attempts in U.S. federal courts to hold multinational corporations2 liable for public-international-law violations they commit in the course of their transnational activities.3 These socalled foreign direct liability cases, in which plaintiffs file civil-liability claims against parent companies of multinational corporations in the courts of developed countries for damage caused by subsidiaries in developing countries, have emerged more slowly across the Atlantic, however. To date, only a handful of such cases have appeared before courts in Europe.4 Two recent claims, one before the London High Court against shipping corporation Trafigura for personal injuries caused in the Ivory Coast and one before a Dutch court against oil giant Shell for environmental damages caused in Nigeria, may indicate a growing interest in the potential of foreign direct liability cases before the national courts of E.U. Member States.5 At the same time, political developments are taking place at the E.U. level, sparked by the publication in April 2008 of the influential Ruggie Report, which may turn out to have a significant effect on the political and legal climate for future cases within the European Union.6

Even though no equivalent to ATCA exists in Europe or anywhere else,7 plaintiffs may achieve similar results using ordinary tort law.8 Whereas ordinary tort claims can never substitute for ATCA claims, they may provide an important alternative when ATCA is unavailable due to the nature of the claim9 or the fact that it is brought before a court outside of the United States. The U.S. litigation culture, however, is uniquely favorable to foreign direct liability cases,10 so in countries other than the United States, such cases may face serious legal translation problems. 1 ] Differences in legal culture, substantive law, and procedural and practical matters may act as barriers to the successful pursuit of foreign direct liability cases in countries other than the United States. Still, as evidenced by past and current foreign direct liability cases before non-U.S. courts, these barriers do not render such cases impossible.

Cases like the English case against Trafigura and the Dutch case against Shell raise the prospect of translating foreign direct liability cases into the European context. Even though domestic regulations generally have retained their primacy in the civil law domain, due to the European Union's growing political and legal influence on its Member States, E.U. policies and regulations increasingly determine the European climate for foreign direct liability cases.12 At the same time, interconnected legal histories and shared legal cultures have led to many common European legal features. The question this Article answers is the following: what is the feasibility of foreign direct liability cases before courts in Europe, given the current European political and legal climate?

The underlying issue in foreign direct liability cases is access to justice for individuals and communities who are from developing host countries and who have suffered damage at the hands of multinational corporations diat operate out of developed home countries.13 In cases such as these, the host-country government often will be involved itself in the multinational corporation's activities there, either as a business partner or as a beneficiary. These governments are likely, therefore, to condone the corporation's activities even if they cause damage to third parties in the host country, which often considerably diminishes the victim's chances of receiving a fair trial in the host country.

Even if the victims do have access to justice in the host country and receive a verdict there entitiing them to compensation for their damages, local subsidiaries involved in the harmful activities will often be financially incapable of meeting a substantial damages claim. …

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