contribution by Lisa Nandy MP

When the House of Commons returns next week, one of the many pieces of legislation that Members will be scrutinising will be the ‘Legal Aid, Sentencing and Punishment of Offenders Bill’. It has attracted controversy, quite literally from left, right and centre.

There has rightly been great criticism of the impact on the poorest people in society but one specific, overlooked area of concern is the impact the proposed legislation will have on holding British-based multi-nationals to account when they commit human rights and environmental abuses abroad.

Already, there are alarmingly few mechanisms to hold businesses accountable when they operate across national borders and while we should promote the best of British business abroad, we should also ensure that business activities, particularly in the developing world, do not fuel or cause conflict and harm.

Take the activities of Trafigura, an oil trading company, which was found guilty of repeatedly dumping toxic waste on the Ivory Coast. On one occasion the company was directly responsible for the illnesses of over 100,000 people.

Very few options are available for victims of these crimes who are unfortunate enough to find themselves in such a situation. They are often too ill, poor and intimidated to take action, even if the laws and framework in the country allowed it.

The most viable option, albeit a risky, costly and often lengthy one, is to pursue civil litigation against the company in Britain. With the help of a progressive law firm and an insurance company, 30,000 of the victims filed a class action against Trafigura. The case was settled out of court and Trafigura paid out $152 million.

This was only possible through the ‘no win, no fee’ model. The costs of bringing the case to court, evidence gathering, representing 30,000 impoverished Ivorians and over 50 lawyers working on the case, were tens of millions, all borne initially by the lawyers and insurers.

Under the present system, if companies like Trafigura lose their case, they pay the legal costs, plus an additional success fee determined by the courts to cover the lawyers for the significant risk they have undertaken in bringing the case. This seems reasonable. After all, the ‘no win, no fee’ system was introduced in the 1990s because legal aid had been cut. The cost is not borne by the taxpayer but by the losing party.

Without a success fee, lawyers have neither the incentive to take on costly, risky and resource-intensive cases, nor do they have the resources to invest in doing so. In many cases lawyers have to fund their investigations for years before the case goes to court without any guarantee they will recoup their costs.

The Bill will stop successful lawyers recovering a success fee from defendants and allow lawyers to take a fee of up to 10% from victims’ compensation. This is neither right, nor fair. Compensation, by literal and legal definition, should replace the loss a victim has incurred; this money should be theirs and not susceptible to a hefty lawyers’ fee.

This point however, is almost moot, as such cases will simply not be brought in future. With no success fee to fund new cases and, thanks to other changes lawyers potentially unable to recover even their costs, they will not be able to afford to bring them.

There are over 70,000 people who have suffered serious harm that remain uncompensated in the Ivory Coast. No lawyer, under the current system, is prepared to represent them. The likelihood of lawyers doing so in future is almost inconceivable.

You can take action here: http://action.amnesty.org.uk/ea-action/action?ea.client.id=1194&ea.campaign.id=11587

—
Lisa Nandy is the Labour MP for Wigan

Reader comments

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