The prospect of multinationals being sued in the UK for harm they have allegedly caused to communities abroad has increased with a landmark ruling against a mining company.
A House of Lords decision that British-based Cape plc can be sued for damages in the UK by more than 3000 South African miners and their families suffering from the effects of asbestosis, has been hailed by corporate liability experts as a significant victory for stakeholders.
‘It means companies can be held accountable in this country for their operations abroad,’ said Susannah Read, spokeswoman for Leigh Day & Co solicitors, which has been representing the former Cape employees.
‘This will catch the companies that aren’t being careful and those who are exploiting conditions abroad while not expecting to be held accountable.’
The claims against Cape relate to asbestos mining during the apartheid period in South Africa. Cape, which has been based in the UK for 100 years, withdrew all its assets from South Africa in 1979 and has argued that it is not responsible for the actions of its former South African subsidiaries.
The UK’s Court of Appeal had ruled that the defendants could not be tried in the UK as it related to matters in South Africa, but the House of Lords judgement has overturned that ruling. No date has yet been set for a trial in the UK.
Earlier this year the Royal Institute of International Affairs began a study to examine how companies can reduce the risk of becoming involved in such ‘foreign direct liability’ cases. Publication of a final report is expected in the middle of 2001.