The United Nations Forum on Business and Human Rights brings together business, governments, civil society and the legal profession to develop thinking and share best practice in this emerging area of law and practice. At the 6th Annual Forum, DLA Piper lawyers Sarah Ellington and Jess Hogan were joined by representatives from Anti-Slavery International, Doughty Street Chambers, Freshfields Bruckhaus Deringer and Sancroft International to present a live mediation role play. The role play was intended to explore the potential for mediation to resolve business and human rights disputes, particularly in cross-border cases.
"It is worth mentioning that both DLA Piper and Freshfields, the two London law firms that organised the panel, were intent on demonstrating the need in this emerging field of practice to bring corporate and human rights lawyers to work together with representatives from civil society” remarked Elise Groulx Diggs, Associate Tenant at Doughty Street Chambers.
In the role play, a number of modern slavery and labour related abuses had occurred during the construction of a fictitious resort and a group action was being brought against a local JV company and its English holding company. A number of proposals for potential redress were made (on both sides) including:
- For the holding company - to commit to engaging in human rights due diligence and other measures to exert more control over its subsidiaries going forward
- Putting in place effective local redress to provide access to remedy for all affected individuals (not just the group of claimants represented at the mediation)
- Pledging monies for community schemes to tackle perceived social causes and the effects of undesirable working practices
Sarah Ellington, Legal Director at DLA Piper commented that "The scenario, whilst fictitious, highlighted the potential real life dangers for businesses which do not place consideration of human rights issues at the heart of their business planning and structuring. We also sought to demonstrate the need for business lawyers to understand human rights issues and counsel their clients that reducing risks to people reduces risks to business".
The role-play highlighted a number of significant benefits that mediation can provide to both businesses and individuals or communities who are involved in a situation where human rights have been adversely impacted. For instance, mediation may enable remedies to be offered swiftly without the need to determine complex issues of legal liability, a time consuming process. Similarly, mediation can prevent disputes progressing litigation and thereby substantially reduce associated time and costs as well as potential reputational damage.
It can also provide businesses with a higher degree of control over the dispute and reduce the uncertainty associated with litigation. In particular, in mediation, parties are free to come to any agreement they wish, as long as it is not contrary to the law and public interest. It can also encourage the parties to be creative about solutions, which can be forward looking rather than retrospective, with parties looking at ways to protect against future abuses and providing routes to effective local access to remedy.
While injunctions, orders for restitution in kind, financial compensation or similar remedies might be sought in court proceedings, in the business and human rights context issues relate to access to water, food, housing, standards of health, freedom of expression and association, anti-discrimination and labour standards. This tends to make other forms of remediation might be more appropriate.
The role play highlighted that to resolve business and human rights disputes in a way that is effective for both businesses affected individuals or communities, businesses should balance human rights expertise, with the usual corporate and legal expertise that, for example, considers their corporate and organisational risk profile, so as to minimise the chance of large groups of claimants initiating cross-border disputes.
Caution is still needed for these processes to be effective. This is especially the case where affected individuals or communities (as groups of claimants) have already signed up to conditional fee agreements or damages based agreements with lawyers, in which case they need to recover lawyers' fees, because these can act as a bar to achieving a settlement satisfactory to all parties. It should also be recognized that a formal mediation may be the start of a long process of negotiation which can take many months. In this, largely unscripted, role play the point was made that it took seven sessions for parties to come up with a potential agreement in principle. Even in cases where formal agreements are not reached a positive result of mediation can be that the parties learn to build greater mutual trust and understanding of the dispute.
"Our presentation at the United Nations Forum on Business and Human Rights was set against the backdrop of a growing global trend towards businesses and their advisors proactively addressing their corporate responsibility to respect human rights by managing risks to people as risks to business throughout their organisations. This is taking place at various levels - from corporate structuring and due diligence on new acquisitions, through to commercial agreements and chains of indemnity", stated Jess Hogan, Senior Associate at DLA Piper.