The United Nations Special Representative of the Secretary General for Business and Human Rights, John Ruggie, has warned that if the UK government goes ahead with proposed cuts to its legal aid budget it will impact negatively on the number of cases taken against abuses by Multi-National Corporations (MNCs). Regular readers of the bulletin will recall the UK Government's proposed reduction to Legal Aid, following the publication of its consultation paper last year.
In a May 2011 letter to Minister for Justice Jonathan Djanogly, Mr Ruggie draws attention to three main concerns that the effect of the legal aid cuts will have on business-related human rights harms.
First, Mr Ruggie notes his concern at Government plans to abolish the recoverability of the Conditional Fee Agreement (CFA) success fee from the losing side. He states that as most cases against MNCs are funded by CFA arrangements, proposed reforms requiring claimants to pay success fees to lawyers out of compensation awarded (similar to the "no win no fee" model) would be hugely damaging. Despite the Government's simultaneous intention to raise compensation awards by 10%, Mr Ruggie says that a CFA success fee could still equal or exceed a compensation award, especially in complex human rights cases. This situation could result in the claimants being no better off following a judgment in their favour - "thus being left without access to the substance of an effective remedy."
Secondly, he criticised in his letter the proposal that claimants be required to pay "after the event" insurance premiums themselves.
Third, Ruggie warned that the introduction of the new cost assessment proportionality test for such claims may affect the ability of human rights lawyers to recover costs in excess of the level of compensation awarded. This test would apply even where the costs are essential to the case. In this regard, Ruggie warns that this may act as a deterrent to the already small number of lawyers who take on such cases.
Mr. Ruggie's mandate as United Nations Special Representative of the Secretary General for Business and Human Rights is completed at the end of June.
Click here to view an article on this feature and to view the letter from the Special Representative of the Secretary General for Business and Human Rights.
.