Canadian Lawyer InHouse

Q U I Z By Scott Fairley, Ian Mitchell, and Kim Lawton, WeirFoulds LLP Risks of international tort litigation at home Many Canadian companies with global operations are unacquainted with the risks of domestic tort litigation as a result of their business activities in foreign countries. While there has been increased awareness of the importance of compliance planning with regard to some international sources of risk such as foreign environmental assessments, bribery and corruption prosecutions, and securities class actions, there has been comparatively less cognizance of the risks of international tort litigation — particularly the risks stemming from alleged violations of international human rights norms admitted into Canadian law. The July 22, 2013 decision in Choc v. Hudbay Minerals Inc. has recently brought this topic to the forefront for the Canadian legal audience. In that decision, the Ontario Superior Court of Justice ruled that negligence claims brought by 13 Guatemalans, for alleged human rights violations that took place in Guatemala, could proceed against a Canadian mining company in Canadian courts. While a determination on the merits is still pending, Hudbay has precipitated a discussion within the Canadian legal community about how to lower the risks of international tort litigation. To that end, this quiz will discuss some of the situations Canadian companies operating abroad may have to navigate to manage this potential source of liability. 1 You are legal counsel to a Canadian company with global operations called Worldly Canadian Business Corp. An American member of the company's management team tells you that since Canada does not have a statutory jurisdictional vehicle functionally equivalent to the Alien Tort Statute (which has historically permitted victims of international torts to bring their claims on American soil) your company is not exposed to tort actions in Canada for foreign human rights violations. Is her interpretation of the law correct? (A) Yes (B) No (C) Maybe, it depends 2 After you carefully outline the finer legal nuances surrounding the domestic enforceability of customary international law, another member of your company's management team remarks, "Well, even if our American friend isn't quite right, since threshold cases advancing claims of civil liability for alleged human rights violations by Canadian companies operating abroad have had virtually no success in Canada, there is really nothing to worry about." Is his analysis correct? (A) Yes (B) No 3 Your company is now considering acquiring exploration rights for an oil and gas property in Foreignlandia. The company's CFO is cautioning only due diligence that is considered "absolutely necessary" can be undertaken in order to keep the total acquisition costs down. Does this mean your company should skip a human rights risk assessment exercise? (A) Yes (B) No (C) Maybe, it depends 4 Your company has decided to purchase the property in Foreignlandia and, after exploration activities have been conducted, a decision has been made to move into fullscale production. Should you reassess the human rights policy the company put in place when it was in the exploration stage? (A) Yes (B) No (C) Maybe, it depends 5 Some local citizens of Foreignlandia are unhappy that your company's property has moved into production. They stage a series of protests to voice their discontent. You are informed by the manager of the property in Foreignlandia that the company's security personnel have been accused of malevolent conduct by local citizens. Should company resources be allocated to manage the local issues? (A) Yes (B) No (C) Maybe, it depends WWW.CANADIANLAWYERMAG.COM/INHOUSE DECEMBER 2013/JANUARY 2014 • 17

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