Litigating for Protection and Principle, Not Profit

Owing to a persistent lack of clear parent company/value chain civil liability rules governing the human rights conduct of transnational corporations across jurisdictions, transnational BHR claims have been high-risk and expensive. This risk is heightened by the practical challenges inherent in proceedings spanning multiple jurisdictions, including evidence gathering, access to legal expertise, translation costs, and travel. The situation is exacerbated by claimants who are typically some of the world’s most economically vulnerable, such as migrant workers from lowest income countries, or Indigenous peoples whose rights are still unrecognized even by their own states.

Unlike law firms, CSOs are often not-for-profit. Transnational BHR litigation brought by CSOs in European jurisdictions remains high-risk, although potentially less expensive than engaging a law firm (at least in terms of legal fees) and is often “strategic” in the sense that the actual triumph of litigation may lie less in a final judicial victory than in its capacity to sustain long-term advocacy, shape public narratives, and generate leverage for remediation or reform even where procedural or substantive obstacles make success on the merits unlikely. This strategic orientation, therefore, redefines what counts as “success” in litigation, shifting emphasis away from adjudication toward leverage and agenda-setting.

A recent illustration is the Pakistan Climate Cost Case, brought by the German-based civil society organizations European Center for Constitutional and Human Rights (ECCHR) and medico international in close cooperation with Pakistani organizations National Trade Union Federation (NTUF) and Health and Nutrition Development Society (HANDS).Footnote ³ The case concerns claims brought on behalf of communities affected by catastrophic flooding in Pakistan against major corporate greenhouse gas emitters headquartered in Europe, including the German energy company RWE. Beyond the immediate claims, the litigation is intended to contribute to emerging debates on climate-related loss and damage by testing whether existing domestic and international accountability mechanisms can address transboundary harms suffered by communities in the Global South, or whether such harms continue to fall through regulatory and remedial gaps. In this sense, the case’s significance lies not primarily in the prospect of judicial success, but in its capacity to expose the limits of existing state-centered compensation and remedial frameworks. By pressing questions of corporate responsibility into judicial fora, the litigation operates as a signaling mechanism within broader debates, including those under the United Nations Framework Convention on Climate Change, about whether loss and damage associated with climate change can be meaningfully addressed without engaging the role of corporate actors alongside states.

CSO-Led Strategic Litigation and Corporate Behavioral Change

Strategic litigation is typically pursued alongside complementary non-judicial measures designed to generate reputational, political, and economic pressure on corporate actors, particularly in the absence of effective transnational regulation. Measures taken toward the government will often also involve litigation in the form of administrative complaints to courts or tribunals, which have the authority to review government/ministerial decisions enabling or facilitating the corporate conduct in question. CSOs and journalists will typically also be the ones to investigate corporate-government relationships and any conflicts of interest, especially in the absence of an independent government authority tasked with the role. Yet more formal measures taken toward the company can include complaints to quasi-judicial bodies that may even have a mandate and resources to initiative independent investigations, such as a relevant independent ombudsman; National Human Rights Institute (NHRI); OECD national contact point (NCP); or UN agencies, treaty bodies, or working groups, such as the UN Working Group on Business & Human Rights, with the caveat that the bringing of complaints to such bodies is often restricted if litigation is already underway.

These CSO-taken measures complementing litigation will often be used together in a reinforcing manner, ergo strategically, to compel a company’s change in behavior via affecting its reputation and social license. Their use and effectiveness will be highly dependent on the circumstances of the company, a key factor being whether the company is “public facing” in the sense that it is either publicly listed on a stock exchange or a recognizable “household” brand susceptible to internal or external pressure from shareholders, consumers, and the general public. For example, litigation, with its ongoing procedural and revelatory steps, can serve to keep the story of corporate abuse and allegations of breaches of the law in the media, as facts and arguments are revealed over time. Likewise, media coverage of protests can work to publicize a consumer boycott further, potentially even affecting a company’s share price, especially when taken together with the uncertain outcome of litigation, which has the potential to lead shareholders and investors to raise concerns at the company’s AGM or directly with the company’s leadership.

Litigation as part of a broader set of complementary strategic actions has the real and proven potential to bring even (or perhaps especially) large public-facing companies to mediation and provide remediation to rights-holders. This applies even when the judicial merits of the claimant’s case are notably weak under existing laws. The first-ever transnational civil claim brought before a German court by overseas claimants against a German company for harms occurring in its global supply chain is one such example. The KiK case concerned a 2012 Karachi garment factory fire in which circa 258 Pakistani workers perished whilst producing jeans for the German company, KiK GmbH. The National Trade Union Federation of Pakistan was instrumental in initially advising and supporting the victims and their families to form their own association—the Ali Enterprise Factory Fire Association—as well as providing support for domestic litigation against the government and factory owners. A group of European NGOs provided legal and funding support for the bringing of a transnational civil claim against the German brand before German courts (alleging, inter alia, that the $1 million in voluntary reparations paid by the company to the families of the victims and the survivors was woefully inadequate).

The complex litigation, which involved the application of English common law by German judges as a proxy for the applicable Pakistani law, was dismissed early in proceedings as time-barred on the application of the statute of limitations. While the litigation failed, the ongoing process helped to sustain a public campaign against the company involving media publicization of the disaster. This ultimately led to KiK GmbH agreeing to an additional remediation of $5.15 million for the victims and their families, during a process mediated by the International Labour Organisation. ^{Footnote 4} The extent—financial, time, resources—to which a law firm in Germany would go in pursuing such a claim and subsequent public campaign pro bono and transnationally over many years is highly questionable. The case also illustrates how CSO-led strategies may prioritize negotiated outcomes over judicial clarification, potentially advancing remediation while limiting the development of binding legal precedent.

Particularly in transnational BHR claims, litigation alone—without any of the above complementary measures taken by CSOs—has rarely been the sole impetus compelling financial remediation or specific changes in corporate behavior. In reality, only a very select number of transnational BHR cases have so far succeeded in achieving a positive substantive judgment for victim claimants.Footnote ⁵ One reason for this is that companies are far more likely to offer victim claimants a negotiated settlement as a means of avoiding the broader consequences of having a judgment issued against them.Footnote ⁶

CSO-Led Strategic Litigation and Law Reform

Litigation is necessarily limited to the application of existing law and the narrow analysis of case facts thereto. In this sense, CSO-led litigation often functions less as a corrective to legal failure than as an evidence-producing practice, making regulatory gaps visible and politically salient. By insisting upon political and economic context, CSOs have contrasted the reality facing victims from low-income countries with the high profit margins of transnational corporations and the comparatively very effective means they have had at their disposal, for instance, to defend their investment “rights” across borders through the use of Investor State Dispute Mechanism tribunals.Footnote ⁷

A common political-economic dimension also accounts for the driving role of CSOs and activism in transnational BHR cases, making them very often “bigger than just the case,” emblematic of much larger systemic injustices and inequalities rooted in historical and structural asymmetries of power, such as colonial mercantilism and racism. This dynamic is evident, for example, in the role CSOs played in mobilizing for the adoption of the French Duty of Vigilance Law, which for the first time established a statutory human rights due diligence obligation coupled with a civil liability enforcement mechanism.Footnote ⁸ Following its enactment, CSOs have increasingly relied on this framework to bring litigation on behalf of affected communities, illustrating how advocacy, law reform, and strategic litigation may function not as alternatives, but as mutually reinforcing components of corporate accountability strategies.

Transnational BHR cases are often horrendous, involving large numbers of preventable worker deaths, or pollution so widespread as to be declared ecocide. Their context tends to be the value chains of companies headquartered in the Global North, with the damage occurring in the Global South. The growing phenomenon of so-called climate cases, such as Milieudefensie et al. v. Royal Dutch Shell, which seek to hold fossil fuel companies accountable for their historic role in causing and profiting from climate change are a prime example.Footnote ⁹ This historical dynamic, however, is now changing as the number of transnational corporations from BRICS countries increases dramatically.

Individual cases have provided clear opportunities for CSOs to challenge the economic, legal, and political status quo in the public arena of opinion as well as political-legal decision making. Each time litigation against a transnational corporation for human rights abuses in its global value chain is brought and lost, the opportunity for CSOs and claimants exists to bring the question out of the courtroom and into the public and political arena, namely: What are—or should be—the legal responsibilities and civil liabilities of often hugely profitable transnational corporations concerning their harmful impacts on people’s human rights, our environment and climate?

The 2011 UN Guiding Principles on Business and Human Rights (UNGPs) may have at the same time helped and hindered responses to these questions.Footnote ¹⁰ On the one hand, the framework has created a clear standard of corporate human rights and environmental conduct applicable to the operations of transnational corporations—Human Rights Due Diligence, destined to become Human Rights and Environmental Due Diligence.Footnote ¹¹ Pillar III of the framework also made it clear that states are under an obligation to improve, inter alia, access to judicial remedies for victims of corporate human rights abuses.

On the other hand, the framework’s “smart mix” approach, purporting both voluntary and legislative measures, presumably intended to allow businesses time to adapt and states time for incremental improvements, has in almost a decade and a half led to questionable gains “on the ground” for CSOs and victim claimants attempting to bring transnational civil litigation as a means to redressing the serious harms they are suffering. It is an ongoing challenge for CSOs around the world to ensure that, in light of the increasing trend toward mandatory Human Rights and Environmental Due Diligence legislation, future laws (which can be designed in a myriad of waysFootnote ¹² ) actually improve litigation avenues and access to justice measures for rights-holders, importantly by including civil liability. CSOs thus occupy an ambivalent position within the UNGP framework, simultaneously operationalizing its access-to-remedy ambitions while exposing the limits of its reliance on incremental and voluntary implementation.

The Practical Role of CSOs in Bringing BHR Litigation

Communities and workers suffering the harmful impacts of global corporate activities typically lack knowledge of what rights they have, even as regards local companies, let alone transnational corporations or other actors (such as investors or social auditors) “behind” the abuses. People whose rights have been abused are often some of the most vulnerable in society, likely with limited formal education. Acknowledging this reality and considering the above-mentioned disincentives for law firms to pursue such claims proactively (financially high-risk; high-cost; low-return; even as transnational pro bono cases they require extended engagement for a positive outcome that routinely requires public campaigning in addition to judicial procedure) local and international partner CSOs bring essential legal and other (e.g., scientific; mobilization) expertise and capacity in order to help educate potential claimants on their legal rights and the potential avenues for achieving redress, including transnational civil litigation. Personnel working in CSOs will also often become involved at an early stage following instances of significant corporate abuse, particularly where affected communities lack immediate access to legal, technical, or organizational support. Following the Rana Plaza factory collapse in Bangladesh, for example, trade unions and CSOs played a central role in documenting harm, identifying responsible corporate actors within global supply chains, and supporting victims in articulating claims for compensation and accountability.Footnote ¹³

They play a key mobilizing role in instigating litigation and, when underway, function as a logistical link between lawyers and claimants across jurisdictions and cultures by providing cultural, social, and political expertise. In addition, they also assist with the gathering of evidence and sustaining cross-border legal coordination. Evidence gathering will often include research and investigation into corporate structures, policies, and purchasing practices; recording and translating victim testimonies; documenting sites of alleged harm, such as factories or pollution sites; specialist CSOs may also undertake their own specialized scientific and expert assessments, for instance, of pollution or how a particular technology works or engage independent experts to do so. These practices position CSOs not only as facilitators of claims, but as epistemic intermediaries whose assessments and framing choices shape how harm is translated into a legally cognizable form.

CSOs will also typically be the gateway for affected communities and workers to obtain funding for their litigation claims, either from their own funds or via their professional networks. Finally, CSOs will also typically be there to advise and assist rights-holders in the employment of other “strategic” measures outlined above. In recognition of the central role CSOs often play in connecting rights-holders with judicial processes, human rights bodies have recommended that claimants be permitted to be represented by CSOs and that such organizations be granted standing to participate directly in judicial proceedings on their behalf.Footnote ¹⁴

Risks and Challenges of CSO Involvement in BHR Litigation

It ought to be acknowledged again that there exists an asymmetry of power between often vulnerable or marginalized people from low-income countries who have suffered instances of corporate abuse and professional CSO personnel. The latter are normally comparatively well-educated and privileged, effectively acting as expert gatekeepers to formalized avenues of state power and opportunities for redress. Unless legally representing claimants directly (as opposed to a third-party lawyer), CSO personnel are normally not under any legal fiduciary duty toward the workers or communities they are ostensibly working for when mobilizing for litigation. Questions around the ethical role and behavior of CSOs in the context of remediation after mass corporate harm events can arise.Footnote ¹⁵ Beyond ethics, CSO involvement may also reshape power relations within the accountability ecosystem itself, privileging certain harms, communities, and legal strategies over others.

These risks underscore the importance of proper and accountable CSO governance and operating conduct, which may include an independent grievance mechanism; relevant and transparent policies, including the CSO’s own human rights commitments and policies; clear and regular communication and expectation management; and ways of working that are not only culturally and socially sensitive, but respect and facilitate the autonomous decision making and political orientation of potential claimants. Their cases can function as a powerful opportunity to open up to broader political contexts and legal movements. At the same time, their voices, needs, values, and wishes can also be co-opted, funneled, misconstrued, and depoliticized.Footnote ¹⁶ It has been argued that human rights advocacy risks highlighting the position of lawyers and litigation at the cost of other types of knowledge and practice.Footnote ¹⁷ In a transnational corporate liability context, agendas of claimants and CSOs often do not coincide at the difficult and predictable stage when the corporate defendant offers an impressive settlement deal, thereby retarding the potential of a public judgment and legal reasoning that sets a liability precedent advantageous to future claimants. Notwithstanding these concerns, further discussion of these issues, such as proposals for internal CSO grievance mechanisms for rights-holders, has emerged in the literature, even if such proposals have yet to translate into widespread or institutionalized reform.Footnote ¹⁸ These tensions underscore that CSO-led litigation is not inherently emancipatory, but contingent on governance practices, accountability to affected communities, and the distribution of decision-making power throughout the litigation process.