Last month, Dyson agreed to settle a lawsuit brought by 24 migrant workers who alleged they were subjected to forced and abusive treatment in a Malaysian factory producing parts for the company.
While the details of the settlement remain private, the case is still significant as the settlement came soon after the UK High Court found that the claims against Dyson, a British company, could proceed before English courts, even though they concern harms caused abroad. This holding signals a continued shift in the landscape of business and human rights litigation towards increased corporate accountability.
Another recent example emerged last week in France, when the Paris Judicial Court found Yves Rocher Group liable for failing to comply with the French Duty of Vigilance Law with respect to its subsidiaries abroad. The claim concerned a wave of dismissals by Yves Rocher’s Turkish subsidiary in 2018 affecting employees who had joined a trade union.
The ruling is significant as it marks the first time that a French company has been found liable for human rights violations arising from its activities abroad. Yet most of the victims were unable to obtain compensation, as the Court deemed their claims inadmissible due to a settlement agreement previously concluded with the Turkish subsidiary in 2019.
Trends in Business and Human Rights Litigation
Overall, cases like this reinforce that human rights risks in global supply chains are no longer just reputational; they are increasingly legal. To date, business and human rights litigation has predominantly relied on tort law, criminal law and administrative or regulatory law. As modern slavery, child labor and forced labor laws are increasingly introduced around the world and with several EU regulations requiring corporate sustainability due diligence set to enter into force, the grounds for holding companies accountable for human rights (and environmental) harms are likely to expand.
For companies, this underscores the importance of having effective due diligence systems in place, including clear governance and grievance mechanisms, to ensure they can proactively identify and address harms to people (which are increasingly, and evidently, harms to their business as well).
Key Questions Around Business and Human Rights Litigation
Who constitutes a claimant in business and human rights cases?
Generally speaking, according to the UN Basic Principles, a victim is defined as a person who has suffered harm. This may include an individual or a group of individuals. The concept is not limited to those who were the direct target of the violation, but also encompasses persons who are affected by it, either directly or indirectly. Individuals entitled to reparation (or substantive remedy) may therefore include both direct victims of human rights violations and persons who are not direct victims but have nonetheless suffered material, physical or moral harm as a consequence of the violation, such as relatives or family members of the victim.
In litigation, the class or the group of claimants must be clearly defined in a lawsuit for a lawsuit to proceed. Additional claimants who meet the criteria of the defined class may subsequently join the lawsuit as plaintiffs.
While lawsuits must define the class or individuals bringing claims, parties may agree to settlements that provides remedies to a broader group than the original claimants. Settlement agreements may also establish compensation funds for future claims, enabling individuals who suffer harm at a later stage to seek redress.
What are the types of remedies awarded or agreed on in business and human rights settlements?
Remedy refers to “both the processes of providing remedy for an adverse human rights impact and the substantive outcomes that can counteract, or make good, the adverse impact”. These outcomes or substantive forms of remedies may take different forms, including restitution, compensation, rehabilitation, satisfaction and guarantees of non-repetition. They often require a combination of these forms, depending on the context and the type of harm involved.
This combination has also been referred to as a remedy ecosystem or a bouquet of remedies, for example, by the Working Group at the UN and by the OECD National Contact Point for Responsible Business Conduct in their final assessments in the cases against Telenor and Lundin Energy.
While compensation is the most common remedy in business and human rights cases settlements often cover a broader range of remedy than financial payments alone.
Beyond direct compensation to claimants, remedies may include dedicated funds for legal aid, medical and memorial costs, community infrastructure and projects supporting vulnerable groups through capacity-building and economic empowerment. The Yahoo Human Rights Fund and the settlement with Camellia Group for abuses on Malawi tea estatesare examples of models that benefit communities beyond the immediate plaintiff class, potentially including individuals who have not yet been harmed.
Some settlements also introduce corporate measures aimed at preventing future harms. These may include employee accountability mechanisms, escalation policies and operational-level grievance mechanisms monitored by independent third parties to ensure allegations of abuse are addressed promptly and fairly.
The Kakuzi case involving human rights abuses on farms in Kenya and the Petra Diamonds case involving abuses in Tanzania are examples where independently monitored grievance mechanisms were included in settlement agreements.
Other remedies may include formal apologies and public commitments not to repeat harms (guarantees of non-repetition). Settlements can also include protections for human rights defenders and vulnerable groups, such as non-victimization clauses and independent oversight to ensure there is no retaliation against those who raise concerns.
At the same time, it is important to recognize the limits of remedy. Certain harms such as killings, torture or severe physical and psychological abuse can never truly be undone. In these situations, the objective of remedy cannot simply be to “make whole” what was lost, but rather to acknowledge the harm, providing redress for victims and/or surviving family members and prevent similar violations from occurring again.
The Future of Business and Human Rights Litigation
Recent developments such as the Dyson settlement and the Yves Rocher ruling illustrate a broader shift in the legal landscape: companies are increasingly being held to account for human rights harms through litigation.
At the same time, lawyers representing claimants are seeking broader remedy ecosystems that go beyond financial compensation alone, but also request organizational changes within companies, such as the introduction of escalation policies and operational-level grievance mechanisms aimed at preventing future harms.
A key aspect in designing substantive remedies in business and human rights litigation is that it must involve affected rightsholders. Remedies should respond to the diverse experiences and expectations of those affected and rightsholders should be able to participate without fear of victimization. This also means that rightsholders should be consulted when determining the types of remedy to be requested in a legal action or in a settlement agreements.
As legal frameworks evolve and litigation expands, companies see an additional, tangible incentive to establish clear human rights accountability structures, effective due diligence systems and meaningful engagement with rightsholders.
Cecilia for the CORE team
