Tort Liability At Home For Alleged Wrongs Abroad: The Common Law Goes Extraterritorial?

Contemporary anti-corruption and bribery legislation is distinguished by its extraterritorial reach to conduct abroad - conduct which may indeed be lawful and/or expected as a condition of doing business where it occurs - as a basis for criminal liability at home both for individuals and other legal persons. Such statutes were, at inception, a marked departure from the principle of the sovereign equality of states, and previously sound business practices, that individuals and companies doing business abroad take and adhere to the law as they find it. Now, however, our anti-corruption regimes hold their individual and corporate entities to a common standard wherever they go.

In this phenomenon, Canadian legislation and courts may now be starting to lead by example. We are seeing the beginnings of similar developments in the realm of civil liability. Specifically, several recent decisions suggest a new type of extraterritorial tort liability for alleged violations of international human rights in foreign jurisdictions to which Canadian companies, particularly in extractive industries operating abroad, may be exposed. The fact that many of these companies are either based in or have asset-based connections to Canada also suggests that Canadian courts may become a centre for litigation of this kind.

Recent Examples of International Tort Litigation in Canadian Courts

Choc v. Hudbay Minerals Inc.1 involves three lawsuits brought by members of the indigenous Mayan Q'eqchi' population in El Estor, Guatemala, for alleged abuses committed by security personnel at Hudbay's former mining project in Guatemala in 2007 and 2009, including a shooting, a killing and gang rapes. The plaintiffs have advanced claims against Hudbay, a Canadian mining company with headquarters in Toronto and incorporated under the Canada Business Corporations Act, for being directly liable for the actions of its former Guatemalan subsidiary (and in one of the three actions, for also being vicariously liable for the actions of the Guatemalan subsidiary). The plaintiffs argued that Hudbay was directly liable for failing to prevent harms committed by the security personnel of its Guatemalan subsidiary, and that a duty of care was owed by the parent company to the members of the local community. Amnesty International, acting as an intervener, made submissions regarding international law, standards and norms supporting the existence and scope of such a duty of care.

Madam Justice Brown of the Ontario Superior Court denied a preliminary motion to strike, allowing the claims to proceed to trial, and found that the plaintiffs had pled all material facts required to establish the constituent elements of their claim of direct negligence and a novel duty of care owed by a parent company (which are reasonable foreseeability, proximity, and absence of policy reasons to offset or...