Chapter - III. Tortious Liability of Multinational Corporations in India

Transcription

1 Chapter - III Tortious Liability of Multinational Corporations in India

2 CHAPTER-III TORTIOUS LIABILITY OF MULTINATIONAL CORPORATIONS IN INDIA A tort is a civil wrong for which the remedy is an action for unliquidated damages and which is not exclusively the breach of a contract, or the breach of a trust, or the breach of other merely equitable obligation - Salmond1 2 The term tort was introduced into the terminology of English Law by the French speaking lawyers and Judges of the Courts of Normandy and Angevin Kings of England. As a technical term of English law, tort has acquired a special meaning as a species of civil injury or wrong. Till about the middle of the seventeenth Century tort was an obscure term, at a time when procedure was considered more important than the right of an individual. This emphasis on procedural aspect for determining the success for a case continued for some 500 years, till 1852, when the Common Law Procedure Act was passed and primacy of substance over the procedure gradually gained firmer ground. Today the maxim as it stands is ubi jus ubi remedium, i.e. where there is right there is remedy. 1 Salmond & Hueslon: Law of Torts 18th ed see generally 2 Ms Bhuvana Veeragavan: Torts in India Submitted to on 6th Dec

3 Tort is the French equivalent of the English word wrong and of the Roman law term delict. The word tort is derived from the Latin word tortum which means twisted or crooked or wrong and is in contrast to the word rectum which means straight. It is expected out of everyone to behave in a straightforward manner and when one deviates from this straight path into crooked ways he is said to have committed a tort. Hence tort is a conduct which is twisted or crooked and not straight. Though many prominent writers have tried to define Tort, it is difficult to do so for varied reasons. The key reason among this being, that the law of Torts is based on decided cases. Judges while deciding a case, feel their primary duty is to adjudge the case on hand rather than to lay down wider rules and hence they seldom lay down any definition of a legal term. Furthermore the law of tort is still growing. If a thing is growing no satisfactory definition can be given. 3.1 Nature Of Tortious Liability It is pertinent to understand what is meant by tortious liability or rather the nature of tort law in order to understand its utility. To throw more light, the word tort evolved from at one time very nearly passing into literary use as a synonym for wrong but after the middle of the seventeenth century, a practise began in the courts of the common law, of distinguishing between actions in contract for breaches of contract and actions for other wrongs, and of using the word tort as a compendious title for the latter class of actions. Since then it was JThe first reported of the word tort is in Boulton Vs Hardy(1597) Cvo.tWzSAl,5 A%:Salmond and Hueston Lem of Torts th ed. Page 11,Footnote 48 44

4 usual to speak of actions in contract and action in tort. So a tort came, in law to refer to that particular class of wrongs for which an action in tort was recognized by the courts of common law as a remedy and to lose the generic sense of wrong which it may have helped in popular use. Another interesting result of this association of the word with a form of action was that it came to refer also to the liability of a person who did not commit any tort or wrong, e.g. a master who is sued for the damages by the person injured by a tort committed by his servant. This was because an action in tort was the remedy against the master and in course of time and in response to new needs and conditions, the master was held liable to pay damages even though he had not committed any tort. So the law of torts is that body of law which deals with the liability of persons against whom an action in tort would lie. 3.2 Tort Law in India In India the term tort has been in existence since preindependence era. The Sanskrit word Jimha, which means crooked was used in ancient Hindu law text in the sense of tortious of fraudulent conduct 4. However, under the Hindu law and the Muslim law, tort had a much narrower conception than the tort of the English law. The punishment of crimes in these systems occupied a more 4 Text of Narada, Cited in Priyanath Sen: General Principles of Hindu Jurisprudence 1918 Amazon Co. U.K. Page 11 45

5 prominent place than compensation for wrongs. The law of torts in India presently, is mainly the English law of torts which itself is based on the principles of the common law of England. However the Indian courts before applying any rule of English law can see whether it is suited to the Indian society and circumstances. The application of the English law in India has therefore been a selective application. In this context, in M.C. Mehta v. Union of India5, Justice Bhagwati observed. We have to evolve new principles and lay down new norms, which will adequately deal with new problems which arise in a highly industrialized economy. We cannot allow our judicial thinking to be constructed by reference to the law as it prevails in England or for the matter of that in any foreign country. We are certainly prepared to receive light from whatever source it comes but we have to build our own jurisprudence. During British rule, courts in India were enjoined by Acts of Parliament in the UK and by Indian enactments to act according to justice, equity and good conscience if there was no specific rule of enacted law applicable to the dispute in a suit. In regard to suits for damages for torts, courts followed the English common law insofar as it was consonant with justice, equity and good conscience. They departed from it when any of its rules appeared unreasonable and ^AIR 1987 SC

6 unsuitable to Indian conditions. An English statute dealing with tort law is not by its own force applicable to India but may be followed here unless it is not accepted for the reason just mentioned. 3.3 Law of Torts in India whether unnecessary To fully assess the role played by law of torts in a modern society, it would be instructive to turn to the history of England during the last three centuries. This is for two reasons firstly, tort litigation in England has grown significantly, making it an interesting study and secondly, the law of torts in India has been largely borrowed from the English law of torts. The outstanding fact of England s legal history relevant to the present context is the growth of her own tort law from small beginning to the size and status of a separate branch of law. This was the work of her lawyers and judges who developed the action for damages as a remedy for violations of rights and duties and fashioned it as an instrument for making people adhere to standards of reasonable behaviour and to respect the rights and interests of one another. As a result, the English people benefited by the cultivation of habits of thought and conduct which helps social peace and cooperative effort, inculcated a live sense of individual rights which they do not hesitate to ascertain in courts of law. The necessary 47

7 corollary of this is the formulation of a large body of rules defining in detail the rights of the individual in relation to others and the conditions in which he can assert them in a court of law. So we have a body of law whose rules have grown and are constantly growing in response to new concepts of rights and duty and new needs and conditions. If it is true to say that the English people attained during this period, a degree of social unity and integration enabling them to achieve phenomenal success in various aspects of their life, activity and welfare, it is difficult to resist the inference that among the many forces and influences that made this possible, was the development of their system of law and justice so as to afford security to the citizen in his life, person, properly and rights and interests which he values. An integral and important part of this system is tort law6. Evidence of its importance is afforded by the large and growing volume of litigation and case law in actions for torts of various kinds and in particular those of defamation, negligence and nuisance. In deciding these actions English judges have tried to make their decisions sub-serve the purposes already stated. They have taken care to allow claims only when they are just and make their awards of damages serve, on the one hand as a deterrent of wrong doing and on the other, afford satisfaction to parties suffering from injury or loss. 6.A. Laksminath & Sridhar: Ramaswamy Iyers Law of Torts,Lexis Nexis Butterworths 10lb ed see generally. 48

8 The views here stated find support in the almost whole sale adoption of tort law of England along with her other laws by progressive nations like those of the U.S.A., Canada and Australia. Though we have done likewise in borrowing the English law of torts, we have to make a far greater use of it than we do now for making it serve the purposes for which the people of other countries aforesaid have used it. The use made of it in these countries in evidenced not only by the case law in their courts but also by the continual interest evinced by their lawyers, judges and professors in the development of this branch of law by means of their contributions to the growing volume of literature on it. It is undeniable that we cannot afford to neglect any agency which can help to regulate individual conduct in conformity with the needs of social peace and contentment which are the basic factors on which our plans of national advancement can rest. It is hardly necessary to add that while adopting English rules and theories, we have to make alterations and adaptations of them which are demanded by conditions in India as observed by various Indian Judges and also take note of the great changes in this branch of law that are taking place elsewhere. Therefore it is unnecessary to state that, there is absolutely no scope of doing away with this branch of law. Some may argue that the 49

9 law of torts merely plays a role of a residuary law. However bearing in mind the facts above mentioned it is clear that there is no truth in this argument. 3.4 Torts whether simple overlooked The next logical progression would be to determine whether law of torts has been simply overlooked. The development of the absolute liability rule in the M.C. Mehta case and the Supreme Court s direction on Multi-national corporation liability, recognition of Governmental tort by employees of government, principles on legality of State, evolution of tort of sexual harassment, grant of interim compensation to a rape victim, and award of damages for violation of human rights under writ jurisdiction, including a recent Rs.20 crore exemplary damages in the Upahaar Theatre fire tragedy case by the Delhi High Court are significant changes in the tort law of India, which affords a preliminary answer that tort law has not been overlooked. There have been a number of enactments such as the Public Liability Insurance Act, 1991, Environment Protection Act, 1986, Consumer Protection Act, 1986, Human Rights Protection Act, 1993, Pre-Natal Diagnostics Techniques Regulations and Prevention of Misuse Act, 1994, embodying the new principles of tortious liability in India. The Motor Vehicles Act, 1988 and judicial interpretation 7.M.C. Mehta V Union of India, AIR 1987 SC

10 continue to contribute to development of accident jurisprudence. The unfortunate Bhopal Gas Leak disaster has triggered a new path of tort jurisprudence, leading to environment tort, toxic torts, governmental torts, MNCs liability, congenital torts, stricter absolute liability, etc. Still the Indian Law Reports furnish in this respect a striking contrast to the number of tort cases before the Courts. While most branches of law, eg. crimes, contracts, properly, trusts, etc. have been codified, it is interesting to observe that there is yet no code for torts in India. Most of the development in tort law is the contribution of the Indian Judges and lawyers. Though recommendations for an enactment on tort law were made as early as in 1886 by Sir F. Pollock, who prepared a bill known as the Indian Civil Wrongs Bill at the instance of the Government of India, it was never taken up for legislation. Undoubtedly a code of useful, but it is well to recognize that this branch of law is still in the process of growth and while it would be difficult to prepare a code, it would not also help a proper development of the law to do so. Lack of a code for the law of torts acts as a deterring factor for it to branch out as a favoured form of litigation. The growth of tort law in India does not even compare to other progressive countries which have put it to much better use. 51

11 Acknowledging the fact a code on torts would be premature for the reasons aforementioned, it would perhaps be wiser to start with enactments on particular topics on which the case-law in India is unsatisfactory and has to be rectified. One of the first recommendations for legislation made by the Law Commission appointed by the Government of India is on the subject of liability of the government for torts of its servants. On the other hand the reason why an Indian code on this branch of law is premature is that there is very little tort litigation in our courts and there have not been sufficient opportunities for applying principles evolved elsewhere or evolving principles appropriate to Indian conditions. At present it is a singular circumstances that very few cases of torts go before the Indian courts. Until there is code for the law of torts not many people will prefer to go to the courts for cases involving torts, as they would not be sure of its outcome. 3.5 Remedies under Law of Torts * Actions brought under tort law are among the oldest of the legal remedies to abate pollution8. Most pollution cases in tort law fall under the categories of nuisance, negligence and strict liability. To these traditional categories, the Supreme Court has added a new class based on the principle of absolute liability. This norm was 8.Shyam Divan & Armin Rosencranz:Environmental Law & Policy in India Oxford University Press 2nd ed Page 88 52

12 developed by the court in the post-bhopal period in response to the spread of hazardous industries and was later adopted by the legislature9. 1. Damages and Injunction or both. A plaintiff in a tort action may sue for damages or an injunction, Damages Damages are the pecuniary compensation payable for the commission of a tort. Damages may be either substantial or exemplary. Substantial damages are awarded to compensate the plaintiff for the wrong suffered. The purpose of such damages resolution i.e. to restore the plaintiff to the position he or she would have been in if the tort had not been committed. Such damages, therefore, correspond to a fair and reasonable compensation for the injury. Exemplary damages are intended to punish the defendant for the outrageous nature of his or her conduct, as for instance, when he or she persists in causing a nuisance after being convicted and being fined for it. The object of the court in such cases is to deter the wrongdoer. The deterrence objective has recently prompted the Supreme Court to add a fresh category to the type of cases where 9 Both Public Liability Insurance Act of 1991 & the National Environment Tribunal Act of 1995 adopt this norm 53

13 exemplary damages may be awarded, viz. when harm results from an enterprise s hazardous or inherently dangerous activity. In the Shriram Gas Leak Case10, oleum gas escaped from a unit of the Shriram Foods and Fertilizer Industries and inured a few Delhi citizens. The court observed that in such cases, compensation must be correlated to the magnitude and capacity of the enterprise because such compensation must have a deterrent effect. The larger and more prosperous the enterprise, the greater must be the amount of compensation payable by it. Damages awarded in the tort actions in India are notoriously low, and pose no deterrent to the polluter. Lengthy delays in the adjudication of cases combined with chronic inflation dilute the value of any damages that a successful plaintiff may receive. Consequently, although in theory damages are the principal relief in a tort action, in practice injunctive reliefs are more effective in abating pollution. Accordingly, litigation strategies must shift away from the conventional common law emphasis on damages. Lawyers in India intent on abating pollution may seek a temporary injunction against the polluter followed by a perpetual injunction on decree. Damages should be viewed as a bonus. 10 M.C. Mehta V Union of India 1987 SC

14 Injunction An injunction is a judicial process where a person who has infringed, or is about to infringe the rights of another, is restrained from pursuing such acts. An injunction may take either a negative or a positive form. It may require a party to refrain from doing a particular thing or to do a particular thing. Injunctions are granted at the discretion of the court. Injunctions are of two kinds, temporary and perpetual. The purpose of a temporary injunction is to maintain the state of things at a given date until trial on the merits. It is regulated by sections 94 and 95 as well as Order 39 of the Code of Civil Procedure of It may be granted on an interlocutor}7 application at any stage of a suit. It remains in force until the disposal of the suit or until further orders of the court. Rule 1 of Order 39 provides that temporary injunctions may be granted where it is proved : (a) that any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit, or wrongfully sold in execution of a decree, or (b) that the defendant threatens, or intends, to remove or dispose of his property with a view to defrauding his creditors, or 55

15 (c) that the defendant threatens to dispossess the plaintiff or otherwise cause injury to the plaintiff in relation to any property in dispute in the suit... The Supreme Court has held that courts also have an inherent power to issue a temporary injunction in circumstances that are not covered by the provisions of Order 39 when the court is satisfied that the interests of justice so require11. The grant or refusal of a temporary injunction is governed by three well established principles : (1) the existence of a prima facie case (a showing on the facts that the plaintiff is very likely to succeed in the suit); (2) the likelihood of irreparable injury (an injury that cannot be adequately compensated for in damages) if the injunction is refused; and (3) that the balance of convenience requires the issue of the injunction (a showing that the inconvenience to the plaintiff if the temporary injunction is withheld exceeds the inconvenience to the defendant if he or she is restrained). Perpetual injunctions are regulated by sections 37 to 42 of the Specific Relief Act of A perpetual injunction permanently restrains the defendant from doing the act complained of. It is granted at a court s discretion after judging the merits of the suit. A perpetual injunction is intended to protect the plaintiff indefinitely (so that he or 11 Manohar Lai Chopra V RaiBaja Seth Hiralal AIR 1962 SC 527,532 56

16 she need not resort to successive actions in respect of every infringement), assuming that the circumstances of the case remain essentially unchanged. A court may permanently restrain the defendant where damages do not provide adequate relief or where the injunction would prevent a multiplicity of proceedings. Thus, where hazardous dust from a brick grinding machine pollute the air of a neighbouring medical practitioner s consulting room, the polluter was permanently restrained from operating the machine. A court may grant it injunction even though the anticipated damage may not be very serious, as lost as the damage is continuous or frequent. The balance of convenience test also applies to the award of a permanent injunction: The court must be satisfied that the damage that the defendant would suffer by the grant of the injunctions outweighed by the damage the plaintiff would suffer if the injunction was refused. Finally, the court will consider the injunction s impact on third parties, for example when the granting of an injunction would throw a large number of people out of work. 3.6 Nuisance Negligence, Strict Liability and Absolute Liability A.Nuisance Modem environmental law has its roots in the common law 12. Ram Baj Singh V Babulal AIR 1982 All

17 relating to nuisance. A nuisance is an unlawful interference with the plaintiff s use or enjoyment of land. A plaintiff must, therefore, prove some injury to his enjoyment of property and his own interest in that property. An occupier of the property can sue for nuisance. Ordinarily, a nuisance means anything that annoys, hurts or offends; for an interference to be an actionable nuisance, the conduct of the defendant must be unreasonable. Further, a nuisance must not be momentary, but must continue for some time : A single, short inconvenience is not actionable. A nuisance would include offensive smells, noise, air pollution, and water pollution. There are two kinds of nuisance public and private A public nuisance injures, annoys or interferes with the quality of life of a class of persons who come within its neighborhood. It is an unreasonable interference with a general right of the public. It is both a tort and a crime. The remedies for a public nuisance are : (1) a criminal prosecution for the offence of causing a public nuisance ; (2) a criminal proceeding before a magistrate for removing a public nuisance14; (3) a civil action by the Advocate General or by two or more members of the public with permission of the court, for a declaration, an injunction, or both Indian Penal Code of 1860, Section Code Of Criminal Procedure of 1973, Section Code of Civil Procedure of 1908,Section 91 58

18 A private nuisance is a substantial and unreasonable interference with the use and enjoyment of land. Reasonableness of the defendant s conduct is the central question in nuisance cases. To determine reasonableness, courts will be guided by the ordinary standard of comfort prevailing in the neighbourhood. Minor discomforts that are common in crowded cities will not be viewed as a nuisance by the courts. An action for private nuisance may seek injunctive relief as well as damages. In cases of a continuing cause of action, such as pollution of a stream by factory wastes or smoke emissions from a chimney, the proper course is to sue for an injunction. Repeated actions for damages may be brought to recover the loss sustained upto the date of the court s decree; but future losses, which are contingent on the continuance of the wrong, are not usually awarded. Damages offer poor relief since the plaintiff would be compelled to bring successive actions. Ordinarily, therefore, courts grant the plaintiff an injunction where a nuisance exists or is threatened, unless he or she is guilty of improper conduct or delay. B. Negligence A common law action for negligence may be brought to prevent environmental pollution. In an action for negligence, the plaintiff must show that (1) the defendant was under a duty to take reasonable care to avoid the damage complained of; (2) there was a breach of this 59

19 duty; and (3) the breach of duty caused the damage. The degree of care required in a particular case depends on the surrounding circumstances and varies according to the risk involved and the magnitude of the prospective injury. An act of negligence may also constitute a nuisance if it unlawfully interference with the enjoyment of another s right in land. Similarly, it may also amount to a breach of the rule of strict liability in Rylands v Fletcher, if the negligent act allows the escape of anything dangerous which the defendant has brought on the land. The casual connection between the negligent act and the plaintiffs injury often the most problematic link in pollution cases. Where the pollutant is highly toxic and its effect is immediate, as with the methyl isocyanate that leaked from the Union Carbide plant in Bhopal, the connection is relatively straightforward. The casual is more tenuous when the effect of the injury remains latent over long periods of this and can eventually be attributed to factors other than the pollutant, or to polluters other than the defendant. C. Strict Liability j nr The rule of in Rylands v Fletcher holds a person strictly liable when he brings or accumulates on his land something likely to cause harm if it escapes, and damage arises as a natural consequence of its LR3HL LR3HL

20 escape. But strict liability is subject to a number of exceptions that considerably reduce the scope of its operation. Exceptions that have been recognized are : (1) an act of God (natural disasters such as an earthquake or flood); (2) the act of a third party (e.g., sabotage); (3) the plaintiffs own fault; (4) the plaintiffs consent; (5) the natural use of land by the defendant (i.e. strict liability applies to a non-natural user of land); and (6) statutory authority. D. Absolute Liability With the expansion of chemical-based industries in India, increasing number of enterprises store and use hazardous substances. These activities are not banned because they have great social utility (e.g. the manufacture of fertilizers and pesticides). Traditionally, the doctrine of strict liability was considered adequate to regulate such hazardous enterprises. The doctrine allows for the growth of hazardous industries, while ensuring that such enterprises will bear the burden of the damage they cause when a hazardous substance escapes. Shortly after the Bhopal gas leak tragedy of 1984, the traditional doctrine was replaced by the rule of absolute liability, a standard stricter than strict liability. Absolute liability was first articulated by the Supreme Court and has since been adopted by Parliament. 61

21 The genesis of absolute liability was the Shriram Gas Leak Case which was decided by the Supreme Court in December The case originated in a writ petition filed in the Supreme Court by the environmentalist and lawyer, M. C. Mehta as a public interest litigation. The petition sought to close and relocate Shriram s caustic chlorine and sulphuric acid plants which were located in a thickly tli populated part of Delhi. Shortly after Mehta filed this petition, on 4 December, 1985 oleum leaked from Shriram s sulphuric acid plant causing widespread panic in the surrounding community. Chief Justice Bhagwati, who presided over the Supreme Court bench, was concerned for the safety of Delhi s citizens. Moreover, the Chief Justice saw in the oleum leak a way of influencing the pending and far more important Bhopal Gas Leak Case. In the first reported order in Shriram, the Chief Justice observed that the principles and norms for determining the liability of large enterprises engaged in the manufacture and sale of hazardous products were questions of the greatest importance particularly since, following upon the leakage of MIC gas from the Union Carbide Plant in Bhopal, lawyers, judges and jurists are considerably exercised as to what controls, whether by way of relocation or by way of installation of adequate safety devices, need to be imposed upon (hazardous industries), what is the extent of 18. M.C. Mehta V Union of India, AIR 1987 SC

22 liability of such corporations and what remedies can be devised for enforcing such liability with a view to securing payment of damages to the person affected by such leakage of liquid or gas19. Union Carbide hinted at a sabotage theory to shield itself from the claim of the Bhopal victims. It was suggested that a disgruntled employee working in the pesticide factory owned by Carbide s Indian subsidiary may have triggered the escape of the gas. Such a theory afforded a defense under the rule of strict liability lay down in Rylands v. Fletcher. But any faith Union Carbide may have reposed in the sabotage theory was soon shaken by Chief Justice Bhagwati s rejection of the Rylands rule in situations involving hazardous industries. In his last judgement before retirement, Chief Justice Bhagwati spoke for the court: We are of the view that an enterprise which is engaged in a hazardous inherently dangerous industry which poses a potential threat to the health s safety of the persons working in the factory and residing in the surrounding areas owes an absolute and nondelegable duty to the community to ensure that no harm results to anyone on account of hazardous or inherently danger nature of the activity which it has undertaken... We would therefore hold that where an enterprise is engaged in a hazardous or inherently dangerous activity and harm results to anyone on 19. M.C. Mehta V Union of India, AIR 1987 SC

23 account of an accident in the operation of such hazardous or inherently dangerous activity resulting, for example, in the escape of toxic gas the enterprise is strictly and absolutely liable to compensate all those who are affected by the accident and such liability is not subject to any of the exceptions which operate vis-a-vis the tortious principle of strict liability under the rule in Rylands v. Fletcher What is Mass Torts? In brief, Mass Torts can be explained as Such activity of the defendant, the harm caused by which is wide and a large number or sector of society gets affected simultaneously. In other words, we can say that the cases of mass torts are somewhat different from those situations when only one or two persons are harmed. About the relationship of mass torts and industrialization, there are certain striking features which differentiates it from the other ordinary cases of torts 1. As the effects arising from the industrial hazards are prolonged and uncertain, it is almost impossible to exactly ascertain the amount of damages. 2. The responsibility of National Government in a welfare state to LR3HL

24 3. act as the guardian of people s lives and properties is activated because such cases usually involve a large section of society. Moreover, ordinarily that section is poor, powerless and illiterate and hence, hardly in a position to act on its own Not natural persons but legal persons are behind these activities (companies and that too MNC s in certain cases) it becomes difficult to find out the forum for suing the dependant company because of its web of corporate office. 3.8 Salient features/characteristics of Mass Torts The salient/defining characteristics of a mass tort includes- 1. Numerous victims who have filed or might file damage claims against the same defendants. 2. Claims arising from a single event or transaction, or from a series of similar events or transactions spread over time. 3. Questions of law and fact that is complex and expensive to litigate and adjudicate- frequently questions that are scientific and technological in nature. 4. Important issues of law and fact which are identical or common to all or substantial subgroups of the claims. 65

25 5. Injuries that are widely dispersed over time, territory and jurisdiction. 6. Caused indeterminacy - especially in cases involving toxic substance exposure - that precludes use of conventional procedures to determine and standards to measure any casual connection between plaintiffs injury and the defendant s tortuous conduct. 7. Disease and other injuries from long delayed latent risks especially in cases involving toxic substance exposure. 3.9 Problem before Courts/Litigants under Mass Torts The mass tort litigation presents some unique problems for the courts and the litigants. Some of them are as follows - 1. The large number of litigants, plaintiffs as well as defendants, makes mass litigation burdensome. These large numbers significantly complicate the processing and resolution of litigation with procedures that evolved primarily for Simple lawsuits - i.e. those involving one or two parties on each side. 2. Mass tort litigation can involve enormous personal, financial and political stakes for parties on all sides. It also imposes large burdens on the courts system in terms of both public costs and concentration of cases within particular jurisdictions. 66

26 3. Timing is critical for plaintiffs with significant disabilities and expenses. Yet as the number of claims increases, the need of plaintiffs for prompt compensation becomes harder to satisfy. The complex issues and large number of parties can result in long delays in processing and resolving cases. 4. Litigation involving toxic torts presents particular difficulties centering on issues, both technical and legal, about the causation and documentation of injuries and diseases. The frequently long latency period between exposures to a toxic substance and injury, together with the need to identify the products to which exposure occurred, further complicates legal and technical issues. 5. Finally, mass litigation presents special treats to the fairness of our justice system, raising the possibilities that outcomes will be inconsistent; that defendants faced with a great number of claims may be forced to make significant settlements even when liability is unlikely; that defendants can avoid responsibility by aggressively pursuing litigation; that compensation is not related to the seriousness of injuries; and that the burdens on defendants might not accurately reflect their relative culpability Nature of the Trial under Mass Torts 67

27 In the last decade, mass trials have come to be seen in much of the academic literature as the proper and efficient answer to mass torts in our mass society. Burdened by lengthening dockets, federal judges have begun to experiment with mass trials to try many claims at once. In this way, we appear ready to reject a centuries old tradition of individual claim autonomy in tort litigation, involving substantial personal injuries or wrongful death. Insufficient attention has been paid, however, to the impact of mass trials on the fairness of such proceedings to individual plaintiffs, on the relationship of counsel to client, on the role of the judge in coercing settlement, and on the temptation to distort substantive law to skirt important procedural obstacles to mass trials. As explained below, all of these concerns argue against using mass trials to adjudicate mass tort cases. The better course is to coordinate and consolidate pretrial discovery and motions practice but then individually try the tort cases in an appropriates venue. After a number of cases have been tried substantial incentives will operate to encourage the private settlement of many of the remaining claims Multi-National Comporation s (MNC s) liability under mass torts Under the mass torts, there are certain striking features on the grounds of which a MNC should be held liable. They are as follows 68

28 1. MNC s by virtue of their global purpose structure, organization, technology, finance and resources have it within their power to make decision and take actions that can result in industrial disasters of catastrophic proportion and magnitude. This is particularly true with respect to those activities of the MNC which are ultra hazardous or inherently dangerous. 2. Key management personnel of multi-nationals exercise a closely-held power which is neither restricted by national boundaries not effectively controlled by international law. The complex corporate structure of the multi-national, with networks of subsidiaries and divisions, makes it exceedingly difficult or even impossible to pinpoint responsibility for the damage caused by the enterpris3 to discrete corporate units or individual in reality, there is but one entity, the monolithic multinational, which is responsible for the design, development and dissemination of information and technology worldwide, acting through a forged network of interlocking directors, common operating systems, global distribution and marketing systems, financial & other control. In this manner, the multinationals carries out its global purpose through thousands of daily actions, by a multitude of employees and agents. Persons harmed by the acts of the multinational corporation are not in a position to isolate which unit of the enterprise caused the harm, yet it is evident that the multinational enterprise that caused harm is liable 69

29 for such harm. The multinational must necessarily assume this responsibility for it alone has the resources to discover and guard against hazards and to provide warnings of potential hazard. This inherent duty of the multinational is the only effective way to promote safety and assure that information is shared with all sections of its organization and with the nations in which it operates. 3. A MNC has a primarily absolute and non-delegable duty to the persons and country in which it has in any manners caused to be undertaken any ultra hazardous or inherently dangerous activity. This includes a duty to provide that all ultra hazardous or inherently dangerous activities be conducted with the highest standards of safety and to provide all necessary information and warnings regarding the activity involved. For example, the defendant Multinational Union Carbide breached this primary absolute and non-delegable duty through its undertaking of an ultra hazardous and inherently dangerous activity causing unacceptable risks at its plant in Bhopal, and the resultant escape of lethal MIC carbide further failed to provide that its Bhopal plant met the highest standards of safety and failed to inform the Union of India and its people of the dangers therein. Defendant Union Carbide is primarily and absolutely liable for any and all damages caused or contributed to be the escape of lethal MIC from its Bhopal plant. 70

30 To conclude A mass tort is such activity of the defendant which causes harms to a large number/sector of the society. Under mass torts, a MNC should be held liable, if it - i. results in industrial disasters by virtue of their global puipose. ii. fails to promote effective safety measures. iii. fails to share the information with all sectors of its organization. iv. fails to share information with the nations in which it operates. v. breaches the primary, absolute and non-delegable duty to persons & country in which ultra-hazardous' activities are carried out by them. 71