Law minister Veerappa Moily?s proposal to enact a radical law to bind corporates like Union Carbide with vicarious liability under both criminal and civil laws (for negligence) and to permit class action suits has generated a debate in the legal community. In law, a class action or a representative action is a lawsuit where a large group of people collectively move the court to seek compensation. Such lawsuits originated in the US but have been embraced by other countries, too.
They seem to be the need of the hour in India because the government has failed to put a proper law in place despite the Supreme Court?s decision in the case of MC Mehta vs Union of India, popularly known as the Oleum Gas Leak case, laying down the absolute liability principle. The case decided by a five-judge bench of the apex court punished Shriram Food and Fertilisers Industries heavily, leading to the shutdown of the entire complex. The absolute liability principle means that companies engaged in inherently hazardous activities have absolutely no excuse when an accident occurs. The apex court held that any enterprise engaged in an inherently dangerous activity is absolutely liable to compensate all those affected by an accident. In such a case, the measure of compensation must be correlated to the magnitude and capacity of the enterprise because such compensation must have a deterrent effect, the court held. It added that the larger and more prosperous the enterprise, the greater must be the amount of compensation.
In India, unfortunately, though courts have over the years extended the scope of civil damages, there is still no structured law to deal with mass-scale tragedies such as Bhopal, lawyers say. Even 26 years after the gas tragedy, India does not have a formal law of torts that allows victims of a industrial tragedy to seek compensation. No attempt has since been made to put in place a law that would address such gross cases of corporate negligence?both in terms of compensation and the inescapable criminal consequences that must follow.
Ajay Bhargava of law firm Khaitan and Company says, ?The need for laws where liability should be fixed and guidelines on criminal consequences should be laid is being felt. It is the duty of the government to work towards a legislation that can deal with industrial disasters. There is a need to have a standalone law that deals with the settlement of claims as well as fixing criminal liability in such cases.?
This would only be in keeping with what is happening globally. For example, Chevron?s illegal oil-related dumping of at least 16 billion gallons of toxic waste into the Amazon rainforest is at the root of a class action lawsuit in Ecuador, where the oil giant now faces more than $27 billion in damages. Toyota owners, who are claiming that massive safety recalls are causing the value of their vehicles to plummet, have filed at least 89 class action lawsuits that could cost the Japanese auto giant billions, according to experts.The sheer volume of cases involving American Toyota owners claiming lost value? 6 million or more?could signify losses in excess of $3 billion for the automaker.
Also notable was a 2008, $300-million class action lawsuit on behalf of the residents who lived close to the site of a powerful propane explosion, accusing the City of Toronto of negligence for allowing Sunrise Propane Industrial Gases? plant to operate in a residential area. Last year, the Brumby government and a private electricity company faced one of the largest class actions in Victorian history over a devastating firestorm that snapped two kilometres of power line in Kilmore East. A class action suit has been filed against Singapore-owned electricity company SP AusNet, which is responsible for maintaining most of the power lines in eastern Victoria. While the Insurance Council of Australia has estimated the cost of the fires at about $500 million, SP AusNet?s legal liability has been capped at $100 million, under a deal struck by the former Kennett government with private utility operators. The Brumby government could be forced to cover a shortfall of hundreds of millions of dollars.
By far the most notorious man-made environmental disaster in America?s history, the Exxon-Valdez oil spill of 1989, was devastating for the coast of Alaska when 11 million gallons of crude oil were released into the secluded Prince William Sound, eventually polluting more than 700 miles of coastline. Hundreds of thousands of birds and animals were adversely affected by the environmental disaster. Exxon was indicted on five criminal counts and has paid $4.3 billion in fines, lawsuits and clean up costs. However, the state?s interest in the matter ended after it settled its pollution case against the company in 1991 for $1 billion. Thus, despite Exxon?s promise to take responsibility for the spill and to compensate the victims, individual and class action lawsuits were filed almost immediately.
Compare all this with the Bhopal tragedy. According to advocate MR Shamshad, the local government or the Union of India along with the prosecution were neither interested in upholding the justice system for its citizens nor looking at a serious hazard to the environment, which is evident from the fact that a huge amount of toxic waste is lying at the factory site even today. How do we ensure that there are no more Bhopal-like tragedies? And if there are any, there should be a redressal system. Only an appropriate law can ensure this, says Shamshad.
(Concluded)