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Class action law suit against Canadian retailer for Bangladesh victims difficult, but not impossible

A shopper passes demonstrators outside clothing retailer Primark in central London April 27, 2013. The demonstrators were protesting following the collapse of a building in Bangladesh where low-cost garments were made for Western brands.


Western retailers and fashion brands are taking greater interest in the working conditions of contract workers overseas, as questions are raised in legal quarters about the potential for greater liability after disasters like the collapse of the Rana Plaza.

Lawyers in Canada say launching a class action on behalf of Bangladeshi victims against a Canadian retailer in court here would be very difficult, but not necessarily impossible.

"I wouldn't rule it out or say it's impossible," said Dimitri Lascaris, a class-action lawyer with Siskinds LLP in London, Ont. "But it would be challenging."

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Lawyers say any Bangladeshi plaintiffs suing here would face an uphill battle and that they would likely have to show some sort of direct, hands-on involvement or key decisions related to the factory took place in Canada, or involved Canadian personnel. But many overseas garment factories are run by subcontractors, their relationships with Western retailers further obscured by middlemen and complex supply chains. And any lawsuit would also face strong arguments that the legal fight belongs in Bangladesh, where the events occurred and those directly responsible and affected live.

Several legal actions trying to hold Canadian mining companies accountable for the alleged human-rights abuses blamed on subsidiaries overseas have failed in recent years.

Toronto lawyer Murray Klippenstein, who represents a group of Guatemalan plaintiffs suing Toronto-based HudBay Minerals Ltd. over violence allegedly perpetrated by security staff at a mine the company once owned, said any lawsuit launched in court here against a Canadian retailer over a disaster like the one in Bangladesh would likely fail, unless Canadian laws change.

"I think that the current rules of contracts and corporate subsidiaries allow one to maintain the appearance of arm's-length dealings which doesn't actually fit reality these days," Mr. Klippenstein said, noting that instant global communication makes it much easier to track conditions in factories overseas.

Still, Riyaz Dattu, a lawyer with Osler, Hoskin & Harcourt LLP in Toronto, who advised companies on these issues, says more cases involving alleged wrongdoing by subsidiaries in other countries are continuing to crop up in Canadian courts, and that companies are paying attention.

"There is increasingly a movement to find means for holding corporations liable for actions that they are taking abroad," Mr. Dattu said. " We're into uncharted territory, but it is not out of the realm of possibility that victims in overseas countries … would look to Canadian courts."

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About the Author
Toronto City Hall Reporter

Jeff Gray is The Globe and Mail’s Toronto City Hall reporter. He has worked at The Globe since 1998. From 2010 to 2016, he was the law reporter in Report on Business, covering Bay Street law firms and white-collar crime. He won an honourable mention at the National Magazine Awards for investigative journalism in 2010. More


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