Against Settlement in Transnational Business and Human Rights Litigation

In “Against Settlement,” Owen Fiss argued that settlement may not always be the optimal result of civil suits, particularly those that involve novel or ambiguous areas of law or ostensible power imbalances. That work spurred a range of scholarship around the merits and demerits of settlement. And although the settlement versus litigation debate is now almost four decades old, its currency persists in common law systems in which courts are, at times, called upon to expand or even re-envision doctrines or procedural rules. This article revisits that debate. It applies “Against Settlement” to transnational business and human rights litigation that has, over the past few decades, resulted in a number of high-profile civil claims across the common law world. In the context of that area of litigation, adjudication on the merits of a claim has benefits beyond the specific litigants involved. I focus on three transnational business and human rights case studies, all of which affirm one or more aspects of Fiss’s argument that the notion of settlement as a systemic solution ought to be challenged. First, I address how the October 2020 settlement in Nevsun Resources Ltd v Araya further obscures what continues to be a murky intersection of customary international law and Canadian common law. Second, I look at United Kingdom litigation around Barrick Gold’s labour practices in East Africa. In that instance, settlement has been ineffectual to stop the mining giant from continuing to engage in harmful practices that contribute to personal and environmental harm. And third, I discuss how the settlement in Garcia v Tahoe Resources Inc is an example of transnational corporate defendants side-stepping accountability when they settle out of court, even if they publicly acknowledge wrongdoing. The case studies suggest that Fiss’s argument remains relevant and, to the extent it can be operationalized, it should be taken seriously, despite the fact that Alternative Dispute Resolution (ADR) mechanisms have become a panacea for problems associated with state-based judicial dispute resolution processes.