The last few months have seen a great deal of activity before the courts on the issue of corporate responsibility. Plaintiffs are struggling to find different legal avenues to attribute legal responsibility between related companies. Two recent cases that have dealt with this issue are Yaiguaje v. Chevron Corporation and Garcia v. Tahoe Resources Inc. The former involves the piercing of the corporate veil, and the latter, the attribution of liability from a subsidiary to a parent company under tort law.
These cases are anchored on legal theories that are not responsive to a new modern corporate reality, where related companies act in concert as a group of companies, yet are allowed to enjoy limited liability. The challenge for the courts will be to find a legal theory that allows companies to act as legally distinct entities, and yet be accountable for the actions of related companies operating within a group of companies in certain circumstances.
Torts are what happens when one person causes a loss to another. Where they happen is an entirely different question. And it can be even trickier to figure out where a plaintiff should sue a defendant for interfering, unlawfully, in its business activities – what we call unlawful means tort. It’s a question Canadian courts have yet to resolve.
That’s because a series of events may be at play, and only one might determine where the tort happened.
It’s an issue we have mostly managed to ignore so far. In 2012 the Supreme Court in its Van Breda ruling gave us a two-stage inquiry into assessing whether a given court should assume jurisdiction over a tort. First, it’s up to the plaintiff to establish that a factor presumptively connects the litigation to the jurisdiction. That could be the location of where the tort was committed. Or it could be another connecting factor, such as where the defendant carries on business. Then, for the second part of the inquiry, it’s up to the defendant to rebut the presumption by showing that, based on the facts, the connection isn’t enough to be substantial and does not point to any real or strong relationship between the subject matter of the litigation and the forum. If the defendant is successful on this count, the court must decline on jurisdiction.
Is it abusive for one party to an agreement to have the right to choose to pursue a claim in any competent court while the other party is bound to only one jurisdiction?
Until recently, asymmetrical jurisdiction clauses – also know as one-sided clauses – in commercial agreements have come under assault.
Fortunately, that appears to be changing.
There have been a number of court decisions, from the French courts in particular, declaring asymmetrical jurisdiction clauses to be unfair and abusive and are therefore void. These courts have held that these clauses contravene the basic procedural principle of equality of parties, where one party is granted under the agreement better opportunities to bring claims against the other.
In-house counsel are often asked to share privileged materials with third parties that have a common interest in a piece of litigation. Common interest privilege is a category of privilege that permits parties to disclose privileged evidence between themselves without losing privilege. The determination of common interest is a factual one, which may consider whether the parties share a common goal, seek a common outcome or have a self-same interest on either or both the general claims (e.g., both sued for exactly the same alleged misconduct) or certain specific allegations (e.g., an expert report on one specific matter in issue). Common interest privilege is asserted and the documents are shared—often with little to no understanding about the nature of the privilege claim being asserted or how to best share documents with the third party in a way that protects its subsequent dissemination.
A common interest privilege is not a stand-alone privilege that can be claimed on all documents shared with third parties in the face of actual or impeding litigation. In order to claim the benefit of a common interest privilege, the documents must benefit from either solicitor-client privilege or litigation privilege. Where the privileged document is shared, both the originating party and the third party receiving the document can claim a common interest privilege, independent of one another.