Academic papers I enjoyed reading

Since September 2015, I’ve been working as a Research and Teaching Faculty member of Leiden University (the Netherlands) and as part of my role, I’ve been reading a wide variety of academic papers.

I thought I would post some of the articles I’ve read, and found particularly interesting, through this post. Maybe you will enjoy reading them to.

I will briefly comment on the aspects of the paper that I found to be interesting. Obviously, for intellectual property considerations, I’ll only provide links to the full text of articles that are already available in the public domain. (Usually this is done through university repositories and SSRN]

  • Feldman, Eric and Stein, Alison I., Assuming the Risk: Tort Law, Policy, and Politics on the Slippery Slopes (2010). Faculty Scholarship. Paper 296. [Also published in Feldman, Eric and Stein, Alison I., “Assuming the Risk: Tort Law, Policy, and Politics on the Slippery Slopes”, DePaul Law Review, Volume 59, 2010, pp. 259-303]This was part of our required reading for International Tort Law during my LLM (Adv.) programme in International Civil and Commercial Law at Leiden University.  I will be honest- aside from a few perilous journeys down a ski slope, I was largely unfamiliar with the ski industry before reading this article. Not only did I learn about how the ‘assumption of risk’ doctrine (a.k.a. volenti non fit injuria) historically developed in the USA, but I also became informed of how the ski industry works in Vermont and Colorado and how a nexus of factors influence the debate on assumption of risk in an inherently ‘risky’ activity: inter (and intra) state politics, the clout of large ski slopes, the leverage of insurance companies and, of course, landmark tort litigation. The article serves as a reminder of how strong the law and economics scholarship is in the US!
  • GM Gulati, TMT Isaac and WA Klein, ‘When a Workers’ Cooperative Works: The Case of Kerala Dinesh Beedi‘, UCLA Law Review, Vol. 49, 2002, pp. 1417-1454.This is an article I just finished reading (04.02.2016) as part of my research into the internal administration of worker cooperatives. A lot of the literature (in English) on this topic concentrate on cooperatives in the Global North (i.e. Spain, USA, Italy, UK) with a relatively small number of academics studying those that exist in the Global South. In some ways, the latter group should be the locus of a rich vein of research. On the one hand, cooperatives in developing countries have suffered from endemic government interference, corruption, dearth of necessary cooperative education and training as well as the degenerative tendencies of many cooperatives: lack of a long-term orientation, intra-member conflicts over residual profit distribution, managerial impotence and shirking being just some of the observed problems. On the other hand, examples like the Kerala Dinesh Beedi cooperative(s) is a heartening example of how worker-controlled and managed firms can flourish in a capitalist economy.Let me first explain why it is so remarkable. Several cooperatives in India, and in the state of Kerala in particular, have failed due to government interference. Beedi, the product manufactured by these workers, is a cheap cigarette and the return per pack of Beedi is infinitesimally small. As a result, wages and working conditions in the industry are correspondingly abysmal, with regular media exposés of child labour being used. In such an industry, it is remarkable that the workers of such an industry were able to buy-out a Beedi manufacturer and establish a firm that has been a market leader in the production of Beedi since the mid-1960s, employs tens of thousands of heterogeneous member-workers, pays well above the industry standard (3 times in 2002) and has now diversified into other products. They were able to survive, even when their annual turnover was reduced by two-thirds!What the article reveals is the confluence of factors that allowed such a cooperative to survive the vicissitudes of competition, recession and falling demand for tobacco. By fleshing out the internal workings of the cooperative, from the shop floor worker to the central cooperative board of directors, we see that having ideologically dedicated and hard working directors and professional management, a slim management structure, mutual monitoring by workers, high product quality standards and high worker satisfaction can collectively contribute to a successful and long-lasting worker cooperative. The article is easy-to-read (I read a lot of it on the train between Leiden and Den Haag) and it provides delightful observations, like the practice of supervisors reading newspapers and stories to the shop floor workers as entertainment.
  • The Straddler, David Ellerman in conversation with the Straddler, ‘Against the Renting of Persons’, Winter 2017, available online at: <http://www.thestraddler.com/201715/piece2.phpIn this illuminating interview, Ellerman’s main argument is that we have moved from a system where people can be bought and sold to one where their hours can be rented. This commodification of people conflates rational man with things.He draws a comparison between employment contracts and voluntary contracts of slavery, as existed in the past, primarily as they both constitute contracts of alienation rather than delegation. In other words, these contracts apportion key decision making powers completely to employers/owners  rather than being delegated selectively and conditionally. (Doesn’t matter if this is done voluntarily or not, so moving beyond discussion on coercion and consent) The basis of this factual and moral view of inalienability stems from the inalienability of conscience – that you cannot become less of a person even if you contract to do so. By extension, logically, you can’t fully alienate from yourself key decision making powers and responsibilities though the law previously enabled this in the context of slavery, marriage and employment and now does so only in the latter. This also entails the employer expropriating the lion’s share off the fruits of an employee’s labour (while also treating them as a distinct individual in the event that the employee becomes implicated in a crime or wrong doing!) Instead there should be a shift in the discourse towards a more democratic approach where these non absolute, selective powers are delegated conditionally within employee employer relations.This has to be done within member owned firms rather than as formally self employed persons as the latter will merely erode their hard fought protections with little or no benefit.
  • Marleen A. O’Connor, ‘Promoting Economic Justice in Plant Closings: Exploring the Fiduciary/Contract Law Distinction to Enforce Implicit Employment Agreements’, in Lawrence E. Mitchell (ed.) Progressive Corporate Law, Westview Press: Colorado, 1995, pp. 219-245.
    The thrust of O’Connor’s argument in this article is that director’s fiduciary duties should be read expansively not only to include the interests of shareholders, but also to encompass non-shareholder constituencies such as workers. This is especially in situations of seismic corporate change, such as plant closings and redundancies. Her reasoning is that workers have ‘implicit’ employment agreements with their employers, that in exchange for accepting lower pay at the start of their careers, they will enjoy secure tenure. The workers receive the training they need and the employer’s have a ‘safety valve’ in the form of being able to let inadequate workers go without incurring too significant an expense. These important motivational aspects are left unsaid from formal documents as they are not easily reducible to written terms, yet they merit serious consideration in the wake of mass redundancies as they risk the considerable labor investment made by employees with no possibility of future return. The fiduciary approach is superior to a contractual approach as it relies on trust stemming from property rights rather than contractual promise. As such it doesn’t require express terms and in fact can override contractual provisions that are contrary to it.The author has a skeptical view on the efficacy of stakeholder (a.k.a. constituency) statutes in holding directors to account for failing to uphold workers’ interests, despite their widespread adoption in US states. However, she concedes that famous cases like LOCAL 1330, UNITED STEEL WKRS. v. U. S. STEEL – which found that courts cannot reverse a plant shutdown decision made by a Board of Directors on the basis of un-profitability and that there is no property right to employment – may have been decided differently if a stakeholder statute had been in force at the time of the decision. [Contrast this with the Kamani Tubes Worker Cooperative discussed in an earlier blog post or the Bangladeshi worker recuperated factory that I will discuss in a future post]

    I particularly liked the farsightedness of this statement, made in the first footnote of the article: “…networks constitute the most efficient form of organization for today’s economic circumstances because they maximize both the flexibility of market transactions and the control associated with hierarchical organization. Fiduciary law’s moral mandate to act in the parties’joint interests may facilitate evolving business practices.” (p. 236). This feeds into her critique of conventional transaction cost economics that views networks to be between “markets and hierarchies” (p. 223ff). She contends that economic transactions do not only turn on promises and exchange and the transaction costs inherent in this but also on trust that is built overtime.  The importance of networked organizations seems to be a theme in the literature I’ve been reading recently, including in this essay on the Greek recuperated, self-managed soap factory Vio.me: https://roarmag.org/essays/worker-control-viome-greece/

    To establish whether an unconventional fiduciary relationship exists, the author’s review of state-level jurisprudence suggests that three trends emerge: “whether the interaction involves a high degree of trust, whether the relationship has continued for a long period, and whether one party is vulnerable because it relies on the other’s decisionmaking [sic] discretion” (p. 225). In essence, the third characteristic means that the features of arms-length, equal bargaining are absent and a considerable degree of control is vested in the stronger party. The weaker party relies on the stronger party’s expertise, with the hope that the latter will uphold the latter’s dignity and be compensated by the former’s improved performance.

    O’Connor concludes by positing that the US corporate governance paradigm needs to be reformed so as to incorporate employee participation committees modeled on works councils in Europe and directors’ fiduciary duties extending to employees. (On the neutral referee model briefly mentioned in this article, also see O’Connor’s ‘The Human Capital Era: Reconceptualizing Corporate Law to Facilitate Labor-Management Cooperation’, 78 Cornell Law Review 899 (1993) and Mashiko Aoki, ‘Toward an Economic Model of the Japanese Firm’, 28 Journal of Economic Literature 1 (1990).)

  • David Ellerman, ‘On Property Theory‘, Journal of Economic Issues, Vol. 48, No. 3, 2014, pp. 601-624.

    Labor produces Labor’s product (Q,–K,0), which is the sum of the de facto responsible actions conceived as a “commodity” (0,0,L), plus the whole product (Q,–K,–L). But Labor only appropriates (as first seller) the “labor commodity,” while the employer appropriates the whole product. (p. 621)

    Why do legal authorities  (passively) enable employers to (mis)appropriate the responsibilities and liabilities of employees actions and thereby appropriate the whole product resulting from said actions? This is the core question Ellerman seeks to explore. He argues that in reality employees only agree to cooperate with employers in certain activities but by dint of doing so, do not automatically assign to the employer responsibility (and liability) for their joint activities (p. 617) nor enjoyment of the whole product. However, legal authorities read this ‘transfer’ of responsibility and entitlement to the whole product into employment contracts and legitimize the status quo through their non-action in rectifying this appropriation. In a manner of speaking it is an example of the invisible (judge’s) hand at work. In contrast, if the employer-employee were participants in a joint criminal enterprise and the law became ‘visible’, they would both have been legally responsible and liable individually. They would bear the fruits and consequences of their own actions. On a philosophical level, the mis-imputation of responsibility in the employment contract is in violation of  ‘Hume’s conditions’ that transfers can only happen by consent and that promises [contracts] must be performed, as well as the basic Lockean principle that legal responsibility follows de facto responsibility. What is interesting though is that even if there is purported consent, Ellerman argues elsewhere that certain transactions and relationships cannot be consented to because, among other things, the inalienability of conscience.  As a consequence, Ellerman argues for the abolition of the conventional employment relationship altogether  and its substitution with a system where “production could only be organized on the basis of the people working in production (jointly) hiring or already owning the capital and other inputs they use in production” (p. 619). In other words, responsibility, as with membership, would solely rest on those who work in the firm.

 

Regulating the On-Demand Economy: An Agenda (Working Paper)

Regulating the On-Demand Economy: An Agenda (Working Paper)

A shorter version of this working paper appeared in the Law & Our Rights section of Bangladesh’s Daily Star. The link is here: <http://www.thedailystar.net/law-our-rights/law-watch/regulating-demand-transport-technology-1322203 >  In the coming weeks and months, I hope to expand the thoughts behind this article into a more substantial piece that includes other online platform enterprises.

— x —

Within a few days of Uber formally launching its operations in Dhaka, the BRTA banned its operations on the ground that it was illegally providing a taxi/private-hire service. This impasse between a regulatory authority and a market-leading start-up ‘unicorn‘, provides an opportune moment to discuss the emergence of the ‘on-demand’ economy in Bangladesh. This article will briefly discuss what is meant by the on-demand economy before elaborating on the legal problems that certain on-demand economic actors, namely ‘ride-hailing apps’ like Uber can pose to regulatory authorities. It thereby hopes to recommend certain actions that can be taken to preserve the market value of these enterprises without harming the individuals and communities that use its services.

The On-Demand Economy

The ‘on-demand’ economy refers to the “economic activity created by digital marketplaces that fulfil consumer demand via immediate access to and convenient provisioning of goods and services.” There has been a growing interest in Bangladesh in using online platform enterprises in particular, some of which are among the largest global players in the on-demand economy. Online platform enterprises seek to distinguish themselves from many other businesses involved in e-commerce as they do not sell their own goods or services but purportedly, as tech companies, help connect persons offering goods and services to those looking for them. In exchange, the platform extracts a benefit, usually in the form of a share of the earned income or a subscription. Going from TV shows (e.g. Netflix) and music (e.g. Spotify), it is now possible to get a ride in someone’s car (e.g. Uber) or a short-stay in someone’s house (e.g. Air B & B) with a few clicks of a button and a reasonable commission. In short, in a global economy low on disposable income and high on instant gratification, they monetize the growing interest in transient, immediate streaming of goods and services over actual ownership or permanent employment.

Ride-hailing, ride-sharing and carpooling platforms (e.g. Chalo, ShareSAM etc.) have now been around for a few years in Bangladesh, with Uber being the most celebrated entrant to the market. In the tech and start-up coverage of these platforms, they have generally been touted for their potential to solve specific problems: reducing traffic congestion, lowering costs of transport, freeing logistical bottlenecks and so on. Enthusiasts laud their redemptive capacity to ‘disrupt’ the conventional means of providing services, by being more agile and responsive to customer needs, offering more flexible modes of employment and nurturing a sharing culture within communities. Others have expressed concern about how these platforms will weaken the business of conventional taxicab/private-hire companies, erode the protection of workers and impact the safety of passengers. Both perspectives have merits and both camps have equal reason to be aggrieved about existing regulations, one for it being inadequate to harness the potential of emerging internet-based enterprises and the other about the lacunae in rights and protections the operations of these enterprises expose. Using the specific example of Uber will demonstrate why this is especially true in licensing and labour legislation.

Licensing

The BRTA has banned Uber for providing taxi/private hire services without the requisite documentation or permission under the Taxicab Guidelines 2010, read with the Motor Vehicles Ordinance (MVO), 1983.However, that prohibition rests on the assumption that Uber is a taxicab company. In legal actions throughout the world, Uber has presented itself as an online labour brokerage dispatching ‘independent’ drivers to passengers. Unlike orthodox taxicab companies, Uber has no fleet, no central garage/depot and, in their view, employ no drivers. In some countries, it is possible to use the app to connect non-professional drivers to passengers but in many others, it is limited to those that have private hire vehicle (PHV) licenses.

In countries like Bangladesh, strict conditions are placed on the use of motor vehicles to transport private passengers for hire/reward. One option that Uber has reportedly explored is contracting with taxicab companies. However, a taxicab company would struggle to comply with both Uber’s business model and the industry’s Guidelines. While the latter requires certain distinguishing marks (Articles খ (5)-(6), চ(1)) to be used, fixed transparent fares (Articles ঙ (1)-(2)) to be charged and mobile phones not to be used while driving (Article ঝ(9)), Uber’s business model generally uses well-conditioned but anonymous cars, imposes ‘surge’ pricing to automatically raise fares during periods of high demand and penalizes drivers who do not follow predesignated routes on their smartphones.

Instead, ride-hailing platforms could look to the burgeoning number of private hire vehicles that are driven by the individuals who own them. For them ride-hailing apps present a lucrative opportunity to bolster their business. They can feasibly do so if they have, inter alia, a professional driving license (sections 2(41), (44), Form D), a contract carriage permit that may specify a designated route, a tax token (sections 51, 63(2)(i), (xii)), third party liability insurance (sections 109-110) and their vehicle is appropriately registered, meets fitness standards and has distinguishing marks. Still, these provisions, coupled with the contractual requirements of ride-hailing apps, are quite onerous and could have a dissuasive effect on using these platforms. It is also evident that the permits and licenses granted under these laws do not contemplate the use of web/mobile applications for navigation and customer complaints or GPS tracking of vehicles. In India, retrofitting earlier regulation to extend older licensing rules for ‘radio taxi’ operators to online platforms was found to be wanting. As such, this requires fresh regulation.

Part-II

Labour

For this nascent industry to grow, it must come to address the problem of who is responsible for maintaining working conditions. Courts in other jurisdictions have grappled with the question: is the driver an independent contractor, using an online platform to secure client-passengers, is he a worker of an intermediary contracted with the platform or is he employed by the platform itself?

Determining ‘worker’ status is important given that the Labour Act (LA), 2006 (as amended) guarantees a raft of protections for workers that do not automatically extend to independent contractors. These include, but are not limited to, maximum working hours (sections 100-106), leave (sections 115-118), minimum wages (section 140, 145, 148-149), unionising (section 176) etc. As such, employment status determines which party bears safety net costs.

Usually, with regard to taxicab companies, under the Taxicab Guidelines, the company is obliged to only use duly-trained and qualified drivers that they have appointed (Articles ক(14)-(15)).  This provision, coupled with the definition of worker stated in MVO, 1983 (“worker means driver” in s. 2(60)) and the Fourth Schedule of the Labour Act which states that workers includes individuals employed as drivers (clauses 27, 30), indicates a presumption that a taxi driver has an worker relationship with their taxicab company.

What complicates this picture, with the insertion of a platform and its influence over the activity of drivers, is whether taxicab/private-hire-vehicle companies or even individual driver-owners are fully in control over the transport service. The question of who the employing entity is in such situations turns on the facts, rather than on contract, and will be determined by who ‘employs’ the worker and who exercises management and control over such decisions (sections 2(49)). Judgments such as Aslam, Farrar & Others v Uber B.V. et al, Case Nos. 2202550/2015 (Aslam) delivered by an English employment tribunal on 28 October 2016 indicate that only looking at the literal word of a platform’s terms and conditions is unhelpful in determining employment status. The tribunal noted the manner in which Uber twisted contractual language and created fictions to carve out any responsibilities it might have to the driver or the passenger. However, since the law seeks to identify and protect those workers in a position of subordination and dependence (Byrne Brothers (Formwork) Ltd-v-Baird & Others [2002] ICR 667, paragraph 17) the court disregarded such legal gymnastics and looked towards the real relationship between the parties. In London, it was found that Uber interviewed and recruited drivers, instructed how they may carry out their duties, asserted its discretion to accept/decline bookings for the driver as its agent, exclusively controlled key information about the passenger, penalized the cancellation of trips and the use of routes other than the one specified by them, managed performance through a rating system and reserved the power to unilaterally vary contract terms (Aslam, paragraph 92).This was sufficient to find that a contractual relationship between the driver and the passenger could not exist and that instead there was a dependant work relationship between drivers and Uber, with the former being a ‘worker’ and the latter being an employer (Aslam, paragraph 98).

Whether this will translate into a platform being considered an employing entity by Bangladeshi authorities is uncertain. While drivers seeking ‘worker’ status may similarly claim that ride-hailing apps exert a high degree of control and management, it is possible that the platform will seek to shift responsibility onto taxicab/private-hire-vehicle companies by claiming they are de facto “contracting agencies” under section 3A, LA 2006. Drivers supplied by contracting agencies are treated as workers of the latter, except during compensation claims (section 161, LA 2006).

It is worth pointing out that, in the UK, Canada, Spain and Italy, ‘dependant’/’independent’ workers represent a third employment status, between employee and self-employed, and are not extended the same protections as employees.  A roughly equivalent status in Bangladesh would be that of ‘casual’ workers, individuals who work on an “ad-hoc basis in an establishment for work of a casual nature” (section 4(4)) and are entitled to fewer rights, e.g. no pay for extended stoppage of work.  A platform could argue that their drivers fall under this classification given that they are free to log on/log off the platform but that is doubtful.

Regardless of status, certain inconsistencies with the labour legislation would remain. For instance, section 110 restricts workers being employed in more than one establishment in one day without permission which is contrary to the aim of ride-sharing, where a person may wish to offer their driving services to more than one platform/operator (‘multi-homing’) or work in another profession altogether.

Conclusions & Recommendations

The highlighted regulatory gray areas and lacunae are merely the tip of the iceberg. The operation of ride-hailing apps may raise concerns about passenger discrimination and safety, secure handling of private data (section 63, Information and Communication Technology Act, 2006) and anti-consumer allegations for variable, arbitrary pricing. Conversely, as the platforms offer similar features and products, issues regarding copyright and patent infringement might also arise. Given the uncertainty clouding the legality of ride-hailing platforms and the fact that the Competition Commission is still findings its feet, clashes between platforms or with various drivers’ associations regarding abuse of market dominance (section 16, Competition Act 2016) are still beyond the horizon.

As daunting as it may be to regulate such a fast-changing industry, going forward, a compromise should be struck between preserving laudable protections and enabling a culture of shared commuting. One option could be introducing a new transport provider category such as “on-demand transportation technology aggregator” to Bangladesh’s road transport laws as has been done in various parts of India, through advisories and guidelines.

Following a multi-stakeholder consultation, the BRTA’s transport committees could consider issuing a new form of permit for aggregators that are granted on the conditions that permit holders maintain detailed, up-to-date records on their drivers and vehicles, ensure passengers are not discriminated against or threatened and cooperate with government authorities when required. At the same time, licensed vehicles could be exempt from having distinguishing marks, colour or a separate registration category. This permit could be complemented with guidelines setting out best practices on data protection, pricing and on maintaining a ‘level playing field’ in the road transport market. With regard to the employment status of drivers, some scholars have argued in favour of introducing third, intermediate categories in jurisdictions where they are absent. For the sake of simplicity, it may be preferable to retain the existing presumption towards ‘worker’ status – if a certain amount of time is spent using the platform or an amount of income earned. The precise terms of this can be specified under further guidelines.

Morshed 
Leiden

The Relationship between the Rule of Law and Separation of Powers: A Bangladeshi Perspective

The PDF below contains an essay I wrote for a Legal Theory class at Warwick in 2008-2009 on the aforementioned topic. I spent a good part of my Spring break reading Rousseau and social contract theories before writing this. There is much I would add now, in light of recent case law, but I still maintain the view that both terms are essentially contested and than an appreciation of whether rule of law ‘exists’ in a country cannot be divorced from local realities or the country’s stage of political maturity.

Relationship between Rule of Law and Separation of Powers in BD

Morshed
the Hague

Official English Translation of the Bangladesh Labour Act (2006)

Please find below the official English translation of the Bangladesh Labour Act, 2006, as amended till 2015. This is an invaluable resource for anyone conducting research on Bangladesh’s labour and employment law and will somewhat settle the questions researchers might have concerning applicable terminology.

Bangladesh Labour Act 2006 (with amendments till 2015)

Morshed
Leiden

A few thoughts on Judicial Conduct post-retirement

One of the hot topics of discussion in Bangladesh at the moment concerns the actions of judges post-retirement. As per our Constitution, a retired Justice of the High Court Division of the Supreme Court of Bangladesh may practise before the Appellate Division of the Supreme Court of Bangladesh but the question is whether it is ethical to do so, given the dignity of their position and the post-retirement benefits they enjoy.

The Bangalore Principles of Judicial Conduct (2002), the leading ‘soft law’ instrument on the issue, and Bangladesh’s Judicial Code of Conduct (2000) are silent on the rights and responsibilities of superannuated judges. It is also unclear whether their principles should simply extend to such judges. Perhaps, instead, it is worthwhile to look at the example of the UK and Australia in this regard:

Chapter 9 of the UK’s Judicial Conduct Guide (2013) states that: “9.1. The conditions of appointment to judicial office provide that judges accept appointment on the understanding that following the termination of their appointment they will not return to private practice as a barrister or a solicitor and will not provide services, on whatever basis, as an advocate in any court or tribunal in England and Wales or elsewhere, including any international court or tribunal, in return for remuneration of any kind, or offer or provide legal advice to any person. The terms of appointment accept that a former judge may provide services as an independent arbitrator/mediator and may receive remuneration for lectures, talks or articles.” Crucially, 9.2 adds: “Even in retirement a former judge may still be regarded by the general public as a representative of the judiciary and any activity that might tarnish the reputation of the judiciary should be avoided.” In my view, this would seem to extend many of the obligations under the Bangalore Principles to retired Judges.

In contrast, Australia’s Guide to Judicial Conduct (2007) is less explicit about what judges can and cannot do. Chapter 7.2.1 of the 2nd edition of this Guide states that a Judge (re-)joining the Bar “is a “grey area” in which it is not possible to formulate Australia-wide guidelines. A judge contemplating retirement should consult the Australian Bar Association, and the local Bar Association or Law Society for relevant rulings. All however proscribe appearance as counsel in a court of which the judge was formerly a member, for various periods ranging from two to five years.” Similarly, judges are allowed to engage in commercial and political activities subsequent to retirement but with the same caveat as the UK: “[e]ven in retirement…a former judge may still be regarded by the general public as a representative of the judiciary, and any activity that might tarnish the reputation of the judiciary should be avoided. “

I think this last guideline should also be incorporated in Bangladesh’s Judicial Code of Conduct, to emphasize the need for retired judges to be sensitive to their exalted status in society.

Morshed
the Hague

Are Class Actions Possible in Bangladesh?

Simply put, class actions are civil suits where one or more plaintiffs are permitted to file a suit on behalf of a broader group (or ‘class’) of people. In other words, it is a procedural device used by courts to manage the number of plaintiffs in a suit, protect defendant(s) from inconsistent obligations, protect the interests of absentees, provide convenient and economical means for disposing of similar lawsuits, and facilitate the spreading of litigation costs among numerous litigants with similar claims. (1) Such suits are particularly popular in the USA, where it is an option available under Rule 23 of the Federal Rules of Civil Procedure.

A variant of class action suits, public interest litigation (PIL) also issues from American jurisprudence (2) and has been extant in South Asia for several decades. This is a form of litigation where an individual or organisation (such as an NGO) files a suit  on behalf of a group for the public interest. The group represented are often marginalised groups and the defendants have historically been public authorities but more recently have included large corporations.

The prevalence of PILs in South Asia has been ascribed to a number of factors including the existence of a large public sector, a history of authoritarian rule and the lackadaisical monitoring  of businesses. An example of a public interest issue, raised before Bangladeshi courts, is the prohibition of the use of child labour in cigarette factories. (3)

While this may yield some damages for the affected parties, the primary purpose of such litigation is to change (or enforce) the action of public authorities. This raises questions about whether a PIL is the best mechanism for bringing a private entity to court and what the limits of ‘public interest’ are.

It is for this reason that the use of class action suits would be complementary to PILs. They would create scope for an individual consumer to bring proceedings against a pharmaceutical company responsible for producing adulterated medicine, on behalf of all consumers in a similar group or a misdiagnosed patient to sue a hospital on behalf of all patient’s who have been misdiagnosed by that hospital.  Technically speaking, such actions are already possible in Bangladesh, whereby one person may sue on behalf of all parties who share the same interest (not necessarily a public interest) (4). However, it is a provision which is not actively applied and, indeed, not widely known about. On the one hand, this may be due to a lack of judicial familiarity with the concept. On the other,lawyers lack an incentive to bring such actions as they do in the US.

The Bar Council rules regarding the professional conduct of lawyers in Bangladesh renders it difficult for them to enter into ‘conditional fee agreements’, as potential success of a case is not one of the permitted considerations in ‘fixing fees’ (5) and receiving a pre-determined percentage of damages (if successful) involves a commingling of the property of the client and counsel.(6)

Moreover, as with most countries outside of the US, ‘punitive’ or exemplary damages are not generally granted in Bangladesh. Cynically speaking, if they were, lawyers would be more enthusiastic in collecting litigants, in the hopes that they would receive a hefty sum if their clients’ action is successful.

References

(1) United States Parole Comm’n v. Geraghty, 445 U.S. 388, 402-03, 100 S.Ct. 1202, 1211-12 (1980).

(2) See Brown v Board of Education, 347 U.S. 483 (1954).

(3) Ain-O-Salish Kendra (ASK) and another vs. Bangladesh, 63 DLR (2011) 95

(4) Order 1, Rule 8 of Bangladesh’s Code of Civil Procedure, 1908 reads: “(1) Where there are numerous persons having the same interest in one suit, one or more of such persons may, with the permission of the Court, sue or be sued, or may defend, in such suit, on behalf of or for the benefit of all persons so interested. But the Court shall in such case give, at the plaintiff’s expense, notice of the institution of the suit to all such persons either by personal service or, where from the number of persons or any other cause such service is not reasonably practicable, by public advertisement, as the Court in each case may direct. [emphasis added]

(5) Chapter II (10) of the Bangladesh Bar Council Canons of Professional Conduct and Etiquette

(6) Chapter II (6) of the Bangladesh Bar Council Canons of Professional Conduct and Etiquette

Morshed
Leiden