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17 Apr 2014

Brooks M. Hanner, Corporate Counsel (USA)

Can Your Company Be Sued For a Terrorist Attack?

…[C]ompanies that were indirectly or unwittingly connected to terrorism faced lawsuits after an attack…[R]ecent case law and statutory developments have strengthened the legal protections available to an innocent business involved in a terrorist attack…Much of the surge in terrorism-related lawsuits in the last decade is owed to expansive interpretations of the Anti-Terrorism Act. The ATA creates third-party liability for a company that provides “material support” for terrorism…In the early 2000s, courts began to weaken the causal nexus required between the terrorist act and nonterrorist third parties that were indirectly tied to funding an attack…[T]here have been recent signs that courts are beginning to reestablish the required causal nexus…Recent cases interpreting the Alien Tort Statute will further decrease a corporation’s potential liability for damages from an overseas terrorist attack…Taken together, these developments have essentially foreclosed the possibility of successful ATS claims against corporations that were indirectly involved in a terrorist attack on foreign soil…[Refers to BP, El Paso Energy, Hilton, Marriott, Sun International Hotels & UBS]