Loblaws & Bureau Veritas class action lawsuit (re Rana Plaza collapse, Bangladesh)
In response to the Rana Plaza factory building collapse in Dhaka, Bangladesh, three survivors and a relative of the garment workers who died in the collapse (the plaintiffs) filed a lawsuit in Canada against Loblaws (asserting negligence, vicarious liability and breach of fiduciary duty) and social auditing company Bureau Veritas (asserting negligence). In July 2017, the court dismissed the case, finding the claims to be time-barred under the law of Bangladesh and the tort unviable. The case was appealed in 2018 but the Court of Appeal confirmed the dismissal.
On 24 April 2013, the Rana Plaza factory building in Dhaka, Bangladesh, collapsed killing 1,132 people and leaving thousands more injured. On 22 April 2015, the plaintiffs filed a class action lawsuit with the Superior Court of Ontario, Canada.
The plaintiffs asserted that Loblaws, by adopting CSR standards, voluntarily assumed responsibility for ensuring that the buildings where its garments were made were safe and structurally sound. They argued that Loblaws was negligent by failing to take adequate steps to prevent foreseeable harm to the garment workers and vicariously liable for the negligence of its suppliers and sub-suppliers, over whom Loblaws exercised control. They also asserted that Loblaws breached its fiduciary duty by failing to ensure that the audits and inspections performed by Bureau Veritas were sufficiently comprehensive to protect garment workers from foreseeable harm.
The plaintiffs argued that Bureau Veritas was negligent in failing to conduct reasonable audits and inspections of the factories in Rana Plaza building and negligently failed to advise Loblaws to include structural integrity as part of the audit process.
In July 2017, the court released its judgment dismissing the case. It held that claims were time-barred under Bangladesh’s Limitation Act 1908 (the law held to apply) except for claims made by workers who were minors at the time of the collapse.
The court held that the defendant companies did not owe the garment workers a duty of care under either the law of Bangladesh (principally relying on English and Indian jurisprudence) or of Ontario and the negligence claims failed. The court was not persuaded there was the required legal relationship between Loblaws and the plaintiffs for a fiduciary duty to attach.
On 22 April 2015, the plaintiffs filed a class action lawsuit with the Superior Court of Ontario, Canada. Proceedings were brought under the Class Proceedings Act, 1992, S.O. 1992, c. 6. The case was heard in April 2017.
On 5 July 2017, the Superior Court of Ontario published its judgment dismissing the case.
In April 2018, the Ontario Court of Appeal heard the appeal. The court published its judgment on 20 December 2018 confirming the dismissal but reducing the costs awarded to the defendants.
Plaintiffs’ Statement of Claim (amended), 5 November 2015
Decision of the Superior Court of Ontario, 5 July 2017
Decision of the Ontario Court of Appeal, 20 December 2018
The Rana Plaza class action - is Canada the next frontier for global human rights litigation?, Baker McKenzie, 23 November 2015
Vacuousness of CSR on Display in Loblaws' Victory in Rana Plaza Class Action Lawsuit, David Doorey, Canadian Law of Work Forum, 12 July 2017
Lost in Translation: Rana Plaza, Loblaw, and the Disconnect Between Legal Formality and Corporate Social Responsibility, David J. Doorey, 2017
Ontario Court of Appeal applies foreign law, dismisses cross-border class action, Osler, 10 January 2019
Appeal court upholds dismissal of Bangladeshi garment workers' class action against Loblaws over deadly factory collapse, Lancaster House, 5 February 2019