The unique character of the Bhopal disaster -- the large number of victims, urgent need for compensation, and the complex questions of transnational law -- taxes the existing system of legal remedies and calls for an innovative and imaginative legal solution.
While it is too early to predict legal positions with confidence, it is probable that liability on the part of Union Carbide and/or its Indian subsidiary will not be the key issue. The case is more likely to turn on whether compensation for the victims should be measured by American or Indian standards, whether recovery can be sought in U.S. as well as in Indian courts, and which of the two nations' laws should apply.
Several teams of American lawyers have already filed suit in U.S. courts on behalf of Indian victims of the disaster, claiming damages of well over $50 billion. The American attorneys have reportedly negotiated contingent-fee arrangements with their Indian clients entitling the attorneys to as much as one-third of any eventual settlement or recovery.
Since Indian law does not permit contingent-fee arrangements, American attorneys have a strong incentive to pursue these claims in American courts and seek a high settlement or recovery under American law. Union Carbide, for its part, can be expected strongly to resist, by every legal means available, what it is likely to view as excessive, or even ruinous, compensation demands in the U.S. courts.
One can safely predict years of complex, duplicative, highly technical and extremely expensive litigation in the U.S. courts. The final results will long be uncertain and may differ among victims; indeed, the U.S. courts might ultimately refuse to decide these claims on the grounds that Indian rather than the U.S. courts are the most appropriate forums. In the meantime, the many thousands of victims of the disaster will remain uncompensated. If, as is most likely, Union Carbide eventually reaches some settlement with the victims, claims for legal fees by American attorneys who have initiated suits in the U.S. courts may absorb a substantial amount of the compensation given.
Wouldn't it make more sense for the Indian government, on behalf of the victims, to negotiate directly with Union Carbide for the corporation's payment of a lump sum settlement, with arrangements for the Indian government to distribute this money to the victims under procedures it establishes?
Such a lump-sum settlement should appeal to the Indian government, since it would permit much prompter compensation of victims, treat victims uniformly according to standards and procedures established by India itself, ensure that all money paid by the corporation will go to the victims without deductions for attorney and litigation fees, and reduce the considerable costs to both the American and Indian legal systems and publics from complex, extensive and prolonged litigation.
It should also appeal to Union Carbide, since it would enable the corporation promptly to meet its moral responsibilities to the victims, eliminate the uncertainties, expense, aggravation and heavy contingent liabilities of protracted litigation, and enable it quickly to put the problem behind it. A lump-sum settlement might be negotiated that, while permitting fair and very substantial compensation of victims by any but uniquely generous American tort recovery standards, would still be within a range the company could meet without threatening its existence. By keeping down legal costs, such an arrangement would leave much more available for the victims of the disaster.
Certainly, the size of any negotiated lump-sum settlement and the procedures for ensuring its full and fair distribution will have to take account of the alternative possibility of recourse to the U.S. courts, so U.S. law and the American legal profession will in any case have played a useful and important role in securing adequate compensation for the victims. This kind of arrangement would be analogous both to agreements between the U.S. and foreign governments for the lump-sum settlement of U.S. claims for large-scale takings of American property abroad, with subsequent distribution of the lump-sum among the various American claimants by congressionally established U.S. Claims Commissions, and to class action procedures in the American courts in other large-scale injury situations, such as the recent "Agent Orange" settlement.
One problem with such a lump-sum settlement arrangement would be whether American lawyers could continue to pursue claims of Indian clients in U.S. courts despite the settlement. If the Indian government implemented the arrangement by legislation or decrees prviding that its claims procedures were to be the exclusive remedy for victims of the disaster, there is a good possibility that the U.S. courts would recognize this Indian law as barring further actions in our courts.
Alternatively, some umbrella arrangement at an intergovernmental level, similar to that used to settle the problem of U.S.-Iranian claims following the hostage crisis, might be devised.
The important thing is to get just compensation to the Bhopal victims as quickly and efficiently as possible -- and to do it with minimal drain on the compensation fund, least cost to the legal systems and public of each nation and, consistent with fair treatment of the victims, least damage to the viability of the corporation and its shareholders. A settlement along the lines suggested here might best meet these needs.