Transnational Corporate Liability For Human Rights Violations, Part 2

Canadian parent companies with foreign subsidiaries face some difficult policy issues that arise from the recent Ontario court decision, and others that could arise if the foreign plaintiffs are ultimately successful at trial. For example:

• Agency relationship. If the Canadian parent company is ultimately found to be indirectly liable for the actions of its subsidiary under the theory that the subsidiary was acting as the "authorized agent" of the parent, it will be important to consider the basis for the finding of "agency." In particular, it will be necessary to consider whether the basis for the finding of "agency" is an erosion of the long-standing, foundational principle of corporate separateness, or whether the factual findings in respect of the actions of the parent and subsidiary fit easily into the traditional grounds for a finding of agency. The result could have implications for what parent companies should do to mitigate liability through their corporate