Pavlo Kuftyryev, managing partner of GRECO law company, tells RBC-Ukraine in an interview about the Vasylkiv tragedy, and his leadership role in successfully pursuing the first-ever class-action lawsuit in Ukraine for one million dollars of compensation; about accusations of pressure on business; and the about the possible recovery of a record amount of compensation from the Nikolaev alumina plant.
– Tell us more about the Vasilkiv tragedy case and how you managed to conclude a settlement agreement.
The Vasylkiv tragedy was a fire at an oil depot near the village of Kryachki in the Vasilkov district of the Kyiv region, which occurred on June 8-16, 2015. GRECO lawyers in this case represented the interests of a foundation set up to manage the consequences of the Vasylkiv tragedy. We were able to convince the site operator to conclude a settlement agreement, according to which more than UAH28 million (the equivalent of US$1 million) were paid in compensation for moral damage caused by the tragedy. Of these funds, UAH22 million were paid directly to the victims.
To give you an idea, the state environmental inspectorate, which conducts inspections throughout the country, issues millions of fines, but in fact it fails to collect these funds for the state budget in 90% of cases, for a number of reasons. With all due respect to the employees of this department, with whom we are always ready for discussion and joint action, their efficiency in our case was inadequate. The ministry does not pay enough attention to environmental issues, and the inspectorate has to be persuaded to be more active, and to draw upon the resources of civil society.
Fire at an oil depot near the village of Kryachki in the Vasilkov district of the Kyiv region
– Would it be correct to say that it was precisely the possibilities of such a joint action of citizens that helped to secure victory and compensate the victims for the damage? Tell us more about the mechanism of such actions.
– Our lawyers initiated the first class-action lawsuit in Ukraine to protect the interests of citizens. In a situation where the rights of many citizens have been violated or it is impossible to immediately determine the number of victims, class-action lawsuits are the only effective way to protect rights. Class-action lawsuits in Ukraine are a way to bring people together to solve common problems. In this case, the legislation in Ukraine relating to environmental protection and consumer rights, expressly provides for the possibility of filing group or class-action claims. But in other cases, the absence of rules for considering class actions in the procedurally does not prevent such cases from being filed. Moreover, there is a right to file one claim by more than one plaintiff, and a maximum number of plaintiffs – even millions – is not specified. Therefore, even in the absence of a special law, it is possible to file a class-action lawsuit.
– In this lawsuit, you defended the interests of a foundation established in the wake of the tragedy to represent victims’ interests. Is it necessary to create a public organisation to file class action lawsuits?
– No. This is not required. However, to simplify communication with all the plaintiffs and explain how we represent their interests, our lawyers used this particular method. This also helped in the distribution of compensation. In addition, most of the victims had such a desire. The main argument was to bring the matter to the end. Before that, the victims tried many times, but there was no justice.
– The first class action lawsuit in Ukrainian history ended with the conclusion of a settlement agreement. Is this the best option for those affected?
– As in any such dispute involving sensitive topics for society, a settlement agreement would be the best option. For those affected, this means a guarantee of receiving compensation and going through the process in the shortest possible time. If we had had to wait for the court’s decision, and then its appeal and enforcement procedures, the case would have dragged on for years. For the defendants, it is an opportunity to preserve their reputation and show their social responsibility. Given the peculiarities of litigation and enforcement proceedings in Ukraine, of course, a settlement agreement is still the best option for both parties.
– Did the state draw any conclusions after that?
– The main thing is that we have created a precedent to further protect and promote the rights of citizens. I believe that the situation around the Vasylkiv tragedy will become an impetus for this industry to become a living instrument, a law that can be applied by the court. Norms are not effective on their own. They will become effective when people – citizens, their civil society associations or lawyers – begin to defend their legitimate interests and force the system to apply these laws for their intended purpose.
– How was the amount of compensation determined?
– We do not have a method of monetary evaluation of a person’s life and health. It is impossible to assess harm to health in Ukraine, especially that caused by a carcinogen or environmental pollution, according to current standards. Therefore, the determination of compensation amounts has become a difficult issue. We followed an accessible method for calculating moral damages, using our own methodology, and thus determined the amount of claims.
– You have already filed a second class action lawsuit, regarding damage to victims from the actions of the Nikolaev Alumina Plant. Is there a willingness to reach a settlement agreement?
– The case is in progress, and I cannot comment on all aspects of it. Our lawyers secured a decision in favour of local residents in the court of first instance. A decision was madeto require the polluting plant to pay UAH 9.2 billion of compensation for all participants (almost UAH7 million each of the more than 1,200 people who united to protect their rights). In order to protect the rights of the plaintiffs and secure a genuine prospect of compensation payment, the property of the NAP has been seized for an amount consistent with the amount of the claim.
– There are comments in the media that filing a class action lawsuit is a way of putting pressure on business.
– Such an assertion would mean that any appeal to a court can be called pressure, especially if it is accompanied by a statement on securing a claim. There is a very thin line here. After all, we are not seeking the closure of the plant or to stop its activities. We understand the importance of production for the economy and for the state. We help citizens living near a polluting plant to defend their right to a safe environment. And this concerns, first of all, the workers of the plant themselves. The company, on the other hand, is receiving a message: we are saying that in the 21st century, you cannot use the methods of work that were normal half a century ago.
We pay attention to the fact that production must be responsible and environmentally friendly to the greatest possible extent. It’s time to change: we need to recycle waste, we need to think about sustainable development and safe production. Some people in Ukraine just want to make money and for their children to leave for a more comfortable or environmentally friendly country, where the damage will not affect them. But these hopes are nonsensical. Planet Earth is a complex organism in which everything is interconnected, so neither the owners of enterprises nor their relatives can hide from the harmful emissions or waste produced.
If we return to the NAP case, then red sludge is a production waste that cannot be avoided. However, it can be properly disposed of. And it could have been done much earlier, without waiting for a critical situation to emerge. This waste is highly toxic, and, together with other factors, it increases the risk of serious illnesses. Just look at the statistics of the spread of cancer in Ukraine.
Economically developed countries have already come to this conclusion a long time ago. In those countries, governments understand that taxes paid by business are not a reason to excuse their behaviour in the environmental sphere. Yes, every working plant or enterprise is important for Ukraine now. This makes us turn a blind eye to the damage done to nature and citizens. And, therefore, it is impossible to hope that the central or local authorities will be the driver of environmental changes. We all understand what it can lead to. And the sooner our common efforts force the authorities to make such changes, the better we can preserve the quality of life of citizens and the health of our children.
– Since you returned to the topic of the NAP: the head of the “Sluga Narodu” faction recently wrote on Facebook that this plant is “blackmailed by environmental activists.”
– First of all, I am not an environmental activist. I am a lawyer, for whom the main thing is to uphold the law and protect people. Although nature, of course, is not indifferent to me either. It is surprising to me that Mr. Arakhamia, a native of Nikolaev, does not care about either the people or the ecology of his native region. If he had seriously taken an interest in the question, he would have known that millions of tons of bauxite ore are being imported into Nikolaev. The mined alumina is transported to Norilsk, but the production waste – red sludge – stays in Nikolaev. It is illegally stored, without any permission from the Ministry of Ecology, in the open air near Nikolaev, where its lethal effects will remain forever.
Red mud near NAP (photo: nikvesti.com)
Secondly, it is surprising that Arakhamia defends the interests of the plant, but forgets about the interests of the people. How can a legislator equate a legal appeal to the court, by real people who live there, with blackmail? Globally, there are thousands of such examples of class action lawsuits. The fact that we have only a few such cases so far in Ukraine only means that Ukraine lags behind developed countries in the protection of citizens’ rights. I think that a responsible politician, a parliamentarian, should be pleased with the first steps that the country is taking towards real protection of people’s interests: unless, of course, he has no personal interest in this topic.
– In what areas are class-action lawsuits the “right” way to solve the problem?
– In any case in which there is a question about the rights of a large number, or even an indefinite number, of citizens. Such cases could include consumer protection (food, medicines or medical products), financial services (consumers of financial services, depositors or borrowers of banks and other financial institutions), investors in construction or simply residents of apartment buildings, communities and groups of people, shareholders, etc. All those who seek to protect the common interest can already use this tool.
We have two cases of class-action lawsuits, and they have been accepted for proceedings in court. This means that judicial practice today is sufficient to apply this tool for protecting the rights of citizens, without any special law or procedural regulation. A class-action lawsuit reflects the power to unite people, common interests and goals.
Do you know why some problems have not been solved in our country for years and decades? People do not have the skill to unite and use collective power. Ukrainians should master the instrument of class-action lawsuits.