In a landmark judgment amidst a rising wave of class actions, the Court of Appeal (CA) has overturned the High Court’s decision to dismiss a £5 billion claim against BHP concerning the 2015 Fundao dam disaster. Over 200,000 claimants are now able to proceed with their claim against BHP in the English courts.

The lengthy judgment looks in detail at several points of law and includes an analysis of the Brazilian and English group litigation systems. One effect of the comprehensive discussion is to showcase the English courts’ group litigation capabilities, which are highlighted in particular through the CA’s discussion of:

  • The Brazilian system for class actions: The CA noted that class actions in Brazil can only be initiated by specific entities such as the Brazilian Federal Public Prosecutor and government agencies. Also, under the Brazilian system claimants can only obtain a generic sentence addressing liability – they must then bring separate proceedings to recover individual losses. By contrast, the CA noted the “very wide and flexible array of case management tools” available to the court in England and specifically the availability of group litigation orders, designed to provide access to justice and compensate for individual loss.  
  • The alleged ‘unmanageability’ of proceedings: In response to the suggestion that the proceedings were abusive because of their ‘irredeemable unmanageability’, the CA expressed considerable doubts as to whether proceedings could ever truly be described as such. Through its discussion the CA made clear that knotty case-management issues and difficult proceedings are the English court’s bread and butter.

Other points of interest include the CA’s rejection of the existence of parallel Brazilian proceedings as a reason to halt the claim in this jurisdiction; the court found that the degree of overlap was relatively limited, and noted that the stay in the Brazilian claim meant the claimants would probably not see any trial or progress for at least 2 years. The CA’s position on the scale of the litigation was also notable; it commented that any burden this claim might place on English courts could not be disproportionate where the claimants have arguable claims for significant sums.

This case demonstrates that the English courts are well-equipped and willing to handle group litigation, and that the inherently complex nature of large-scale multi-party disputes (often with an international element) will not deter the English courts from allowing such claims to proceed.

In context of environmental litigation more specifically, this decision along with cases such as Lungowe v Vedanta and Okpabi v Shell show a clear trend for claimants to look to UK parent companies for retribution in relation to environmental damage elsewhere in the world.   

Written by: Amy Khodabandehloo, Senior Associate, and Anusha Kasture, Solicitor