Court of Appeal revives significant environmental group action against BHP Group

The Court of Appeal has granted permission for a significant group action to proceed against one of the world’s largest mining concerns, an Australian multinational, BHP.

In 2015, Brazil suffered its worst ever environmental disaster when the Fundão Dam in Mariana collapsed. Following the disaster, claims were brought in Brazil against the operator-owners of the dam, including BHP entities.

Later, a claim form was issued in England. The claim is brought by 202,600 claimants (including Brazilian citizens, 530 businesses, 25 municipal authorities and six religious organisations) who seek damages of £5 bn. It was served on a UK BHP entity which sits at the head of the BHP group and on an Australian entity which carries on business at offices in the UK. By the time the claim was served, proceedings were well underway in Brazil (involving other BHP entities, but not the UK BHP entity) together with a compensation and remediation programme, in which about three quarters of the claimants had been involved.

At first instance, BHP successfully struck out the claims after arguing that:

1. Brazil was the more appropriate and available forum; 
2. there was a risk of irreconcilable judgments; and 
3. it would be pointless, wasteful and duplicative to allow the claims in England given the litigation and compensation/remediation programme in Brazil.

The claimants sought permission to appeal and were initially unsuccessful until utilising a rarely successful route to secure permission to appeal under the Civil Procedure Rules (r. 52.30).

On 8 July 2022, the Court of Appeal allowed the appeal and instructed that the claim must proceed to trial.

The Court of Appeal held that there is insufficient overlap between the Brazilian and English proceedings and that the “the remedies available in Brazil are not so obviously adequate that it can be said to be pointless and wasteful to pursue proceedings in this country”. The Court refused to stay the claim against the BHP UK entity pending resolution of the Brazilian proceedings (on the primary basis that the consequential delay, of possibly over a decade, would cause very substantial prejudice to the claimants in obtaining relief) and against the Australian entity (on the basis that, broadly speaking, the claims against that entity would, in practice, not be pursued in Brazil).

The Court of Appeal determined that “there is a realistic prospect of a trial yielding a real and legitimate advantage for the claimants such as to outweigh the disadvantages for the parties in terms of expense and the wider public interest in terms of court resources”. 

In reaching its decision, the Court emphasised that the English Courts are able to manage litigation of considerable complexity involving very large numbers of parties and issues. In particular, the Technology and Construction Court is well-known for its ability “robustly and actively to case manage complex litigation” by appreciating “the importance of identifying the real issues, a realistic timetable, proper disclosure, costs management and party co-operation”. Group litigation orders or “GLOs” offer the Court even more flexibility in order to preserve the rights of groups of people who have suffered small individual losses through the use of, for example, the selection of lead cases, trials of preliminary issues and sophisticated e-disclosure.

BHP is considering whether to seek permission to appeal the judgment to the UK Supreme Court.