Court Of Appeal Allows Brazilian Environmental Group Litigation To Proceed

• Jurisdiction: European Union
• Law Firm: Norton Rose Fulbright
• Subject Matter: Environment, Litigation, Mediation & Arbitration, Environmental Law, Trials & Appeals & Compensation
• Author: Georgina Fernando
• Published date: 29 March 2023

InMunicipio de Mariana v BHP [2022] EWCA Civ 951, a group claim brought by over 200,000 Brazilian claimants following the collapse of the Fund'o dam in Brazil has been revived by the Court Appeal. It overturned the High Court's decision to strike out the group claim as an abuse of process. The case provides guidance on when a claim may be struck out as an abuse of process under the Court's general case management powers in CPR 3.4(2)(b) and, importantly, signals that the English courts are willing to hear multi-jurisdictional ESG group actions.

Background

The claims for compensation for losses suffered by the group of claimants were brought against the Brazilian subsidiary of BHP, which jointly owned the Fund'o dam, and various other BHP entities, including the English parent company. The defendants applied to strike out/stay the claims in the High Court on four grounds:

1. Brazil was the more appropriate forum;
2. there was a risk of irreconcilable judgments due to parallel proceedings in Brazil;
3. there was an abuse of process; or alternatively
4. the claims should be stayed on case management grounds.

In the High Court, Mr Justice Turner struck out all the claims as an abuse of process due to the perceived risk of irreconcilable judgments and cross-contamination from parallel proceedings in Brazil and the burden placed on the court's resources by high volume group claims. The judge noted that the claims would be "irredeemably unmanageable" in England and that the claimants could not expect to receive any more advantageous redress in England than in Brazil.

Court of Appeal decision

The Court of Appeal reversed the High Court's decision to strike out the claims. The Court of Appeal concluded that the claimants' claims were not "clearly and obviously pointless and wasteful" and therefore should not be struck out. In reaching this conclusion, it considered the correct approach to striking out a claim for abuse of process. While there is no exhaustive list or clear definition, for a claim to amount to an abuse of process it must either be manifestly unfair to the litigating parties or bring the administration of justice into disrepute among "right-thinking people".

Unmanageability is not a sufficient basis for an abuse of process 'without more'

In his first instance judgment, Mr Justice Turner referred extensively to the burden placed on the courts by hearing these claims which involved a high volume of claimants with complex and potentially divergent claims. In...