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BHP successfully applies to strike out 200,000 claims as abuse of process

In the recent decision of Municipio de Mariana v BHP Group plc [2020] EWHC 2930 (TCC), Turner J has struck out, as an abuse of process, the claims of 202,600 Claimants arising out of the collapse of the Fundão Dam in Brazil. The claims had been brought in England against BHP Group plc and BHP Group Ltd. This was understood to be the largest ever group claim in England (by number of individual claimants).

The Defendants had applied to (i) strike out or stay the claims as an abuse of process; (ii) stay the claims against BHP Group plc pursuant to Article 34 Brussels Regulation (recast) due to the existence of related proceedings in Brazil; (iii) stay the claims against BHP Group Ltd on the grounds of forum non conveniens; and/or (iv) stay the claims on case management grounds.

Following an 8-day hearing in July 2020, Turner J struck out all claims against the Defendants as an abuse of process, and in the alternative held that, had he not struck the claim out, he would stayed proceedings on jurisdictional grounds under (as regards BHP Group plc) Article 34 and (as regards BHP Ltd) forum non conveniens.

In finding the claims to be an abuse of process, Turner J held that:

  • The claims in England would involve “closely related group claims moving forward in parallel in two different jurisdictions” and the “wasted time, costs and duplication of effort involved in advancing the same case simultaneously in the two jurisdictions would be considerable and liable to give rise to incompossible findings.
  • [T]he prospect of attempting to manage the claims of over 200,000 claimants where such a high proportion of them are taking (or have taken, or reserve the right to take) steps to achieve compensation in Brazil for the same losses as those in respect of which they wish to establish a right to damages against the defendants in England is nothing short of alarming.
  • [T]his unremitting cross-contamination of proceedings would lead to utter chaos in the conduct of litigation in both jurisdictions the procedural position of each of which would be in a near constant state of flux.
  • The Claimants had presented no “workable procedural mechanism for resolving the claims” and it was not sufficient for the Claimants to “outsource” the responsibility for devising such a mechanism to the court’s case management powers.
  • The “claims would be not merely challenging but irredeemably unmanageable if allowed to proceed any further in this jurisdiction.” Even if the claims had not been unmanageable, the Judge concluded that the claims would have “a very significantly deleterious impact indeed upon the scarce resources of the English courts”.
  • The Claimants had access to multiple existing routes of redress in Brazil, and the Judge rejected the Claimants’ contention that those routes were “effectively broken or stalled”.

Overall, the Judge held that that “the claimants’ tactical decision to progress closely related damages claims in the Brazilian and English jurisdictions simultaneously is an initiative the consequences of which, if unchecked, would foist upon the English courts the largest white elephant in the history of group actions” and that it would be “manifestly unfair to the defendants to be required to engage in massively expensive and protracted litigation devoid of any realistic promise of substantive advantage to the claimants.

In the alternative, Turner J also held that he would have stayed the claims against BHP Group plc pursuant to Article 34. The Judge held that: there was a “very close” degree of relatedness between the English and Brazilian proceedings, there was at the very least a real risk of irreconcilable decisions between them and it would be expedient to hear and determine the related actions together, the Brazilian proceedings were “considerably more advanced” than the English proceedings, the “Brazilian court and legal teams are now immersed in the facts of the matter”, and that allowing the claims to proceed in England in parallel with the Brazilian proceedings “would be the very antithesis of the proper administration of justice.”

Finally, Turner J also held that he would, in the alternative, have stayed the claims against BHP Group Ltd on the grounds of forum non conveniens. In particular, the Judge rejected the Claimants’ submission that justice required that a stay not be granted because substantial justice could not be done in Brazil. The Judge held that the Claimants’ evidence fell “far short” of the cogent evidence that was required for such a finding.

Daniel Toledano QC, Nicholas Sloboda, Maximilian Schlote, Stephanie Wood and Veena Srirangam acted for the Defendants, BHP Group plc and BHP Group Ltd, instructed by Efstathios Michael and Richard Swallow of Slaughter and May. You can view the full Judgment here.