Shearman And Sterling

Royal Courts of Justice in London

October 06, 2021

Court Rejects UK Class Action for Mass Environmental Tort Claim

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COURT REJECTS UK CLASS ACTION FOR MASS ENVIRONMENTAL TORT CLAIM

In October 2019 we reported on the English Court of Appeal’s decision in Lloyd v Google[1], which concerned the application of the “same interest” requirement as to class definition in “representative proceedings” (a form of class action claim in the English Courts) for loss of control of personal data. The Supreme Court’s judgment is awaited following Google’s appeal of that decision, which was heard in April this year.

In the meantime, the Court of Appeal last week handed down a further judgment on the “same interest” test in the context of mass environmental tort claims: Jalla v Shell International Trading and Shipping Co Ltd[2]. The approach the Court of Appeal took in Jalla, as contrasted with Lloyd v Google, provides a reminder of the difficulty of establishing the “same interest” requirement for a representative action generally, and highlights the difficulty in attempting to use representative actions as a vehicle for mass environmental damages claims in particular.

Background

The appeal arose in the context of a claim by two individuals, who were part of the Bonga community of approximately 28,000 people occupying land on the Nigerian coast. An oil spill in December 2011 is said to have caused extensive damage to the land. The claim form identified the claimants as being the two named claimants “for themselves and on behalf of the Bonga Community.” The claim was for damages or remediation in relation to the damage and effects of the oil spill. The defendants, Shell International Trading and Shipping Co Ltd (a U.K. company) and Shell Nigeria Exploration and Production Company Ltd (together, the “Shell entities”), were said to be liable for the spill and its consequences. 

Analysis

The claim has entailed a complex procedural history to date, raising various jurisdiction and limitation issues. The issues before the Court of Appeal on this occasion were whether the case was “materially indistinguishable” from Lloyd v Google (Ground 1) and whether, because each represented party would need to prove that he or she had individually suffered loss and damage as a result of the spill, the “same interest” requirement in Rule 19.6 of the Civil Procedure Rules was met (Ground 2).

The Court of Appeal dismissed the appeal on both grounds.

Ground 1

The Court drew a number of distinctions with Lloyd v Google. That was a claim for “per capita” damages for breach of statutory duty, as a result of which all the represented parties suffered the same type of damage (loss of control of their personal data without their knowledge or consent) over the same period of time.

That was not the case in Jalla. The facts relating to each parcel of affected land and the loss and damage potentially suffered by each represented party could be different (the spread, scale, and long-term effect of the oil spill was different in different parts of the vast area of land concerned, which was the size of Belgium). These matters would have to be investigated in each case in order to determine whether each represented occupier had a claim.

Limitation was also in issue in Jalla, unlike in Lloyd v Google, because each represented party’s claim would need to be assessed individually for any applicable limitation defence, given that the relevant date of damage would vary from party to party (unlike in Lloyd where uniform per capita damages occurred during the same period of time across the whole class). The Court also found that the purported representatives were seeking, impermissibly, to bring the claim as a representative action in order to try to overcome the expiry of a limitation period that affected them in respect of at least one of the Shell entities.

Finally, Jalla was not, in truth, a representative action at all, as all the represented parties had in fact signed on to another claim known as Jalla 2, in which they were pursuing their claims individually.

Ground 2

Notwithstanding its findings on Ground 1, the Court further concluded that the claimants had misconstrued the High Court’s findings such that Ground 2 failed as a threshold matter. The High Court had made it clear that the existence of individual claims whereby damage would need to be proved on a case by case basis did not necessarily prevent the claims continuing as representative proceedings, provided that those individual claims could be regarded as “subsidiary” to the main issue(s) raised in the proceedings. The relevant test was whether all represented parties’ claims were “the same for all practical purposes” (emphasis added). On the facts of the present case, the individual claims were not “subsidiary” to the main issue in the proceedings but an integral part of the overall issues raised: the represented parties would each need to show sufficient damage to their particular parcel of land to justify the remediation relief that they sought and would need to show that the nature and scale of the remediation costs (or any scheme by which the remediation would be implemented) were caused and justified by reference to the Shell entities’ breaches of duty, in each case. The individual claims were not, therefore, the same for all practical purposes—they were each potentially different.

Comment

This decision confirms that there is a high threshold for establishing a representative action, and that this is particularly so on the facts of Jalla or a similar mass environmental tort fact pattern. However, the Court noted that a claim such as Jalla may be the subject of “perfectly workable litigation” (and possibly would be in the related Jalla 2 claim), notwithstanding that it failed to meet the test for a representative action. The Court noted that mass environmental claims tend to lend themselves better to group litigation orders (i.e. the group case management of claims that are brought individually), or the approach of simply naming all claimants on the claim form, or of selecting test claimants which reflect common issues, and recurrent individual issues, across the class. Conversely, representative actions may be a more viable mechanism in data protection claims (as in Lloyd v Google) which are more likely to feature a fact pattern that gives rise to the same breach of duty and type and extent of loss across the class. We await the Supreme Court’s decision in Lloyd v Google to see if such a distinction will be borne out.

Stepping back, Jalla, following Supreme Court decisions in Okpabi v Royal Dutch Shell Plc[3] and Lungowe v Vedanta Resources Plc[4], is yet another example of the trend of individuals seeking redress by bringing suits for alleged environmental damage in developing economies against U.K.-based parent companies in the English courts. These cases have now been contested on a few different procedural grounds, which has thus begun to establish certain procedural thresholds for the viability of mass environmental tort claims in the English courts. Having said this, both the questions of jurisdiction for parent company liability in Okpabi and Lungowe and of eligibility for representative environmental actions in Jalla have turned on the facts of the relevant case. This leaves a degree of uncertainty for U.K. parent companies as to their potential liability for such claims and portends, at least for the time being, the likelihood of similar claims being asserted in the future.

Footnotes

[1] [2019] EWCA Civ 1599
[2] [2021] EWCA Civ 1389
[3] [2021] UKSC 3
[4] [2019] UKSC 20

Authors and Contributors

Jonathan Swil

Partner

Litigation

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+44 20 7655 5725

London

Mehran Massih

Counsel

Real Estate

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+44 20 7655 5603

+1 212 848 7377

+1 212 848 7377

London

James Matthews

Senior Associate

Litigation

+44 20 7655 5819

+44 20 7655 5819

London