UK High Court blocks £5bn lawsuit against BHP over Brazil disaster
Largest group claim in English legal history struck out as ‘abuse of process
The UK High Court has thrown out a £5bn lawsuit against the world’s biggest mining group BHP brought on behalf of more than 200,000 Brazilians seeking damages from a deadly dam failure in 2015.
In a judgment published on Monday, Mr Justice Turner struck out the group claim — the largest in English legal history — saying the proceedings amounted to a “clear abuse of process”.
“In particular, 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,” he said.
The decision follows an eight-day jurisdictional hearing in July that sought to establish if BHP, which has headquarters in the UK and Australia, could be held liable for the conduct of foreign subsidiaries.
Nineteen people died when a dam holding waste material from an iron ore mine in the Brazilian state of Minas Gerais collapsed just over five years ago. The Fundão tailings dam was owned by Samarco, a joint venture between BHP and Vale, the world’s biggest producer of key steelmaking ingredient iron ore.
The claimants contend that BHP, through Samarco, was ultimately responsible for the dam failure because it repeatedly ramped up iron ore production and storage of the toxic tailings despite warnings that this would compromise its safety.
Tom Godhead, a partner at law firm PGMBM, which is representing the claimants, called Monday’s judgment “fundamentally flawed” and said it would appeal.
“BHP have succeeded, once again, in delaying the provision of full redress for the victims of the worst environmental disaster in Brazilian history,” he said. “Elements of the judgment have no proper basis in both English and European law, such that we are overwhelmingly confident that it will be overturned.”
BHP said the ruling was a “strong endorsement” of its position that the proceedings were “unnecessary” because they duplicated matters already covered by the work of the Renova Foundation, which it set up in 2016 with Vale to carry out repair and compensation work. Renova has already spent £1.4bn.
“The decision also reinforces that the compensation and remediation schemes in Brazil managed by Renova — and supervised by the Brazilian Courts — are the most appropriate means for individuals and communities to pursue their claims and seek reparation,” BHP said
Monday’s ruling comes 18 months after the UK’s Supreme Court said thousands of Zambian villagers could bring a legal challenge in the English courts against mining company Vedanta over alleged pollution in Zambia.
“The 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,” said Mr Turner in his judgment.