Court of Appeal hears bid to revive £5bn Brazil group claim

Lawyers representing hundreds of thousands of claimants affected by one of Brazil’s worst environmental disasters have asked the Court of Appeal to revive one of the largest group claims in English legal history, a mammoth £5bn action against mining giant BHP.

More than 200,000 Brazilian citizens, hundreds of businesses and 25 municipal authorities are suing BHP Group plc and an associated Australian company, BHP Group Limited, over the 2015 collapse of the Fundao dam in Mariana, southeast Brazil. The disaster killed 19 people and released millions of cubic metres of toxic waste.

The claim was brought on the basis that the overseas-registered defendants are liable under Brazilian environment law as ‘indirect polluters’, under the Brazilian civil code and for alleged breach of duty under Brazilian corporate law, which is denied.

BHP applied to strike out the claims as ‘pointless and wasteful’ saying the claimants could obtain redress from other parties in Brazil and, in November 2020, Mr Justice Turner granted BHP’s application as the case was a ‘clear abuse of process’. The judge also said the claim would be ‘irredeemably unmanageable if allowed to proceed any further in this jurisdiction’.

The claimants’ application for permission to appeal was refused, first by Turner and then by Lord Justice Coulson on the papers, but the Court of Appeal granted permission after an oral hearing last year.

Opening the claimants’ appeal in Mariana and others v BHP Group plc and another today, Alain Choo-Choy QC argued that Turner had been wrong to strike out ‘admittedly arguable claims for substantial sums’ on the basis of ‘the (perceived) unmanageability or burdensome nature of the proceedings’.

‘Individual claimants, however numerous, cannot be deprived of access to justice simply on the ground that the proceedings of which their claims form part are considered unmanageable or burdensome,’ he said in his skeleton argument.

But Charles Gibson QC, for the defendants, emphasised that the Fundao dam was owned by Samarco – a joint venture owned 50/50 by BHP Brasil and Vale, which is ‘one of the largest global mining companies’.

BHP Brasil and Vale have established a compensation scheme called Renova, which is supervised by the Brazilian federal court and has already paid compensation to around 100,000 of the claimants, Gibson said. He argued that ‘the Brazilian state, the prosecutors and, above all, the Brazilian justice system have devoted and continue to devote vast effort, time and resources to resolving dam-related disputes and achieving finality’.

In these circumstances, 'it is an abuse of process to allow these circa 200,000 appellants now to sue these two respondents in England, seeking the same full redress under Brazilian law,’ he concluded.

The hearing is due to conclude on Friday. Judgment is expected to be reserved.