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Legal case

Landmark judgment in decade-old litigation against Shell plc as Court of Appeal rejects “global claims” approach

This case builds on case law relating to the responsibilities of companies and their legal obligations to address environmental harm overseas.

The UK Court of Appeal has handed down its most recent judgment (in favour of the claimants) in the major group litigation case concerning two communities in the Niger Delta, concerning a decade-old claim against Shell plc and its Nigerian subsidiary. The case of Alame & Others v Shell PLC and The Shell Petroleum Development Company of Nigeria Ltd [2024] EWCA Civ 1500 was brought by more than 13,000 members of the Bille and Ogale communities who claim to have been affected by approximately 100 oil spills causing extensive environmental damage including contamination to land, waterways and drinking water. The claimants’ case is that the defendants failed to prevent, mitigate or remediate the oil contamination and that they are liable to compensate the claimants in respect of the harm suffered by the affected individuals and communities.

Background

The High Court previously ruled that the claims must be treated as “global claims”, i.e. “all or nothing claims”, which will fail in their entirety if any material contribution to any of the damage was made by a cause for which the defendants were not responsible, (e.g. crude oil theft and related spills, and spills from assets controlled and operated by third parties). The High Court therefore also ruled that the litigation could not be progressed by way of the selection and trial of lead claims (which would favour the claimants).

Court of Appeal Decision

The Court of Appeal unanimously allowed the claimants’ appeal against the “global claims” order, meaning the claimants could formulate their claims as they wished rather than their opponents or the judges choosing.

In another move that will likely encourage potential claimants, the Court of Appeal also clarified the court’s case management approach to such class actions where claimants are at a substantial disadvantage regarding their access to information and ability to participate fully in proceedings. The Court of Appeal stressed the “substantial inequality of arms” in relation to the disparity of information between claimants and defendants in cases such as this and highlighted the importance of disclosure as “one of the most powerful tools available in achieving justice”. The court held that the procedure should involve ensuring the parties are on an equal footing in relation to access to relevant information, by way of a collaborative process, to ensure fairness in the proceedings. Indeed, it stated that “before the distraction of global claims emerged, the parties were close to agreeing that standard disclosure should be given.”

Wider Impact

This case builds on increasing case law relating to the responsibilities of companies and their legal obligations to address environmental harm overseas, and clarifies the relevant tests that can be applied in relation to causation, and the process of selecting lead cases presents the opportunity “to concentrate the minds of the parties on the real issues in dispute”. This case will certainly be one to watch with the trial due to start later this year.