Court of Appeal reopens landmark £5bn lawsuit against BHP for Brazil dam collapse
London’s Court of Appeal has today decided to reopen a historic £5bn lawsuit against mining giant BHP over the collapse of a dam in Brazil in 2015.
In an unexpected u-turn, the court said that a group of 200,000 claimants would be able to appeal against a lower court’s decision to throw the case out back in November.
The collapse of the Fundao dam, which was run by BHP subsidiary Samarco, killed 19 people and triggered one of the worst environmental disasters in Brazilian history.
Local communities were flooded with mining waste, which also poured into river systems and even the Atlantic ocean.
Initially, the Court of Appeal agreed with the lower court that the giant group action was an abuse of process because the claimants could already seek redress in Brazil.
But in a ruling today, three judges said: “Whilst we fully understand the considerations that led the judge to his conclusion that the claim should be struck out, we nevertheless believe that the appeal has a real prospect of success.”
According to Tom Goodhead, partner at PGMBM, which brought the group action, today’s judgment was “monumental”.
“After the case was struck out in March there was a view that this was the end of the road for the victims. So it is incredibly rewarding for us to be able to tell them that we still believe they will see satisfactory redress through the English courts”, he said.
He added that the claimants were encouraged by recent precedent, such as the Supreme Court’s 2019 decision that Vedanta did have a case to answer in England over their responsibilities to Zambian villagers affected by pollution caused by one of their companies.
In addition, he cited the ruling that Shell can be sued in English courts by Nigerian communities affected by the company’s operations there.
In response, BHP said: “BHP’s position remains that the proceedings do not belong in the UK.
“Issues brought by the claimants are already covered by the work of the Renova Foundation, by existing decisions of the Brazilian Courts or are the subject of ongoing legal proceedings in Brazil.
“BHP will not be distracted from our commitment to do the right thing for the victims of the Fundão dam failure.”
BHP said it had already paid out 4bn Brazilian reals in compensation to people affected by the disaster.
The case is a landmark test for whether multinationals can be held liable for the conduct of subsidiaries abroad.
The judgment came as BHP announced the purchase of Canadian miner Noront Resources for £187m.