What now for mass environmental tort claims?
Jalla & Anr v Shell International Trading & Anr [29.09.21]
In the wake of the COP26 conference and the potential for further climate change litigation, we look at the recent Court of Appeal (CA) decision of Jalla & Anr v Shell International Trading & Anr (Jalla) [29. 09.21] which considered the extent to which representative actions may be allowed in mass environmental tort claims.
The Court of Appeal upheld the first instance decision to strike out the representative element of the claim for failing to satisfy the requirement under Civil Procedural Rule (CPR) 19.6 – that such claims may only be brought by or against representative parties who have the “same interest” as representatives of any other persons who have that interest.
This narrow approach was recently affirmed by the much anticipated Supreme Court decision in Lloyd v Google (Lloyd) [10.11.21] relating to loss of control of personal data by iPhone users. Here, the Supreme Court held that, although the “same interest” requirement was met in terms of commonality of issues, the compensation of loss or harm would have to be assessed on a case by case basis such that the “same interest” test was not fulfilled and any ensuing representative action would have been unsustainable.
These decisions highlight the ongoing challenges faced by claimants seeking to rely on the representative action regime to claim compensation, and other remedies, for environmental and other types of loss or damage. They also send a clear message that the court is likely to continue to adopt a strict interpretation of the “same interest” test.
The Jalla claim was brought by two appellants, Harrison Jalla (Jalla) and Abel Chujor (Chujor), on behalf the Bonga Community consisting of 28,000 individuals living on the Nigerian coast. Jalla and Chujor occupied land along the coastline that was affected by an oil spill during an extraction procedure, for which Shell was allegedly responsible. Damages were sought by the represented parties on an individual basis and remediation relief was pursued to resolve the environmental issues caused by the oil spill. The two grounds of appeal were as follows:
- Whether the appellants and the Bonga community had the same interest in their claims.
- Whether this claim was materially indistinguishable from that considered by the Court of Appeal in Lloyd  which allowed a representative action to be established on grounds that the “same interest” requirement was satisfied (though, as set out above, that decision has now been reversed by the Supreme Court).
The Court of Appeal found that the claimants did not have the “same interest” as required by CPR 19.6. Whilst there were common issues of fact to be determined (including the cause of the oil spill and whether the defendants had breached their duty of care), each of the large number of claims required individual consideration and proof of damage, necessitating individual defence arguments. It therefore was not shown that the oil spill had caused the same damage to all claimants or that they were entitled to the same relief in satisfaction of the “same interest” test.
Jalla was, in any event, concluded to be materially different to the CA decision of Lloyd on grounds that there was lack of clarity, namely, whether the occupiers of the land affected by the oil spill could each establish a cause of action. By comparison, the represented class in Lloyd could be determined with certainty at the outset. In reaching its conclusion, the Court of Appeal had regard to the following:
- There were no causation issues arising in Lloyd whereas, in Jalla, each representative party would have had to establish a causative link.
- In Jalla each represented party was required to establish that the alleged damage was sufficient to warrant either injunctive relief or compensation, whereas damages for loss of control of data in Lloyd did not require consideration of personal circumstances.
- In Lloyd, limitation was not raised as an issue, whereas limitation issues were central to Jalla.
Indeed, the comments of LJ Coulson in the appeal decision about the classes and potential structure of mass environmental tort claims clarify the way in which the court expects claimants to frame their claims.
In particular, LJ Coulson noted that “in a certain kind of pollution case” a representative action could be an appropriate way to structure the claim. He cited the example of a group of residents seeking an injunction against a company operating a chemical plant whose chimney was emitting pollutants. Here, it was “overwhelmingly likely” those residents would have the same interest, such that they could be represented in an action by one resident.
Contrast that with a situation where the residents each had different injuries arising from the pollution. Such claims would usually be pursued via a group litigation order (GLO). The court commented that this case “could (and perhaps should)” have been brought as a GLO, and that each side blamed the other as to why it had not been framed in this way.
Of greater interest were LJ Coulson’s comments on the willingness of the English courts to deal with multi-party environmental claims.
Of greater interest were LJ Coulson’s comments on the willingness of the English courts to deal with multi-party environmental claims. Following the decision in Vedanta Resources PLC v Lungowe and Others , the English courts are able to accept and manage claims pursued against UK based companies for the actions of their global subsidiaries. But such claims must be properly framed – in this case a representative action was simply not the right device.
Jalla can be seen as the latest in a line of environmental claims setting out the approach of the English courts to questions of liability of UK parent companies for their global subsidiaries.
The approaches taken by the Court of Appeal in Jalla and the Supreme Court in Lloyd suggest that the scope for representative actions brought under CPR 19.6 is narrow and emphasises the importance of properly identifying the parties’ commonality of interests, causation and damages to a potential representative action.
Even if there are common issues of law and fact, this may not be enough to demonstrate that the parties have sufficiently the “same interest”. Differences in issues of causation, defences and damages need to be carefully examined in order to ascertain whether a representative action is possible. If not, claimants may turn to alternative methods such as GLOs to bring mass environmental tort claims, which are gaining in popularity across a whole range of other mass tort claims including product liability and ESG related claims. Jalla is a case giving guidance to parties on the procedural limits of the new era for global mass environmental tort claims, an era where a multinational corporation based in the UK can face action in the courts of England and Wales for the activities of their global subsidiaries.
Globally-based defendant companies and their liability insurers will have to closely watch this space to see whether and to what extent there is potential for more opt-out actions in the UK.