BHP, an Australian multinational mining company, is facing the largest opt-in class action lawsuit ever brought in the UK. The compensation case against the mining group recently expanded to a record 700,000 claimants who are seeking up to £36 billion for damages caused by the 2015 mining disaster in Brazil.
Collapse of the Fundão Dam
The case relates to the collapse of the Fundão tailings dam in the state of Minas Gerais which was owned and operated by Samarco, a Brazilian company jointly owned by Vale (a metals and mining company) and BHP Billiton Brasil. The dam collapse, considered to be Brazil’s worst-ever environmental disaster, released 40 million cubic metres of toxic mining waste, killing 19 people, polluting hundreds of kilometres of waterways and destroying entire villages and natural habitats.
The claimants, represented by law firm Pogust Goodhead in the UK as well as local lawyers in Brazil, are seeking compensation for alleged damage to their homes and livelihoods. Goodhead's most recent estimate for damages of up to £36 billion is based on an estimation of £17 billion in damages plus 12 per cent interest per year since the tragedy.
A trial has been scheduled for April 2024 in which BHP's liability for the disaster will be determined. However, even if BHP is found to be liable, it could take a number of years until a ruling is given on the amount of compensation due.
Pursuing a claim in the UK Courts
In 2018, dissatisfied with the redress available in Brazil, over 200,000 Brazilian claimants initiated proceedings in the UK against the parent companies of BHP Billiton Brasil; BHP Group PLC (a UK company who owned BHP's 50% stake in Samarco), and its Australian arm, BHP Group Limited. BHP were initially successful in having the High Court strike out the claim as an abuse of process by arguing that the UK group action was "pointless and wasteful" as it duplicated ongoing legal proceedings for compensation in Brazil. The UK Court of Appeal however, in Município de Mariana v BHP Group UK Ltd, disagreed and allowed the claim to be pursued in the English courts. In its judgement, Lord Justice Underhill stated that there was still “a realistic prospect of a trial yielding a real and legitimate advantage for the claimants” and that "the remedies available in Brazil are not so obviously adequate that it can be said to be pointless and wasteful to pursue proceedings in this country".
Climate change litigation bites again
This case is another example of climate change litigation; a type of litigation that has significantly increased over the last decade. The case also highlights the court's openness to holding parent companies responsible for incidents involving their subsidiaries abroad.
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