Court of Appeal Decision Highlights Supply Chain Accountability for UK Companies

The Court of Appeal has recently handed down a pivotal decision in Limbu & others v Dyson Technology, Dyson Limited & Dyson Manufacturing Sdn Bhd [2024] EWCA Civ 1564 addressing allegations of forced labour and unsafe working conditions in factories linked to Dyson’s supply chain. The ruling marks a significant step forward in holding UK-based corporations accountable for labour practices within their global operations and follows closely on the heels of the decision in World Uyghur Congress v National Crime Agency [2024] EWCA Civ 715, signalling a growing judicial focus on ethical practices and accountability for human rights abuses.

Background

The claimants, a group of 24 workers from Nepal and Bangladesh, have brought serious allegations against Dyson and two of its suppliers in Malaysia. The workers claim they were trafficked to Malaysia, and endured exploitative working conditions, low wages, and unsafe environments while manufacturing components for Dyson products. Bringing claims in tort and unjust enrichment, the claimants allege that the three defendants are legally liable for the abuse they allegedly suffered during their forced employment, having gained financially from the exploitation.

Initially, Dyson argued that the English courts lacked jurisdiction and maintained that Malaysia was the appropriate forum for hearing the claims, given that the alleged misconduct occurred there, and Malaysian law applied. The High Court agreed and dismissed the claims, leading to the claimants' appeal.

Key Findings

The Court of Appeal overturned the High Court’s ruling, allowing the claims to proceed in England. The Court highlighted three main factors that supported this decision:

1. Domicile of Dyson Entities: As Dyson Technology Limited and Dyson Limited are domiciled in England and are the principal protagonists (with the Malaysian Dyson entity "a more minor and ancillary defendant") the Court emphasized the legal and practical relevance of hearing the case in the UK.
2. Barriers to Justice in Malaysia: The Court recognised that pursuing claims in Malaysia posed significant obstacles for the claimants, including financial constraints and limited access to effective legal representation.
3. Relevance of Evidence in England: Many of the key documents and witnesses necessary for the case are in England, supporting the English courts as the most suitable forum for the dispute.

The judgment reaffirms that claimants can bring cases to the English courts when there are strong connections to the UK, even if the alleged harm occurred abroad.

Implications for UK Businesses

This decision is not an isolated development but part of a broader legal trend toward increased scrutiny of corporate accountability. It sends a clear message to multinational corporations: the actions of overseas suppliers can expose parent companies to legal challenges in their home jurisdictions.

With the Court of Appeal having already confirmed in the World Uyghur Congress case that products of gross human rights abuses do not lose their criminal nature because someone in the supply chain paid adequate consideration for them, there is clearly a growing willingness by the Courts to address human rights violations linked to UK-based companies.

The judgments underscore the judiciary's readiness to tackle such issues. Both criminal and civil risks arising from multinational supply chains are intensifying, making it essential for UK companies to implement rigorous oversight mechanisms, ensuring compliance with human rights, labour, and broader ESG standards.