“Settled” Environment Claim Continues in the High Court

The collapse of a dam in itself is a disaster, however in this situation the collapse of the Fundão Dam unleashed a wave of toxic waste from mining activity that engulfed the neighbourhood swiftly and went on to cause considerable environmental damage to communities in the locality, with the waste spreading to the Atlantic Ocean over 400 miles away.

In total, 19 people lost their lives and swathes of people were left homeless and with no livelihood as a direct consequence of the collapse.

Almost 10 years on and the litigation arising from the disaster continues. In our article from March 2023, we discussed the litigation which followed the collapse of the dam and the potential claims available to the claimants whose lives had been devastatingly impacted by the collapse. In particular, we looked at how the claim had ended up being litigated in the English Court, notwithstanding the fact neither the claimants, the defendant nor the disaster had a connection with England. However, Samarco Minerao SA (the dam’s owner), was a Brazilian joint venture between Vale SA and BHP Brasil Ltda. BHP Brasil Ltda was an Anglo – Australia venture owned by BHP Group (UK) Limited (based in England) and BHP Australia (based in Australia).

The claimants were able to establish, via the Court of Appeal after challenging the initial judgment from the High Court, that the English courts had jurisdiction to hear the claim.

The claim is in the headlines again following a settlement in the sum of $31bn (approx. £23.9bn) which was reached between the Anglo-Australian venture and the authorities in Brazil in the same week that the trial commenced on behalf of the thousands of claimants who suffered loss and damage as a result of the disaster.

The settlement was described by BHP as being “full and final” which should mean the end of any lines of recovery for losses sustained as a result of the disaster however, the group claim continues. 

It would appear the “full and final” settlement has not been reached with the consent or instructions of the claimants in the group action, leaving their claims ‘live’ to proceed in the court, as there is no settlement in relation to the loss and damage they have suffered.

Comment

Keith Davidson, Environment Partner at Irwin Mitchell, comments:

“Environmental litigation cases against polluting companies are continuing to increase in terms of quantum and scope. The Fundão Dam environmental damage settlement ($31bn) is currently the most significant, however 3M settled with US municipalities for PFAS forever chemicals in drinking water in the sum of $10bn.  The UK Supreme Court’s climate change judgment in the case of R (Finch) v Surrey County Council [2024] UKSC 20 and its satellite litigation on Scope 3 greenhouse gas emissions is successfully challenging fossil fuel planning applications. This demonstrates the breath of the scope of the courts in relation to environmental litigation.” 

Katie Byrne, Head of Commercial Dispute Resolution at Irwin Mitchell, comments:

“This claim highlights the importance of ensuring all potential avenues are explored when it comes to the most appropriate jurisdiction in which to launch a legal challenge taking account of where the interests of the relevant litigants will be best served.”

“We expect to see further arguments in respect of liability as this claim continues to be heard in the coming weeks. Parent companies should take note of the actions, or inaction, of their subsidiary companies as the English Courts are alive and open to considering arguments that they have locus to hear claims within this jurisdiction.”