Court of Appeal overturns decision to manage environmental group claim as a “global claim”
One of our previous Perspectives blog discussed the High Court’s decision that group claims against Shell regarding oil contamination in the Niger Delta must proceed as “global claims”, thereby significantly increasing the burden of proof on the claimants. The Court of Appeal has allowed the Claimants’ appeal against the High Court’s decision.
Background
As explained in one of our previous blog posts, this group litigation in the UK arises out of oil contamination affecting two areas in the Niger Delta. The defendants are Shell plc and its Nigerian subsidiary (together, “Shell”).
The Claimants' case is that Shell failed to prevent, mitigate or remediate oil contamination resulting from spills and thefts from Shell's pipelines and associated infrastructure operated in or near to the two regions. It is alleged that the failures have caused loss and damage to the Claimants, for which Shell is liable to compensate them. Shell's defence is that major sources of oil pollution in the areas concerned are crude oil theft (bunkering) and related oil spills, illegal artisanal refining by third parties and oil spills from equipment operated by those third parties, being matters for which Shell is not responsible.
The claims are still an early stage. Shell issued a jurisdiction challenge, which was eventually resolved in favour of the Claimants by the Supreme Court. The claims are now being managed under a group litigation order (GLO).
High Court decision
In July 2023, a case management conference took place to address a number of procedural issues, including Shell's proposal, based on the state of the Claimants' pleaded case, that the court regard the claims as "global claims" rather than “events based” claims for the purposes of case management. The concept of “global claims” derives from construction cases. Global claims are generally regarded as difficult to prove and unattractive to claimants.
The usual course in this type of group litigation is to identify “lead” claimants and then the litigation progresses from there. In November 2023, the High Court ruled that the lack of pleaded detail on causation precluded any sensible identification of lead claimants at this stage. The Court said the necessary causal link between event(s) and breach and breach and loss had not been identified. Therefore, the claims had to proceed as “global” claims rather than “events-based” claims, unless the claimants were able to plead causation in more detail, including which oil spills caused each claimant’s loss (see Alame v Shell Plc [2023] EWHC 2961). The High Court described such a “global” claim as an “all or nothing” claim.
A further hearing subsequently took place which considered case management and disclosure issues following the November 2023 judgment: Alame v Shell Plc [2024] EWHC 510 (KB).
Appeal
The Claimants appealed against the High Court's ruling that the claims must proceed as “global” claims. On 14 October 2024, the Court of Appeal announced it was allowing the appeal. Its full written judgment is to follow, but it is now clear that the claims in this case will not be proceeding as global claims.
Comment
The Court of Appeal has not yet published its full written judgment, which will explain the Court’s reasoning for allowing the appeal. In any event, this decision is likely to be welcomed by claimants. In cases of environmental contamination, it can often be difficult to particularise at an early stage which individual event has caused each individual loss. From the claimants’ perspective, there is often an information imbalance; for example, the Claimants in the Shell case alleged that Shell held the necessary information (e.g. overflight material, satellite images and pipeline pressure data) that would enable the Claimants to establish which oil spill or spills caused the relevant loss. The Claimants highlighted that it would be unfair for them to have to particularise their case on causation at the very start of case, before any expert evidence or disclosure had been ordered. We will report in more detail on the decision once the Court of Appeal delivers its reasoned judgment.