The Court of Appeal’s latest on representative actions in Jalla v Shell: To what extent will “representative actions” be permitted in environmental claims?

The Court of Appeal’s latest on representative actions in Jalla v Shell: To what extent will “representative actions” be permitted in environmental claims?

In its second judgment in Jalla and others v Shell International Trading and Shipping Company,[1] the Court of Appeal considered whether the case could proceed as a representative action under CPR 19.6. The Court’s judgment indicates that claimants seeking compensation for environmental damage may have difficulty using the representative action procedure, but the Court supported the use of other group action mechanisms in such cases. In reaching its decision, the Court drew comparisons with claims based on data protection law, such as Lloyd v Google.[2] The Court stood by its decision in Lloyd v Google, describing it as the “paradigm example” of a representative action.[3] These comments are of particular interest in light of the Supreme Court’s judgment, still pending, in Lloyd v Google; and in considering the procedural mechanisms currently available to claimants in environmental litigation.

Background

The claim in Jalla arises out of an oil spill in the Bonga oilfield, which is located 120km off the Nigerian coast. The second respondent, Shell Nigeria Exploration and Production Company Ltd (SNEPCO), operates a Floating Production Storage and Offloading facility. The claimants allege that during an oil transportation operation there was a significant spillage of oil into the ocean. The first respondent, Shell International Trading and Shipping Co Ltd (STASCO), is alleged to be liable for the conduct of the master and crew of the relevant vessel.

The claimants are 27,800 individuals and 457 communities based along the affected coastline. They allege that the December 2011 oil spill damaged fishing, farming, the mangrove forest, and the supply of drinking water. The same area has also been affected by other sources of oil pollution during the relevant period.

The claim was filed by two representatives. The appellant, Mr Jalla, was described by the Court as a respected and important person within the Bonga Community. He is associated with a charity, the Oil Spill Victims Vanguard, which the claimants submitted would receive and distribute any funds recovered from the defendants for the cost of a remediation scheme.

Limitation issues and refinements of the claim

The Court of Appeal’s first judgment in this litigation upheld a High Court ruling that the claims against STASCO, which was joined as a party in April 2018, fell outside the six-year limitation period and were therefore barred (see our perspectives piece here).[4]

The claimants subsequently raised the possibility that some non-coastal land was only affected at a later date as the oil spill moved in-land. Following the directions of the High Court, the claimants filed further particulars setting out the date their land was allegedly damaged.  The particulars were filed relating to around ten members of the claimant group, including the one of the proposed representatives.

The claimants also argued that, in written submissions filed in advance of the High Court hearing, they “refined” their claim by conceding that the central relief that they sought was remediation, not individual damages. The claimants’ position was that they could pursue individualised claims for damages in the protective proceedings that were separately filed (known as Jalla 2) instead of pursuing them in the representative action.

The issues on appeal

The High Court found that the original claim could not be pursued as a representative action, notwithstanding that the claimants only sought remediation.[5] There were some common issues such as the fact of the spill, how and why it occurred, whether it was in breach of the defendants’ duty to any claimant, and - the Court was prepared to assume - whether the Defendants’ owed a duty of care. However, each claimant would nevertheless need to demonstrate that they had suffered damage which needed to be remediated. The claimants then appealed the High Court decision.

Court of Appeal judgment

After summarising the case law on CPR 19.6, the Court of Appeal distilled the following principles:

  • A representative action requires “congruity of interest” between the representative and the claimants being represented.
  • The starting point is the language of the legislation – that the representative has “the same interest in the claim” as those being represented. This cannot be abrogated or modified because the effect of CPR 19.6 is to bind all represented parties to the result of the proceeding.
  • Determining whether the claimants have the “same interest” requires a commonsense approach.
  • A representative action may be possible even if the represented parties also have their own separate claims for damages, but only where this is subsidiary to the main common issues. For example, representative actions were nevertheless possible in cases where the primary relief was an injunction.[6]
  • Defences may be relevant too, but the fact that individualised defence might be available does not preclude a representative action if the defendant is unlikely to rely upon it.
  • It must be possible to ascertain at the outset whether someone is a member of the class being represented.

The Court observed that the primary purpose of the CPR 19.6 procedure is to save time and cost because the court need not be concerned with the granularity of the individual claims. In this case, there would need to be an individual determination for each claimant that they were affected, that the harm was caused by the December 2011 oil spill (and not other sources of pollution), and that the date that the harm arose meant the claim was not time barred. This was not cured by selecting a representative whose claims were not time-barred because each claimant would only know whether they came within the class after the court determined the issue of the limitation period for each individual claim. The claimants’ proposal to bifurcate the proceedings by determining liability on a representative basis and relief on an individual basis would also not remedy these issues because it would not be clear which of the represented claimants were bound by the court’s determination.

The Court considered that this claim was materially distinguishable from Lloyd v Google, which is a statutory claim that “by definition” included the same breach and type of damage.[7] Further, no issues of individualised claims arise in Lloyd v Google because the representative disavowed any claim based on personal circumstances and the limitation period to claim for other pecuniary loss had expired.

Comment

The result is perhaps unsurprising as the claim is, despite its refinement, a significant step removed from the facts in Lloyd v Google. The Court’s more general comments may also present challenges for using the representative action procedure for mass tort claims, particularly as it went on to observe that it did not consider claims for personal injury were likely to be suitable for representative actions either. However, it remains to be seen whether these comments will be applicable on the specific facts of future cases, especially in respect of non-personal injury claims rooted in alleged breaches of the Human Rights Act, or Equality Act 2010, for example.

The Court was more encouraging about using representative actions for environmental damages where injunctive relief is sought, but practically these may be uncommon in cases of devastating environmental disasters and may not provide full redress to victims. Other mechanisms nevertheless remain available to mass tort claimants, such as Group Litigation Orders, which have been used extensively and effectively in the past. These often work with parties agreeing on a group of “test cases” through which the key issues in dispute can be assessed by the Court. Whilst any finding of the Court in relation to “test cases” is not formally dispositive of the claims of others within the group, as per representative actions, it is not uncommon for parties to use the Court’s findings in “test cases” as a basis for resolution of a wider group of claims through Alternative Dispute Resolution.

Looking beyond the scope of environmental claims, it is plain from this judgment that the Court stands by its decision in Lloyd v Google, which is currently being considered by the Supreme Court. Notably, the Court chose to determine the first ground of appeal (whether the case was materially indistinguishable from Lloyd v Google) “on the assumption that Lloyd v Google was correctly decided”. The Court also described Lloyd v Google as a “paradigm example of a representative action”. Significantly, the Court of Appeal’s approach to the facts in Jalla may also serve to allay any concerns that Lloyd v Google has opened the floodgates to the use of representative actions across a broader suite of group actions. Irrespective of the eagerly awaited verdict in Lloyd v Google, it is clear that the courts will be cautious in extending the availability of CPR19.6 particularly in a ‘mass tort’ context.

Footnotes

[1] Jalla and others v Shell International Trading and Shipping Company [2021] EWCA Civ 1389.

[2] Lloyd v Google [2020] QB 747.

[3] At para 53.

[4] Jalla and others v Shell International Trading and Shipping Company [2021] EWCA Civ 63.

[5] Jalla and others v Shell International Trading and Shipping Company [2020] EWHC 2211 (TCC)

[6] The Court pointed to The Duke of Bedford v Ellis [1901] AC 1 as an example.

[7] At para 77.