English Court Of Appeal Sets The Way Forward in Significant Environmental Damages Group Litigation

In Alame and others v Shell Plc and another,¹  the Court of Appeal of England and Wales has overturned a High Court judgment concerning the approach to causation in a significant environmental damages group action, finding that the High Court's proposed method for determining the claims would be "a recipe for an extremely expensive and insufficiently focused disaster".

Although the decision is in an environmental damages group action, the two key takeaways from the Court of Appeal's decision are also relevant to group actions more generally:

• In group litigation, where there is an imbalance between the parties in terms of access to relevant material, courts may seek to equalise this "inequality of arms" by ordering disclosure against the party holding that information.
• Claimants are free to formulate their case in the manner of their choosing, but courts may still exercise general case management powers to control pleadings e.g., through orders for strike-out/summary judgment.

Looking into 2025 and beyond, we also expect the English Courts to continue to demonstrate willingness to take jurisdiction over disputes where claimants seek to hold English companies liable for the tortious acts of their foreign subsidiaries as they did in this case and others (see Mariana v BHP², Okpabi v Shell³, and most recently Limbu v Dyson⁴).

Background

In this judgment, the Court of Appeal overturned an earlier High Court procedural judgment in the Bille & Ogale Group Litigation.

The claimants in these proceedings, representing two groups of individuals and two communities, seek damages from Shell Plc and its Nigerian subsidiary for alleged pollution caused by oil production operations in the Niger Delta, Nigeria. The lengthy procedural history is summarised at paragraphs 7 to 28 of the judgment, including unsuccessful appeals to the Supreme Court on jurisdiction and decisions regarding collective case management via a Group Litigation Order.

The judgment appealed most recently⁵ held that the claims were insufficiently particularised to identify appropriate lead claimants for the "second trial" in the proceedings. The second trial will follow a preliminary issues trial in Q1 2025, to determine an agreed list of 22 issues including the interpretation of Nigerian Law.

The High Court ordered that, for the second trial, the claimants should advance "global claims". Global claims are most commonly used in construction litigation where it is difficult to disentangle various events that led to a claimant's loss. Rather than trying to establish causation between a particular event and the loss suffered, a claimant will plead that a collection of events (each of which are attributable to the defendant) together caused the loss. This approach was supported by Shell – in order to defeat a global claim, Shell would only have to establish that other factors for which Shell was not responsible had materially contributed to the damages alleged by the claimants.

The claimants argued that being forced to pursue global claims would impose an impossibly high burden on them, and that they were only unable to identify appropriate lead claimants due to not having sufficient relevant information following a procedural stalemate: the claimants argued that they could not further particularise their claims without disclosure from the defendants, and the defendants argued that they could not be required to provide such disclosure without further particulars.

The judgment

The Court of Appeal has now broken the stalemate, finding that there was a "substantial inequality of arms" between the parties, in (a) the defendants' possession of substantially more relevant information than the claimants; and (b) the claimants' inability to fund the proceedings and reliance on the conditional fee arrangement with their legal representatives.

The Court of Appeal ruled that the case should proceed on the basis of three principles (but has left the mechanics of implementation to the High Court):

1. ensuring the parties are on an equal footing in relation to access to relevant information (i.e., by ordering further disclosure by the defendants);
2. selecting lead cases through a collaborative process before that disclosure, under the court's supervision; and
3. requiring the claimants to further particularise their claims once they have sufficient information to do so, so that the defendants have a fair understanding of the claimants' case.

The Court of Appeal held that the High Court should not have required the claimants to reformulate their case as global claims in any event. Parties to litigation should be permitted to formulate their claims as they wish and "not forced into a straitjacket (or corner or cul-de-sac) of the judge's or their opponent's choosing".⁶ Nevertheless, the Court of Appeal acknowledged that the court can apply its general case management powers to manage how parties pursue their claims, including by making strike-out or summary judgment orders.