Court of Appeal finds claimants cannot be forced to pursue claims for environmental damage as "global claims"

The Court of Appeal has overturned the High Court's decision that group claims against Shell Plc and its Nigerian subsidiary relating to oil contamination in the Niger Delta must proceed as "global claims": Alame v Shell Plc [2024] EWCA Civ 1500.

The High Court had held that, unless the claimants could identify which oil spills were alleged to cause their losses, the case could proceed only as a global claim (see our blog post here). The Court of Appeal noted that the concept of a global claim had developed in the context of construction cases. It enables a claimant to recover when its loss was caused by multiple events for which the defendant was responsible, even if it cannot identify the losses caused by each event. The downside, the court said, is that a global claim will generally fail if the defendant can show it was not responsible for an event which contributed significantly to the loss.

The Court of Appeal emphasised that in any litigation it is up to the claimants, and not the court, to decide how they wish to formulate their claims. In the present case, the claimants had made it clear that they did not advance a global claim, and that had to be respected. The court therefore did not go on to consider the status of global claims in English law and whether such an approach could be applied to environmental claims.

The Court of Appeal's decision is also of interest for the court's approach to disclosure and case management, again overturning the High Court's decision as to the proper approach (see our blog post here). It suggests that the court will take into account whether there is an inequality of arms between the parties, including a significant asymmetry of information, in deciding on the appropriate order for disclosure – though it will not permit a mere "fishing expedition". It also emphasises the importance of lead or test cases as a tool for managing complex group litigation.

Background

The judgment arose in the context of the Bille and Ogale Group Litigation. As explained in our previous blog posts, linked above, the claimants allege that the defendants failed to prevent, mitigate or remediate contamination from oil spills and thefts from their pipelines and associated infrastructure, which caused damage to the claimants’ land and communities. The defendants deny responsibility for the contamination, blaming other factors including illegal refining.

The claimants' statements of case identified 10 specific oil spills, and this was later increased to almost 100 spills through proposed amendments, but these do not purport to list all spills on which the claims are based. The claimants' position is that they are unable to provide further particulars pending disclosure and expert evidence.

In a decision in November 2023, the High Court held that the claims must proceed as "global claims" rather than "events-based" claims, unless the claimants could plead a more specific case as to which oil spills were alleged to cause each claimant's loss. At a further hearing in March 2024, the court held that, because the claims would proceed as global claims, there could not be any sensible identification of lead claims. Instead, there would be a trial of preliminary issues followed by a factual trial to examine the causes of all oil contamination in the relevant region over the period in question (2011-2013).

The claimants appealed against both the declaration that the claims must proceed as global claims and that this precluded their case management by reference to lead claims.

Decision

The Court of Appeal allowed the claimants' appeal on both issues. Stuart-Smith LJ gave the lead judgment and Bean and Males LJJ gave short concurring judgments.

Global claims

Stuart-Smith LJ held that the judge's declaration that the claims must proceed as global claims had to be set aside, as the court is not entitled to require a party to establish its case by a particular method.

"A party should be permitted to formulate their claims as they wish, not forced into a straitjacket (or corner or cul-de-sac) of the judge’s or their opponent’s choosing."

That does not mean the court has no control over how a party brings their case. It has various powers of case management, including orders for strike-out or summary judgment. But unless the claim is to be dismissed or stayed, Stuart Smith LJ commented, a party's right to bring the claim, and freedom to determine how it intends to prove it, should normally be respected.

In the present case, the claimants had made it clear that they did not advance a global claim, and therefore it was wrong to impose that route upon them. The fact that the claimants could not currently plead or prove a link between specific oil spills and their alleged losses did not mean they were pursuing a global claim.

Future case management

Stuart-Smith LJ referred to the "essentially circular procedural wrangle" in this case, in which the claimants say they cannot give sufficient particulars of their claims without further information from the defendants, and the defendants say they cannot be required to provide further information without further particulars about the claims.

He noted that there was a "substantial inequality of arms" between the parties, both because the defendants had considerable quantities of relevant information that was not available to the claimants, and because the claimants had to fund the litigation through lawyers acting under a conditional fee agreement (CFA).

The court's management of the claims had to be informed by the overriding objective and, in particular, the obligation to ensure that the parties are on an equal footing and can participate fully in the proceedings. Stuart-Smith LJ agreed that in cases involving a significant asymmetry of information, the process of disclosure is one of the most powerful tools available for achieving justice. If the scope of disclosure is too tightly confined by reference to the existing pleadings, the claimant might be unable to obtain the material needed to make out its case.

Accordingly, while the court must be alert not to permit mere "fishing expeditions", where the case the claimants wish to bring has been clearly articulated, the court should carefully scrutinise any suggestion that a defendant does not know the case it has to meet for the purposes of disclosure because it has not yet been pleaded with sufficient particularity. Importantly, however, before the case could be brought to trial, the claimants would be required to give sufficient particulars so that the defendants knew what case they had to meet and had a fair opportunity to meet it.

Stuart-Smith LJ also disagreed with the judge below that the claimants' pleaded case precluded the selection of lead claims. Instead, this was a "paradigm example of a case which can only be progressed by reference to lead cases". In contrast, the judge's direction for a factual trial involving an inquiry into the causes of all oil contamination over a three-year period in a 500 square mile region was "a recipe for an extremely expensive and insufficiently focussed disaster".

Ultimately, Stuart-Smith LJ said, the court should be seeking to refine issues progressively to the point where their fair resolution would lead to the final disposal of the litigation or substantial parts of it. That involved three "guiding principles":

1. Striving to ensure the parties were on an equal footing in relation to access to relevant information, which meant further disclosure was required.
2. Selecting lead cases through a collaborative process, with the court being involved as necessary.
3. The claimants setting out the nature of their cases, once they were in possession of sufficient information, so that the defendants would have a fair understanding of the case they have to meet.

How those principles should be implemented was a matter for the High Court. However, Stuart-Smith LJ expressed the hope that lead cases could be selected, or at least selection criteria agreed, without having to wait for further disclosure.