Malawian Farmers’ Claim Survives High Court Judgment on Costs Capping Order
The High Court’s decision in Thomas and others v. PGI Group Ltd [2021] EWHC 2776 (QB) relates to a claim brought on behalf of 31 Malawian women (the “Claimants”) who had worked on tea and macadamia nut plantations operated by Lujeri Tea Estates Limited (“Lujeri”), a subsidiary of PGI Group Ltd (“PGI”).
The Claimants are seeking to hold PGI liable for incidents of sexual discrimination, sexual harassment and rape that allegedly occurred during the period that the Claimants were employed by Lujeri. This High Court judgment related to the Defendant’s application for a costs capping order (CCO) under CPR r. 3.19. A CCO is a relatively rare order by which the Court can limit the amount of costs that a party can recover from another party in litigation – certain thresholds need to be satisfied before the Court will make such an order, including that the usual processes of case management and detailed assessment of costs will not themselves control the risk of costs being disproportionately incurred. The determination of this application was a pivotal moment for the continuation of the claim (which is likely to come on for trial next year). If the CCO had been granted, it could have forced the Claimants to discontinue their claim. The High Court deemed this to be akin to striking out the proceedings, which it was not prepared to do on the basis of the arguments made by PGI. The Court held that granting a CCO was disproportionate and not in the interests of justice.
This decision is reflective of a broader trend of increasing numbers of claimants seeking to hold English parent companies accountable in England for violations of ESG principles (including, for example, human rights impacts) in the context of their overseas operations and supply chains. The Court’s unwillingness in this case to make a CCO – where its effect would be to stymie claims of this nature – is likely to be welcomed by those representing groups of other potential claimants.
Nigeria Oil Spill Representative Action Distinguished From Lloyd v Google
In Jalla and others v. Shell International Trading and another, over 28,000 residents affected by a December 2011 oil spill off the coast of Nigeria (the “Claimants”) sought to bring a representative claim under CPR 16.9 for negligence and nuisance against Shell International Trading and its Nigerian subsidiaries (collectively, “Shell Nigeria”). It is worth noting that there are parallel proceedings to this claim, known as Jalla 2, under which each claimant in those parallel proceedings is seeking individual damages.
In August 2020, Shell Nigeria successfully applied for this claim to be struck out, with the Technology and Construction Court finding that the Claimants had not sufficiently demonstrated a “shared interest” within the meaning of CPR r. 19.6. The Claimants sought to appeal this decision to the Court of Appeal, on the basis that their claim is “materially indistinguishable” from the landmark Lloyd v Google case that is currently proceeding through the English courts.
On 29 September 2021, the Court of Appeal handed down judgment dismissing the appeal. In its judgment, the Court of Appeal distinguished this case from Lloyd v Google (which itself is subject to a pending appeal to the Supreme Court), on the basis that the Claimants will need to provide individual proof of damage in relation to each ‘parcel’ of land affected by the oil spill. By contrast, in the Lloyd v Google case, the claimants had suffered from the same damage in relation to “the loss of control or loss of autonomy in their confidential information”.
The Court of Appeal in the Jalla case also took issue with the fact the Claimants appeared to be using the representative actions procedure to bypass the six-year statute of limitations. Lord Justice Coulson noted that, “if the court concludes that an action is not a representative action under r. 19.6, then the fiction should not be maintained that it is merely to protect the claimants from the limitation consequences of that conclusion”.
This judgment is significant for two reasons. First, it indicates that even if the Supreme Court finds for the claimants in the Lloyd v Google case, that may not assist other claimants in representative actions brought in relation to environmental disasters where such claims entail quantifying the individual impact of the disaster on the individuals bringing the claim. Secondly, this judgment shows that the English courts will be careful to prevent the representative claims procedure under CPR r. 19.6 being used to attempt to bypass statute of limitation issues.