Environmental Claims Against UK Parent Companies: Emerging Trends and the Court of Appeal Ruling in the Fundão Dam Class Action

A number of significant and recent decisions in the English courts highlight the developing trend for environmental claims, or claims engaging a broader range of ESG issues, against UK parent companies on the basis of alleged acts or omissions by overseas subsidiaries.  With some exceptions, the English courts have been reluctant to dispose of these claims at an early stage in the proceedings.  In particular, following jurisdiction challenges, the Supreme Court has found it at least arguable that UK parent companies owed a common law duty of care and/or a statutory duty to the claimants for environmental damage allegedly caused by overseas subsidiaries.

Most recently, the Court of Appeal (“CoA”) held that a claim commenced by Municipio de Mariana (a municipal authority in Brazil) and 202,599 other claimants in relation to the 2015 collapse of the Fundão Dam in Brazil (the “Fundão Claim”) can proceed in the English courts. In particular, the CoA held that it should not be struck out as an abuse of process, or stayed in favour of proceedings already underway in Brazil, thereby overturning the judgment of the High Court (“HC”).  That decision is subject to an application for permission to appeal to the Supreme Court, but in the meantime an eight-week trial of liability issues in the Fundão Claim has been fixed for April 2024, following a hearing in the High Court in December 2022.

In this article we first explore some of the key recent decisions, before discussing the Fundão Claim and its implications in more detail.

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