ARTICLE
17 April 2024

Alame & Ors v Shell & Anor: Lessons In The Case Management Of Large Group Actions

TS
Travers Smith LLP

Contributor

It’s not just law at Travers Smith. Our clients’ business is our business. Independent and bound only by our clients’ ambitions, we are wherever they need us to be. We focus on key areas of work where we are genuinely market leading. If it’s hard – ask Travers Smith.
In recent years, there has been an increasing trend for claims to be brought in the English Courts on behalf of large groups of claimants seeking redress for environmental damage suffered in overseas jurisdictions.
UK Environment
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Introduction

In recent years, there has been an increasing trend for claims to be brought in the English Courts on behalf of large groups of claimants seeking redress for environmental damage suffered in overseas jurisdictions. Although the English Courts have been reluctant to prevent such claims from proceeding on the basis of early procedural objections from defendants, their size and complexity have presented significant case management challenges (an issue we have previously addressed inthisarticle).

The recent decisions ofAlame & Ors v Shell plc & Anor[2023] EWHC 2961 ("Alame 1") and [2024] EWHC 510 ("Alame 2") demonstrate the challenges that such claims can present, and the extent to which the English Courts are willing to be flexible and pragmatic in order to find practicable solutions to those challenges. We examine below the case and what it may indicate about the Courts' likely approach to similar claims in future.

Background

The claims arose out of oil spills in the Bille and Ogale regions of the Niger Delta. Pipelines in the area are operated by Shell Petroleum Development Company of Nigeria Limited, the subsidiary of Royal Dutch Shell plc, a UK-domiciled company (together "Shell").1The claims were brought by way of four separate proceedings that are being case managed together.2

The claimants, a group of 14,000 individuals, allege that Shell failed to prevent, mitigate, or remediate oil contamination resulting from spills from its pipelines and associated infrastructure, and are liable for damage arising as a result of that contamination.3In response, Shell contends that major sources of oil pollution in the relevant areas arise from events for which it is not liable, including spills resulting from oil theft and illegal refining by third parties.4

By the time of the relevant hearings, only five claimants had been able to identify the particular oil spill or other event leading to the contamination alleged to have caused them loss. The remaining claimants had identified a number of oil spillages, and described the damage suffered as a result of consequential contamination of the land and waterways, without pleading any causal nexus between each oil spill and the damage suffered by each individual claimant.5

The challenge confronted by the Court

InAlame 1andAlame 2, the Court grappled with the case management of claims for which the vast majority of claimants had not pleaded any causal nexus between the relevant oil spill and the damage suffered by each individual claimant.

The claimants submitted that the claims should proceed on the basis that each was an "events-based claim", and that each claimant would in due course plead a causal link between their loss and a specific event for which Shell was responsible. The claimants submitted that those particulars could be provided only after disclosure and the obtaining of expert evidence.

By contrast, Shell contended that the claims (save for the five for which a particular causal nexus had been pleaded) must fail for want of particularity and should be struck out, or alternatively should proceed as a "global claim".

What is a global claim

A claim may proceed on a "global" basis where it is difficult to disentangle various events that led to a claimant's loss. Instead of pleading and proving a causal link between a particular event and the loss suffered, a claimant will plead a collection of events each of which are attributable to the defendant, and which together are alleged to have led to the loss suffered.

Global claims most commonly arise in the construction context. They can be difficult to make out in environmental contamination cases, in which there may be multiple events attributable to different actors (in this case, contamination arising from various oil spills by different operators).

The way forward

The Court inAlame 1agreed with Shell that there was no practical alternative but to view all the claims for which no causal nexus had been pleaded as "global claims", unless or until a more particular case could be identified.6

That decision has significant implications for the future progress of the claims. Under English law, a global claim is in broad terms "all-or-nothing" in nature, meaning that a claimant will recover nothing if it is established that a factor for which the defendant is not liable made a significant contribution to the damage. The precise nature of a global claim under Nigerian law is a matter to be determined in the proceedings by way of a preliminary issue.7 However, assuming the approach in Nigerian law is analogous to that under English law, if Shell can succeed in demonstrating that pollution for which Shell is not liable made a significant contribution to the loss suffered by the claimants, then the claims will likely fail.

The decision will also have significant case management implications for the proceedings, some of which were addressed inAlame 2.

The claimants had contended that the claims should proceed by reference to the need to select appropriate "lead claimants", that would then be used to determine issues common to groups of other claimants.8 On that approach, disclosure and evidence would be directed towards identifying appropriate representative lead claimants and determining the existence of a causal link between the loss suffered by that individual claimant and particular contamination events.

However, the Court rejected that approach as inappropriate for the resolution of global claims.9 Instead, it directed that the claims should proceed on the basis that it would be necessary to examine all oil contamination of the relevant area within the relevant period (2011 to 2013), with a view to determining whether Shell could be said to be liable for all relevant loss arising from that contamination.10 Disclosure, witness evidence and expert evidence would all also be required to proceed on that basis.11

Conclusion

Alame 1andAlame 2are examples of the increasing trend towards the bringing of complex transnational group litigation brought before the English Courts, and the significant case management challenges that such claims present. These decisions demonstrate the extent to which the English Courts are willing to be flexible and pragmatic in order to find practicable solutions to those challenges. At the same time, they show that the Courts will exercise careful control over such claims, and ensure that case management approaches reflect the realities of each individual case.

Footnotes

1 Alame 1,paragraph 1.

2 Alame 1,paragraph 3.

3 Alame 1,paragraph 4 and 13.

4 Alame 1,paragraph 4.

5 Alame 1,paragraph 9 and 13.

6 Alame 1,paragraph 45.

7 Alame 2,paragraphs 8 to 10.

8 Alame 2, paragraph 4.

9 Alame 2, paragraph 5.

10 Alame 2, paragraph 13.

11 Alame 2, paragraphs 5 and 12 to 14.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

ARTICLE
17 April 2024

Alame & Ors v Shell & Anor: Lessons In The Case Management Of Large Group Actions

UK Environment

Contributor

It’s not just law at Travers Smith. Our clients’ business is our business. Independent and bound only by our clients’ ambitions, we are wherever they need us to be. We focus on key areas of work where we are genuinely market leading. If it’s hard – ask Travers Smith.
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