Angelika Hellweger of Rahman Ravelli considers the latest developments regarding the allegations against the company.
Appliance manufacturer Dyson has failed to prevent a forced labour case against it being held in an English court.
The Court of Appeal has ruled that claims that migrant workers were abused in Malaysian factories should be heard in Britain. The court decided that England was "clearly and distinctly the appropriate forum'' as Dyson's UK company was "the principal protagonist'' - overturning a High Court ruling that the case should be heard in Malaysia.
The workers' legal representatives claim that Dyson did nothing about their allegations that they were trafficked and mistreated at a factory making parts for the company's products. The workers want Dyson to pay them compensation for alleged negligence, false imprisonment and unjust enrichment.
Justice Andrew Popplewell, giving the Court of Appeal decision, said the issue is "an allegation of a failure occurring among the management in England and is alleged primarily to have occurred in England.''
The workers, from Nepal and Bangladesh, allege that they suffered exploitative and abusive working and living conditions while employed by ATA IMS, a third-party supplier of products and components to the Dyson Group. The workers say they were kept in crowded and insanitary accommodation, were forced to work more than 12 hours a day for less than the minimum wage and were tortured and beaten.
Dyson ended its contract with ATA in 2021. The alleged abuses were reported in a 2022 Channel 4 programme. This prompted Dyson to bring a defamation case against Channel 4 after the broadcast. But this was later dropped after Channel 4 argued that the allegations in its programme were true.
Notable
This latest development in the case is notable as it will make it easier to bring other supply chain cases in the English courts against UK-based companies. When the case is heard, it will be significant as it will see a court determining whether a company owes a duty of care in tort for the acts or omissions of one of its suppliers.
Companies with a sufficient jurisdictional connection to the UK now face a greater risk of litigation, enforcement action and reputational damage over supply chain issues. The inclusion of ESG obligations in supply chain agreements – relating to matters such as working conditions - could be a way to manage such risks and avoid the problems Dyson now faces.
But if they are to be effective, those obligations must have real consequences if the third party supplier fails to meet them. Linking the payments under any agreement to the adherence to ESG obligations can ensure they are met, with companies being aware they face financial difficulties if they do not uphold all aspects of the deal.
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