The Court of Appeal in Limbu v Dyson [2024] EWCA Civ 1564 concludes that England is the appropriate forum for a key Environmental, Social, and Governance (ESG) dispute to proceed.
Background of the Case
The case involves claims brought by Nepalese and Bangladeshi migrant workers against companies in the Dyson group. The workers alleged trafficking, forced labour, and poor working and living conditions while manufacturing components and parts in the supply chain for Dyson. Most of the claimants were employed in factories operated in Malaysia by two local (non-Dyson) companies.
The case before the Court of Appeal was not about whether those claims were made out (it was accepted that they had a real prospect of success), but rather whether England was the appropriate forum for the claims to be heard. The Court of Appeal allowed the appeal, determining that England was indeed the appropriate forum.
Key Points of Interest
There are some key points of interest arising from the court's consideration of the issues on appeal and its evaluation of the relevant factors as to whether England was the appropriate forum:
Domicile of Dyson companies: The Court of Appeal noted that the first instance judge failed to take into account the fact that the first and second Dyson defendant companies are domiciled in England, which was an important factor when considering jurisdiction. Also key was the fact that the dissemination of relevant ESG policies to be adhered to took place in England and the allegation of failure occurring against management in England is alleged primarily to have occurred in England. Alleged unjust enrichment of the Dyson defendant companies also took effect in England.
Risk of irreconcilable findings: There was a risk of irreconcilable findings in relation to related defamation proceedings in England, which Dyson had brought against a broadcaster concerning the same subject matter.
Defence conducted from England: The first instance judge also erred by not considering that the defence of the claims would be conducted from England by English employees and officers of the English Dyson defendants.
Funding and equality of arms: The claimants' inability to fund their claims in Malaysia, coupled with the availability of funding options in England, favoured England as a jurisdiction. The Court also considered the inequality of arms between the parties, concluding that "Both in terms of the standard of legal representation and the ability of the claimants to attend and give evidence in person, equality of arms favours England."
Location of documentation: The Court noted that the alleged abuse was unlikely to be documented, whereas "The bulk of the documentation in the case is likely to be that relevant to the central issue of responsibility for the alleged abuse in the supply chain" and documentation as to what the English companies knew and how they responded, would be located predominantly in England.
Comment
Although each case will turn on its facts, the Court of Appeal was clear that England is the most appropriate forum for this dispute. We may well see more cases of a similar nature being heard in the English courts. The case also provides insights into the operational implications for companies, the need for companies to remain vigilant and proactive in their ESG strategies and the potential reputational risks associated with ESG non-compliance.
The case will now proceed to be determined in the High Court (absent any settlement) and will be of key interest to companies in respect of their liability for issues down the supply chain.
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.
