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Oil spill representative action attempt fails to meet “same interest” threshold

22 September 2020

Harrison Jalla & Ors v (1) Royal Dutch Shell Plc (2) Shell International Trading & Shipping Co Ltd (3) Shell Nigeria Exploration & Production Co Ltd [2020] EWHC 2211 (TCC)

Representative elements of a claim by individuals and communities arising out of an oil spill off the coast of Nigeria have been struck out by the English High Court.  Although there were some common issues of law and fact, they were not sufficient to satisfy the requirement that the multiple parties had “the same interest” within the meaning of CPR r.19.6.  This was because of individual differences regarding damage suffered and limitation issues.  

The two lead claimants sought to bring claims in negligence and nuisance against the defendants (three companies in the Shell group) on behalf of 27,830 individuals and 479 communities said to be affected by the oil spill.  The case has raised a number of jurisdictional and procedural issues to date, there is an appeal outstanding and fresh, related proceedings have been issued.  This decision, however, is focussed on representative action issues. 

“Same interest” test must be satisfied

Under CPR r.19.6, a claim may be begun or continued by or against one or more persons as representatives of any others who have the “same interest” in the claim.  This type of “representative” action proceeds on an opt-out basis, so there is no need for the represented class to be joined as parties to the action or even to be identified on an individual basis.  It is the same type of claim that Mr Lloyd is trying to bring against Google.

A key question in this case was whether the lead claimants had the “same interest” as those they purported to represent. There was also a dispute over a connected issue of whether the class had been sufficiently ascertained.

“Same interest” claims do not need to be identical, but must be the same “in effect”

Stuart-Smith J agreed with earlier authority that, while the causes of action of the representing and represented parties do not need to be “congruent”, they do need to be “in effect” the same for all practical purposes.  The “same interest”, which the represented parties must have, is a common interest, which is based upon a common grievance, in the obtaining of relief that is beneficial to all represented parties.  It is not sufficient to identify that multiple claimants wish to bring claims that have some common question of fact or law.  

In this case, while the claims raised common issues of law and fact in relation to the oil spill, the individual claimants and communities would each need, to complete their causes of action, to prove that the spill caused them damage (the claimants being potentially affected at different times and to differing degrees).  The “individualised claims” regarding damage were just as important as the common issues of fact and law; they were not “subsidiary” as the claimants had tried to argue.  There were also differences in how limitation defences were likely to be run by the defendants.

So, although there were some common issues of law and fact, there remained a high number of individual claims requiring individual consideration of proof of damage, and individual defences.  This made the claim unsuitable for a representative action.

Ascertainment of class

As well as the common interest point, the defendants had also challenged the claimants’ ascertainment of class, which is a requirement for a representative action.  While the court examined these as separate questions, it noted that the question of “same interest” and “identification of the class” are closely connected.  In order to bring a representative action, it must be possible to identify the members of the represented class at all stages of the proceedings (and not just at the end) and the represented cohort must be defined with a sufficient degree of certainty.

The court ruled obiter that it would not have struck out the claim on the basis of failure to ascertain the class as the individual and community claimants were listed in schedules to the Particulars of Claim, and solicitors had asserted that all had given authority to the lead claimants to act on their behalf.

The judgment also considered an estoppel argument run by the claimants, but the submissions were ultimately held not to be relevant to the substance of the judgment, and are not considered further here. 

Comment

This case demonstrates the very restricted circumstances in which a CPR r.19.6 representative action can be taken.  The reality is that, in many cases, parties may have claims where there are common points of law or construction, but thereafter their interests and legal rights diverge.  They may be in a different position with respect to the specific facts of their case, the loss they have suffered, and their claims may have additional issues, such as limitation issues. 

In such situations, the representative action may establish, for example, the true construction of a clause in a standard form contract.  Thereafter, individual claimants would have to bring their own case, bound by the common principles of construction already agreed in the representative action, to prove and recover their own loss.

Alternatively, if claimants do seek to recover their loss or damage collectively in CPR r.19.6 proceedings, they may have to abandon or leave to one side their individual claims for loss, and pursue only, as the judge put it, the “lowest common denominator” of claim as a representative action.  For example, in previous representative actions referred to in the judgment, the claimants claimed based on breach of statutory rights, rather than for individual loss (The Duke of Bedford v Ellis & ors1) or disavowed any claims based upon the particular facts related to an individual represented person’s loss (Lloyd v Google). 

Tadhg O’Leary

 

Footnotes:

  1.   [1901] AC 1