UK: Green light for appeal of abuse of process ruling in mass tort claim

Last year’s High Court decision in Municipo de Mariana & others attracted attention as it saw the dismissal, for abuse of process, of one of the largest mass tort claims before the English courts. Permission to appeal was initially denied by the Court of Appeal. That permission decision has, however, recently, and exceptionally, been overturned and it is now open for an appeal to progress. We take a look at why this has come about and why the case is being watched.

The decision of Turner J

The Mariana case concerns proceedings by a large number of claimants against two defendants, an English company (Plc) and an Australian company (Ltd) – being the ultimate parent companies of a multi-national mining group.

Those claimants seek compensation under Brazilian law in respect of the collapse of the Fundão dam in Brazil (which was run by one of Ltd’s subsidiaries). Plc and Ltd have been challenging the ability of the claimants to bring the proceedings in England.  

Last year ([2020] EWHC 2930), the claims were struck out primarily on the basis of abuse of process. More detail is available here, but, in general, the judge (Turner J) looked at issues such as the apparent lack of any objective reason for pursuing Plc and Ltd as defendants in England (when other avenues of redress were being pursued by the claimants), and numerous factors which made the proceedings unmanageable; including unremitting cut-across of other proceedings and local redress schemes in Brazil.

Red light for an appeal…

The claimants attempted to appeal Turner J’s ruling, but permission to appeal (PTA) was refused first by Turner J and then by the Court of Appeal (Coulson LJ). Generally speaking, under the English Civil Procedure Rules (CPR), the possibility of any appeal is at an end once the relevant appellate court refuses permission.  

Following that ruling, however, the claimants re-applied to the Court of Appeal, invoking CPR 52.30. That rule provides an exceptional basis upon which that court can reopen its final determination of an appeal in highly restricted circumstances (it also extends to a final PTA determination).

The rule’s parameters are fully discussed in the Court of Appeal’s judgment referred to below [57-64] but the essence is that it is a highly restricted remedy which requires an applicant to show that the integrity of the earlier proceedings has been critically undermined (not just that a wrong result may have been reached). Of particular relevance here being that one indicia may be where a judge has wholly failed to grapple with issues raised on a PTA application.  

Becomes green…

On 27 July, the Court of Appeal ruled on the claimants' application ([2021] EWCA Civ 1156, click here). In its view, flaws in the manner in which Coulson LJ had dealt with the initial PTA application, and their relationship to other features of the case, satisfied CPR 52.30. The Court of Appeal then also gave permission for the appeal against Turner J’s original judgment to proceed.  

As to why CPR 52.30 was satisfied, that was a highly procedural, and fact specific, matter concerning the degree to which Coulson LJ had engaged with the claimants’ grounds of appeal. An outline is, however, helpful – not least as a preview of the main issues which will arise in the substantive appeal. 

In summary, the Court of Appeal identified three arguments which Coulson LJ had rejected but without engaging with the claimants' points. These were, in a nutshell:

First, allegations that Turner J was wrong in law to treat unmanageability as a ground upon which abuse of process can be based. In that respect Coulson LJ had focused on whether Turner J's view as to unmanageability was appealable, not the point of principle [73-82].

Second, an argument that unmanageability of process could not be relied upon to “trump” jurisdiction derived from Article 4 of the Brussels I Recast Regulation (this applied to Plc as proceedings were commenced before the end of the UK/EU transition period). Coulson LJ had not addressed this (92-94]; and

Third, an argument that 58 of the claimants could not bring proceedings in Brazil and, therefore, as a matter of law, fell to be treated differently. Coulson LJ had not engaged with this; having treated the argument as an attack on Turner J's findings of fact [95-101].

In the Court of Appeal’s view, when combined with a number of other factors, the situation was one where CPR52.30 was engaged. Those other factors included the centrality of these points to the claimants’ challenge, the probability that the outcome would have been different had Coulson LJ grappled with the points, and the importance of the claim and the issues raised by the strike-out application [105-106].

Given the considerable overlap between the issues raised in the application and whether PTA should be granted, the Court was also satisfied that it should grant such permission as well; an appeal would have a real prospect of success, and the situation was novel and would benefit from full consideration by the Court of Appeal [107-109].

That grant of permission was, however, subject to a significant condition – that the claimants, by early September, comply with an earlier order made by Turner J (see [2021] EWHC 146 (TCC)) that an interim payment on account of costs (totalling £8 million) be made to the defendants – albeit with liberty to apply to the court to persuade it otherwise.  

Comment and conclusions

This decision means that the door is now open, subject to resolution of the aforesaid condition on costs, for the claimants to proceed to a full appeal against the decision of Turner J on abuse of process. The progress of the case will be watched closely. In mass tort situations, overlapping proceedings in a local jurisdiction and elsewhere may well not be uncommon. So, the degree to which those are susceptible to head-on challenge through abuse of process arguments is an important practical question for those planning litigation strategies on each side.