A compensation case against BHP over a 2015 mining disaster in Brazil has expanded to 700,000 claimants seeking damages of up to £36bn, making it the largest opt-in class action suit ever brought in the UK.
The case relates to the collapse of the Fundo tailings dam at the Samarco Maria mine complex in Minas Gerais state, which killed 19 people and released 40 million cubic meters of tailings polluting hundreds of kilometers of waterways. The Brazilian claimants are seeking compensation for alleged damage to their homes and livelihoods.
“The number of people who have signed up reflects a lack of confidence in existing redress mechanisms,” said Tom Goodhead, chief executive of law firm Poguest Goodhead, which represents claimants. “We believe it is the largest in the world by number of selected customers.”
The claimants’ lawyers, including Poguest Goodhead in the UK as well as local lawyers in Brazil, will earn up to 30 per cent of the settlement if their case is successful.
Goodhead said additional claimants in Brazil were signed up by local lawyers. “It runs like a small military operation, we look at every town, village and city. . . . Every client in our case has a lawyer in Brazil, as well as a lawyer in England.
The law firm’s new estimate of maximum potential damages of £36bn, published on Wednesday, is based on an estimate of 12 per cent interest per year since the accident plus damages of around £17bn. In official court documents, most damages have not yet been fully quantified.
A procedural hearing will be held later this month, with a hearing scheduled to begin in April 2024 that will initially determine whether BHP is liable. If BHP is found liable, a subsequent ruling on the amount of compensation could take several years.
“BHP UK will continue to defend the group’s actions and reject their claims in their entirety,” the company said in a statement.
“BHP’s view remains that this action is unnecessary as it duplicates matters already covered by the Renova Foundation (under the supervision of Brazilian courts) and other legal proceedings in Brazil,” it said.
While a separate legal case is underway in Brazil over compensation for the disaster, the UK Court of Appeal ruled last year that there was “relatively limited” overlap between the two cases.
Given the thousands of claimants who have signed up, there are practical questions about how such claims can be managed.
Currently many large lawsuits in the English courts are “opt-outs”, which are seen as easier to administer because they are brought by a class representative and consumers are automatically enrolled unless they specifically choose not to. They include a case brought by Walter Merricks, a former UK financial ombudsman representing 46mn people in a £10bn lawsuit against MasterCard.
The project where the tailings dam collapsed was owned and operated by Samarco, a Brazilian company jointly owned by Vale and BHP. At the time of the accident, BHP was dual-listed in London and Sydney.
BHP and Vale established the Renova Foundation in 2016 to undertake repairs and compensation for those affected by the tailings dam collapse. The foundation has so far spent nearly $6bn, including $2.6bn in compensation and financial assistance to 410,000 people.
