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UK Judge Nixes Damages Claim Over Brazil Dam Failure

Brazilians seeking $6.3 billion in compensation from Anglo-Australian mining giant BHP over a massive dam failure in 2015 suffered a major setback after a British judge ruled Monday that their case belongs in Brazil's courts.

(CN) — Brazilians seeking $6.3 billion in compensation from Anglo-Australian mining giant BHP over a massive dam failure in 2015 suffered a major setback after a British judge ruled Monday that their case belongs in Brazil's courts. 

Justice Mark Turner of the High Court in Manchester ruled that more than 200,000 Brazilians chose the wrong venue for their case against BHP.

In dismissing the lawsuit, Turner pointed to the legal and logistical difficulties in opening a trial in the U.K. while proceedings are underway in Brazil, and he said those complications could be worsened if Brazilian and British courts were to issue “inconsistent judgments.” 

“It can safely be predicted that this unremitting cross-contamination of proceedings would lead to utter chaos in the conduct of litigation in both jurisdictions the procedural position of each of which would be in a near constant state of flux,” he said.

Turner furthermore called the prospect of managing the claims of more than 200,000 Brazilian claimants, many of whom are pursuing damages in Brazil, “nothing short of alarming,” saying it would result in “wasted time, costs and duplication of effort.” He also cited difficulties in providing translators and potential errors caused by mistranslations. 

“The task facing the managing judge in England would, I predict, be akin to trying to build a house of cards in a wind tunnel,” Turner wrote. 

PGMBM, a multinational law firm handling the plaintiffs’ case, said this is the largest group litigation in the history of British courts. Its lawyers said Turner's ruling was faulty, and the plaintiffs have vowed to appeal.

Those injured by the dam failure brought their case to Great Britain claiming that they could not get justice in Brazil over the catastrophic collapse on Nov. 5, 2015, of the Fundão tailings dam in the Brazilian state of Minas Gerais. It was one of Brazil's worst environmental disasters. 

The disaster released an estimated 2.1 billion cubic feet of iron ore and water. Nineteen people were killed in the resulting avalanche of mud that inundated towns, villages, farmlands and rivers in its path, eventually reaching the Atlantic Ocean 430 miles away. The villages of Bento Rodrigues and Paracatu de Baixo were destroyed.

The toxic flood washed out bridges, roads, houses, churches, factories and businesses. Five years later, farmers and fishermen in the region say waterways, most importantly the Rio Doce, and land remain polluted by the toxic tailings.

Led by the municipality of Mariana, the plaintiffs filed the case in Britain because BHP has headquarters in London and Australia. Turner held hearings in the case this past July.

Besides nearly 202,000 individuals, 531 businesses, 25 municipalities, 16 faith-based institutions, five utility companies and the Krenak indigenous tribe are seeking compensation.

After the dam collapse, BHP set up a recovery program and plaintiffs sought damages in Brazilian courts. But the plaintiffs argue neither has been up to the task.

“BHP have succeeded, once again, in delaying the provision of full redress for the victims of the worst environmental disaster in Brazilian history,” said Tom Goodhead, a lead lawyer with PGMBM, in a statement. “We will continue to fight ceaselessly, for however long it takes, in any court in the world to ensure that BHP are held accountable for their actions.” 

The plaintiffs turned to the British court system because they argued that they cannot expect to get compensation in Brazil, where they contend the courts are slow and unreliable.

PGMBM argues that BHP is “ultimately responsible” for the dam failure because it ignored expert warnings that piling up more iron ore tailings might cause the dam to collapse. BHP also allegedly failed to act when cracks in the dam appeared. BHP faces liability because it was a co-owner of the dam and mine.

But Turner said bringing claims into Britain's courts while also seeking damages in Brazil was “a clear abuse of process” that would “if unchecked … foist upon the English courts the largest white elephant in the history of group actions.”

BHP asked the judge to throw the case out of British courts, arguing the matter belongs in Brazilian courts. The company argued that legal proceedings in Britain would be “pointless, wasteful and duplicative” of proceedings taking place in Brazil.

BHP also argues that about 100,000 claimants have received compensation from Renova Foundation, the recovery program set up in 2016 to help those damaged by the dam collapse. Under this program, the company says three villages have been rebuilt, Krenak families have received monthly financial aid, and alternative drinking supplies have been furnished.

This photo shows the Bento Rodrigues District, in the municipality of Mariana, Minas Gerais, Brazil, after the Fundão tailings dam ruptured in 2015, causing a flood of mud that cascaded onto several houses. (Photo by Rogério Alves/TV Senado via Courthouse News)

Turner pointed to Renova's compensation scheme as further reason to throw out the British lawsuit because “questions are bound to arise as to whether (and to what extent) damages already received in Brazil relate to, or are distinct from” damages pursued in Britain. He also said the fact that people have received compensation from Renova shows that the Brazilian legal system has functioned at least in part properly. 

“The English Court is effectively being asked to mark the homework of the judges of a foreign sovereign power,” Turner wrote. 

Duarte Junior, the mayor of Mariana, a town in the path of the avalanche of mud, said in a statement that the compensation scheme in Brazil was a failure and that British courts needed to step in. 

“For five long years we have been frustrated, trying to rebuild our lives and communities in the face of the companies who are responsible for the disaster,” he said. “Compensation so far has been completely inadequate and every day we still live with the effects of what happened.” 

Brazilian federal prosecutors also are seeking $29 billion in damages from BHP and its Brazilian partner, mining giant Vale.

It’s not the first time that a British company has been sued in Britain for alleged environmental damage in a foreign country. 

Last year, the U.K. Supreme Court allowed a case related to pollution claims in Zambia against Vedanta Resources, a London-based metals and mining company, to proceed in Britain. The Supreme Court said the case could be tried in the U.K. because the plaintiffs were too poor to litigate their case in Zambia and because they were unlikely to be represented in Zambia by a legal team with adequate expertise.

Courthouse News reporter Cain Burdeau is based in the European Union

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