Mass torts case alert: Supreme Court refuses permission to appeal in Unilever case

The Supreme Court has refused permission to appeal in this important mass tort case. Chris Owen and Adam Bristow consider the impact of that decision and how it contrasts with the recent Supreme Court judgment in Vedanta.

The Supreme Court has recently refused the Claimants’ application for permission to appeal the Court of Appeal judgment in AAA and others v Unilever PLC and Unilever Tea Kenya Limited [2018] EWCA Civ 1532. The Claimants - 218 Kenyan nationals - were attempting to bring mass tort claims against Unilever Plc and its Kenyan subsidiary, the owner of a tea plantation in Kenya, at which the Claimants allegedly suffered ethnic violence at the hands of third-party criminals.

This is the end of the line for the Claimants: they could not demonstrate at first instance or on appeal that they have a good arguable claim against Unilever PLC as anchor defendant for their claim in the English courts, because an arguable duty of care as between Unilever PLC and the Claimants was not made out (see our previous article on the Court of Appeal judgment).

This development follows a recent judgment of the Supreme Court in Vedanta Resources PLC and another v Lungowe and others [2019] UKSC 20. That case confirmed that a duty of care can exist between a parent company and third parties affected by the operations of its subsidiaries. The decision in Vedanta appears to widen the circumstances in which an arguable parent company duty of care can be made out (see our recent article on this judgment).

Against the background of Vedanta it is perhaps surprising that the Supreme Court was unwilling to hear an appeal of the Unilever case. However, the Supreme Court in Vedanta emphasised that the existence of a parent company duty of care is a fact-specific analysis, to be undertaken on a standalone basis in each case. We suspect that this influenced the Supreme Court’s decision to refuse permission to appeal.

It is, however, interesting to query whether the Unilever case would have been decided differently at first instance, if it was heard now, post-Vedanta. The Supreme Court’s refusal of permission to appeal does not mean that it agrees with the lower courts’ decision regarding the existence of an arguable duty of care in the Unilever case - it simply means that, in the opinion of the Justices, the Claimants’ appeal did not raise an arguable point of law of general public importance which ought to be considered by the Supreme Court. It is plausible that, given the guidance of the Supreme Court in Vedanta, a first instance judge might now approach the relevant legal and factual analysis around parent company liability less restrictively and consider that the relatively low jurisdictional bar was cleared.

In terms of next developments to watch out for:

  • A similar case involving Shell was heard by the Court of Appeal in 2018, in which the Court of Appeal concluded there was not an arguable duty of care as between Shell and Nigerian nationals affected by the acts of Shell’s Nigerian subsidiary (see our article). The Claimants in the Shell case have a pending application for permission to appeal to the Supreme Court. A decision on that application is expected shortly.
  • The Vedanta case will now proceed to substantive trial - the trial is yet to be listed, although we understand a case management conference (being a formal procedural hearing to determine the steps and timetable to trial) is scheduled to take place in December 2019.

Developments in both these cases will be closely watched and have significant implications for the issue of when a parent company can be held liable for acts of its subsidiaries.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.