Jalla v Shell: What Does It Mean for Representative Actions?

Jalla v Shell: What Does It Mean for Representative Actions?

The outcome of August's 'Jalla v Shell' has set a precedent that could have significant consequences for coming representative actions.

Reading Time: 4 minutes

Signature Litigation’s Abdulali Jiwaji, Johnny Shearman and Ligia Bob examine the case and what it might mean for the upcoming Lloyd v Google action.

In March of this year, the Supreme Court granted Google Inc. permission to appeal the Court of Appeal decision which allowed the landmark representative action brought against it for privacy breaches to proceed (Lloyd v Google). Whilst this legal battle has been widely publicised, the more recent decision in Jalla v Shell International Trading and Shipping Co Ltd [2020] EWHC 2211 (TCC) highlights that the courts will not simply rubber stamp attempts to bring claims forward as class actions.

Mr Jalla and Mr Chujor issued the claim against Shell not only on their behalf but on behalf of the 27,500 plus number of individuals and 457 communities in Nigeria that allege to have suffered damage as a result of the oil spill off the coast of Nigeria in December 2011. The claimants allege that Shell is responsible for the oil spill and the damage that the claimants have suffered as a result of it. Shell has rejected the accusations and is defending the claim on numerous grounds, including that no oil from the spill reached the Nigerian coastline or caused any damage.

Representative actions and “the same interest” requirement

Messrs Jalla and Chujor have sought to pursue the claim against Shell as a representative action – such an action can be brought were more than one person has the same interest in a claim and the claim is brought by or against one or more of those persons.

Prior to the most recent decision in these proceedings, several hearings had already occurred.  In March of this year, the court gave judgment addressing limitation and many other issues concerning the “unsatisfactory state of the Claimants’ evidence“. The judge directed a further hearing to address, amongst other things, the “representative” nature of the action and whether its structure needed to be adjusted.

Following the hearing in March, Shell applied to strike out the proceedings, submitting that they were not properly constituted as a representative action under rule 19.6 of the Civil Procedure Rules of England and Wales (“CPR”). Shell reasoned that Messrs Jalla and Chujor and those they purported to represent did not share “the same interest” for the purposes of rule 19.6(1) of the CPR.

Messrs Jalla and Chujor then issued fresh protective proceedings, which largely mirrored the proceedings already on foot. Upon issuing the protective proceedings the claimants abandoned their individualised claims for damages in the present proceedings so that the main relief sought was remediation.

In its most recent judgment, handed down in August, the court decided that, even though the claims of Messrs Jalla and Chujor and of those they represented raised some common issues of law and fact, the group of claimants did not satisfy “the same interest” requirement under rule 19.6(1).

In reaching its decision, the court determined that the individualised claims of the represented class of claimants were not merely subsidiary to the main issues raised in the claims brought by Messrs Jalla and Chujor. In this instance, the issues of loss, damage and causation were an integral part of the overall issues raised by the proceedings. In particular, the representative claims would require individual evidence of damage as each claimant would likely allege that they had suffered loss in different ways and to varying degrees. In addition, this would lead to Shell pleading individualised factual and causation defences.

In this instance, the issues of loss, damage and causation were an integral part of the overall issues raised by the proceedings.

Accordingly, the court found that the represented claimants did not satisfy the requirement of “the same interest” and the proceedings could not continue as a representative action. However, whilst the representative elements of the proceedings were struck out, the court allowed the claims of Messrs Jalla and Chujor to proceed in their own right.

What comes next?

It is evident from recent decisions in this area that the courts will closely examine “the same interest” requirement under CPR 19.1(6) when deciding whether a representative action should be permitted to  continue. This is understandable as grouping claims together would be ineffective when there is the possibility of divergence on the issues. If such cases were allowed to proceed it is highly likely that the benefit of reduced costs would be lost.

On this occasion the court highlighted, however, that “the same interest” requirement is statutory and must take into account the overriding objective, namely that cases should be handled justly and at proportionate cost. The requirement, therefore, for claimants to share the same interest should not be invoked as an “unnecessary technical tripwire“. This reasoning leaves scope for pragmatism when deciding whether future representative class actions can advance.

It is clear that the claimants in the present case intended to follow the path of Lloyd v Google, but failed to clear the “same interest” hurdle. Therefore, all eyes will now be on the Supreme Court when it hears Google’s appeal. That hearing is not expected to take place until late 2020 or early 2021 but either way the Supreme Court’s decision will likely have an impact on the representative class action landscape for many years to come.

Abdulali Jiwaji is a partner and Johnny Shearman is a professional support lawyer in Signature Litigation’s London office. Ligia Bob is an associate in Signature Litigation’s Gibraltar office.

Leave A Reply