The Memo: The Mariana dam collapse: The largest class action in English legal history makes it to the High Court

It has been almost a decade since one of the worst environmental disasters in Brazil occurred. When the Mariana dam breached, around 50m cubic meters of toxic waste was released, which ended up killing 19 people, destroying hundreds of homes and polluting the Doce River and surrounding ecosystems. The dam was a joint venture between mining companies Vale and BHP, and was operated by Brazilian company Samarco. Following the incident, these three organisations established the Renova Foundation to provide compensation for individuals and small businesses. So far, more than 445,000 have claimed compensation through this scheme, and the Renova Foundation has so far paid out over £5.9 billion in repairs. Nonetheless, many individuals' claims have still been brought to the Brazilian courts.

However, here in London, the incident is set to become one of the most pivotal claimant lawsuits to hit the English courts. Over 620,000 individuals have launched a whopping £36 billion civil suit against BHP to determine whether the Anglo-Australian company (headquartered in the UK at the time) is responsible. This litigation is separate from an ongoing case in Brazil which Vale recently tried to settle with a new $23.8 billion settlement proposal, up from its last offer of $18 billion in April. 

A unique aspect of this case is the involvement of litigation financing. This case is being funded by US alternative asset manager Gramercy, which has given law firm Pogust Goodhead £450 million to fight cases such as this, making it the largest litigation funding deal in legal history. Up to 30% of any sums paid in a favourable ruling would be received by the lawyers and funders. More generally, class actions are also on the rise in the UK: in 2023, there were around 540 million class members in total, and the claimed sums totalled £123.17 billion!