High Court clears way for BHP class action

Tara Cosoleto | October 12, 2022

A class action against BHP over a 2015 Brazilian dam collapse that killed 19 people can proceed despite not all of the claimants being Australian residents, following a High Court ruling.

The group of more than 29,000 people held BHP shares on the Australian Stock Exchange, the London Stock Exchange and the Johannesburg Stock Exchange before the Fundao Dam failure.

The village of Bento Rodrigues was wiped out when the dam in southeastern Brazil collapsed, killing 19 and displacing 700.

The Australian class action covers a period from October 2013 until the dam failure on November 9, 2015.

The claimants alleged they suffered losses because BHP failed to meet its stock exchange disclosure obligations and because the mining company was misleading or deceptive. 

BHP argued any claimants who were non-Australian resident shareholders could not legally be part of the class action. 

But Australia’s High Court on Wednesday dismissed BHP’s appeal, ruling the legislation does not restrict a claimant’s geographical location or residence. 

“BHP’s construction of (the law) ignores the Constitution and the legislation passed by the Commonwealth Parliament… and rewrites the Federal Court of Australia Act,” the High Court justices said in their judgment.

“BHP’s construction (of the law) would signal a ‘radical departure’ from the accepted bases.”

BHP told AAP it remained committed to defending the shareholder class action in Australia. 

Lawyers from Phi Finney McDonald and Maurice Blackburn, who are representing the claimants, said Wednesday’s decision promoted access to justice.

“It ensures that foreign group members can seek redress and vindicate their claims in Australian courts,” Phi Finney McDonald special counsel Cameron Myers said in a statement.

“This decision has positive ramifications for all manner of class actions with an international element, including environmental claims.” 

The class action was first filed in the Federal Court in May 2018. 

There were originally three separate class actions but Federal Court Justice Mark Moshinsky in December 2018 ruled the case by Vince Impiombato could proceed as the open class.

Some 200,000 Brazilians are also trying to take BHP to court in England over the dam failure.

BHP tried to halt the proceedings through the UK Court of Appeal but the company lost its bid in July.