BHP found liable for Brazil dam disaster in multibillion pound London ruling

The High Court in London has determined that BHP, the world’s largest mining group, bears responsibility for Brazil’s worst recorded environmental disaster. The collapse of the Fundao dam in Minas Gerais in 2015 resulted in 19 deaths and extensive pollution, triggering a collective action from more than 600,000 Brazilian villagers, businesses and local authorities. The claim, valued at £36 billion, marks a pivotal moment in multinational liability for environmental negligence.

Mrs Justice Finola O’Farrell, delivering judgment at the Royal Courts of Justice, ruled that BHP’s decision to continue raising the dam height despite acknowledged safety risks directly and immediately led to the dam’s failure. The court applied Brazilian law, under which any party responsible for polluting activities, whether direct or through control, finance, or profit, is categorised as a polluter and is liable for resulting damage.

This case is the first time any company linked to the Fundao dam disaster has been successfully held to account. Lawyers representing the claimants state that over 40 million tonnes of toxic waste surged through the region, leaving environmental damage that persists nearly a decade later. The claimants’ legal team highlighted the ruling as long-awaited justice for the communities devastated by the disaster, stating it sends a signal to companies regarding their duty of care and long-term responsibilities.

BHP, which reported profits of around £7.7 billion last year, has confirmed its intention to appeal the decision. The company maintains that since 2015, BHP Brasil, Vale and Samarco have together allocated $13.4 billion to reparations and compensation, reaching more than 610,000 affected individuals. BHP argues that up to 240,000 of the original claimants have withdrawn after receiving compensation in Brazil, potentially reducing the size and value of the claim in the United Kingdom by half.

The High Court previously determined that Brazilian law was applicable and that arguments to limit liability to the subsidiary company, Samarco, were not persuasive; both BHP and Vale were held responsible for their roles. Vale was later removed as a co-defendant following a settlement but remains liable for half of any damages ultimately awarded. The specific amount of compensation to be paid by BHP will be set at a subsequent hearing.

This landmark judgment is expected to influence future transnational litigation against UK-based companies and highlights the significance of English courts as venues for complex claims applying foreign law. Legal observers note that the procedural avenues available in English law, enabling claimants to access vital internal corporate records, are likely to strengthen similar actions in the future.

The litigation has also brought scrutiny to the law firm Pogust Goodhead, which represented the Brazilian claimants. The firm faced internal controversy following allegations concerning its founding barrister and funding practices. Critics have questioned the motivations and distribution of funds in class action models, cautioning that the principal beneficiaries may be legal funders and firms rather than claimants. Nevertheless, the High Court’s ruling against BHP continues to resonate as a landmark in global corporate accountability.