Judges condemns late argument in “forensic arms race” of a case

Dam collapse: Huge group action

A High Court judge has strongly attacked the claimants in what he described as a “forensic arms race” over a complex claim by 202,000 Brazilian people and businesses following the collapse of a dam in 2015.

Mr Justice Turner was particularly critical that one of the claimants’ QCs, Charles Hollander, introduced a new argument on the seventh day of an eight-day hearing this summer, which was not mentioned in his 211-page skeleton argument. The judge dismissed the argument.

But before he had time to finish writing his judgment in August, the claimants launched “an unheralded application for permission to appeal” the ruling on the issue to the Court of Appeal.

Turner J said if the argument, which related to the solvency of the company which owned the Fundao dam, “had really been a genuine and significant cause for concern on the part of the claimants, then it was completely incomprehensible why it had not been raised much earlier as a matter of blindingly obvious and free-standing importance”.

He said that in March this year, the claimants served about 1,000 pages of witness statements and experts’ reports in which there was “no suggestion whatsoever” that the company, Samarco, might not be able to meet its liabilities.

“It is abundantly clear from the defendants’ skeleton argument that they were proceeding upon the assumption that the solvency of Samarco was simply not in issue.

“This assumption was entirely reasonable and, if the point were not conceded by the claimants, ought to have been challenged straightaway and not on the penultimate day of the hearing.

“I formed the view that, if I were to permit the claimants to raise and develop the Samarco issue, then I would have been obliged to grant the defendants the opportunity to respond.

“Bearing in mind the superabundance of material which had already been deployed by both parties on all the other issues in the case, I was in no doubt that this new point, if permitted to flourish, would derail the timetable of the hearing.”

Turner J said the hearing ended at on the last day of term in July, and because of Covid-19 social distancing restrictions the Civil Justice Centre in Manchester had taken up four of its largest courtrooms”.

He was delivering judgment in Municipio de Mariana v BHP Group and another [2020] EWHC 2471 (TCC). The hearing dealt with applications on four grounds by the defendants to find that the case should not be allowed to proceed in this jurisdiction, but this ruling concerned the detailed reasons why he was refusing permission to appeal his decision on the Samarco point.

Turner J said the complexity of the issues went “only some way” towards justifying the “accumulation of the huge swathes of documentation” deployed by the parties.

He said the trial bundles ran to over 30,000 pages, with the claimants’ skeleton argument taking up 211 pages and the defendants’ 187. The transcript of the eight-day hearing itself came to about 1,200 pages.

“A close analysis of the parties’ cases thus reveals a fractal pattern of progressively complex and ever-finer recursive detail of sharply declining significance. I dread to think of the costs which have been expended on this exercise.”

Turner J said that, during the hearing, he questioned one of the defendants’ QCs, Charles Gibson, about the quantity of material.

“His explanation relied partly upon the procedural complexity of the proceedings in Brazil and partly upon the need to respond to the growing number of submissions raised and documents relied upon by the claimants in what, to my mind, had long since deteriorated into a forensic arms race.”

The judge said he took the view that any attempt “at the eleventh hour” to restrict the deployment of material would be “likely to do more harm than good” and the “genie was already out of the bottle”.

However, the judge said the limit of his “arguably over-generous indulgence” was reached on the seventh day of the hearing when Mr Hollander introduced his new argument that Samarco might not be able to afford to meet all the claims against it brought in Brazil.

Turner J said he began to write up his ruling in August, but three weeks later he found out that the claimants had launched an appeal.

“It would appear that the claimants’ advisors had intended that I should not be made aware of the application and that I would thus proceed to give substantive judgment in ignorance of their application for permission.

“Apparently, they feared that, if I were told about the application, I might interpret it as an attempt to influence my substantive judgment. The defendants’ solicitors, however, and in my view rightly, considered this to be inappropriate and the claimants’ solicitors relented.”

Turner J said the “proper and obvious course”, though not mandatory, was for Mr Hollander to apply to him for permission to appeal his ruling under CPR part 52.3(2)(a).

The judge said the “obvious time” for the claimants to apply to him for permission to appeal was at the time of his decision not to hear the new argument, on 30 July, or in writing when he started writing his judgment.

He remained of the view that it was “far, far too late” for the claimants to seek to raise the Samarco issue.

“I decline to change my mind about my ruling on the Samarco issue and consider that the Court of Appeal should adjudicate on the matter before I hand down my substantive judgment. I have, accordingly, circulated a draft order for consideration by the parties.”

Mr Hollander is one of two QCs and 10 counsel in all instructed by PGMBM for the claimants, with three QCs and four juniors lining up for the defendants, instructed by Slaughter & May.

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