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15 Feb 2021

Hausfeld LLP

Commentary : "Supreme Court Allows Appeal Against Shell and Nigerian Subsidiary"

" Supreme Court Allows Appeal Against Shell and Nigerian Subsidiary", February 2021

The Supreme Court in Okpabi & Others v Royal Dutch Shell Plc & another [2021] UKSC 3 has clarified the limited scope courts have when determining whether a claimant has an arguable case. Save in exceptional circumstances where demonstrably untrue, factual statements set out in the pleadings should be accepted as putting forward an arguable case. Where a court does not focus on the pleadings, it risks conducting an inappropriate mini trial, evaluating the weight of available evidence and ultimately, exercising judgment on that basis. 

It was also held that there is no special doctrine of legal responsibility on a parent company in relation to the activities of its subsidiary. Generalised assumptions regarding a duty of care owed by a parent in relation to the activities of the subsidiary are wrong. A parent does not have to take direct or substantial control of its subsidiary’s operations to establish a duty of care in favour of any person/class of persons affected by the subsidiary’s activities...

This decision demonstrates the importance of claimants fully particularising their case as early as possible. Particulars of claim should also be updated as and when claimants become aware of additional relevant facts. Where an interlocutory challenge to the prospects of a particularised claim is made, the parties can avoid problems of lack of proportionality by following the prescribed review of the pleadings only. The reaffirmation that factual statements made in support of a claim should be accepted is welcomed news to claimants who may otherwise be deterred by the prospect of lengthy and costly satellite litigation.