BP lawsuit (re Colombia)

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In July 2005 a group of Colombian farmers instituted proceedings in the English High Court against BP Exploration Company (Colombia) alleging that the construction of an oil pipeline by OCENSA (a consortium led by BP) caused severe environmental damage to their lands.  In particular, the farmers claimed that the pipeline cut across key water sources which resulted in soil erosion, spoiled crops and fish ponds being starved of water.  Further, they alleged that BP, while not directly involved, benefited from the activities of paramilitaries employed to guard the pipeline.  The farmers argued that the paramilitaries intimidated the local population, obstructed farming and suppressed legitimate opposition to the pipeline.  The farmers claimed that the combined effect of these factors was the destruction of their way of life leading to destitution for them and their families.  The farmers asked for £15 million in compensation.

BP argued it had already made compensatory payments to the farmers and that, in any event, any lawsuit against BP should be in Colombia.  Lawyers for the farmers countered that many had not received payments and those that had, had not received adequate payments.  Many farmers claimed they were forced to sign agreements that they could not understand.  Further, the plaintiffs argued it was necessary to bring proceedings in London because Colombian lawyers who had become involved in the case had been harassed and threatened.

In June 2006 BP and the farmers met for mediation in Bogotá.  On 22 July 2006 the parties announced that a settlement had been reached.  The parties did not disclose the terms and amounts paid.  However, in a joint statement they did announce that BP, without admitting liability, had agreed to establish an Environmental and Social Improvement Trust Fund for the benefit of the farmers, together with a programme of workshops dealing with environmental management and business development.  According to press reports, the amount paid by BP was not thought to be as high as the £15 million originally claimed, but was believed to run to several million pounds.

In December 2008, Particulars of Claim were filed with the English High Court by a Colombian farmer living in the Zaragoza-Caceri region of Colombia claiming he suffered serious environmental damage to his land as a result of the construction of the OCENSA pipeline.  This claimant is part of a group litigation (the group litigation order was issued on 24 September 2008), and his claims are representative of the claims of the group.  This group of individuals was not part of the 2006 settlement with BP.  The trial started in London in October 2014.  On 27 July 2016, the UK High Court of Justice dismissed the lawsuit, ruling that the plaintiffs failed to provide sufficient evidence to prove the damage attributable to the Ocensa pipeline works.

- Colombia Farmers Take BP to Court Over Oil Pipeline, Brianna Lee, International Business Times, 17 Oct 2014
- BP pays out millions to Colombian Farmers, Robert Verkaik, Independent [UK], 22 Jul 2006

- Farmers 'terrified out of their homes' to sue BP for £15m, Robert Verkaik, Independent [UK], 18 Jun 2005

- 'What use am I to anyone dead?', Jeremy Lennard, Guardian [UK], 18 Dec 2002

- [PDF] BP fails to compensate landowners in Colombia for land taken for the OCENSA pipeline, From Chapter 9 of ‘Some Common Concerns’, by Greg Muttitt & James Marriott, Oct 2002, Excerpted Jun 2003

- BP: BP Colombia

- Leigh, Day & Co. [plaintiffs’ counsel]: Leigh Day return to Colombia to meet more farmers, 18 Mar 2008
- Leigh, Day & Co.: Successful mediation result for Colombian Farmers, 24 Jul 2006

- [PDF] Flores v BP Exploration Company Ltd - Particulars of Claim, 1 Dec 2008

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Article
1 January 2017

Leigh Day hit with £27 million indemnity costs order in Colombian pipeline case

Author: David Bowden, David Bowden Law (UK)

...Stuart-Smith J dismissed all claims in July 2016...against BP Exploration Company (Colombia) Limited in relation to damage which Colombian farmers claimed they had suffered...The claimants’ cases were funded by means of a ‘no win, no fee’ agreements...The defendant had to pay its own costs on a standard retainer basis...By the time of the November 2016 costs hearing, the Defendant had incurred £34 million in defending these...claims.  The claimants’ costs budget was £24million in September 2014...Stuart-Smith J ruled that the defendant could have costs on the indemnity basis...for costs incurred from a date 5 weeks before the liability trial started.  The judge’s criticisms...extended to the claimants’ solicitors (Leigh Day)...Overall Stuart-Smith was scathing of the ‘siege mentality’ of the claimants’ legal team which he ruled led to a ‘lack of independence of mind’ which had ‘penetrated the legal team as well’...Leading counsel for the claimants pleaded with the judge at the hearing that an order for indemnity costs would have a chilling effect for similar claimants bringing environmental damage claims against large corporations or for access to justice more generally....

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Article
11 August 2016

Judgment handed down in long-running class action regarding the Ocensa pipeline in Colombia

Author: Herbert Smith Freehills – Litigation notes (UK)

[T]he High Court has rejected claims by a group of Colombian Farmers in relation to the construction of the Ocensa pipeline in Colombia during the mid-1990s...Broadly, the claims were that the damage had been caused to the claimants' properties from the Ocensa pipelines' construction...The claims...focussed on the reduction in the economic capacity of the farms...and specific losses, such as loss of cattle...The claims were found to have largely failed on the facts...[T]here was insufficient factual evidence to demonstrate that any harm had occurred by reason of the Ocensa pipeline...[T]he claimants had not applied for permission to appeal...[T]he judge found that in many cases the damages claimed bore a limited relationship with the evidence itself...Further issues existed in relation to expert evidence...

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Article
27 July 2016

Florez Arroyo et al. v. Equion Energia (ex-BP Exploration Company)

Author: High Court of Justice (UK)

[full text of judgement]

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Article
17 October 2014

Colombian Farmers Take BP To UK Court Over Oil Pipeline

Author: Brianna Lee, International Business Times

A group of Colombian farmers this week began legal proceedings against…BP over allegations that an oil pipeline caused serious damage to their land and crops. The case is one of the largest international environmental lawsuits of its kind and marks the first time BP will face a U.K. court for its actions overseas…It’s rare to see a case like this litigated in the U.K., analysts say. “The avenues for extraterritorial claims for victims of alleged human rights abuses have been shrinking, both in Europe and in North America,” said Mauricio Lazala, deputy director of the Business & Human Rights Resource Centre, a London-based nonprofit organization that monitors human rights in businesses around the world.

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Article
13 October 2014

BP faces High Court trial for environmental damage in Colombia

Author: Leigh Day

One of the largest environmental legal cases in UK legal history begins in London on Wednesday 15th October 2014 as Colombian farmers bring their legal fight against BP to the High Court. The…trial will be the first time BP have faced the UK Courts over their business actions overseas and the first time compensation for environmental damage to privately owned land, caused by a UK oil company, has been litigated in…UK courts. A…judge will be asked to assess whether BP breached agreements with Colombian farmers and were negligent in causing environmental damage to their farmlands due to the construction of the OCENSA oil pipeline across their private properties in the mid 1990s. Lawyers for the 73 mostly subsistence farmers…will argue that the British company Equion Energia…negligently managed the construction of the OCENSA oil pipeline causing serious damage to their land…Some farmers say sedimentation of wells meant they did not have a source of drinking water for some time...The claims will be argued with reference to contractual and extra contractual liability under Colombian law...

 

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Article
12 October 2014

Colombian farmers sue BP over oil pipeline’s alleged impact

Author: Jane Croft, Financial Times (UK)

BP is being sued for environmental damage that Colombian farmers allege the oil group caused to their land by building a pipeline. The case, which opens at the High Court this week, is being brought by 73 peasant farmers known as “campesinos”, who are seeking about £18m in compensation from the oil group. They claim that the British company Equion Energia (formerly BP Exploration (Colombia) Limited) negligently managed the construction of the Ocensa oil pipeline in Colombia during the mid-1990s – causing serious damage to their land…The trial is likely to be one of the largest environmental legal cases in recent years…The farmers…allege that the construction of the pipeline caused severe soil erosion, reduced vegetation coverage and blocked up or reduced vital water sources, thereby significantly reducing the productivity of their farms…BP said in a statement it was confident in its legal position and was defending the case vigorously. “The Ocensa pipeline project in Colombia involved significant steps being taken at the time of construction to engage with local communities, make appropriate compensation payments and ensure that the land the pipeline traversed suffered no material damage,” it said...[Also refers to Shell] 

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Article
18 March 2014

Colombian farmers prepare for trial against former BP company [UK]

Author: Leigh Day

…73 Colombian farmers…are alleging that the British company Equion Energia (formerly BP Exploration (Colombia) Limited, or BPXC) negligently managed the construction of the OCENSA oil pipeline in the mid 1990s which caused serious damage to their land…In 2010 BPXC changed its name to Equion after BP sold off its shares in BPXC…The farmers’ claims will be heard in the UK’s Technology and Construction Court starting on 7th October 2014…The Claimant farmers are expected to give evidence in London or from Colombia…They allege that BPXC played a central role in the design, implementation and management of the project and the construction process…These claims involving compensation for environmental damage caused by a UK oil company to privately owned land outside the UK are probably the first of this kind to be litigated in the UK courts…

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Article
9 June 2013

[PDF] Corporate Legal Accountability Quarterly Bulletin – Issue 9, June 2013

Author: Compiled by Business & Human Rights Resource Centre

Welcome to the 9th issue of the Corporate Legal Accountability Quarterly Bulletin. To assist all those following corporate legal accountability issues, we send this bulletin to highlight key developments, new cases profiled on our site, updates to existing profiles, and other news. Our Corporate Legal Accountability Portal is an online information hub providing resources for non-lawyers as well as lawyers – including victims, advocates, NGOs, businesspeople, lawyers bringing lawsuits against companies and lawyers defending companies. The portal provides impartial, concise information about lawsuits against companies in which human rights abuses are alleged – its aim is to demystify these lawsuits. Each case profile includes materials from both the plaintiffs and defendants, to the extent they are available.[Refers to adidas, Agua Mineral Chusmiza, Alstom, Areva, BASF, BP, CACI, Chevron, Chiquita, Drummond, DynCorp, ExxonMobil, HudBay Minerals, Monterrico Metals (part of Zijin), Rio Tinto, Shell, Tate & Lyle, Texaco (part of Chevron), Titan (now L-3), Vedanta Resources, Veolia Transport (part of Veolia Environnement)]

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Article
24 May 2011

Multinationals will profit from the government's civil litigation shakeup [UK]

Author: Richard Meeran, Leigh Day, in The Guardian [UK]

The government's proposed changes to the civil litigation costs regime, which will severely restrict access to justice for many vulnerable individuals, have so far passed relatively unnoticed. However, those adversely affected will include victims of UK multinational human rights violations in developing countries…Two aspects of the government's proposals…will dramatically impact on claimant lawyers' ability and enthusiasm to litigate in future: First, that defendants should only pay claimants' legal costs if "proportionate" to the compensation…these cases…are intrinsically complex. Moreover as so much is at stake, the multinationals instruct top City law firms to defend them to the hilt. Consequently, legal costs invariably substantially exceed compensation…Secondly, claimant lawyers' success fees will not be recoverable from defendants and would instead need to be deducted from claimants' compensation…The result – that claimants' lawyers can recover legal costs only up to the level of damages without success fees – will make these multinational cases financially unviable. [refers to Cape, Thor Chemicals, Trafigura, BP, Monterrico Metals (part of Zijin)]

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Article
9 May 2011

[PDF] Implications of the Jackson Civil Costs Reforms for Human Rights Cases against Multinational Corporations [UK]

Author: Corporate Responsibility Coalition

The UK government has recently proposed wide-ranging reforms to the costs regime for civil litigation following a review by Lord Jackson. The…reforms will significantly restrict the ability of claimants and their lawyers to recover legal costs from defendants. They will have particularly devastating consequences for human rights claims against multinational corporations (MNCs)... [in particular:] MNCs will no longer have to pay a success fee in the event that a case against them is successful…MNCs will only have to pay claimants’ basic legal costs insofar as they are ‘proportionate’ to the compensation received…in reality…[this] will mean that wherever the costs of a claim exceed the compensation awarded (which, as explained, is almost inevitable in cases against MNCs), MNCs will have strong grounds for resisting payment of the additional costs, even where they were essential to the success of the case…[and] [i]nstead of MNCs paying the full costs, the reforms propose that a proportion of the costs are instead taken out of claimants’ compensation.

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