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22 Feb 2018

Lucas Roorda, Rights as Usual

Okpabi v. Shell on Appeal: Foreign Direct Liability in Troubled Waters

This February...the Court of Appeals decided on the appeal against the interlocutory decision in Okpabi v. Shell...[I]n a split decision (Sales LJ disagreeing) it upheld the High Court’s ruling that the applicants had no arguable claim against Shell, dismissing the appeal on all counts. This post examines the main tenets of the Okpabi appeals decision, how it compares against similar cases like Lungowe, and what that may mean for the future of foreign direct liability cases in English courts.

...The Okpabi appeals decision is disappointing for several reasons. First, assessing “proximity” according to the standards set by the Court of Appeals essentially rewards corporate groups whose parent companies do not get actively involved with their subsidiaries’ operations...Second, it could be argued that the Court of Appeals’ approach to the proximity standard requires the plaintiffs to have a “winnable” rather than an “arguable” case...Third, this early incursion into the merits puts plaintiffs at a serious disadvantage with regard to producing evidence. They cannot rely on disclosure rules in this phase of the proceedings..

...A better approach...would “merely” require that the claimants demonstrate that their case was “more than speculative”.

...As the claimants have opted to take the case to the UK Supreme Court, it can only be hoped that some of the deficiencies in the Okpabi appeals decision are remedied later. If Okpabi is adopted as the right approach for assessing a ‘good arguable case’ for a duty of care, the prospects for foreign direct liability cases in the United Kingdom may be in serious jeopardy.