The recent case of Jalla v Royal Dutch Shell is a potent reminder of the considerations that claimants should take into account, particularly relating to the circumstances in which amendments to the particulars of claim will be accepted by the court, limitation issues, and the quality of evidence provided in support of applications. The judgment makes for informative reading, and contains important lessons both for legal practitioners and for lay clients.
The claim related to an oil spill which occurred off the coast of Nigeria in December 2011. The claimants brought a representative action on behalf of over 27,500 claimants from a Nigerian coastal area, alleging environmental damage to the coastline, fisheries, land and water. The claim was brought against three companies in the Shell Group, namely Royal Dutch Shell (RDS), Shell International Limited (SIL) and Shell Nigerian Exploration and Production Company Limited (SNEPCO). As SNEPCO is domiciled in Nigeria, the court’s jurisdiction over SNEPCO depended on the presence of an English “anchor” defendant. There were limitation issues involved in the claim, due to the fact that proceedings were brought almost six years after the occurrence of the spill.
The claimants discontinued proceedings against RDS. Shortly afterwards, they realised that the second defendant they had named, SIL, was not the correct party against which to bring proceedings. They were left in the position where the proceedings would fail due to the lack of an appropriate anchor defendant, unless they could successfully amend the claim form to list a different second defendant, Shell International Trading and Shipping Company Limited (STASCO).
The legal issues
At first, the claimants wished merely to amend the name of the second defendant, rather than substituting STASCO for SIL, in order to take advantage of the simple procedure to amend the claim form prior to service which is set out in CPR 17.1. Their justification for this was that there was no practical difference between the two companies, due to the fact that they were closely related.
This submission was unsupported by any evidence and the claimants backed away from it. They subsequently issued an application to join STASCO to the proceedings as second defendant after expiry of the limitation period, under the procedures in CPR 17.4 or CPR 19.5. The claimants said that they were doing this out of an “abundance of caution” in order to “regularise the position”. However, due to the fact that the application was brought under these procedures, the court decided to settle the limitation issues at the outset.
The claimants gave two reasons why time should not run since the time of the spill in December 2011, which would make any new claim statute-barred due to expiry of the limitation period. These were the suggestion that the defendants had deliberately concealed relevant evidence, and that there existed an ongoing duty on the defendants to clean up the spill and mitigate its consequences on the affected communities. However, the judge disagreed with the claimants’ approach.
The claimants were criticised for failing to discriminate between different companies within the Shell Group. The deliberate concealment of evidence will only prevent the running of time against the defendant who was responsible for the concealment, and the claimants did not provide any evidence to show that STASCO was the party responsible. This meant that time had not ceased to run against STASCO specifically, and that the defendants therefore had an arguable case on limitation.
When a party tries to amend its claim and there are limitation issues, there are two procedures that may be followed, depending on whether the claimant has merely misnamed the defendant, or has in fact mistakenly named the wrong party as defendant. It was found in this case that the claimants had mistakenly named the wrong party, and the court was therefore obliged to follow the procedure set out in CPR 19.5(a). When following this procedure, even where a claimant demonstrates a relevant mistake, the exercise of the court’s discretion must take into account broad considerations of justice and prejudice.
Before the court is even able to exercise its discretion to allow amendments to the claim form or particulars of claim outside of the limitation period, it must first be satisfied that any “new claim’ arises out of “the same or substantially the same facts”. It was found in this case that, despite the claimants’ assertions that there was no practical difference between SIL and STASCO, the two parties were related to the claim in different capacities. The claims did not arise out of the same or substantially the same facts and the preconditions to allow the amendments after the expiry of the limitation period were therefore not met.
Criticism of the claimants’ evidence
In the judgment, the claimants’ evidence was heavily criticised. The judge rejected the witness evidence of the claimants’ solicitor, despite the fact that this was supported by a signed statement of truth. The court was “driven to conclude that his evidence is unreliable because of his demonstrable, consistent and persistent misrepresentation of the position as disclosed by his correspondence”. The entirety of the evidence relied on by the claimants in support of their application was therefore not admitted.
This demonstrates the importance of ensuring that, when giving evidence, you are only stating accurate facts. Your assertions should be supported by evidence as far as possible in order to lend credibility to your statements. Even solicitors are not immune to having their evidence called into question, so this applies doubly to those who are not qualified legal professionals.
With no evidence in support of their position, the judge stated that he was “some considerable distance short of being satisfied that there was a relevant mistake within the meaning of rule 19(5)”. There was therefore no discretion to allow the amendment of the claim form to join STASCO as a defendant.
The judge went further than this and stated that if he had such discretion, he would not have exercised it in favour of the claimants. He identified five reasons for this:
- The claimants knew they had limitation difficulties but did not apply under the correct procedure in the first instance.
- The effect of the amendment meant that STASCO was first notified of its involvement way after limitation had expired.
- There was reasonable doubt about the claimants’ intention to sue STASCO.
- The claimants had unreasonably delayed in bringing the application.
- The claimants raised “an unwarranted deliberate concealment argument that was unjustified in both fact and law”.
Lessons for clients and practitioners
There are three key lessons to take away from this judgment, which are relevant both to claimants and the legal practitioners who represent them.
Firstly, if there are any concerns surrounding limitation issues when amending a claim form or particulars of claim, it is important to ensure that the correct procedure is being followed.
Secondly, it is important to ensure that you are bringing proceedings against the correct party at the outset of proceedings. It is not a good idea to leave this to chance, even if there are various parties in the same group against whom proceedings can be brought. Courts take the doctrine that corporations have separate legal personalities seriously, and so justifying an error in the name of the defendant by suggesting that two separate companies in the same group represent the same economic entity will not be sufficient to guarantee the right to amend the name of the defendant.
The third key lesson is that parties should ensure that all statements made to the court are factually correct, and supported by evidence where possible. Credibility is often a determinative factor in litigation, because courts are generally being asked to compare two different versions of the facts which are presented by the different parties. If your credibility is called into question, any evidence you give may be found to be unreliable, leading to a loss in court. This case highlights that even qualified solicitors are not immune to having their evidence called into question or rejected, so parties to litigation and their representatives should work to protect their credibility at all possible junctures.
This blog was written by David Vickers, trainee solicitor at Knights plc, under the supervision of Melissa Worth, partner.