Lubbe and Others and Cape Plc. and Related Appeals

The House considered the proper application of the forum non conveniens principles as stated in Spiliada Maritime Corporation v. Cansulex Ltd. and the two-stage test for granting a stay. The central questions were whether South Africa was a clearly or distinctly more appropriate forum and, if so, whether the plaintiffs could show that substantial justice would not be done there.

The House accepted that the parent company duty of care question was legally serious and that much documentary evidence relevant to that issue was in England, but held that the emergence of over 3,000 claimants greatly increased the relative importance of the personal injury issues, tipping the first-stage balance in favour of South Africa as the appropriate forum (convenience, proximity of evidence, witness and site inspections).

At the second stage the House concluded that, on the evidence before the court, the plaintiffs had established that there was a real risk of denial of justice in South Africa because of lack of funding and the unavailability of adequate legal and expert representation for the group litigation; that exceptional circumstance justified refusing a stay. The House therefore removed the stay and allowed the plaintiffs to proceed in England. The House declined to decide the disputed question of Article 2 of the Brussels Convention, as it was unnecessary to the decision.

The claimants (over 3,000 individuals, mostly South African residents) sued Cape Plc in England, alleging that as a parent company it owed and breached a duty of care to employees of its South African subsidiaries and to persons living near their operations, resulting in asbestos-related personal injury and death. The defendant was an English-incorporated company whose historical operations and group structure gave rise to the alleged parent company responsibility. The proceedings were consolidated as a multi-plaintiff group action.

Procedural history:

• Initial stay application before Mr. Kallipetis QC (deputy judge) — stay granted in favour of South Africa applying Spiliada principles.
• First Court of Appeal ([1998] CLC 1559) allowed the plaintiffs' appeal and refused the stay.
• Defendant challenged that decision; leave initially refused by the Court of Appeal and the House; following subsequent claims by thousands of additional plaintiffs, Buckley J. granted a stay ([2000] 1 Lloyd's Rep. 139), and the second Court of Appeal dismissed the plaintiffs' appeals, upholding that stay.
• The plaintiffs obtained leave and appealed to the House of Lords.

Relief sought: Plaintiffs sought to continue their claims in England; defendant sought stays on grounds of forum non conveniens and abuse of process, arguing South Africa was the natural forum.

Issues framed:

• Is South Africa a clearly or distinctly more appropriate forum under the Spiliada two-stage test?
• If so, would trial in South Africa result in substantial injustice because of lack of funding or legal representation (Article 6 ECHR considerations being invoked)?
• Are there public interest or Brussels Convention (Article 2) implications affecting the availability of a stay?

Court's reasoning:

• On the first stage the House accepted that, given the mass of personal injury issues and the local concentration of evidence and witnesses, South Africa was prima facie the more appropriate forum for trial of the group action.
• On the second stage the plaintiffs produced evidence that legal aid funds in South Africa had been curtailed and that contingency fee arrangements and local practitioners were unlikely, on the evidence, to be available at the scale and with the resources required to prosecute the group litigation to trial; the novelty and procedural uncertainty of group actions in South Africa exacerbated the funding risk. The House held that these circumstances amounted to a real risk of denial of justice if the actions were stayed in favour of South Africa and that, exceptionally, stay should be refused.
• The House therefore removed the stay and allowed the plaintiffs to continue in England. It did not decide the effect of Article 2 of the Brussels Convention because resolution was unnecessary to the outcome.

The House allowed the plaintiffs' appeals against the stay and dismissed the defendant's appeal against the first Court of Appeal. The Lords concluded that although South Africa was prima facie the more appropriate forum given the number of claimants and the local personal injury issues, the plaintiffs had shown that, in the exceptional circumstances of this group litigation, they would be denied justice in South Africa because of lack of funding and adequate legal and expert representation; consequently a stay in favour of South Africa should be refused.

Deputy Judge Mr. Michel Kallipetis Q.C.: stay granted (12 January 1998). First Court of Appeal (Evans, Millett and Auld L.JJ.): plaintiff appeal allowed ([1998] CLC 1559). Defendant sought further challenge; initial leave refused by Court of Appeal and House (December 1998). After mass issuance of writs Buckley J.: stay granted (30 July 1999) reported at [2000] 1 Lloyd's Rep. 139. Second Court of Appeal (Pill, Aldous and Tuckey L.JJ.): appeals dismissed (29 November 1999) ([2000] 1 Lloyd's Rep. 139). Leave to appeal to House of Lords granted (7 February 2000); House of Lords judgment given 20 July 2000 ([2000] UKHL 41).