UK tort law on human rights abuses in supply chains: The Dyson Litigation

Chris Riley is Reader in Commercial Law at Durham Law School and Irene-marié Esser is Professor of Corporate Law and Governance in the School of Law, University of Glasgow. In this blog they consider the extent to which UK courts are willing to adjudicate upon harms committed overseas in connection with UK company supply chains. This blog is part of the Extractive Industry and Foreign Security Network blog series.

UK tort law on human rights abuses in supply chains: The Dyson Litigation

Introduction

Recent years have seen a steady stream of litigation brought against UK parent companies for the environmental harm and human rights abuses caused by their overseas subsidiaries.  This blog considers the Court of Appeal decision of Limbu v Dyson Technology ltd which is significant in providing new information on how UK courts treat tortious wrongdoing in UK company supply chains.

The litigation is being brought by 24 Nepalese and Bangladeshi workers against the Dyson group.  They worked, in Malaysia, for two Malaysian companies that were not themselves Dyson subsidiaries, but did form part of Dyson’s supply chain.  It is alleged that the Malaysian companies (or their agents) trafficked the claimants to Malaysia, and there subjected them to forced labour and other abusive working practices. The claimants are suing three companies within the Dyson group (two are English registered companies, and the third is registered and domiciled in Malaysia). 

The interlocutory challenge: Forum non conveniens, not merits of claim

Defendant companies have, unsurprisingly, challenged such attempts to litigate overseas harms in England, often by issuing interlocutory applications challenging English jurisdiction on the basis that the parental action has no reasonable prospect of success.  If the UK court accepts this argument, then that will leave only the claim against the subsidiary, to be pursued (if at all) in the country where the harm occurred.  This defence strategy worked in AAA v Unilever [2018] EWCA Civ 1532, but failed in both Vedanta Resources plc v Lungowe [2019] UKSC 20 and Okpabi v Royal Dutch Shell plc [2021] UKSC 3. 

As with cases such as Unilever, Vedanta and Okpabi, the Dyson defendants sought to prevent the litigation being heard in England.  But unlike those earlier cases, they did not argue that the claimants had little prospect of establishing liability.  Rather, they invoked the forum non conveniens doctrine, arguing that Malaysia was a more appropriate forum than England in which to determine liability.  The ability of English domiciled defendants to invoke forum non conveniens was extremely restricted pre-Brexit; hence defendants’ reliance, instead, on challenges based on the supposed weakness of the parental claim.  But post-Brexit, questions of jurisdiction now fall to be determined by the common law, including the forum non conveniens doctrine. 

This has opened up a new potential line of defence for UK companies pursued in England for harm suffered overseas.  At first instance, the defendants’ jurisdictional challenge was successful ([2023] EWHC 2592 (KB)).  In December 2024, however, the Court of Appeal overturned the High Court decision ([2024] EWCA Civ 1564). This might seem to offer some reassurance to claimants that English courts will remain reasonably accessible for harm caused overseas by the subsidiaries of the UK parent companies.  These jurisdictional aspects of the claim have been extensively discussed elsewhere and will not be analysed further here, save to note that the defendants have now been given leave to appeal by the Supreme Court.

The supply chain context and the choice of causes of action

The other distinctive features of this litigation concern the identity of the primary wrongdoers, and the causes of action that are being pursued.  Unlike many of the earlier cases, the claimants are not seeking to hold a parent liable for harm caused by its own subsidiaries.  Rather, the Dyson defendants are being pursued in respect of alleged misconduct in Dyson’s external supply chain.  Whilst actions for harm inflicted by supply-chain actors are not entirely unknown (see e.g, in the UK, Josiya v British American Tobacco Plc [2021] EWHC 1743 (QB) and, in Germany, Jabir v KiK Textilien und Non-Food GmbH) (Case No. 7 0 95/150), English courts have not yet ruled ontortious liability in that context.  To that extent, then, the Court of Appeal in Limbu regarded the issue as being ‘a novel one in English law’ (para 71). 

The significance of the supply chain context will depend on the causes of action on which the claimants rely.  The first cause of action in Limbu is in the tort of negligence.  It is worth remembering that the developing jurisprudence on the liability of a parent company, in the tort of negligence, for harm caused by its subsidiary has now firmly established that ordinary tort law principles apply, and that there is not a separate test peculiar to parents and subsidiaries (see especially the Supreme Court judgements in Vedanta ([2019] UKSC 20, paras 50 and 54). 

These ‘ordinary’ principles make liability turn on whether the defendant companies interfered sufficiently in the operations of the Malaysian companies to become tortiously responsible for the injuries caused to the claimants (see eg Vedanta [2019] UKSC 20, at para 49, and Okpabi [2021] UKSC 3, at paras.146-147).  On this basis, everything seems to turn on the nature of the interference, whilst nothing turns on whether the company being interfered in happens to be an internal subsidiary or an external supplier.  It will be interesting to see if Limbu confirms this.  

Although Lord Biggs, in the Supreme Court in Vedanta, emphasised interference as the basis for a parent’s liability, intriguingly he also suggested, rather as an aside, a different basis on which a parent might be liable, namely (at para 53):

‘it seems to me that the parent may incur the relevant responsibility to third parties if, in published materials, it holds itself out as exercising that degree of supervision and control of its subsidiaries, even if it does not in fact do so. In such circumstances its very omission may constitute the abdication of a responsibility which it has publicly undertaken.’

Another significant feature of Limbu is that the claimants are also now using such a ‘holding out’ by the defendants as a separate basis for their tortious liability.  Lord Briggs did not expand, in Vedanta, on the basis of such liability, including the conditions that must be satisfied for it to arise.  It seems, like the earlier case of Chandler, to be founded on an ‘assumption of responsibility’ by the defendant company, but with that assumption to be found in the public statements issued by the company (rather than the four indicia set out in Chandler). 

Conclusion

It will be interesting to see whether the judgement in the Limbu litigation offers any clarification of the basis of this ‘liability by holding out’, including how statements made by companies under section 54 of the Modern Slavery Act 2015 are dealt with and, again, whether the conditions for such liability distinguish between internal group members and supply chain companies.