In this highly anticipated judgment, the English High Court has held that BHP is liable for the 2015 Fundão dam collapse in Brazil, which caused widespread environmental and socio-economic damage.

Background

The background to the case and key legal arguments pursued are explained in an earlier blog post, which is available here.

In summary, over 600,000 Claimants sought damages in respect of losses alleged to have been caused by the collapse of the Fundão dam on 5 November 2015. The dam was owned and operated by Samarco Mineração S.A. (“Samarco”), a Brazilian entity structured as a 50:50 joint venture between BHP Brasil and Vale S.A. The ultimate parent of BHP Brasil is BHP Group Limited (“BHP Australia”). Proceedings were instituted on a joint and several basis against BHP Group (UK) Limited and BHP Australia (together, “BHP”), who operate together as a single economic entity in a dual-listed structure.

The First Stage Trial, which primarily concerned the question of liability, was heard over a 12-week period between October 2024 and March 2025.

What did the High Court decide?

In a detailed judgment, Mrs Justice O’Farrell has held that BHP is liable for the collapse of the Fundão dam under Brazilian environmental law and the Brazilian Civil Code. To reach that conclusion, the Judge made several significant findings, which are summarised below.

BHP is strictly liable under Brazilian Environmental Law

The Court found that BHP is strictly liable as a “polluter” under Brazilian environmental law. This was notwithstanding that the dam was owned and operated by Samarco (the joint venture company between subsidiary BHP Brasil and Vale S.A), not BHP. However, the Court accepted that BHP exercised control over Samarco’s board and activities, participated in decision-making, assumed responsibility for risk management within Samarco, provided financing, and derived benefit from Samarco’s operations.  Specifically, BHP was involved in Samarco's activities “at every level” from “strategic decisions” to “detailed operational matters”.

Applying the multifactorial test from Brazilian case law, the Court concluded that BHP was directly and/or indirectly responsible for Samarco’s activities that led to the collapse. BHP, therefore, fell within the broad statutory definition of a "polluter" (which includes indirect polluters) under Brazilian environmental legislation.

BHP is liable for fault under the Brazilian Civil Code

The Court also found BHP liable for fault under Article 186 of the Brazilian Civil Code. It held that BHP’s assumption of responsibility for risk assessment and management of the dam, together with its full participation in the dam’s operations, gave rise to a legal duty to prevent harm resulting from any act or omission that was negligent, imprudent, or lacking in skill. BHP's argument that it was a typical shareholder which did not have the kind of direct control to make it liable was rejected.

The Court found that, by August 2014, BHP knew (or ought reasonably to have known) that the dam was critically unstable. In those circumstances, it was negligent for BHP to continue raising the dam and to fail to implement remedial measures. BHP’s acts and omissions were held to be a direct and immediate cause of the collapse.

The claims are not time-barred

BHP argued that all, or many, of the claims were time-barred by prescription (i.e., limitation) under Brazilian law. The Court ruled that the claims were not time-barred because:

• the claim forms contained sufficient information, as required by Brazilian law, to interrupt limitation;
• limitation was suspended by criminal proceedings until at least 24 September 2024; and
• the correct limitation period was five years, not three. The collapse was classified as a “consumer accident” under Brazilian law, making the claimants “consumers by equivalence” (or bystanders) entitled to the five-year limitation period under Brazilian statute.

Significantly, victims may therefore bring claims against BHP until at least September 2029.

Waivers and compensation schemes should be considered individually

BHP maintained that Claimants who accepted compensation under settlements with Renova, Samarco, BHP Brasil, Vale, or through compensation schemes, were barred from pursuing these claims by the release and waiver provisions in those agreements. However, the Court found that the effect of each settlement depends on its specific terms, determining issues of construction and principle by reference to a sample of settlement agreements.

The Municipalities have standing

The Court rejected BHP’s argument that the Municipalities lacked capacity or standing. It held that the Municipalities’ pursuit of private law claims in a foreign jurisdiction did not constitute an exercise of Brazil's sovereign rights. It was simply an exercise of the Municipalities' administrative rights. Furthermore, Brazilian law imposes no restriction on the Municipalities’ capacity to bring such claims in another jurisdiction.

Wider implications and next steps

Based almost solely on its findings under Brazilian law, the English Court has held a UK‑domiciled parent company liable in relation to operations associated with its Brazilian subsidiary in Brazil. The Court has sent a clear signal that it is willing to deal with cases where both the underlying harm and all claimants are located outside its jurisdiction and most of the issues to be tried are governed by foreign law.

The UK Supreme Court decisions in Vedanta and Okpabi had already clarified that a UK‑domiciled parent company may owe a duty of care under English law to individuals harmed by activities connected to its overseas operations.

This judgment underscores the imperative for global businesses to assess and strengthen management frameworks to mitigate litigation risk associated with environmental and social harms associated with their overseas operations.

The proceedings themselves will now proceed to the Stage Two Trial (scheduled for October 2026-March 2027), which will consider whether the losses claimed by the Claimants were caused by the dam failure and issues of quantum. The Claimants seek damages of up to £36 billion.

There will also be a consequential hearing to address any applications for costs or permission to appeal. BHP has already indicated its intention to appeal (see here). It also maintains that the UK group action is duplicative of remediation and compensation that has already occurred in Brazil, and it has reiterated its commitment to implementing the agreement reached with the Brazilian public authorities and public defenders in October 2024, which provided R$170 billion (US$32 billion) for reparation of the impacts of the dam failure.