Vedanta Resources Plc v Lungowe [2020] AC 1045; [2019] 2 WLR 1051; [2019] UKSC 20 (the Zambian case) and Okpabi v Royal Dutch Shell Plc [2021] 1 WLR 1294; [2021] UKSC 3 (the Nigerian case), affirmed that normal duty of care principles are sufficient to ascribe liability to parent companies for harm caused by their subsidiaries (eg, where the parent exercises sufficient control over the subsidiary).

There is also a deeper significance to the decisions, suggests Dr Chris McGrath in “Implications of the United Kingdom’s Approach for Parent Company Liability in Australia”, in the Company and Securities Law Journal, 38.8. “Both Vedanta and Okpabi have immense implications for … ‘practical access to justice’ for people impacted by the operations of subsidiaries in often very poor countries.”

The access to justice issue arises when well-resourced TNCs wage a war of interlocutory attrition over jurisdictional questions against much less well-resourced claimants.  In dealing with a dispute over the proper place to bring the claim in Vedanta (the UK or Zambia), Lord Briggs, referring to the decision of the lower court judge on jurisdiction, said:

substantial justice would be unavailable in Zambia … essentially from two factors: first, the practicable impossibility of funding such group claims where the claimants were all in extreme poverty; and secondly, the absence within Zambia of sufficiently substantial and suitably experienced legal teams to enable litigation of this size and complexity to be prosecuted effectively, in particular against a defendant … with a track record which suggested that it would prove an obdurate opponent.

In Okpabi, the Supreme Court affirmed the principles laid down in Vedanta. Both decisions underscored that large TNCs should not be permitted to “kill” a claim by providing a “mountain of evidence and submissions” at a preliminary interlocutory stage of litigation.

McGrath suggests lawyers in Australia, where “direct parent company liability for harm caused by subsidiaries … has almost completely fallen off the radar”, heed the “clear, compelling and attractive” reasoning in Vedanta and Okpabi.