Why the recent Limbu v Dyson judgment matters to UK companies

The recent case of Limbu & Others v Dyson [2024] EWCA Civ 1564 highlights how English courts determine the difficult and often contentious issue of where a case should be heard.

UK companies working with international supply chains, or part of multi-national groups, will note this decision with interest. Despite the relevant acts taking place abroad, and despite the defendant having a local entity, England was deemed to be the most appropriate forum.

At HF, our international casualty experts have wide-ranging experience in advising – and where necessary litigating – on issues including forum and applicable law. For advice and support contact Imogen Mitchell-Webb.

 

Background

The claims

The Limbu case concerns claims made by factory workers working for Malaysian companies supplying Dyson. Proceedings have been issued against two UK-based Dyson entities (‘Dyson UK’), and Dyson’s Malaysian entity (collectively referred to as ‘Dyson’ below).

The claimants allege that they were trafficked to Malaysia to work in factories supplying components to Dyson. They say they had their passports confiscated and were required to live in inhumane accommodation. When at work, they were subjected to oppressive conditions, beatings, torture, intimidation and withholding of wages. Those who whistleblew were also subjected to further abuse and threats.

The claimants are seeking compensation for alleged lost wages, personal injuries, false imprisonment, intimidation and assault, in addition to restitutionary unjust enrichment (ie requiring the defendants to return benefits achieved at the claimants’ expense).

The claims are subject to Malaysian law.

 

The appropriate forum

The Court of Appeal found that England was the most appropriate forum, overturning a previous High Court decision which determined that the Malaysian courts should have jurisdiction.

The key findings regarding the grounds of appeal were:

 

Equality of Arms

The claimants were able to fund the proceedings in England and would not be able to afford Malaysian proceedings, due to the unavailability of lawyers who would act under a CFA. (Dyson’s undertaking to pay certain costs did not remedy this).

The claimants would also be able to access a better standard of legal representation in England, give evidence in person and have access to interpretation services.

 

Centre of Gravity of the Proceedings

The High Court focussed on where the abuse happened when looking at the ‘centre of gravity’ of the case. The correct approach was to identify the location of the ‘principal protagonist’, which is Dyson UK as the core of the claims relate to allegations that Dyson UK permitted / failed to stop the abuse.

Equally, Dyson UK would take control of the defence regardless of where the claims were heard.

 

Convenience

Most relevant documents were in the UK, and witnesses were either in the UK or able to travel here to give evidence. It was relevant that hearing the proceedings in Malaysia would put the claimants at risk (eg of deportation and further abuse).

 

Applicable Law

Malaysian law governs the claim, which points to the Malaysian courts being the preferable forum. However, the English courts are adept at applying foreign law, and Malaysian law is similar to English law in any event.

 

Why is this judgment important to UK companies?

The key point here is that regardless of where torts occur or what law applies, determination of the most appropriate forum has to consider which forum best serves the interests of the parties and the ‘ends of justice’ (Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460).

In this case, the location of the abuse and applicable law were outweighed by various factors making England the most appropriate forum, including England being (i) most closely tied to the ‘principal protagonist’, (ii) where most documents were stored, (iii) where witnesses could freely give evidence and (iv) where the claimants could fund a better standard of legal representation.

This decision will interest all UK companies with international supply chains, as well as multi-national companies who may be operating under the misapprehension that having a local entity (such as Dyson’s Malaysian entity in this case), may enable relevant proceedings to be heard abroad.

Whether hearing the case in England is legally or strategically positive or negative will depend on the circumstances of the case. Forum dictates procedural aspects – for example rules on disclosure and expert evidence – but not the legal tests applying to duty, breach, causation and quantum (which are determined by applicable law).

However, an equally relevant factor for many UK companies is that the reputational and commercial impact of English proceedings is often more significant than foreign proceedings which may evade the spotlight.

The Limbu claims will now proceed through the English pre-trial procedure, and it will be some time until any final outcome is determined. UK companies with foreign supply chains will be watching these claims carefully, with a view to identifying any risks related to failures in due diligence or control over foreign suppliers.