Milasi Josiya & 7, 262 Others v British American Tobacco Plc
| Jurisdiction | England & Wales |
| Judge | Mr Justice Martin Spencer |
| Judgment Date | 25 June 2021 |
| Neutral Citation | [2021] EWHC 1743 (QB) |
| Docket Number | Case No: QB-2020-004542 |
| Court | Queen's Bench Division |
[2021] EWHC 1743 (QB)
Mr Justice Martin Spencer
Case No: QB-2020-004542
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Richard Hermer QC, Miss Tamara Oppenheimer QC, Mr Edward Craven and Miss Kate Boakes (instructed by Leigh Day) for the Claimants
Mr Charles Gibson QC, Mr Alex Barden and Mr Jacob Turner (instructed by Slaughter and May) for the First and Second Defendants (“BAT Defendants”)
Miss Shaheed Fatima QC, Mr Andrew Scott and Mr Timothy Lau (instructed by Ashurst LLP) for the Third to Eighth Defendants (“Imperial Defendants”)
Hearing dates: 19 and 20 May 2021
By this group action, some 7,263 Malawian tobacco farmers, comprising 4,066 adults and 3,197 children, claim damages against certain companies in the British American Tobacco group (hereinafter “BAT Defendants”) and/or certain companies in the Imperial Tobacco group (hereinafter “Imperial Defendants”) for negligence and/or conversion (of the tobacco leaves) and/or unjust enrichment. On 15 March 2021, the BAT and Imperial Defendants both applied to strike out the claim pursuant to CPR 3.4(2)(a) or (b) and this judgment arises out of the hearing of those applications.
Background
For the purpose of these applications, I take the background from the first witness statement (hereinafter referred to as “Day1”) of Mr Martyn Day dated 5 March 2021 and from the Particulars of Claim. This does not imply that the defendants necessarily accept this narrative as correct.
The claimants are Malawian citizens who all, at some stage, lived and worked on tobacco farms in the central and northern regions of Malawi. They overwhelmingly originate from the south of Malawi and are said to have been trafficked from their family homes to the tobacco farms. Most of the claimants lived and worked on the tobacco farms as family units where a family of usually some four to five would farm a plot of land of approximately 2.5 acres. The child claimants are aged between 3 and 17 and worked on the farms with their parents, undertaking a variety of jobs depending on their age.
Malawi is one of the poorest countries in the world, with around 80% of the population employed in agriculture. It has been calculated that some 51% of the population live below the poverty line and around 25% of the population are considered to live in extreme poverty, defined as living on less than $1.90 per day. This level of income makes it difficult to access food, clean water and shelter and nearly impossible to pay the cost of hospital or school fees. The claimants, falling within the “extreme poverty” bracket, are considered to be highly vulnerable.
The claims in tort and unjust enrichment are said to arise from the “unlawful, exploitative and dangerous conditions in which the claimants produced tobacco leaves” on the tobacco farms. Those conditions are said to include the widespread use of unlawful child labour, unlawful forced labour and the systematic exposure of vulnerable and impoverished adults and children to extremely hazardous working conditions with minimal protection against industrial accidents, injuries and diseases. The defendants, who are multinational tobacco groups and who manufacture cigarettes made from the tobacco leaves grown by the claimants, are said to have been fully aware (either actually or constructively) of the systematically unlawful, exploitative and dangerous conditions in which the tobacco they acquired and used was produced in Malawi. It is alleged that the defendants facilitated, assisted and/or encouraged such unlawful, exploitative and dangerous conditions in order to acquire tobacco leaves at the lowest possible cost and to maximise their profits from the sale of cigarettes. It is alleged that the defendants owed the claimants a duty of care. It is further alleged that the defendants have been significantly enriched at the expense of the claimants, this enrichment being unjust as the product of unconscionable exploitation of the claimants' weakness, duress, undue influence, failure of consideration pursuant to void, unenforceable or non-existent contracts and/or illegality giving rise to claims in restitution. It is further alleged that a significant number of the claimants owned legal title to the tobacco leaves grown on the tobacco farms and that the defendants wrongfully deprived the claimants of the use and possession of those tobacco leaves, giving rise to a claim in conversion.
Mr Day explains that he and his firm, Leigh Day (“LD”) have considerable experience (over 21 years) of bringing group claims on behalf of people living in the African continent including, for example, claims for Masai and Sumuru against the Ministry of Defence for leaving unexploded ordnance on practice ranges in northern Kenya, claims for 30,000 Ivorians for toxic waste exposure against Trafigura, a trader in oil, and claims for 2,500 Zambians against a multinational company, Vedanta, in relation to pollution emanating from a copper mine in the Zambian Copperbelt.
The Malawian tobacco farms are operated by “Contract Farmers” of whom the claimants are tenants. The Contract Farmers sell the raw (green) tobacco farmed by the claimants (through state regulated auction houses and subject to minimum price requirements imposed by the Tobacco Commission of Malawi) to “Leaf Buyers” who are part of multinational groups of companies with their headquarters in the US. The Leaf Buyers process the tobacco and then sell it to various customers including the defendants. The Leaf Buyers principally involved in the purchase of tobacco grown in Malawi are called Alliance One and Limbe Leaf.
The Pre-Action Correspondence
BAT Defendants have been represented by Slaughter and May (“SM”) throughout. Imperial Defendants were represented by Allen & Overy LLP (“A&O”) in the pre-action stages, and then by Ashurst LLP from shortly before the proceedings were begun.
On 20 September 2019, LD sent a Letter Before Action to certain companies in the BAT group, then on behalf of just 794 claimants, setting out in detail the background to the claim and the allegations against BAT Defendants, which at that time included unlawful means conspiracy, deceit, false imprisonment and intimidation as well as the causes of action now pleaded, together with allegations of criminal behaviour, such as breach of a statutory obligation or prohibition (which was imposed in Malawi for the benefit or protection of tenant farmers), money laundering, and assisting or encouraging the commissions of offences of human trafficking, slavery, servitude and forced labour, such alleged criminal behaviour being said to justify an injunction. The letter also made a request for documentation, as follows:
“Documents Requested
83. In order to progress our clients' claims we request the following documents from the Defendants:
a. A list of the farms and districts in Malawi from where the Defendants purchase tobacco;
b. A copy of tobacco purchasing contracts between the Defendants and leaf buyers in Malawi relating to the farms being worked on by the Claimants;
c. A copy of export documents between the Defendants and leaf buyers in Malawi relating to the unmanufactured tobacco obtained from farms in Malawi.
d. Purchase documents related to the amount of tobacco purchased from Malawi in the last tobacco season.
e. Policies provided to the leaf buyers in Malawi in relation to farm conditions and farmer working conditions.”
This request gives, perhaps, the first clue to the fact that the claimants' solicitors lacked information on a vital part of the chain linking each claimant to the defendants, namely that the defendants had purchased tobacco originating from the farms worked on by the claimants. This has been referred to variously as the “nexus issue” or “foundational issue”.
The Letter of Claim was followed up, on 12 November 2019, with an Electronic Register of Claimants which included the name, gender, claimant category, family unit name and identity of the contract farmer for the previous season and the year that each adult claimant began tobacco farming. This was supplemented by a similar Electronic Register in respect of a further group of claimants in February 2020.
SM responded on behalf of BAT Defendants in their letter dated 20 December 2019. This letter noted, inter alia, four matters in particular:
(i) the fact that BAT Defendants had purchased only about 4% of the Malawian tobacco crop in the previous 6 years;
(ii) the lack of underlying factual evidence;
(iii) the failure to particularise individual causes of action; and
(iv) the need to prove title through the supply chain.
The letter also challenged the viability of the causes of action, including those which have survived into the Particulars of Claim. In relation to unjust enrichment, SM pointed out that the
“Letter of Claim provides no evidential basis for the (novel) assertion that the Claimants can trace an equitable proprietary interest into tobacco leaves in the hands of the BAT entities. In particular, you have provided no details about the supply chain third-party leaf buyers, such as details of the terms on which the tobacco leaf is transferred in that part of the supply chain.”
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