Out-Law / Your Daily Need-To-Know

High Court adds 255 claimants to group freezing order

Out-Law News | 12 Feb 2020 | 3:24 pm | 2 min. read

The High Court in London has agreed to add a further 255 claimants to a case brought by Colombian farmers against a major oil company, despite there being an interim freezing order against the company already in place.

The court said the extra claimants could be added to the claim against Amerisur Resources because it would be a waste of time and resources to require them to make a completely new application.

The case was brought by a group of Colombian farmers against Amerisur for the alleged contamination of local water sources by the company’s oil drilling operations. They filed a claim for damages under Colombian law for the harm to their health, way of life and livelihoods.

The group then applied for, and obtained, an interim freezing injunction for over £3 million against Amerisur after they found out that the company was due to be acquired by Chilean company GeoPark and converted into a private company. The freezing order was limited to those claimants who were already party to the action.

However in the latest hearing, the court ruled that it had jurisdiction to add the new claimants to the case despite the fact that no consent forms had been filed with the court.

As the date for the freezing order ‘return date’, or hearing, was not until late March and Amerisur had not yet offered an undertaking in relation to its assets, the court also agreed to adjust the amount of the freezing order upwards due to the additional claimants.

Andrew Barns-Graham

Pinsent Masons

This decision demonstrates that the courts are willing to tackle this difficult area.

Corporate crime expert Alan Sheeley of Pinsent Masons, the law firm behind Out-Law, said the case demonstrated the English and Welsh courts’ “pragmatic and sympathetic approach” to groups of victims.

“The courts of England and Wales are becoming much more claimant friendly in respect of group actions and more understanding of the practical difficulties in respect of acting for a large group of victims,” Sheeley said.

“Ultimately, each victim would not normally be able to individually pursue an action owing to the financial implications of issuing proceedings. However, as a group, they will often have a financially viable claim. Such thinking is in line with the overriding objective and more importantly allows access to justice which in England and Wales can be prohibitively expensive and risky because of the cost regime, whereby the losing party pays the winner’s costs,” Sheeley said.

Pinsent Masons fraud expert Andrew Barns-Graham said the decision would also have an impact on group fraud cases.

“The courts of England and Wales have a long way to go to enable real access to justice in group actions, but this decision demonstrates that the courts are willing to tackle this difficult area,” Barns-Graham said.

“Victims of fraud, such as Ponzi schemes, really do need to act quickly following the fraud. They should immediately liaise with specialist civil fraud solicitors that are well skilled and well versed in the difficulties of group actions if they are going to be successful in bringing a claim and more importantly recovering their money,” Barns-Graham said.