BHP share price on watch as court clears the way for potential $9 billion ‘day of reckoning’

The BHP Group Ltd (ASX: BHP) share price will be on watch on Monday morning.

This follows some big news out of the United Kingdom on Friday.

Why is the BHP share price on watch?

The BHP share price will be on watch today after the mining giant was dealt a blow in the English courts at the end of last week.

Law firm PGMBM announced on Friday that it successfully overturned BHP’s victory in the Court of Appeal relating to Samarco dam disaster a class action. PGMBM and its Brazilian litigants are suing the Big Australian for 5 billion pounds or approximately A$8.8 billion.

In response to the news, PGMBM stated:

Victims of Brazil’s worst environmental disaster are celebrating today after a landmark ruling ensured that FTSE 100 mining giant BHP will now finally face their day of reckoning in the English courts.

PGMBM’s Managing Partner, Tom Goodhead, added:

This is a monumental judgement that means the victims of the worst environmental disaster ever seen in Brazil are a step closer to justice. BHP is a multinational that generates huge profits in the regions where it operates, and it is only right that they are held directly accountable in the UK. The days of huge corporations doing what they want in countries on the other side of the world and getting away with it are over.

What drove the decision?

The court found that the previous Judge’s decision to strike out the proceedings for abuse of process was flawed in a number of respects and wrong.

The court documents revealed five key reason for this:

(1) the fact that a claim properly advanced is said to be “unmanageable” does not as such make it an abuse;

(2) in any event, the Judge’s conclusion that the proceedings were “irredeemably unmanageable” is not sustainable;

(3) the Judge was wrong to rely on forum non conveniens factors as part of his analysis on abuse of process;

(4) whilst a properly arguable claim may in principle be abusive if it is (clearly and obviously) pointless and wasteful, the Judge’s error in relation to the manageability of the litigation infected his conclusion on whether that was the case here; his reasoning that there was nothing to be gained by the claimants in the English courts was premised fundamentally on his (unjustified) view that their claims here were unmanageable;

(5) the Judge failed properly to analyse the position of the 58, and the consequences of their position for other claimants; he treated the claimants as a single indivisible group against whom the application must succeed or fail altogether, rather than treating the application as constituting an application against each claimant, with the position of each claimant or group of claimants being considered individually.

Though, this isn’t the end of the story. Far from it. BHP has the option to appeal Friday’s decision in the Supreme Court. Though, at the time of writing, the Big Australian was still considering its response to the news.

The post BHP share price on watch as court clears the way for potential $9 billion ‘day of reckoning’ appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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