Federal Court

BHP Billiton will seek to have an Australian class action into the Samarco dam disaster delayed in a bid to avoid prejudicing homicide charges laid against current and former executives in Brazil.

The miner flagged in Melbourne’s Federal Court on Friday that it was likely to request a stay of proceedings on the class action filed by lawyers at Phi Finney McDonald, which now faces a competing class action claim run by Maurice Blackburn Lawyers.

Class action litigants have sought compensation for losses they incurred when trading BHP shares before and after the 2015 dam collapse, which killed 19 people in Brazil’s Minas Gerais region, destroyed several towns and bridges and polluted the River Doce.

In October 2016, Brazilian authorities charged 22 people with criminal offences over the disaster, including eight past or present BHP executives.

Those facing the charges include two current vice-presidents at BHP, Margaret Beck and Tony Ottaviano, and three Brazilian-based employees, Sergio Fernandes, Andre Cardoso and Guilherme Ferreira.The two biggest names charged were former group management committee members Jimmy Wilson and Marcus Randolph, who are now in leadership roles at CBH Group and Boart Longyear respectively.
BHP has sought to have the most severe of the charges terminated and continues to fight the matter in Brazilian courts, and BHP’s lawyer Wendy Harris QC highlighted that situation on Friday when flagging plans to ask Justice Mark Moshinsky for a stay of proceedings to ensure “individuals in Brazil would not be prejudiced by that proceeding”.
The request for a delay will be formally argued in October, but if granted the class actions could be delayed years until the Brazilian charges are resolved.

In the meantime Maurice Blackburn and Phi Finney McDonald look set to battle for primacy in the action.

Maurice Blackburn said it expected its action would attract significant support from institutional and retail investors, and said its claim would have litigation funding rates of between 10 per cent and 15 per cent.
“We have good reason to believe the company should have informed the market of serious problems at the dam as early as August 2014,” said Maurice Blackburn’s principal lawyer Brooke Dellavedova. Maurice Blackburn’s class action is focused on a shorter period of time (between August 2014 and November 2015) than Phi Finney McDonald’s, which seeks to capture investors trading BHP shares between October 2013 and November 2015.

The Australian class actions follow similar class actions that have been launched in the US over the tragedy.

Mr Randolph recently told The Australian Financial Review that he felt for his former subordinates at BHP, who were still trying to forge careers whilst defending homicide charges.

“It isn’t that difficult for me, I was already the chairman of Boart Longyear when that lawsuit started and I continue to be, and I am not looking for full-time work. The people I really feel sorry for are the ones that used to work for me, the people that were there with me, that are younger than me, and are still actively engaged in trying to have a career,” he said in May. “That is a hell of thing to try and explain in a job interview”