Scotland update on collective redress: Scottish courts find time for tea

Users of collective redress mechanisms may have been following the Kenyan tea pickers group action currently making its way through the Scottish courts.

The latest judgment has rejected the defender employer’s attempt to have the case thrown out on jurisdiction and forum non conveniens grounds.

This significant group action, a mass claim for personal injuries, will now proceed in Scotland (subject to any appeal). It confirms the litigation risk for corporates with any presence in Scotland.

To recap, the case is brought by 1,000+ Kenyan tea pickers who work on a tea plantation in Kenya. The workers allege musclo-skeletal injuries arising from their work. The action is being taken against their employer of record, a Scottish domiciled company within the Swire Group.

A judgment was issued last week following a three-week hearing on jurisdiction.

The company failed to have the claims dismissed on jurisdiction or forum non conveniens grounds. This significant case will therefore now proceed in Scotland, subject to any appeal that may be made.

This will no doubt be a very costly decision for the company, and one that it clearly took great pains to avoid – such is obvious from the range and nature of the expert witnesses employed to try to persuade the court of its position, all of whom had to be flown into Scotland to give evidence.

This latest development is notable given it confirms the litigation risk of a group claim proceeding in Scotland against companies with any presence in Scotland.

It is also useful given the relative novelty of the group procedure mechanism in Scotland – this is one of only three live formal group actions in Scotland -, as well as to see the approach of the courts on issues of forum non conveniens and the focus on access to justice.

Key takeaways

The jurisdiction battle involved detailed examination of Kenyan employment legislation and a statutory scheme set up to administer industrial disease claims made by Kenyan workers.

Broadly, however, there are some clear lessons of more general application to companies operating across multiple jurisdictions.

1. Review and rationalise your corporate structure to minimise the risk of proceedings in countries where you have no significant activities or presence.

In this case, the Scottish employer company was incorporated in 1925 (“The African Highlands Produce Company Limited”) and maintained a historical registered office address in Aberdeen. There was no particular reason why the company continued to be registered in Scotland. It was solely as a result of this historic registered office that they have found themselves defending a mass claim in the courts in Scotland.

Scotland is a newcomer as a jurisdiction of choice for mass claims for redress, more regularly seen in the courts in London and other major commercial centres. Consider if there are entities in your corporate structure that may expose you to litigation risk in a country in which you have no significant operations and/or where there may be disadvantages in defending a claim.

2. Review older contracts to check who the contracting party is within your corporate structure.

Is this outdated and could it expose you to a litigation risk as explained above?

3. Consider any contracts that contain choice of jurisdiction clauses. Are these sufficiently clear and certain?

Here, the company relied on the implied inclusion of a choice of jurisdiction clause by reference. There were complex difficulties around this. Ultimately if you wish to ensure where you will be defending any dispute that arises, it will be safer to include a choice of jurisdiction clause expressly or by clearer reference (where such a choice is permitted – legal advice may be required in e.g. employment situations).

On the issue of jurisdiction, there are a couple of key takeaways.

4. The company’s registered office alone provided a basis for jurisdiction in Scotland.

On the question of jurisdiction, there was no effective agreement excluding the jurisdiction of the Scottish courts. The Scottish courts had jurisdiction on the basis of the registered office.

5. Access to justice trumped.

On the question of forum non conveniens, despite a long list of compelling factors in favour of the Kenyan courts, the Scottish court was ultimately swayed by access to justice issues.

The company cited numerous compelling factors in favour of the Kenyan courts: lack of employees, factories or business in Scotland; the irrelevance of a registered office presence only; Kenya as the place where the alleged harm was suffered; the company’s operation as a branch in Kenya; the relevance of Kenyan employment law; the practicalities of foreign witnesses giving evidence and the need for interpreters; the workers and all the senior officers of the company residing in Kenya; the requirement to understand Kenyan culture, behaviour and custom; the need for investigations in Kenya; the uncertainty over whether an order of the Scottish court concerning the inspection of property would be enforceable in Kenya; inter-state and comity issues.

However, the judge was persuaded there was a “cogent evidence of a material risk that the group members may not obtain justice if they are obliged to litigate their claims in Kenya”. Poverty and lack of representation were the deciding factors. These “far outweigh” the rationale of the company in seeking to have the claims heard in Kenya.

The judge referred to practical difficulties of a substantially illiterate, poor and unrepresented employee population to navigate the statutory compensation scheme in Kenya for such claims. There are no charitable organisations with the means to fund the claims. There would be no legal aid available. There are no alternative methods of funding claims. The employees would potentially be liable for adverse costs (no QOCS). There is no collective redress mechanism. Few lawyers in Kenya would have the skill and resources to run a mass claim. There may be issues about taking actions against a substantial commercial entity.

In taking this line, the Scottish courts have clearly borne in mind public policy arguments – and ones prevalent in Scotland rather than in Kenya – in their decision.

Clearly such arguments will not be available in all cases. However, cases like these for mass compensation can emanate from countries where similar concerns may arise.

Companies with any presence or activities in Scotland should take heed of this direction of travel.

Hugh Hall Campbell KC v James Finlay (Kenya Limited) – [2023] CSOH 45

By Burness Paull LLP, Scotland, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact ukscotland@transatlanticlaw.com

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