The Bodo Community & Ors v CW Law Solicitors

This is the return date for the hearing of an application by the claimants for an interim injunction, earlier injunctions having been ordered by Stuart-Smith J, and an application to have them discharged, itself having been dismissed.

The context of this injunction application relates to oil spills in the Niger Delta, which impacted upon what has been known as the Bodo community. Shell, which is the defendant in the proceedings in this country, has admitted liability for the oil spills, although there is a dispute as to the period of time over which the oil spills took place and the amount of oil which was discharged from the pipelines into the Bodo community area.

The claimants, who comprise many thousands of people in or with close connections to the Bodo area, are or have certainly been represented to be represented by the well-known solicitors firm Leigh Day. Shell and the claimants have agreed that the English court, and in particular the Technology and Construction Court, should have jurisdiction to resolve the disputes which have arisen between the parties. Over the past 12 months or more, I, as the judge charged with the case management and the eventual trying of the case, have made a number of procedural orders to lay down a timetable to bring the case on for trial on substantive issues between May and July next year, 2015. To that end, it has been largely agreed and resolved that the cases brought by the "lead claimants", numbering about 50, should be heard so that the court can give judgment on liability and quantum in relation to them. This is with a view to establishing what it is hoped will be representative findings so that the remaining thousands of claimants and Shell can then amicably resolve their disputes.

I have issued one substantive judgment in this case already, reported as The Bodo Community and Others v Shell Petroleum Development Company of Nigeria Limited [2014] EWHC 1973 (TCC) on 20th June 2014. This dealt largely with what were important Nigerian law issues and finally decided that the claimants' rights of compensation were fixed by reference to the compensation entitlements set out in the Oil Pipelines Act 1956. Shell has openly accepted that it is in principle liable to compensate appropriate claimants for damage and disturbance to the claimants' lands and/or to their livings. Although it could be said that on the preliminary issues dealt with on this judgment Shell were more winners than were the claimants, it cannot begin to be said that the claimants have lost the litigation. There remains, as I have indicated, their potentially significant entitlements to compensation under the Oil Pipelines Act 1956.

The evidence before the court is that Leigh Day signed up some 14,000-15,000 clients a number of years ago in relation to this litigation. I am told that letters of instruction were secured from these claimants and details of each was secured vis-à-vis the oil leakages. That is something short of witness statements, but some information I am told on each of these claimants was secured. Doubtless due to death or moving away, there may have been some slight changes to those originally listed as claimants. Indeed, I think I have been told about several of those already.

The current set of problems has arisen in this way. On 12th August 2014, Shell informed Leigh Day that they had entered into a settlement agreement with the defendant in these injunction proceedings, namely CW Law Solicitors, in relation to what was said to have been over 7,400 individual residents from Bodo for losses allegedly suffered as a result of the 24-inch trans-Niger pipeline operational spills in 2008. I should say that those are exactly the same spills to which the English proceedings with which I am concerned relate.

A firm called Harding Mitchell originally issued proceedings in 2012 on behalf of, it was said, the 7,400 individual residents of Bodo and I am told that a default judgment was entered against Shell, but there is an outstanding application by Shell to set that judgment aside.

Shell went on in their letter of 12th August to indicate that they had been engaged in settlement discussions with Harding Mitchell, who by this stage had been replaced by CW Law, the defendant in the proceedings with which I am immediately concerned. Shell informed Leigh Day that they had concluded an agreement with CW Law and a Nigerian firm called Egbegi & Co., and indeed that settlement agreement has since been disclosed. Shell indicated that they were alive to the possibility that a number of claimants represented by Egbegi & Co. and CW Law could also possibly be represented by Leigh Day in the substantive proceedings in England with which the TCC is concerned. Shell in their letter sought a way forward to try to ensure that there was no inappropriate overlap between those that they were settling with in the settlement agreement entered into between them on the one hand and CW Law and Egbegi & Co. and those for whom Leigh Day acted.

What has happened since then is that Leigh Day sought further information from Shell. They involved CW Law in effect to find out what was going on. They sought a modus operandi to try to get to the bottom of the extent to which there might be overlap. There was not forthcoming, so far as I can ascertain, from CW Law what might be called appropriate co-operation on that front and so the matter lurched towards the injunction proceedings which were issued on 24 September 2014. It was becoming clear by or on 24 September that CW Law and Egbegi were in the process, so it was indicated, of seeking to sign up people who they indicated that they thought were their clients to get them to sign waiver forms which would demonstrate to Shell that Egbegi and CW Law acted for them and that they would abandon any claims which they otherwise had in relation to the financial settlement on offer from Shell.

I should come back to the settlement agreement made on 12th August 2014 which has now been disclosed. It is clear on the face of the settlement agreement that CW Law and Egbegi, at least on its face, apparently acting as co-principals were representing the clients to which the settlement agreement was supposed to relate. There is no indication that one was inferior to another or that one was the agent of the other. Indeed the preambles and other parts of the settlement agreement appear to suggest, and I make no final finding on this, Preamble B, for instance, indicate that the claims brought by Harding Mitchell in this country in 2012 in respect of 7,450 individuals were now being conducted by CW Law on behalf of those individuals. It goes on in Preamble B to say that members of the “CW Law” group wish to settle their claims in the manner set out in this agreement. Preamble F says that CW Law hereby confirms that it will discontinue the English action set out below and hereby confirms that it acts for the individuals named in Appendix 1 hereto. It does not act or purport to act on behalf of the members of the Bodo Community in any representative capacity. Again, it would be surprising if CW Law were an agent of Egbegi if it would agree to wording such as that.

The settlement agreement confirmed that the English action, which initially was issued by Mitchell Harding but since conducted by CW Law, would be discontinued. Clause 2 indicated and warranted that CW Law was duly authorised under the laws of England and Wales and Nigeria to act for and to represent the settling claimants in respect of their claims as such. Compensation was said to be payable in the total sum of £540 per individual settling claimant with £150 in effect to be paid to each individual claimant and £390 per settling claimant to be paid into a trust for the benefit of the Bodo community members.

Clauses 4 and 5, however, said this:

"4.

No individual listed in Appendix 1 hereto shall have the benefit of this Agreement or the offer herein by SPDC to settle his or her claim relating to the 2008 Oil Spills, unless or until it is established to the reasonable satisfaction of SPDC that such individual is exclusively represented by CW Law & Egbegi. CW Law undertakes to use all reasonable endeavours to co-operate with Leigh Day & Co to identify and resolve any issues which may arise in respect of Potential Overlap Claimants.

"5.

No Leigh Day Lead Claimant shall have the benefit of this Agreement or of the offer herein by SPDC to settle his or her claim relating to the 2008 Oil Spills. SPDC should have the right to reject any Release signed by any such individual and/or which SPDC has reasonable grounds to believe might concern any such individual."

The reference to the lead claimants is to the lead claimants in the English action with which I am directly concerned.

There were provisions for payments of costs. Apart from payments to English counsel, the large bulk of payment of costs was to be payable to CW Law, but a substantial element of it, indeed £1.8 million worth of fees and indeed certain counsel fees, were only payable "upon satisfaction of condition precedents in paragraph 6 above in respect of various members of the settling claimants", i.e. the more members who signed up, the more payments were triggered to be made to CW Law and to counsel. It may be a matter of comment (or it may not be) that the lawyers are doing rather better than individual claimants for whom they act. Maybe they have done a lot more work; I do not know. Be that as it may, when it became clear to Leigh Day in particular that releases and waivers were continuing to be signed, they came before Stuart-Smith J in this court to seek an injunction. They were able to give notice to CW Law's leading counsel, who on relatively short notice appeared before Stuart-Smith J. Having heard argument, he made an order, supported by a penal notice, against CW Law Solicitors. The penal notice said this:

"IF YOU CW LAW SOLICITORS, INCLUDING YOUR PARTNERS, AGENTS, SERVANTS (INCLUDING PARTNERS, EMPLOYEES, AGENTS AND SERVANTS OF EGBEGI & CO.) DISOBEY THIS ORDER YOU MAY BE HELD TO BE IN CONTEMPT OF COURT AND MAY BE IMPRISONED, FINED OR HAVE YOUR ASSETS SEIZED."

The substantive part of the order was in paragraph 4, where it was ordered:

"a.

By 4 pm on 1 October 2014, CW Law Solicitors shall disclose the names of any persons who to their knowledge have signed a waiver or settlement agreement pursuant [to] the agreement between CW Law and the Shell Petroleum Development Company Nigeria Ltd of 12 August 2014 and shall provide copies of each signed waiver and settlement agreement.

b.

CW Law Solicitors shall file any other evidence by 4 pm on 1 October 2014.

c.

Leigh Day shall file any evidence in response by 4 pm on 6 October 2014.

d.

The parties shall file skeleton arguments by 4 pm on 7 October 2014."

The return date was today, 9 October. By paragraph 6, this was said:

"Until the return date or further Order of the Court, the Respondent", that is CW Law, "must not take any steps in relation to the settlement of claims made by persons seeking compensation from the Shell Petroleum Development Company Nigeria Ltd or their Servants or Agents in respect of damages arising from oil pollution in the Bodo Creeks."

At the hearing before Stuart-Smith J, Ms. Perry QC for CW Law told Stuart-Smith J, and this is recorded at paragraph page 17 of the transcript, that there were 3,900 who had instructed CW Law and she said this at line 20: "It means that that takes considerable time as we are talking about 3,900 people on a definite list. That is the precise purpose of my solicitor being in Nigeria at the moment." Stuart-Smith J said: "To sign the agreements to waive and release." Ms. Perry said, "Yes." She later said, doubtless on the basis of the instructions that she had received, on page 26, line 17: "I was told today that all the 3,900 are likely to have signed the releases by the end of next week." If the information and instructions she had received were right, that would suggest that there remained a not insignificant number of the 3,900 clients who still had not signed their releases. Later conflicting evidence of that was given, it later being suggested by Mr. Egbegi that the waivers had all been signed on or by 24 September.

On 2 October, for reasons I do not need to expand upon, the defendant sought to discharge the injunction and Stuart-Smith J refused to do so. On that day he ordered that the defendant CW Law was to serve by no later than 12 noon on 6 October 2014 a list of the names of all persons who signed a waiver or settlement agreement, pursuant to the agreements with Shell, and copies of the signature page of the agreement of each such individual and one full copy of the settlement agreement together with copies of any individual amendments or changes to the standard agreement. In addition, he ordered that the defendant was to file and serve, by no later than 12 noon on 6 October 2014, a sworn affidavit from Mr. Amadin Nicholas Ekhorutomwen (the defendant's solicitor) explaining: (a) his non-compliance with the terms of the order made on 24 September; (b) the contents of paragraph 18 of his witness statement dated 29 September 2014 and further explaining why he was not therefore in contumelious default of the Order made on 24 September 2014; and (c) why the agreement in the name of Promise Saafee was signed on 30 September 2014.

His witness statement of 29 September was obviously prepared when he was in Nigeria. In that witness statement he did not seem to indicate any great difficulties that he had encountered, but he said this at paragraph 18:

"I add that I am told by Mr. Egbegi that as at the time of the injunction, all persons signed up to what has been deemed List A had executed the releases and I am able to ask Mr. Egbegi if the court so directs, to make the executed releases available to the Court as soon as reasonably practicable."

He referred to 47, possibly 49, individuals for whom some releases were provided. One of them was signed by Promise Saafee, apparently signed on 30 September 2014, and that explains why Stuart-Smith J asked for an explanation about that.

On 6 October affidavits were served by Mr. Egbegi and Mr. Ekhorutomwen. Those identified a dispute in a sense which may have taken place when Mr. Ekhorutomwen was in Nigeria between 24 September and 5 or 6 October when they both suggested that Mr. Egbegi, who it was said was the principal and that Mr. Ekhorutomwen was simply an agent, did not believe that he was bound by any court order made in this country and that he was not prepared to provide the releases or many of the releases; at one stage it is said that CW Law was "dis-instructed" for a few days. Whether that is right or not seems at best to be unclear and is later said to be the case that he, Mr. Egbegi, confirmed that there was no de-instruction at all. Essentially what he said was that the reason that he had not been able to comply by providing all the releases by the date originally ordered was in effect that Mr. Egbegi was not prepared to hand them over to him or copies thereof. That is his explanation for not complying.

On 6 October attempts were made electronically to transmit the thousands of release forms which it is said that the 3,900 clients had signed. I am told by leading counsel, and I have no reason to doubt, that she was charged with seeking to transfer them electronically, that electricity was cut to her room in chambers and so there was a delay. The exhibits, so to speak, the lists and the forms, which run to 4 or 5, if not 6 lever arch files-worth of hard copy, were transmitted over the next 24 hours or so.

This return was listed for two and a half hours. It would have taken double that. It is clear that feelings are running extremely high on both sides. Leigh Day are convinced, based on the detailed soundings which they have taken from their clients within the Bodo community, that some of those who are apparently listed as being represented by CW Law and Egbegi have never instructed either of those two firms and certainly not authorised them to enter into any settlement agreement or that at least a large number of them have signed any release forms. When one looks at the release forms, it appears that Leigh Day believe that some signatures do not obviously relate to the signatures or marks which they have from the same people on letters of instruction and the like which they have had over the years. Leigh Day have contacted a not insignificant number of the people they believe are their clients whose evidence has indicated that they had never instructed CW Law and/or Egbegi and/or that they had never instructed them to settle on their behalf. There is a real belief that some or all of these releases or a not insignificant number of these releases are forged or fraudulent documents or at the very least for one reason or another have not been signed by the people who they purport to be from.

Against that the defendant has put in evidence which suggests that a number of Leigh Day's clients have decided they are fed up with Leigh Day for one reason or another. There are suggestions that one or other representative of Leigh Day has made threats against various individuals and even a suggestion that one, if not more, has been offered inappropriate financial inducements and the like. I am obviously not in a position to make findings of fact today about the extent to which this is true. I have had extensive evidence from representatives of Leigh Day firmly and in detail challenging any assertions that they have acted improperly. Leigh Day's evidence also suggests that representatives of CW Law and/or Egbegi have been going through the Bodo community area and at least talking to a number of people misrepresenting the position in relation to the current English litigation with which I am concerned. For instance, a number of them appear to have been told by representatives either of the defendant or Egbegi that this English litigation has been lost by Leigh Day and therefore the implication is that in effect any settlement from Shell must be a good one. If that misrepresentation has been made to clients of the claimant and it has been made on behalf of the defendant or its co-principal, if indeed it is a co-principal, Egbegi, then that would be a very serious misrepresentation because, as I have already indicated, it cannot begin to be said that the claimant in these TCC proceedings has lost the case. Indeed it is almost inevitable, and I think Shell through their counsel have indicated in the past, that there will be compensation payable to a not insignificant number of individual claimants. Doubtless the battle will be fought hard on both sides, but it cannot begin to be said that the claimant has lost that litigation. Other misrepresentations, it is said, have been made to people whom Leigh Day believe are their clients.

Mr. Hermer QC and his team of junior counsel in an extensive skeleton supported by up to five witness statements from Mr. Day and various other documents invite the court to make findings of fact. It seems to me that this is difficult for a number of reasons, and I have indicated already in argument at the bar that it is difficult for the court to make findings of fact at least for two reasons. The first is that an indication that findings of fact were being sought was really only made clear in counsel's skeleton dated 2 October. That is two days ago. There were certainly possibly hints of it in Mr. Day's witness statements that there was in effect going to be an application that the court make findings of fact. That has only become clear within the last 48 hours, if not less than that. Although much of the evidence put in by CW Law for the purpose of today was firmly and positively challenged thereafter, none the less it is clear that it would be wrong in a vacuum to make findings of fact. It would involve the court effectively assuming that everything said in the witness evidence on both sides was true. If the court was of that view, then it could not make the findings of fact, but in effect what the court is being asked to do on the basis of written witness statements is to conclude what the probabilities are.

It may be that Mr. Egbegi, if he was called as a witness, would be a good witness. I do not know. It may be that he would be a hopeless witness. The same could be said on all sides. I do not know what the view would be, but where these serious allegations are made, for instance made against representatives of Leigh Day, for the court to make a positive binding finding of fact, for instance, that Leigh Day representatives had not engaged in conduct such as bribery forgery and making threats, it would be inappropriate. It would be even more inappropriate in circumstances in which the claim has only relatively recently been issued on 2 October. There is no general endorsement, save by reference to Mr. Day's first witness statement. There are no particulars of claim yet and one of the fundamental principles of English and indeed I am sure Nigerian law is that a party is entitled to know in detail what the allegations being made against it actually are. Now, certain it is that Mr. Day particularly in his witness evidence identifies a number of facts which he says were untrue, but they are not listed out and it is only in counsel's skeleton that one gets a list of the findings that the claimant wants the court to make. I would be surprised (I say no more) if the types of allegation that are made against a firm such as Leigh Day were true. That said, I am not pre-judging the issue. One would need to consider one way or the other whether the serious allegations of bribery, forgery and making threats were true. One would need to know whether representatives of the defendant CW Law and Egbegi had made deliberate misrepresentations to clients of Leigh Day with a view to luring them away to be represented by other firms. There is a substantial and serious series of issues which are all fact-dependent. I am therefore reluctant to make findings of fact at this stage. If this matter does not resolve itself there will have to be a trial and all these issues will have to be considered.

The primary area of concern today is whether or not and on what terms the injunction should be continued. At one stage there was an indication from the defendant that it wished to have the proceedings today adjourned, but that has been clarified and what was sought to be adjourned was any hearing that involved the making of findings of fact in some final and conclusive way. When it has come down to considering the extent to which the injunction should be continued, a substantial element of agreement has emerged and so it is that it is agreed that the basic injunction that CW Law must not take any steps in relation to settlement of claims made by persons seeking compensation from Shell or their servants or agents in respect of damages arising from oil pollution in the Bodo Creeks is to be continued. Further orders were sought at paragraph 10 of the draft produced by or on behalf of Mr. Hermer QC for the claimant.

I should say that there is, perhaps surprisingly, an issue as to the capacity in which the defendant has acted. It is maintained by way of witness statement or affidavit, supported by a statement of truth from Mr. Ekhorutomwen, pretty well throughout, if not throughout, that he has acted simply as agent for Egbegi & Co. In spite of the inconsistencies between that stance and other evidence, I asked Ms. Perry QC on behalf of CW Law to confirm that the extent to which there was agreement or acceptance by her on behalf of CW Law, if and to the extent that was properly classifiably an agency, that it was given within the terms of the authority which CW Law believes that it has from Egbegi & Co. That assurance was given. So it is that I can make the following further orders which seem all to be sensible.

It is this, that the court orders and declares as follows until further order: (a) any waiver signed pursuant to the agreement between SPDC and CW Law Solicitors and Egbegi & Co., dated 12 August 2014, shall have no effect in the courts of England and Wales in relation to any claims in the Bonny oil pipeline litigation. We need there to add the case references of this case, the TCC cases; (b) permission to the defendant and to SPDC to discharge or vary the orders upon giving Leigh Day no less than 14 days' notice in respect of each client; (c) by midday on 20th October 2014 the defendant shall serve upon the court and Leigh Day copies of letters or records of instruction together with any identity card numbers and any copies of the identity card documents of any claimant represented by Leigh Day in the Bonny oil pipeline litigation who the defendant claims to represent and who it asserts is or may be covered by the agreement between CW Law and SPDC; (d) by midday of 20th October 2014, CW Law is to clarify in writing to Leigh Day whether it still maintains that it represents any of the claimants in the current litigation and, if so, which; and (e) within seven working days of being notified in writing thereof by Leigh Day, CW Law shall provide the originals of waivers in respect of 100 persons selected by Leigh Day.

It is urged very strongly by Mr. Hermer QC that in effect I should make provisional findings that Mr. Ekhorutomwen is in contempt of court. I am reluctant to make any decision about that today. It is odd, to say the least, that in his first witness statement put before the court he did not explain what he later explained about the de-instruction and the difficulties that he was having, if any, with Mr. Egbegi. That is an explanation, it could be said, which should have been given in that earlier witness statement and/or by way of an application made to vary the order made to enable him to secure some more time to get the appropriate releases from all those who had signed releases. There were nominal breaches at least in respect of the service later than midday on 6 October of the releases, but leading counsel has given an explanation and I would not have thought that that would amount to an actionable contempt of court for the late provision of that.

But there is a rather more serious potential breach, and that relates to the fact that of the 3,900 releases, it appears on the face of those copies that have been provided that a number of them were signed after the date of Stuart-Smith J's injunction. A number of them appear to have been signed afterwards or dated on or after 24 September, but then the September date, the 9, has been changed to an 8, or to another date, and one can see the corrections that have been made. But a number of them on their face appear to have been signed after 24 September.

It does seem to me that there is at least a case to answer. At the moment there is no explanation as to how or why that took place. It is said, and it appears on the face of the 3,900 waivers or releases, that each was signed apparently in front of a recognised notary in Port Harcourt, the same one. It is said that, because of court commitments in Nigeria, he is not able at the moment to provide a witness statement explaining what he did and when he signed these documents.

The claimant says in effect that the signing of these waivers after the 24 is entirely consistent with what the court was told on 24 September, namely that Mr. Ekhorutomwen had gone to Nigeria with a view to securing the outstanding signatures. One can understand the potential interest that Mr. Egbegi and possibly CW would have in getting them signed because it might be argued from the settlement terms that the payment of their fees was dependent upon the numbers of signed release forms.

That is doubtless a matter that may be in issue, but it does seem to me that there is a case to answer in respect of that. I am not saying at the moment without an explanation that that breach of the order is established. There may be a very simple explanation and indeed it is I think hinted at, namely that the wrong dates were put down. That may be a matter that the court has to take a view about, but it seems to me that what should happen in relation to this is that the claimant should indicate, say, within three working days, that would be by close of business on Tuesday, those aspects of the breaches of the order which they would seek committal proceedings for. That should be notified to CW Law and within 10 working days thereafter. The defendant should file any further evidence upon which it wishes to rely in response to those further matters. As I have said, I very much hope that some of the minor matters will not be pursued. That is what I am going to do about that.

One thing I should finally say is that I am aware that Egbegi & Co., have secured what is still called an ex parte injunction in a court in Nigeria against Mr. Day personally.

It is not for this court to interfere in any way with the jurisdiction of the Nigerian court handling the injunction proceedings. What I would very much hope is that this litigation in England, in which there are many thousands of claimants in the proceedings before me, is not disrupted. It is very important that Leigh Day, who are conducting these proceedings on behalf of undoubtedly thousands of claimants, should be able to do so without fear or hindrance in the proper performance of their duties as solicitors, their duties not only to their clients, but also to this court. I would very much hope that neither CW Law nor Egbegi & Co. would seek to persuade any court to act in a way which involved any disruption to these proceedings. For instance, Mr. Day may need to be involved and probably will need to be involved in the collation and filing of evidence from the lead claimants. That may involve approvals and signatures of draft witness statements. There are going to be about 30 experts, many of whom are visiting and will have to visit Nigeria in connection with these proceedings, and Mr. Day, as I understand it, has a pivotal role in the collation of that evidence.

I would very much hope that, whatever the Nigerian courts think is appropriate, and that of course is entirely up to them, he and his firm would not be disrupted in the preparation for this trial with which I am concerned in starting in May next year. I have suggested that some consideration be given by both Leigh Day and CW Law and indeed possibly Egbegi & Co. seeing or considering the extent to which there might be some resolution between them.

What is and must be paramount, however, is, first of all, that all of those claimants who wish to continue to use the services of Leigh Day must be allowed to do so, but, similarly, all those who either have never been represented by Leigh Day or do not want to continue to be represented by Leigh Day should be allowed, if they so wish, to secure compensation by way of settlement. What I am very concerned about is that litigation in effect between two firms of solicitors may be necessary, but I very much hope that the solicitors on all sides and the parties will realise that it is the parties' interests that are paramount.