Global mining giant BHP has settled an Australian shareholder class action over the deadly 2015 Fundão tailings dam collapse, resulting in a conditional payout of $110 million.
Global miner BHP Group announced on Tuesday (9 September) that it has reached a settlement in a shareholder class action brought by Phi Finney McDonald, nearly a decade after the catastrophic Fundão dam collapse in Brazil.
After seven years of litigation, BHP has agreed to a $110 million conditional settlement in a class action filed in the Federal Court of Australia, coming just days before the trial was scheduled to begin.
Brett Spiegel, principal lawyer at Phi Finney McDonald, highlighted the significance of the settlement, calling it “one of the few settlements to exceed $100 million in Australian shareholder class action history”.
The class action, jointly run by Phi Finney McDonald and Maurice Blackburn and funded by G&E KMTC Funding LLC, aimed to recover losses suffered by investors following BHP’s alleged breaches of “disclosure obligations and misleading or deceptive conduct” under the Corporations Act 2001.
These allegations arose after the Fundão dam, part of BHP’s Samarco mining operation, collapsed on 5 November 2015, resulting in widespread environmental damage and loss of life.
In a statement, the litigation firm said the core of the claim focused on whether BHP had properly disclosed to the Australian Securities Exchange (ASX) “any knowledge of the dam failure risks and the potential for serious adverse human, environmental and financial consequences”.
The proceedings also alleged that the global mining giant engaged in misleading and deceptive conduct by claiming that “safety was its highest priority” and asserting that robust systems were in place to manage risks across its “operations and subsidiaries, including the Samarco mining operation”.
Phi Finney McDonald stated that BHP has “denied the allegations” made in the proceedings, emphasising that the conditional settlement “does not constitute any admission of liability”.
Cameron Myers, principal lawyer at Phi Finney McDonald, described the settlement as a welcome outcome following a lengthy legal journey that included two High Court appeals.
“After a hard-fought battle that included two High Court appeals, this $110 million settlement is a welcome result for BHP investors wherever they are located,” Myers said.
“Phi Finney McDonald is proud to pursue securities class actions that seek to enforce high standards of market disclosure, which we see as vital to good corporate governance.”
