Court of Appeal affirms English jurisdiction in Dyson migrant worker claims

The Court of Appeal has overturned a High Court decision that declined jurisdiction over claims brought by migrant workers against English and Malaysian companies within the Dyson group. The claims involved alleged abusive employment practices against workers in Malayasia by one of Dyson's Malaysian suppliers (Limbu v Dyson Technology Ltd [2024] EWCA Civ 1564) [1].

The now overturned High Court decision had suggested that UK-based defendants might be able to resist having the English courts hear the claims on jurisdictional grounds. The Court of Appeal’s decision could make it harder for UK-based defendants to resist English court jurisdiction over transnational tort claims.

Background

A group of 24 migrant workers employed at factories in Malaysia, which manufactured components for Dyson branded projects, brought claims in tort and unjust enrichment against three defendants in the Dyson group: Dyson Technology Limited; Dyson Limited and Dyson Manufacturing Sdn Bhd (the Dyson Entities).

The workers were nationals of Nepal and Bangladesh, who had been recruited in their home country and transported as migrant workers to two factories in Malaysia. The Claimants were required to live in accommodation provided to them by their employer.

The workers alleged forced labour and exploitative conditions, claiming they were recruited to work via recruitment brokers, leaving them subject to debt bondage. In addition they claimed mistreatment including being forced to work substantial overtime; refused annual leave; not paid the legal minimum wage; subjected to onerous production targets; and punished if they failed to meet targets, including by way of intimidation and physical violence.

The majority of the Claimants have since returned to their native countries. They all speak little to no English or Malay and are all “extremely impoverished”.

The first and second Defendants (Dyson Technology Limited and Dyson Limited) are domiciled in England, with the third Defendant (Dyson Manufacturing Sdn Bhd) being domiciled in Malaysia.

The Dyson Entities challenged the English court's jurisdiction at the outset, arguing that Malaysia was the proper forum. The High Court initially stayed proceedings against the first and second Defendants (those being the English entities), setting aside the order that gave permission to serve out of jurisdiction on the Malaysian entity, and ruled that Malaysia was the appropriate jurisdiction for the claim, finding that there were not any special circumstances requiring the trial to take place in England.

This decision was subsequently appealed by the Claimants.

Court of Appeal Decision

The Court of Appeal has since overturned the decision of the High Court. In doing so, it identified a number of errors of principle and determined that the following factors meant the dispute was more connected to England than Malaysia:

1. Two of the three Dyson Entities (those being the primary Defendants) were domiciled in England, with England also serving as the centre of management and operational control for the wider Dyson group.
2. The litigation against all three of the Dyson Entities, including the Malaysian subsidiary, would have been handled in the UK. The Judge identified this as a significant connecting factor to England as a forum for the litigation to take place.
3. The policies central to the claims (those being the Dyson Ethical Code of Conduct, the Dyson Modern Slavery and Human Trafficking Statement 2020, the Supply Chain Foreign Migrant Worker Recruitment and Employment Policy and the Dyson Supplier Accommodation Standard) were developed in England and issued by the English domiciled Dyson entities; the policies having been identified by both the Claimants and the Defendants as relevant.
4. The English domiciled Dyson Entities exercised significant control over the supply chain, including factories in Malaysia where the alleged abuses occurred.
5. The alleged breaches, such as failure to enforce policies and respond adequately, mostly involved Dyson personnel based in England. Communications regarding the abuse were directed to and allegedly ignored by Dyson’s management.
6. The claim of unjust enrichment focused on profits derived by UK companies from the alleged abusive practices in Malaysia, ultimately benefiting the English domiciled Dyson Entities at their centre of trading.
7. Parallel defamation proceedings had been issued in England by the Dyson Entities in February 2022, containing overlapping allegations regarding their responsibility for supply chain abuses. These proceedings were brought by Sir James Dyson against the broadcasters of a Channel Four TV programme which aired in February 2022 and related to the abuse of workers at the factories. Though discontinued, these proceedings indicated England as the appropriate forum, according to the Court of Appeal.
8. The parties could expect similar standards of legal representation in England, which was considered less likely in Malaysia. In particular because of the “huge imbalance between the impoverished and vulnerable claimants and the well-resourced and commercially experienced [Dyson Entities]”.
9. The Claimants would also be able to attend trial and give evidence in person in England but not in Malaysia; with the Claimant’s solicitors having confirmed they are able and willing to bring them to attend in person. In Malaysia, the Claimants would have had to give evidence remotely. Moreover, the Claimants who were still living in Malaysia would have risked deportation if they surfaced.

The Court of Appeal deemed England as the appropriate forum due to these key factors. This decision suggests that UK-based companies may find it challenging to contest jurisdiction in similar claims, ensuring that they remain accountable for the overseas conduct of their group companies, especially when key decisions and policies are made in the UK.

The case is due to return to the High Court for trial, making it one to watch for 2025. There are few precedents where a company assumes a duty to claimants harmed by a foreign subsidiary's actions. Extending these principles to a third-party supplier is unprecedented, and this will be the first case examining such liability for supply chain activities.