Legal Business Blogs

A £55m settlement: Hogan Lovells and Leigh Day shake on Shell payout to Nigerian village

Royal Dutch Shell, advised by Hogan Lovells, will pay £55m to 15,600 Nigerian fishermen after a three-year legal battle over two oil spills.

Leigh Day partners Martyn Day and Daniel Leader secured the substantial environmental settlement to the African community, having launched a £300m lawsuit in 2012 which was set to go to trial at the High Court in May this year.

Shell will distribute £35m to individuals affected by the spills with a further £20m going to the fishing community. The deal marks the first time affected individuals have been compensated directly, with the Anglo-Dutch energy giant set to pay £2,200 into the bank accounts of everyone in the Bodo community, southern Nigeria, affected by the spills in 2008 and 2009.

Shell instructed Hogan Lovells litigator John Meltzer, who created and then ran the firm’s renowned product liability group for 15 years until 2013. Meltzer had instructed Charles Gibson QC and Geraint Webb QC of Henderson Chambers, with Day instructing Richard Hermer QC of Matrix Chambers.

The Trans-Niger Pipeline has suffered an incidence of operational oil spills between 2006 and 2010 at a rate 133 times greater than the European average. Leigh Day argued that Shell allowed oil to pump into the creek for six weeks before fixing a broken pipeline and, even then, that Shell took over a month to repair the weld defect in the pipeline. The second spill occurred in December 2008, also as the result of equipment failure, and was not capped until February 2009.

Day said that ‘whilst we are delighted for our clients’, the firm found ‘it deeply disappointing that Shell took six years to take this case seriously and to recognise the true extent of the damage these spills caused to the environment and to the those who rely on it for their livelihood’.

He added: ‘We hope that in future Shell will properly consider claims such as these from the outset and that this method of compensation, with each affected individual being compensated, will act as a template for Shell in future cases in Nigeria and in the other countries in which it operates.’

Chief Sylvester Kogbara, chairman of the Bodo Council of chiefs and elders, said: ‘We are hopeful that the clean-up of the Bodo environment will follow suit in no distant time.’