International supply chains under scrutiny: Dyson in the Court of Appeal

In December 2024, a group of migrant workers from Nepal and Bangladesh won an appeal, in the Court of Appeal in England, to be allowed to bring legal claims against Dyson in the English courts. The claimants allege that they were trafficked to Malaysia and subjected to forced labour and exploitative conditions, while manufacturing components for the Dyson group. At this stage the English courts are not ruling on the merits of the case. They are just deciding whether England or Malaysia is the appropriate place for the claims to be held. 

The ruling in the case of Limbu v Dyson Technology Ltd [2024] EWCA Civ 1564 is a significant development in the expectations placed on global businesses and international supply chains, concerning alleged civil wrongs committed overseas.

What was the Centre of Gravity?

The claimants alleged that third parties within Dyson's supply chain (Malaysian third party suppliers) had engaged in forced labour and subjected workers to abusive conditions. The alleged abuse took place wholly in Malaysia.

In order to decide whether the claims should be heard in Malaysia or England, the courts needed to determine where the centre of gravity was. The High Court said this was Malaysia as the alleged abuse took place there and Malaysian law was the governing law. The Court of Appeal, allowing the appeal by the migrant workers, said that the court needed to look wider than just location and consider other factors as follows:

• The relevant policies had been established in England. The UK office was the location for Dyson's sustainability team with responsibility for developing mandatory supply chain policies, and auditing and ensuring compliance with those policies.
• The failure to ensure policies were implemented in Malaysia, and to respond to the alleged breaches, were alleged to be a failure by Dyson management and personnel in England.
• The related profits were located in England.

In his judgment, Lord Justice Popplewell said "The allegation of breach by Dyson UK in failing to take steps to see that the policies were implemented in Malaysia, and failing to respond adequately to what was or ought to have been known about the abuse, which is at the heart of the allegations of breach for both the negligence and other tort claims, is an allegation of a failure occurring amongst the management in England and is alleged primarily to have occurred in England, although it will also focus to some extent on conduct in Malaysia."

In other words, the focus was on Dyson UK's role and activity in England. So the Court of Appeal ruled that the centre of gravity was England. The court also noted various practical and financial reasons why the claimants would be better pursuing the case from England.

Significance of the Court of Appeal's Decision

As a result of this ruling, businesses may face increased scrutiny and legal responsibility for the actions of their suppliers, particularly concerning labour practices and human rights violations.  This presents a considerable challenge for businesses with extensive supply chains, as monitoring compliance with anti-slavery policies can be costly and resource-intensive. Consequently, businesses will need to implement more thorough due diligence processes to ensure adherence to ethical standards and anti-slavery policies throughout their supply chains. This will involve stronger labour standards policies and more effective enforcement mechanisms, such as regular audits and training programmes.

Overall, businesses must prioritise ethical standards and anti-slavery measures within their supply chains to avoid legal repercussions and meet growing consumer demands for corporate responsibility.

What happens next?

On 10 February 2025 we learned that Dyson has lodged a permission to appeal application to the UK Supreme Court. The Supreme Court, our highest court, will have to consider these issues and rule on whether the migrant workers' claims should be heard in England or Malaysia.

We can assume this will be a long running litigation. If the Supreme Court agrees that the migrant workers can bring a claim in the English courts, we will still need litigation to decide if Dyson is liable. It will be some time before we have definitive answers to the questions raised by the case.

What should UK businesses be doing now?

UK businesses need to be aware that the UK Government has also stepped up its response to modern slavery. In Autumn 2024, the House of Lords highlighted challenges and issues with the UK's current anti-slavery framework, calling for action. In December 2024, the Government responded by acknowledging these issues and identifying a number of measures under review. In January 2025, the House of Commons Joint Committee on Human Rights launched a new inquiry into forced labour in global supply chains. In February 2025, the UK’s Independent Anti-Slavery commissioner published its strategic plan for 2024 to 2026. The plan supports the introduction of mandatory human rights supply chain due diligence legislation in the UK.  We can see then that modern slavery is very much under the microscope at present in the UK and international supply chains are under greater scrutiny than ever. 

Businesses need to be alert to the possibility that claims can be brought against a UK entity for ESG-related impacts in an overseas country. While we need to wait for a definitive answer, it may also be possible for those claims to relate to the actions of a third party supplier in the supply chain. In the meantime, businesses would be well advised to audit and stress test their existing ethical and environmental policies and compliance frameworks. They need to do this across their global operations, and even look at overseas third party suppliers.

Businesses must also consider the implementation of robust anti-bribery controls within their supply chains. Just as with anti-slavery measures, effective bribery controls are crucial to ensuring ethical conduct throughout the supply chain. This will involve establishing clear policies, conducting regular audits and providing thorough training programs to all employees and suppliers. Failure to address bribery risks can lead to severe legal and reputational consequences, adding another layer of complexity to the already challenging task of managing international supply chains.

Do you want to know more about how the case might impact your international supply chains?

Simply reach out to Paula Bartlett or Karen Plumbley-Jones.

This was also co-authored by Jade Wadey, Trainee Solicitor at Womble Bond Dickinson.