Dame Sara Thornton is modern slavery director at CCLA and Oliver Holland is a partner at Leigh Day
Significant modern slavery case highlights supply-chain risks
Dyson has recently settled the case of 24 migrant workers who were employed by one of its suppliers, ATA Industrial, based in Malaysia.
The workers, from Nepal and Bangladesh, alleged, among other things, that their passports had been retained, their movement restricted and that they had paid recruitment fees resulting in debt bondage. They also alleged excessive overtime, unsafe working conditions and that they were subject to punitive disciplinary practices, including assault. Dyson settled the claim with no admission of liability.
The case is one of the most significant supply chain modern slavery claims to be brought before the English courts and to resolve by settlement. It demonstrates the potential for strategic litigation to address alleged human rights abuses within global supply chains.
Duty of care and supply chain liability
The claim built on the principles articulated in an earlier case, in which the UK courts confirmed that a parent company may owe a duty of care in respect of harm caused by its subsidiary.
In the case against Dyson, the claimants argued these principles were capable of applying beyond corporate subsidiaries to supply chain relationships, particularly where a company designs and implements oversight systems, makes public assurances, or exercises a high degree of knowledge and control over supplier operations.
Jurisdiction and access to justice
The case also illustrates that supply chain claims of this nature can be heard in the English courts.
Although the High Court initially held that the case should be heard in Malaysia, the Court of Appeal allowed the claimants’ appeal, finding that limitations on funding and access to justice in Malaysia, together with other factors, meant England was “clearly and distinctly the appropriate forum in which the case could be tried”.
Case management and disclosure
Although the case has now settled, the judgment following the case management hearing sent a strong signal about the importance of equality between the parties in ensuring effective access to justice.
The court also directed early, targeted disclosure of audit reports and communications between Dyson and its supplier. For investors, this highlights the increasing likelihood that internal governance material may become subject to judicial scrutiny in litigation.
Investor implications
Strategic litigation can create legal precedent, drive remediation, rebalance power, act as a deterrent and influence legal reform. This case has created legal precedent, and the 24 workers have settled their claims.
More immediately, it underlines that supply-chain risk is a material issue, not only for companies but also for their investors.
Although Dyson is a private company, the implications extend well beyond a single business. For investors, particularly those with exposure to companies operating in countries or sectors with a high prevalence of modern slavery, the case highlights the material risks associated with apparently poorly governed supply chains.
Investor due diligence must look beyond reassuring statements in ESG reports or human rights policies
First, supply chains are a material risk. For a publicly listed company, any human rights abuses exposed would affect its reputation and, potentially, its share price.
Second, the case illustrates that it is not merely what companies say, but what they do that matters. Cascading policies, periodic audits and whistleblowing mechanisms may be insufficient where systems fail to identify or respond effectively to serious risks.
For investors, the focus should be on whether a company’s controls genuinely operate in practice: how risks are identified, how concerns are escalated, and what action is taken when issues arise. Investor due diligence must look beyond reassuring statements in ESG reports or human rights policies to the reality of how the business is governed.
Third, where problems arise, companies may find it increasingly difficult to contain them. The court’s directions for early disclosure of key documents serve as a reminder that governance processes and decision-making may become subject to forensic scrutiny in litigation.
For investors, this reinforces the need to look beyond the absence of reported controversies and to assess proactively whether investee companies have exposure to risky supply chain practices.
Finally, the case raises the question of whether investors have a role to play when litigation is pursued against an investee company. There may be opportunities for responsible engagement aimed at encouraging early remediation and settlement in a manner that addresses harm and supports the long-term value of the company.
Strategic litigation is rarely about a single case. It can provide a powerful incentive for wider changes in corporate behaviour, helping to protect vulnerable workers from exploitation — because it is the right thing to do, but also because failure to do so can carry legal, reputational and financial risk for businesses and investors.