Dam claimant committee 'acted properly' in terminating class action agreement, High Court hears

A committee which voted to kick out class action firm Pogust Goodhead had the power to do so as representative agents under its contract with the firm, the High Court hearing into the dispute over representation in the Mariana dam claim heard yesterday. 

Sa’ad Hossain KC, representing 12 of the committee members, said: ‘The committee has always acted conscientiously on behalf of the clients, the chairman and his colleagues take their obligations very seriously. The committee of course recognised the removal of [Pogust Goodhead] as solicitor is a serious step to undertake and they have not done so lightly. They have put in a position where they had no choice given [Pogust Goodhead’s] conduct…their failure to provide information.'

Hossain described Pogust Goodhead as 'a shell of its former self. A firm controlled by its funder'. After 'substantial and lengthy consideration' he said the committee had taken the view that the firm had failed. 'What the committee is seeking today is to instruct solicitors with deep knowledge of the case…with the counsel originally instructed. The committee strongly rejects suggestions it has not acted properly.’

More than 27,500 clients have terminated their agreements with Pogust Goodhead, Hossain said, and are now clients of Bailey Glasser International.

In written submissions Hossain said: ‘The Mariana litigation belongs to the clients, not PG or its funders. The committee was not established merely for PG’s administrative convenience. It is the means by which hundreds of thousands of clients exercise collective control over their claims. PG itself told the clients that the committee would be their “voice” and make decisions on their behalf because taking individual instructions would be impracticable.

‘The contractual language [of the conditional fee agreement] gives effect to that purpose,’ he said. The court was told the committee was appointed as ‘representative agents’ in the general management of the litigation.

Judgment was reserved. Mr Justice Waksman indicated he would hand down by Friday or Monday, orally. Consequential arguments could then be heard as he is ‘aware for the need for the parties to have a decision as soon as possible’.