Class action firm Pogust Goodhead has applied to the High Court after a rival legal team associated with the firm’s founder claimed it would be the new solicitor on record in the ongoing Mariana dam litigation.
Bailey Glasser International (BGI), a venture set up by former Pogust Goodhead figures, announced last week that it had been chosen by a ‘client committee’ to act in the next stage of High Court proceedings.
Pogust Goodhead brought the initial claim, on behalf of some 420,000 claimants following the 2015 Brazillian dam collapse.
In November last year, the High Court found the collapse of the Fundão Dam, operated by Samarco, a joint venture between mining giant BHP and Brazilian company Vale, had been ‘foreseeable’. It found BHP was ‘strictly liable’. A further trial – the phase 2 trial – will deal with quantum.
Some former Pogust Goodhead partners and employees who worked on the Mariana dam litigation now work for BGI in its London office. PG’s co-founder, Tom Goodhead, served briefly as a BGI director last year. On the firm’s website, BGI lists the BHP group litigation as part of its collective redress and class actions work.
It said: ‘Partners and senior lawyers now at BGI led the teams that successfully established English jurisdiction and won the 14-week liability trial before the High Court. In addition, BGI partners also had lead responsibility for the causation and quantum phase of the litigation, securing an early trial listing and devising innovative and efficient case-management strategies.’
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In June Pogust Goodhead announced a ‘strategic partnership’ with litigation heavyweight Quinn Emanuel Urquhart & Sullivan as it prepared for the phase 2 trial.
The firm has made an application to the High Court seeking declaratory relief that the client committee has no power to give notice or terminate the collective conditional fee agreements and is not entitled to ‘obstruct or prevent the claimant’s instruction’ of Quinn Emanuel and a new counsel team.
A spokesperson for Pogust Goodhead said the High Court application seeks to resolve ’the underlying legal question: whether the client committee has the contractual authority to make a decision of this magnitude collectively on behalf of the hundreds of thousands of claimants represented by Pogust Goodhead’.
The firm said its position was that the committee ‘does not have the authority, acting on its own, to transfer the claims of hundreds of thousands of other people who have individual contracts with the firm’.
It added: ‘The validity of the purported transfer is disputed and is now before the court. A change of representation at this stage of one of the largest group litigations ever brought before the English courts is not a simple administrative matter. It may have significant contractual, procedural and financial consequences, including issues relating to adverse costs insurance, litigation funding and, most importantly, the timetable for the phase 2 trial.’
A spokesperson for Humphries Kerstetter, representing the client committee, said: ‘The client committee was established to represent the collective interests of the claimants and has broad decision-making powers over the conduct of the litigation, including providing instructions to the lawyers and taking the steps necessary for the continuation or resolution of the case.
‘The committee acted within those contractual powers, repeatedly raised serious concerns about the conduct of the litigation, including through a formal notice, and sought independent legal advice before concluding that a change of representation had become unavoidable. The committee remains fully confident in the decision it took to protect the interests of the people it represents.’
Speaking last week on the purported new arrangement, Faranak Ghajavand, partner and head of commercial disputes at BGI and a former Pogust Goodhead partner who worked on the Mariana litigation, said BGI was ‘grateful to the client committee for the trust and confidence it has placed in us’.
BGI said the vote to terminate the retainer with Pogust Goodhead and appoint BGI was unanimous among committee members.
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