Class action firm PGMBM - formerly known as Pogust Goodhead - has won its fight to keep control of the ongoing Mariana dam litigation. It was challenging an assertion by rival firm Bailey Glasser International (BGI) which said it had been chosen by a committee of claimants to take over the next stage of the mammoth class action.
Pogust Goodhead brought the initial claim, on behalf of some 420,000 claimants over the 2015 collapse of the Fundão dam in the Mariana municipality of Brazil. In November last year, the High Court found the collapse of the 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 phase 2 trial, listed for next year, will deal with quantum.
Pogust Goodhead argued the committee did not have the authority to terminate the collective conditional fee agreements (CCFAs) or litigation management agreements (LMAs) with the firm. The commitee argued it had always acted properly.
In an oral judgment given this morning, Mr Justice Waksman found for Pogust Goodhead that the committee did not have the authority it said it did and therefore could not terminate the agreements or instruct new solicitors. The judgment means that Pogust Goodhead remains on the record as the instructing solicitors.
Read more
Waksman acknowledged that the committee 'was critical of the loss of counsel team which had been instructed by PG but then departed due to a dispute over their fees. PG was criticised by the committee to appoint Quinn Emanuel to assist on litigation while PG remained on record’ as well as critiques over Pogust Goodhead’s funder Gramercy.
He added that the ‘CCFA and LMA make a number of distinctions between the committee and the clients’ and noted that the ‘committee is not a defendant to PG’s alternative claim…against all of the individual clients’.
At the two-day hearing earlier this month, the court heard that Pogust Goodhead estimated that if the contracts were terminated, the claimants would be liable for around £2 billion in costs.
Ruling today, Waksman said ‘it is plain to me that Pogust Goodhead’s construction is preferred’. He found that the committee 'had no power to terminate the PG retainer. It inevitably follows it had no power to instruct BGI since that really depends on termination powers. Indeed, I did not understand the committee to argue otherwise. The committee had no power to instruct BGI.’
The judge also ordered £300,000 costs to be paid on account within 14 days. The hearing, dealing with consequential arguments, continues.
A spokesperson for Humphries Kerstetter, acting on behalf of the client committee, said: ‘The client committee raised serious concerns with its lawyers Pogust Goodhead. When those concerns were not resolved it took the decision to seek to appoint new legal representation to the case.
‘We will be analysing the judgment in depth before deciding on our next steps. As has always been the case, any decision will be made in the best interests of all claimants.’
No comments yet