Tug-of-war over Mariana dam claim as rivals claim leadership

Collective action firm Pogust Goodhead has said that a rival legal team purporting to represent claimants in the Mariana dam case has no authority to do so. 

In the latest twist to one of the largest group claims in English legal history, it emerged on Tuesday that Bailey Glasser International (BGI) had been chosen by a ‘client committee’ to act in the next stage of High Court proceedings.

BGI is the first international venture of US firm Bailey & Glasser, which has a presence in 13 American states and more than 130 lawyers. It says it will work alongside claims specialist Hausfeld & Co LLP which will provide support conducting the litigation in London.

Under the purported arrangement, senior members of the existing Mariana counsel team would return to work on the litigation under BGI’s conduct of the litigation to ensure continuity for claimants.

Pogust Goodhead, which brought the initial claim on behalf of 420,000 claimants following the 2015 Brazilian dam collapse, secured a High Court victory last November when Australian mining giant BHP was found to be strictly liable as ‘polluters’ in respect of damage caused.

Following the announcement, Pogust Goodhead issued a statement questioning the validity of the appointment and insisting that it will represent claimants when issues around causation and quantum go to trial next year.

A PG spokesperson said: ‘The client committee has no authority to terminate Pogust Goodhead’s representation on behalf of the wider group of claimants in the proceedings arising from the Fundão dam collapse. Pogust Goodhead continues to represent hundreds of thousands of Brazilians affected by the worst environmental disaster in the country’s history, and the litigation continues as normal. Following the landmark judgment holding BHP liable for the Mariana disaster, the proceedings have now moved into the phase of assessing losses and determining compensation.

‘A further US$150m in funding has also recently been secured to support the work required during this next phase. We remain committed to addressing legitimate questions, protecting our clients’ interests, avoiding unnecessary disruption and maintaining the current timetable for the trial, which is scheduled to begin in April 2027.’

The spokesperson added that after-the-event insurance for the claims has been secured through Pogust Goodhead and was arranged on the basis that the London-based firm continues to act in the case. Any switch in representative could place claimants costs protection in jeopardy, the spokesperson said. 'This is of utmost concern to us, particularly given the misinformation being circulated about the implications of the committee’s actions. Pogust Goodhead remains the solicitor of record and continues to act in claimants’ best interests, with the overriding objective of protecting both the litigation and the safeguards established for claimants.’

It is understood that on 21 August, Pogust Goodhead received a formal Cure Notice from the client committee raising concerns regarding the management and resourcing of the litigation. On 29 August, PG received notification from the chairman of the client committee purporting to terminate the contract on behalf of certain clients.

In its announcement BGI acknowledged the work done by Pogust Goodhead in bringing the case to the High Court in London and securing the ruling on liability. But the clear message is that it is now taking instructions on the group claim.

Faranak Ghajavand, partner and head of commercial disputes at BGI, said: ‘Bailey Glasser International has taken over conduct of the Mariana litigation in England, working alongside Hausfeld & Co LLP in London. Our priority is continuity for the claimants, with the case proceeding without disruption.

‘It will be led by a team with many years’ experience on the case and a deep familiarity with the issues. We are grateful to the client committee for the trust and confidence it has placed in us, and we will be singularly focused on securing fair compensation for the claimants as efficiently as possible.’

The firm said the committee had the authority to terminate contracts with firms responsible for the case and to authorise the collective transfer of the litigation to different lawyers. The group has broad decision-making powers over the litigation as a whole, including providing instructions to the law firm on behalf of all claimants it represents, and the vote to terminate the retainer with PG and appoint BGI was unanimous among the committee’s members.