Ousted former law firm chief launches bid to wrestle back £36bn BHP lawsuit
The ousted former chief executive of the law firm leading the largest group claim in UK history against mining giant BHP is behind a bid to wrestle the £36bn case from a firm where he previously served as a director, Morning Wire understands.
Thomas Goodhead, who founded Pogust Goodhead (formerly PGMBM) in 2018 with US disputes lawyer Harris Pogust, was ousted as the firm’s chief executive last August over allegations of financial misconduct, allegations which he denied. Goodhead officially left the firm in September.
After years of litigation, the firm secured a landmark High Court victory last November, ruling that BHP was liable for the 2015 Fundão tailings dam collapse.
The Court of Appeal in May this year handed down a judgment refusing the mining giant’s application for permission to appeal.
The firm is leading the largest group action case against BHP on behalf of 420,000 claimants after the collapse of the Brazilian Mariana dam in 2015, which killed 19 people.
The firm was sent a formal notice by the Client Committee raising concern over the management and resourcing of the litigation on 21 August, and eight days later, the company received a notification from the committee’s chairman, the leader of the Brazilian indigenous group, the Krenak community, Marcelo Batista Santana Krenak, alleging they were terminating the firm’s contract on behalf of certain clients.
[Tom] Goodhead appointed the client committee during his time at the firm and reportedly still has a relationship with it, Morning Wire understands.
Krenak has filed a separate legal claim against Pogust Goodhead’s legal entity, PGMGM Law Ltd, according to a court filing seen by Morning Wire.
On 31 August, Bailey Glasser International, a new joint venture led by former partners from Pogust Goodhead and US law firm Bailey & Glasser, of which Goodhead was briefly a director last November, said in a statement it “will replace Pogust Goodhead as solicitors for the clients” in the case following discussions between the client committee and Pogust Goodhead on the claim’s future direction.
However, Pogust Goodhead told Morning Wire it “continues to act as solicitor in the Mariana English litigation, and the court has not determined that BGI has replaced Pogust Goodhead as solicitor for the wider claimant group.”
Dispute heats up
Pogust Goodhead added the Client 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”, and on 4 September filed a High Court application seeking the court’s help to block the committee’s actions.
In a court filing seen by Morning Wire, Pogust Goodhead is alleging the committee cannot lawfully oust it from leading the litigation as well as attempting to block its appointment of Quinn Emanuel in June to handle the damages stage of the trial, claiming it does not hold the right to do either under the relevant client agreements.
According to the filing, Pogust Goodhead said it is entitled to disregard the Committee’s instructions to appoint Quinn Emanuel or a new counsel team.
“Clients are being encouraged to walk away from an established litigation structure on the representation that they can simply move to another firm with no material consequences. Yet those decisions may affect the very contracts, funding, insurance protections and litigation timetable that have enabled this case to reach a 22-week damages trial that is now only months away,” a spokesperson for Pogust Goodhead said.
The law firm added it is “very concerned” and, as a result, made the High Court application “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.”
“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,” Pogust Goodhead added.
When Morning Wire approached them for comment on Tom Goodhead’s involvement, Bailey & Glasser declined to do so.
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,” they added.
Turbulent times for Pogust Goodhead
Pogust Goodhead is also facing a separate £84m lawsuit brought by its own funder last month, Vinci SPS Capital Gestão de Recursos Ltda, over a dispute.
The Brazilian financial services firm alleges that Pogust Goodhead breached its obligations by agreeing to disburse litigation proceeds to barristers and after-the-event insurers without first obtaining its lenders’ required consent.
In another blow to Pogust Goodhead’s group litigation, the High Court rejected the majority of the firms’ ‘dieselgate’ claims brought on behalf of 1.6m UK car owners.
Quinn Emanuel and Bailey & Glasser declined to comment. Tom Goodhead and BHP were approached for comment.