Pogust Goodhead wins fight to retain control of £36bn Mariana litigation

Pogust Goodhead, which recently announced a rebrand to PGMBM, has won a major High Court ruling in its fight to retain control of the £36 billion Mariana dam litigation, after a judge rejected an attempt by a claimant committee to replace the firm with rival Bailey Glasser International (BGI).

Justice Waksman ruled on Monday that the committee did not have the authority to terminate Pogust Goodhead's retainer on behalf of more than 400,000 claimants or appoint BGI in its place.

The decision could have implications beyond Mariana, raising questions about how much power claimant committees have to change legal representation in large-scale group actions.

Limits of authority

The dispute began in August when a committee representing claimants affected by Brazil's 2015 Mariana dam disaster voted to remove Pogust Goodhead, accusing the firm and litigation funder Gramercy of failing to act in their best interests.

Pogust Goodhead challenged the decision, arguing that the committee's authority to manage the litigation did not extend to terminating its agreements with individual clients.

Justice Waksman agreed, finding that the committee's broad powers to manage the litigation did not give it the right to dismiss the firm on behalf of everyone.

The ruling leaves Pogust Goodhead representing the vast majority of claimants, although the ruling does not prevent individual claimants from choosing to change law firms on an individual basis.

Billions at stake

A significant issue considered by the judge was the potentially enormous financial exposure facing claimants if the committee had been able to terminate their agreements without their individual consent.

Pogust Goodhead argued that termination without cause could trigger approximately £2 billion in legal costs, equivalent to around £5,000 per claimant.

Justice Waksman examined the possibility that hundreds of thousands of individuals could face substantial financial liabilities arising from a decision they had not personally authorised.

He rejected the argument that the size of the claimant group made individual consultation impractical.

What’s next

BGI said it shared the committee's disappointment that its authority to change legal representation on behalf of all Mariana claimants had not been upheld.

"The committee has been clear about who it believes should represent the claimants, having raised serious and repeated concerns about the conduct and direction of the litigation under the current firm," a BGI spokesperson said.

"The committee will now consider its options carefully with its legal advisers and it has BGI's full support in doing so."

Individual claimants remain free to appoint different lawyers, although Pogust Goodhead stressed that they must understand the potential financial and insurance consequences of switching firms. The firm said the litigation has a bespoke insurance arrangement designed specifically for the Mariana claim.

Pogust Goodhead also indicated that it intended to dissolve the existing claimant committee following a breakdown in trust between the two sides.

Justice Waksman expressed reservations about any immediate move to remove the committee ahead of an upcoming case management hearing, saying he would be "very surprised" if a judge ordered its dissolution at this stage. He suggested PG could seek court intervention if the committee deliberately obstructed preparations.

Justice Waksman also refused the committee permission to appeal, although it can apply directly to the Court of Appeal.