High Court orders Pogust Goodhead to pay

The law firm Pogust Goodhead, renowned for managing the UK’s largest class action lawsuit against BHP following the Mariana dam disaster, has faced a significant setback after being directed by the High Court to pay costs amounting to £900,000. The firm attempted to sue Saudi agrifood company SALIC on behalf of Brazilian villagers whose communities were affected when a ship sank and polluted local waterways. Craig Shuttleworth, who heads litigation at Pogust Goodhead, argued in court that the Brazilian firm NMG had obtained power of attorney from the villagers through another solicitor, granting Pogust Goodhead permission to file the lawsuit in England.

However, the evidence presented by Shuttleworth revealed serious discrepancies. No one had actually verified the powers of attorney, and Pogust Goodhead failed to investigate its authority to act “in any way” until six months had passed, at which point they were challenged by SALIC. Upon translating the powers of attorney from Portuguese, it became clear that permission was only granted for pursuing the case within Brazil, not in the UK courts.

As a result of these findings, Pogust Goodhead did not contest SALIC’s application to strike out the claim. Mr Justice Bright condemned the original action, stating that it “should never have been commenced in the first place” and constituted “a serious breach of the obligations that it owed to this court and to other litigants.” The implications of this court ruling represent a significant financial blow to Pogust Goodhead, already strained as highlighted by delayed financial results showing net liabilities of £93 million as of December 2023. Furthermore, with funding from US asset management firm Gramercy, the additional payment to SALIC adds to their mounting financial burdens.