Five firms, 620,000 clients and a quiet defendant: lessons from the Pogust saga

The descent into public farce of the fight over who represents 620,000 Brazilian claimants in the Mariana dam mega-case is a litigation PR case study in its own right. Here, litigation PR adviser Michael Evans explains why the lessons run well beyond one firm.

Five firms are now involved on the claimant side of the largest group litigation the English courts have seen, with up to £36bn at stake. Three cannot agree on which is instructed, and the Stage 2 trial on causation and quantum is listed from April 2027, which will come round fast.

Deep breath.

On 28 August, the client committee working on behalf of hundreds of thousands of Brazilian individuals and communities seeking compensation from BHP in relation to the 2015 Fundão dam collapse voted to replace Pogust Goodhead with Bailey Glasser International (BGI), supported by Hausfeld and advised by Humphries Kerstetter. BGI is a joint venture between the US firm Bailey & Glasser and UK-regulated Edward McCourt & Company LLP and counts several former Pogust Goodhead partners on its roll.

Pogust Goodhead responded that the committee has no authority to terminate its representation of the wider group, that it remains on the record, and that the termination puts claimants’ costs protection at risk. Quinn Emanuel has also denied being dropped.

‘The machine that persuaded hundreds of thousands to join could not persuade their representatives to stay’

Quinn arrived only in June, under a partnership announced with a new Gramercy facility of up to $150m for this case, and its litigators moved into Pogust Goodhead’s offices to run the quantum phase. The committee is reported to have objected, and asked what part the funder played. Where external capital decides whether a case runs, the funder becomes part of the story whether it speaks or not.

BHP, as defendant, has said nothing about any of it. It has been busy in Brazil, fighting over the supply of claimants rather than who represents them. As recently reported by RollOnFriday, it complained to a Brazilian court that Instagram advertising by Bingham Long, a Liverpool firm recruiting for its own claim, breached local advertising rules by steering victims away from BHP’s compensation scheme, and had the posts removed. Bingham Long says many remain uncompensated and free to instruct it. Every victim compensated in Brazil is one fewer suing in London.

This is the first lesson: the defendant that lost on liability picks its fights. The claimant side is having all of them at once, increasingly with itself. The arguments you decline to have in public are a strategy.

The brand cuts both ways

Build a practice on the distance between what companies say and what they do, as Pogust Goodhead has seemingly done, and you supply the yardstick you are measured by. A conventional firm in trouble is written up as a business under strain; a campaigning firm as a hypocrite. Pogust Goodhead was never coy about money: a record funding deal, a reported bonus pool paying partners up to £20m. Its proposition was that capital at that scale and doing right by claimants pulled the same way. That claim is now being tested. When the two diverged, which won?

‘Group claims have scaled faster than the governance and comms infrastructure around them, and reputation is where the mismatch shows’

Allegations of improper spending on private jets and helicopters by since-departed co-founder Tom Goodhead, which Pogust Goodhead has distanced itself from and Goodhead himself has denied, would bruise any firm. Claims brought in Brazil by staff who worked on the case, alleging 12-hour days, harassment and discrimination, cut deeper. Pogust Goodhead says those people were employed by separate entities it did not own, and is appealing a finding to the contrary. That may well be legally right, but it’s reputationally untenable, because the sentence a reader retains is that a firm which made its name on the mistreatment of Brazilians is answering allegations about its own treatment of Brazilians.

Lesson two: firms positioning themselves as fighting for the wronged need governance, HR and disclosure that stand up to the scrutiny they demand of others.

You can contract for clients. You cannot contract for confidence

The client relationship was held in place by paperwork on two levels: individual engagement terms, and an overarching agreement constituting the client committee. The committee is taking on the second agreement. It says the agreement lets it terminate for the whole group; Pogust Goodhead says it does not. What prompted the client committee’s calls to move adviser is clearer: according to the Law Society Gazette, it raised concerns about the management and resourcing of the litigation on 21 August, was not satisfied, and acted a week later.

Pogust Goodhead has now applied to determine whether the committee has authority to decide collectively for hundreds of thousands of claimants, and may or may not win. It is also arguing that people who say they have left remain its clients, and one of them, the indigenous leader Marcelo Krenak, issued a Part 8 claim against the firm on 4 September according to City AM. A contract can settle who is on the record. It cannot manufacture confidence.

Meanwhile, the paperwork is under attack from another direction. Prosecutors in Brazil are challenging the sign-up contract used to recruit claimants, alleging abusive terms including restrictions on termination and penalties for withdrawal. The allegations are untested, but they put a question over the instrument the firm relies on.

Lesson three: this was not a failure of investment. Pogust Goodhead built claimant communications on a scale the English market had not seen before: digital sign-up at volume, a campaign film, a press operation. What it could not do was satisfy a committee of its clients asking how the case was run.

Those are different disciplines. Campaign communications acquire claimants and apply pressure. Client communications keep the ones you have, and is two-way and unglamorous. The machine that persuaded hundreds of thousands to join could not persuade their representatives to stay.

The rules police the wrong thing

Civil justice rules focus strictly on stopping funders from directing the legal case, ignoring the fact that public messaging can derail a group action just as quickly as a bad legal argument.

It is hard to envisage a workable regime that gives a funder approval rights over what claimants are told because a funder with a veto on client updates edges towards improper control, and a solicitor’s regulatory duty to inform its clients cannot be contracted away.

Market participants should instead consider drawing a clearer boundary between private client updates and public PR. Agreements could envisage explicit protocols for who announces a settlement or a change of leadership, require notice before either side speaks to the media, and confirm that direct client updates remain exclusively the law firm’s domain, for example.

Ultimately, it pays to consider these boundaries at the term-sheet stage, because such clarity is unobtainable once a dispute over control begins.

Lesson four: consider communications when the funding is negotiated.

Do not fight over the record in public

Competing statements tell 620,000 claimants that the people running their case cannot agree on who runs it. One promises continuity, the other warns that costs protection is in jeopardy, and nobody appears in charge.

Worse is the asymmetry: a robust on-record defence of the firm’s own position alongside a decline to comment on the claimant and staff stories.

Lesson five: if you speak only when your commercial interest is at stake, your silence elsewhere becomes the story.

The real question

What happens next for Pogust Goodhead is ultimately a question for its lenders. The real question is what the rest of the market takes from this. Group claims have scaled faster than the governance and communications infrastructure around them, and reputation is where the mismatch shows.

The Mariana case will outlive this row. Liability is established; evidence runs from April to December 2027, with closings in March 2028. Whoever is on the record by then inherits a claimant group that has watched its lawyers argue publicly about who owns it.

Reputation there is no longer about which firm acts. It is about whether 620,000 claimants, and the jurisdiction that took their case, still have faith in the lawyers running the claim, whoever they turn out to be.