Pogust Goodhead Accuses BHP & Vale of Underhanded Tactics
Ben Thomson, LawFuel contributing editor
The fight that has roiled the mining and legal worlds isn’t only about environmental responsibility as it now opens a new front with a major legal action allegeding that the firm has been cheated out of massive legal fees.
Pogust Goodhead, the UK-based law firm, has launched a major legal action in London’s High Court against mining behemoths BHP and Vale, accusing them of cheating the firm out of £1.3 billion ($1.7 billion) in legal fees.
The firm’s claim, which follows a “letter before action,” alleges an unlawful conspiracy and inducement of breach of contract that claims the mining giants structured massive compensation settlements in Brazil expressly to cut the law firm and its clients out of the fee process.
The claim, handled by Orrick for Pogust Goodhead, centers on a 2024 settlement in Brazil, valued at R$170 billion ($30.3 billion), which, according to Pogust Goodhead, included terms preventing claimants not only from discussing their cases with the UK firm but also from paying it the fees owed under their representation agreements.
The law firm alleges this was no accident but amounted to a coordinated strategy by BHP, Vale, and their joint venture Samarco to “starve the London action of claimants,” deny the firm compensation for its years of work, and threaten the future viability of its entire business model.
“We believe these actions effectively amount to cheating hard-working solicitors and the claimants they represent,” a representative for Pogust Goodhead claimed, saying the law firm was forced forced it to incur over $1 billion in extra borrowing costs just to keep the UK litigation alive, with more than 600,000 victims represented in the original action.
BHP firmly denies the claim entirely. In a published statement, BHP said it “reject[s] Pogust Goodhead’s claims and accusations in their entirety,” and described the fee litigation as “entirely without merit,” vowing to vigorously contest all allegations. Vale has declined official comment on the specifics but continues to defend its settlement efforts in Brazil.
Pogust Goodhead chief executive Thomas Goodhead said: “BHP and Vale have engaged in a seven-year campaign of lawfare against my law firm and against my clients seeking to deny justice by any means possible.
“The companies have repeatedly broken the law engaging in unethical and unlawful practices showing no respect whatsoever for the English legal system. BHP and Vale’s board members and shareholders should be demanding the removal of all employees complicit in this conspiracy and insisting upon governance reforms to prevent such conduct from ever occurring again.”
Legal Fee Battles
With class actions and mass tort cases increasingly straddling borders, the actual mechanics of recovering legal fees has become as contentious as the underlying cases themselves in some cases.
The claim against BHP is the largest claim in English legal history, which sees Pogust Goodhead acting for over 600,000 individuals, businesses and others over the loss and damage suffered in a claim running to tens of billions of pounds.
Legal industry analysts highlight that how global settlements are structured, especially where parallel actions are underway, which can effectively sidestep, invalidate, or dramatically reduce the compensation owed to law firms working under contingency arrangements abroad.
The Pogust Goodhead case could set a precedent for how multinational corporations and global class action law firms negotiate legal fees when compensation deals are reached outside the jurisdiction where the original representation contract exists.
For Pogust Goodhead the firm obviously wants to protect its payday, but also defend the class actions of this nature, involving massive claims asgainst major corporations without cross-jurisdictional hurdles.
