Instruments: Claims withdrawn
Class action firm Pogust Goodhead (PG) was “unhelpful, uncooperative, deliberately obfuscatory and misleading” by not revealing its client’s litigation funding problems for three years, the Competition Appeal Tribunal has ruled.
As a result, the CAT ordered proposed class representative (PCR) Elisabetta Sciallis to pay indemnity costs from April 2023, when negotiations collapsed with the funder she had told the tribunal and the defendants she was talking to.
It summarily assessed three of the defendants’ costs at £608,000 and ordered her to pay interim costs of £850,000 to the other two, pending detailed assessment.
The decision followed Ms Sciallis withdrawing her proposed collective actions against five manufacturers of musical instruments – Fender, Korg, Roland, Yamaha and Casio. These were based on the Competition and Markets Authority’s findings in 2020 that they had restricted retailer freedom to set prices online.
The five collective proceedings claim forms were filed in 2022 and 2023, although there were various extensions around service, with one running into 2025.
Ms Sciallis’s initial evidence in March 2022 was that she was finalising a litigation funding agreement with North Wall Capital to provide cover up to £6.5m, a figure that rose to £18m later in the year when more of the claims were filed.
However, negotiations between North Wall and Pogust Goodhead ceased at some point between January and March 2023.
When the Casio claim was filed in May 2023, Ms Sciallis’s witness statement said she was “making arrangements for the provision of third-party funding for fees and disbursements”.
The CAT said: “Neither the tribunal nor the PDs [prospective defendants] were informed that North Wall had withdrawn its involvement in the proceedings.
“Instead, in extensive correspondence between the solicitors for Yamaha, Roland and Korg and Pogust Goodhead, Pogust Goodhead repeatedly refused to confirm the status of the PCR’s funding arrangements.”
The tribunal rejected the suggestion that the change in language in May 2023 that omitted reference to North Wall was sufficiently clear to understand that its offer was off the table.
It was only a week before a case management conference in March 2026 that PG confirmed for the first time that the agreement with North Wall had “never materialised” and efforts to find another funder had failed. Ms Sciallis listed 25 funders that had been approached.
The tribunal ordered a preliminary issues hearing in June to consider her funding, shortly before which she applied to withdraw the claims.
In a letter to the CAT, PG said efforts to secure replacement funding – including with the assistance of London law firm Edwin Coe – had continued “until very recently”, which was why Ms Sciallis had not sought to withdraw the cases earlier.
This meant the June hearing ended up solely on the issue of whether the defendants’ costs should be assessed on the standard or indemnity basis.
The CAT said a “prudent” PCR would “normally wish to ensure that its funding arrangements are finalised before its collective proceedings claim form is filed” – but it acknowledged there could be reasons to file first, such as limitation.
“In such a case, the proposed class representative should give a full and candid explanation of the stage the funding arrangements have reached, the reasons why it has not been possible to finalise a funding agreement before filing, and how much further time is expected to be needed to do so.”
The tribunal could then give a “reasonable further period” to finalise funding, during which time the proposed defendant “should not be required to take any steps that would require it to incur material costs”.
Failing this, the CAT could consider summarily dismissing the action.
The CAT went on that “if, at any time during the proceedings, the facts and matters set out in the claim form and accompanying evidence change in a material way relevant to the authorisation or eligibility conditions for certification of the collective proceedings, the class representative and their legal representatives have a duty to bring that matter promptly to the attention of the tribunal and the other parties to the proceedings”.
This duty of candour and transparency was not “a particularly onerous” one but Ms Sciallis and her lawyers failed to meet here.
“Instead of being candid and transparent with the tribunal and the PDs, Pogust Goodhead repeatedly refused to answer the enquiries made by the solicitors for Yamaha, Roland and Korg over a period of three years from early 2023…
“[Counsel for Ms Sciallis] accepted that Pogust Goodhead’s responses were opaque and unclear. They were in fact unhelpful, uncooperative, deliberately obfuscatory and misleading…
“Pogust Goodhead seems to have thought that it was entitled to withhold this information from the PDs and the tribunal until the very last minute before a CMC was held before the tribunal.”
The failure to disclose the breakdown of negotiations with North Wall “was unreasonable to a high degree and outside the norm of litigation practice”, the CAT concluded, meaning that costs from April 2023 should be assessed on the indemnity basis.
In a statement, PG said: “The outcome reflects the increasingly challenging funding environment for complex class action litigation in the UK, which is making it harder to pursue and sustain claims for those seeking justice in the face of corporate wrongdoing.
“Whilst difficult, these decisions reflect disciplined case management and a focus on directing resources towards matters with the strongest prospects of delivering meaningful outcomes for clients.
“Pogust Goodhead remains focused on advancing significant litigation and ensuring that the cases we pursue are best positioned to achieve the strongest possible outcomes for those we represent.”
PG is having a rough time in the courts at the moment.
In May, it was ordered to make a £900,000 interim costs payment after a judge found it did not have authority to start proceedings on behalf of Brazilian claimants, while last month a judge partially struck out a defence it lodged in a battle over £3.1m in fees which litigation boutique Seladore Legal says it was owed for support it gave PG on the Mariana Dam case.
Last week’s major Dieselgate ruling – for which PG is one of the lead solicitors – went largely against the claimants.
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