Bright: Serious breach
Class action law firm Pogust Goodhead (PG) has been ordered to make a £900,000 interim costs payment after a judge found it did not have authority to start proceedings in 2020 on behalf of Brazilian claimants.
The firm did not contest the strike-out, a decision Mr Justice Bright said yesterday was “undoubtedly correct”.
He went on: “It is a decision that could and should have been arrived at years before. More than this, these are proceedings that should never have been commenced in the first place.”
The case of Cardoso & Ors v Salic (UK) Ltd concerns a ship sinking in the north of Brazil, in the Amazon region, which allegedly caused contamination affecting local communities.
Bright J explained that PG’s purported authority to act on behalf of the claimants depended ultimately on powers of attorney in Portuguese signed a decade ago by each claimant that conferred authority on a local Brazilian lawyer.
The powers conferred by them were delegated by the various local Brazilian lawyers to a single law firm, which in 2020 purportedly gave authority to PG to commence proceedings in England.
The claim form was issued on 29 December 2020, with a statement of truth, signed by a solicitor, which warranted PG’s authority.
Evidence showed that PG did not have sight of the original powers of attorney at this stage.
Bright J continued: “Pogust Goodhead does not appear to have investigated its authority to act in any way until some time after August 2021, and then only because its authority was questioned by the defendant.”
Even then, the investigations “proceeded extremely slowly” and resulted in “repeated assurance” to the defendant that authority existed.
“These compounded the original failure to investigate authority prior to the issue of the claim form,” said the judge.
“I unhesitatingly accept the evidence of the defendant’s expert on Brazilian law, Dr Melo, that powers of attorney gave authority to the local Brazilian lawyers to act on their behalf in Brazil, in court in Brazil or out of court.
“They did not give authority to commence proceedings outside Brazil.”
Bright J continued: “Pogust Goodhead should not have commenced this action without first confirming its authority to do so, which would have required (as a minimum) checking the powers of attorney and taking legal advice from independent Brazilian lawyers.
“Had Pogust Goodhead done so, it should have been immediately obvious that its authority to act was at least questionable, and should be resolved by seeking confirmation from the claimants.”
It was only in November 2025 that PG first expressed concern that it may not have authority but it then confirmed that it did.
But last week, PG’s solicitors, Clyde & Co, said the strike-out application would not be opposed.
Bright J said: “Pogust Goodhead’s failure to investigate and confirm its authority, before issuing the claim form, was a serious breach of the obligations that it owed to this court and to other litigants – notably, to the defendant.”
Ordering that it pay costs on the indemnity basis, the judge based the interim payment on a bill – after he had reduced it for excessive hourly rates and counsel’s fees – of around £1.28m.
“The approach of the costs judge on the detailed assessment will be very different, but I am comfortable that my figure of £900,000 represents a safe estimate for the purposes of a payment on account.”
Bright J also gave the defendant liberty to restore its application to join PG’s backer, Gramercy, as a party for costs purposes.
PG declined to comment.
The firm is best known for the huge Mariana Dam litigation and earlier this month the Court of Appeal refused BHP’s application for permission to appeal the High Court’s landmark liability ruling in favour of its clients.
Last month, meanwhile, Clyde & Co itself was ordered to pay wasted costs [1] because it wrongly told defendants in a case that it was instructed by the claimant’s insurer.