City law firm Pogust Goodhead is facing an £84m lawsuit from its funder, Vinci SPS Capital Gestão de Recursos Ltda, a Brazilian financial services firm. The dispute is linked to Pogust Goodhead's group action against mining giant BHP.
Vinci SPS Capital alleges that Pogust Goodhead breached its obligations by agreeing to disburse litigation proceeds to barristers and after-the-event (ATE) insurers without first obtaining the lender's required consent. The investment firm had provided 90.09m Brazilian Reais (£12.8m) for the legal action against BHP.
At the centre of the dispute is a £42.7m interim payment for costs that Pogust Goodhead received into its client account. Vinci SPS claims Pogust Goodhead is legally required to transfer these funds into a designated receivables account but has not done so, allegedly delaying the account's opening for over four and a half years.
Pogust Goodhead reportedly claims it cannot transfer the funds until it issues an invoice to claimants and discharges a trust in favour of its ATE insurers. However, Vinci SPS has rejected this position, stating its rights take priority. Vinci SPS launched legal action through Fieldfisher, seeking over £84m plus nearly £600,000 in legal costs. Pogust Goodhead has instructed DAC Beachcroft to defend it.
Last November, the High Court found BHP liable for the 2015 dam disaster in Brazil, which killed 19 people. The next phase of that trial, focusing on causation and loss, is scheduled to begin in April 2027.