London claimant firm secures landmark $552m financing deal

Pogust Goodhead, which is taking on BHP and Mercedes, secures ‘watershed’ deal with investment manager Gramercy 

Tom Goodhead Image courtesy of Pogust Goodhead

The London-based claimant law firm taking on mining giant BHP in a £36bn suit has unveiled a $553m (£453m) investment. 

Pogust Goodhead hailed the corporate debt finance deal with emerging markets investment manager Gramercy as the largest worldwide investment in a law firm, as well as Gramercy’s biggest single investment to date. 

The firm, which was only founded five years ago by barrister Tom Goodhead and US lawyer Harris Poghurst and made its name with litigation relating to the diesel emissions scandal, said it was “following a trajectory more like a fintech start up than a traditional law firm”. 

“This deal shows that global investors have good faith in the outcome of our cases,” Goodhead said. “It will not only ensure we bring our existing cases home, but we are putting global corporate giants on notice that we have the financial muscle to take them on for their wrongdoing.

“We are taking on some of the largest companies in the world – BHP, Mercedes, Johnson and Johnson, Bayer. These companies have access to infinite resources to litigate against these cases. This deal levels the playing field and gives us the ability to go toe-to-toe with them.”

Pogust Goodhead describes itself as a partnership between British, Brazilian, American and Dutch lawyers and has grown to house more than 600 employees, with around 270 in its London headquarters and the rest spread across offices in Edinburgh and Amsterdam, four locations in the US and another three in Brazil.  

News of the Gramercy deal follows the firm securing a landmark judgment from the Court of Appeal in July last year that means its case against mining giant BHP over the 2015 Mariana dam collapse in Brazil will be heard in a UK court. The case has ballooned to include more than 700,000 plaintiffs, making it by some margin the largest group claim in English legal history, with BHP facing claims for compensation amounting to £36bn. 

The firm said that to date it has raised £700m in financial backing, including £150m from ‘special situations’ investor North Wall that was allocated to specific ESG-related cases, with work in progress valued at more than £11bn.

The firm is also active in the UK consumer claims space and is currently representing more than two million clients suing 14 car manufacturers in relation to the Dieselgate scandal. In May last year it secured a settlement on behalf of more than 15,000 claimants in the Volkswagen NOx Emissions group litigation and will face Volvo and Mercedes in court later this year. 

Chief operating officer Alicia Alinia said the investment from Gramercy was a “watershed” moment for Pogust Goodhead that would enable the firm to focus on its two main cases, as well as develop cases it had chosen from the “enormous” number of referrals it had received in the past few months. 

She added that it would also help the firm, which will shortly be moving to new offices in London and is planning to expand into new jurisdictions, to develop its infrastructure. 

Goodhead, who acts as global managing partner and CEO, said the firm’s work represented “a capitalist solution to a capitalist problem”.  

“We are not trying to destroy these companies,” he said. “We are taking them on for corporate misconduct, anti-competitive behaviour, corporate harm and misuse of the environment. The cases we are taking will set the bar for how serious we are as a global society about ensuring that big business is held accountable and upholds its obligations and responsibilities to the communities in which it operates.”

Robert Koenigsberger, founder and chief investment officer of Gramercy Funds Management, added: “The firm has an exceptional track record and we have been impressed by the team and their approach to complex litigation.

“Allocating to this transaction is clearly consistent with Gramercy’s mission to positively impact the well-being of our clients, portfolio investments (and their communities) and team members. The investment materially aligns with our ESG and impact investing objectives.”

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