Private Credit Investors Clash Over £36 Billion BHP Dam Collapse Litigation

Private credit investors are at odds over the management of Pogust Goodhead, the law firm leading the UK's largest-ever class action against mining giant BHP. This conflict arose after Thomas Goodhead, the firm's CEO, was removed and placed on leave due to disagreements with Gramercy, a US fund manager and one of the lawsuit's funders. Other previously undisclosed investors in the litigation include US funds Prisma Capital, Jive Capital, and SPS Vinci, with Cliffwater providing a $14 million loan to Gramercy specifically for funding Pogust Goodhead. The firm's 2022 annual accounts revealed £290 million in losses, and auditors noted "material uncertainty regarding an ongoing concern," highlighting the financial strains of this high-stakes legal battle.

The class action, valued at approximately £36 billion, stems from the 2015 Fundão dam collapse in Brazil, which killed 19 people and caused widespread environmental devastation. The English High Court found BHP liable in November 2025, a decision the company intends to appeal. Despite this legal victory, Pogust Goodhead faces challenges, with over 160,000 claimants (20% of the total) having already opted for domestic settlements in Brazil. BHP's lawyers also argue that an additional 200,000 claimants could be removed because their claims were not filed until eight years after the disaster.

The dispute among investors sheds light on the often-secretive world of litigation funding, where investment funds cover legal costs in exchange for a significant portion of any awarded damages. For example, in a previous UK case against the Post Office, litigation funders received £46 million out of a £58 million award, leaving claimants with only £12 million. This business model, which relies on lucrative and lengthy litigation, is now under scrutiny as thousands of claimants await the outcome of Pogust Goodhead's approach following the leadership changes. The second-stage trial on quantum is scheduled for October 2026 to March 2027, with individual claimant damages potentially determined in 2028 or 2029.