Samarco dam tragedy payouts from BHP, Vale put big dent in UK class action
More than 250,000 Brazilians registered for the BHP-backed compensation scheme over the deadly dam collapse. Much of the $18m a day paid out by iron ore miner Samarco is going to claimants ditching the Pogust Goodhead class action.
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BHP and its partner Vale have been paying out about $18m a day to Brazilians under a compensation scheme set up over the fatal Samarco dam collapse.
The deadline to apply for compensation under the $US30bn ($46bn) scheme was due to expire this week but has been extended until July 4.
The extension comes as big numbers of Brazilians opt for the compensation cash and abandon what London-based law firm Pogust Goodhead touted as a $70bn class action against BHP.
Much of the $18m a day paid out by iron ore miner Samarco, owned by BHP in partnership with Vale, in recent weeks is going to claimants ditching the Pogust Goodhead class action.
In another twist, Brazilian authorities have now launched legal action against Pogust Goodhead. The Brazilian Federal Public Ministry and several public defenders have accused the law firm of discouraging claimants from joining compensation schemes and threatening hefty financial penalties if they switch.
It is understood Pogust Goodhead is now representing about 450,000 claimants – down from about 700,000 originally on its books – in a case before the English High Court.
BHP and Pogust Goodhead and its claimants are sweating on a judgment on whether the mining giant is liable to pay compensation in the UK case.
If it is found liable, the court will then have to deal with the size of any compensation payout.
The final outcome of the case may not be known until 2027 if it continues.
Pogust Goodhead’s original client list included municipal councils, businesses, community groups as well as individuals hit by the 2025 dam collapse that killed 19 people, devastated the town of Bento Rodrigues and other communities, and caused environmental damage along the Doce River in Brazil.
BHP chief executive Mike Henry signed off on a settlement with Brazilian authorities last November after years of negotiations on adequate compensation for the 2015 disaster.
The settlement included less onerous conditions to gain access to compensation than earlier schemes. It was expected to see direct and indirect benefits flow to about 500,000 Brazilians and potentially limit BHP’s exposure to lawsuits in the UK and other jurisdictions.
Some 125,000 individuals and entities that were part of the UK class action had signed up to the Definitive Indemnity Program known as PID in Brazil, which opened in February.
The terms of the agreement between BHP, Vale and the Brazilian government stipulated that those who opted to receive compensation in Brazil were ineligible to participate in the Pogust Goodhead class action.
Pogust Goodhead chief executive Tom Goodhead indicated on a recent podcast that he would receive 2.5 per cent of any damages paid by BHP in the UK case. The law suit against Pogust Goodhead filed by Brazilian authorities alleges the firm “abuses its rights by harming the community affected by the disaster” and has “abusive clauses” in its contracts with claimants.
The contractual terms alleged to be abusive include requirements for clients to pay fees on settlement deals obtained in Brazil even when Pogust Goodhead is not involved, imposing financial penalties for contract termination and discouraging those affected from joining the compensation scheme.
The Brazilian authorities have requested that the offending contract clauses are nullified and that Pogust Goodhead is prohibited from charging fees on settlements obtained in Brazil and pay $9m in “collective moral damages”.
Pogust Goodhead said the civil action had no merit and was an attempt to force claimants in the UK case to accept a settlement in Brazil despite the English court conclusively asserting jurisdiction three years ago.
“The terms in Pogust Goodhead’s retainers are standard terms in any Conditional Fee Agreement. The retainers are subject to English law and have been in force since 2018. We are confident in the validity, operability and fairness of our retainers and will continue to work collaboratively with the relevant Brazilian authorities to resolve the matters at hand,” a spokesman said.
“For hundreds of thousands of people affected by Brazil’s biggest environmental disaster, the English proceedings are the only means available to seek fair redress.”
More than 250,000 people have registered for the PID, including the 125,000 who were UK claimants. The PID is the expanded compensation program established by Samarco following last November’s settlement agreement in Brazil.
Payments have already been made to approximately 32,000 people to date. This is on top of more than 430,000 people who received compensation under previous schemes.
The PID scheme is accessible for Brazilians were not previously covered due to specific criteria and were unable to prove damages. It includes more flexible criteria and one-off payments of $35,000 Brazilian real ($9600) per person.
The scheme includes compensation for fishermen and farmers in the amount of $R95,000, and water damage payments of $R13,000 per person.
Originally published as Samarco dam tragedy payouts from BHP, Vale put big dent in UK class action
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