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Class Action Claim Facing £8m Legal Costs Bill

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A recent ruling by the High Court in London will mean that unsuccessful claimants in the well-publicised Municipio De Mariana & Ors v BHP Group PLC & Anor group action claim will need to make an interim payment of £8m to cover 50% of their opponents legal costs.
In making the ruling, High Court judge Mr Justice Turner said that it was wrong to penalise the defendants for the work done on the case. Justice Turner had already struck out group litigation on behalf of some 202,600 Brazilians last November who were claiming compensation following the collapse of the Fundao dam in Brazil in 2015, saying the task of managing such a case would be ‘irredeemably unmanageable’ if it was allowed to proceed.

The judge also refused permission to appeal and set out his reasons in writing following his ruling. Whilst recognising the complexity and scale of the claims, he pointed out that the draft grounds of appeal were the ‘very antithesis of the conciseness required’, coming to 70 paragraphs over 39 closely-typed pages. The firm representing the claimants, London-based PGMBM, have said there is no question of victims of the disaster incurring any of the costs. In commenting further on the case, Justice Turner said:

Their bloated draft grounds serve only to obfuscate rather than to illuminate what they may perceive to be the merits of their challenge. This, in turn, gives rise to the risk that a judge, whether at first instance or on appeal, may be persuaded to give permission to appeal not through a focussed analysis but having been worn down by a process of relentless documentary attrition.”

The judge rejected 15 separate grounds of appeal (the claimants can still go directly to the Court of Appeal) before moving onto the issue of costs. The defendants’ costs, the judge said, could be seen as extremely high, and he noted that the case had been a ‘forensic arms race’. But the scale of the litigation, the value of any successful claims and the volume of material involved could justify such sums. It was noted too that the claimants had more than 1,000 lawyers and paralegals involved in investigating, considering and pleading the claims, as well as nearly 50 English barristers. An interim £8m was awarded with the rest subject to detailed assessment.In response, claimant law firm PGMBM has said in a statement that it intends to challenge the ruling in the Court of Appeal:

We are now seeking permission to appeal and are very optimistic. In the event of any adverse costs ruling, these would be covered by the funders and insurers of the case, not victims of the disaster.”


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