BHP, miners warned of more class actions by US law firm Pogust Goodhead after Brazil dam disaster

The head of a US law firm that has set up shop in Australia, prompting warnings about “predatory litigation funders”, says it has more class actions against BHP and other miners in the pipeline.

Pogust Goodhead has been representing some 700,000 Brazilian people, councils, Indigenous communities, small businesses and churches in a claim in British courts against BHP over a 2015 tailings dam disaster.

The firm set up an Australian office in February, which global managing partner Thomas Goodhead said at the time was “establishing a base in BHP’s backyard to ensure we explore every avenue in our fight for justice for the victims of one the world’s worst environmental disasters”.

BHP and partners Samarco and Vale have now offered a $39 billion settlement (US$25.7 billion) which would include $11.9 billion already spent on remediation and compensation after the dam collapse and $22.2 billion in cash payments over more than a decade to Brazilian federal and local governments.

But Mr Goodhead said on Wednesday he expected Brazil’s government would reject this offer.

He pointed out that while the settlement offer includes what sounds like a large amount of money already paid in remediation and compensation, by the same point of time after the Deepwater Horizon oil spill, BP had spent the equivalent of $100 billion.

And he indicated the Mariana claim might be just the start, saying Pogust Goodhead was “absolutely” looking to bring other cases.

He mentioned having been contacted by communities in Papua New Guinea about the legacy impacts of BHP operations there, looking at a case related to the BHP, Anglo American and Glencore-owned Cerrejon coal mine in Colombia, and potential Rio Tinto’s Juukan Gorge disaster.

“Until these companies stop committing environmental crimes, then there’s a role for firms such as mine to be seeking to hold them to account,” he told ABC’s Radio National.

Former Treasurer Josh Frydenberg sought to crack down on litigation funding and class action in the previous parliament by tightening corporate governance rules.

He also attempted to cap legal fees at 30 per cent of payouts but that legislation foundered in the Senate.

Pogust Goodhead has previously faced accusations of taking fees worth up to 50 per cent of payouts in a case involving diesel car makers.

Senator Cash said a conservative estimate put the value of claims against Australian businesses at $10 billion in a single year, before the crackdown.

However, the changes were rolled back through the combination of a court decision and Labor unwinding them after it won power.

“These predatory litigation funders and class action law firms are a direct threat to the economic well-being of Western Australia as their stated intention is to come after mining and resources companies,” Senator Cash said.

“It is for the Albanese Labor Government to explain why it is actively rolling back regulation of the predatory class action industry while taking political donations from class action law firms.”