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BHP and Vale accused by UK law firm of 'cheating out' $1.7 billion in legal fees

BHP and Vale face a London suit from a law firm that represents hundreds of thousands people in relation to Brazil's worst environment disaster. The firm alleges the companies tried to cheat them out of legal fees through settlements.

BHP stated that it would contest the allegations and reject them "in their entirety". Vale declined comment.

Pogust Goodhead will demand 1.3 billion pounds ($1.7billion) in unpaid fees from BHP, the company that represents claimants in a case against BHP relating to the collapse of the Fundao Dam in Mariana in the southeast Brazil in 2015.

In the case before London's High Court, the firm represented more than 600 000 Brazilians. In a June presentation, BHP and Vale joint venture Samarco - which owned the dam and operated it - stated that around 130,000 people settled.

In a letter sent by lawyers on behalf of Pogust Goodhead, they claim that BHP, Vale and Samarco pressed claimants to settle their claims "far below their true value".

Pogust Goodhead claims that an agreement for compensation of 170 billion reais ($30,3 billion) signed by Brazil with BHP Vale and Samarco on October 20, 2024 prohibited claimants from discussing or paying the legal fees associated with the deal.

The company says that it also had to incur an additional $1 billion in loan costs for the English lawsuit over the collapse of the dam.

BHP DENIES ALLEGATIONS

BHP's spokesperson stated in a press release that they "reject Pogust Goodhead’s claims and accusations in their entirety, and dispute their legal and factual basis."

BHP will vigorously contest and reject these allegations and claims.

BHP's spokesperson referred to the compensation agreement from last year, saying that: "We still believe Brazil is the best, most effective and efficient place to deliver compensation for the Fundao Dam Failure from Samarco."

Pogust Goodhead has threatened legal action in a "letter before action", which is part of the procedure. This is the latest development after the High Court ruled last month that BHP would be held in contempt for funding a parallel lawsuit in Brazil.

BHP is still waiting for a verdict following the trial of the lawsuit underlying the dam collapse. In that case, Pogust Goodhead claimed it sought damages up to 36 billion pounds.

The dam ruptured in 2015 and released a toxic sludge which killed 19 people. It also left thousands of people homeless, flooded the forests, and polluted all of the Doce River.

The trial started in October and ended in March. BHP denies responsibility and claims that the case is a duplicate of legal proceedings, reparation and repair programmes in Brazil. Sam Tobin is the reporter. Clara Denina contributed additional reporting. Mark Potter (Editor)

(source: Reuters)