A US hedge fund involved in financing a £36 billion lawsuit against mining company BHP over a dam collapse in Brazil that resulted in 19 deaths has encouraged the lead UK lawyer on the case to accept a settlement offer, shortly before supporting his removal as head of his law firm. The collapse of the Mariana dam in 2015 has led to one of the largest environmental litigation claims to date, representing over 420,000 Brazilian plaintiffs.

Tom Goodhead, then chief executive of litigation boutique Pogust Goodhead, was urged by Robert Koenigsberger, managing partner at litigation funder Gramercy, to accept a settlement offer of approximately $1.4 billion, made by BHP and co-defendant Vale. Goodhead believed this offer significantly undervalued the claim, which seeks compensation on behalf of those affected by the disaster. In a recorded conversation from June 2025, Koenigsberger warned Goodhead against pursuing a prolonged legal battle, describing it as “litigation roulette,” and cautioned that refusal to settle could result in no financial recovery for the law firm.

Two months after this exchange, Goodhead was removed as CEO of Pogust Goodhead, in a move reportedly supported by Gramercy. This decision has heightened concerns among the claimants about whether their interests are being properly represented. A “client committee” representing most of the plaintiffs alleges that since Goodhead’s departure, the law firm has been subject to undue influence from Gramercy, compromising its duty to the claimants. This committee had previously attempted to replace Pogust Goodhead but withdrew from that effort last year.

Goodhead has stated that his removal was linked directly to his refusal to accept the settlement offer, suggesting he was pressured by Gramercy to conclude the case at a value he considered insufficient. Gramercy, however, contends that Goodhead was removed “for cause” over contested financial misconduct allegations, which Goodhead denies. He maintains that his spending while leading the firm was disclosed and appropriate for the firm’s scale and business.

The client committee has since engaged Bailey Glasser International, a US-based class action firm with a new UK division, to lead the ongoing litigation, with Goodhead joining this team recently. Another UK litigation firm, Hausfeld, has also been brought on to assist. NorthWall Capital, another litigation funder that invested alongside Gramercy, is reportedly providing financial backing to this rival legal team, though it has declined to comment publicly.

Gramercy accused Goodhead and NorthWall of attempting to profit personally from the claim’s outcome and of undermining the interests of the dam collapse victims. NorthWall dismissed these accusations as false, stating that decisions on legal representation rest with the claimants and their advisers.

Pogust Goodhead has argued that the client committee does not have the authority to remove the firm from the case and warned that switching legal teams could disrupt the litigation’s funding, insurance arrangements, and timeline. Both Pogust Goodhead and the client committee have filed competing claims in the London High Court seeking a determination on who has the right to represent the claimants.

More than two dozen lawyers have left Pogust Goodhead over the past year amid concerns about Gramercy’s influence, which the funder denies. The Solicitors Regulation Authority has indicated it is monitoring developments related to this dispute.

The case is scheduled to proceed to trial in April 2027. An English court ruled in November that BHP and Vale are liable for damages related to the dam collapse, with the forthcoming trial set to determine the amount payable.