Dieselgate law firm warns over future after losing almost £400m

Core Viewpoint - Pogust Goodhead, a class action law firm, is facing significant financial challenges, having lost nearly £400 million over two years and currently dealing with a debt of £633 million, raising concerns about its future viability [1][2][3]. Financial Performance - The firm reported a loss of £95 million in 2023, following a loss of £292 million in the previous year, with revenue at only £3.6 million [2]. - Pogust Goodhead has secured $552 million (£408 million) in funding from Gramercy Funds Management, with an additional $65 million top-up agreed upon last year [2]. Funding and Future Outlook - Company executives expect to secure further funding to continue litigation efforts, indicating forecasts that suggest the ability to meet working capital needs for at least the next 12 months [3]. - However, there is "material uncertainty" regarding the firm's ability to remain operational as future funding is contingent on agreements [3]. Legal Cases - Pogust Goodhead is involved in a multibillion-pound lawsuit related to the Dieselgate scandal, where major car manufacturers, including Volkswagen, were found to have manipulated emissions tests [4]. - The firm is also pursuing a £36 billion class action lawsuit against BHP for the 2015 Mariana dam collapse in Brazil, which resulted in significant environmental damage and loss of life [4]. Internal Issues - The firm has been affected by a scandal involving co-founder Thomas Goodhead, who was ousted amid allegations of misusing litigation funds for personal expenses [5][6]. - Following the upheaval, Pogust Goodhead sought permission to withdraw as lead solicitor in the Dieselgate lawsuit, which was denied, prompting the firm to implement governance changes to enhance financial stability [7].