Judges Slams Class Action Firm for Bringing Claim without Authorisation

Why It Matters

The ruling signals heightened judicial intolerance for cross‑border class actions launched without proper client authority, exposing firms to substantial financial penalties and reputational risk. It also sets a cost‑assessment benchmark for future unauthorized litigation cases.

Key Takeaways

• PG ordered to pay £900k (~$1.15m) interim costs for unauthorized claim
• Judge found PG never verified Brazilian powers of attorney before filing
• Case highlights risk of cross‑border class actions without proper authority
• Costs judge reduced bill from £1.28m to £900k, setting precedent
• Law firms face heightened scrutiny after Clyde & Co wasted‑costs ruling

Pulse Analysis

The Cardoso & Ors v Salic (UK) Ltd case underscores a growing challenge for transnational class‑action firms: ensuring that the legal authority granted abroad extends to foreign courts. In this instance, PG relied on decade‑old powers of attorney signed in Portuguese, which authorized Brazilian lawyers to act locally but did not cover litigation in England. The judge’s finding that PG never examined the original documents before filing highlights a procedural blind spot that can derail multi‑jurisdictional claims and invite costly sanctions.

Beyond the immediate £900,000 interim costs, the decision reverberates through the UK’s class‑action ecosystem. Courts are increasingly scrutinizing the due‑diligence steps firms take when representing foreign claimants, especially where large settlements—such as PG’s involvement in the Mariana Dam litigation—are at stake. The reduction of a £1.28 million bill to £900,000 illustrates how judges will temper excessive fees while still imposing punitive amounts to deter lax authority checks. Law firms must now embed independent cross‑border legal reviews into their intake processes, securing confirmations from local counsel before proceeding.

For investors and corporate defendants, the ruling offers a clearer risk calculus. Companies facing foreign‑origin class actions can now argue that plaintiffs’ counsel failed to establish proper standing, potentially reducing exposure and encouraging early settlement negotiations. Meanwhile, litigation funders and backers like Gramercy may face added scrutiny, as courts consider joining them for costs. The broader market implication is a push toward stricter governance standards in international plaintiff financing, aligning with recent wasted‑costs penalties against Clyde & Co and signaling a more disciplined approach to cross‑border collective redress.