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US Legal Firm That Beat Big Tobacco Now Takes On SA Gold Miners

A US legal firm that helped invent mass-tort litigation in the  1970s by bringing action against asbestos makers and then taking on big tobacco in a litigation that resulted in a $246 billion settlement in 1998, is now spearheading the class action against South African gold miners, reports Bloomberg.

Responding to an appeal from South African lawyer Richard Spoor, the legal firm of Motley Rice LLC, based in Charleston, South Carolina took on the cases of South African miners suffering from silicosis and silicosis-induced tuberculosis.

The firm’s late co-founder Ron Motley is the lawyer who kicked off class action suits by taking on asbestos makers in the US. He then led the litigation against big tobacco that led to the spectacular payout. Co-founder Joseph Rice helped put together more than $12 billion in settlements of lawsuits against BP Plc over the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

It has taken many years, but the firm’s expertise in this field has finally begun to pay off. Last May, a Johannesburg judge certified miners and the families of deceased workers as a class, paving the way for South Africa’s biggest class-action suit.

While it is too early yet to speculate on the size of any payout, a recent settlement suggests it could run as high as $2 billion — 20 times the 2015 profit at the country’s biggest producer.

That would make it worth the lawyers’ investment. The winning attorneys will get either twice their normal fee or 15 percent of any award, South Africa’s High Court has ruled. Spoor has said that he would then reimburse Motley Rice’s costs and negotiate the split of the remainder.

Some 32 companies, which include AngloGold Ashanti Ltd., Harmony Gold Mining Co. and Sibanye Gold Ltd., are the defendants. While denying liability, the six biggest defendants say a "settlement that will be fair to the claimants and sustainable for the industry" is preferable to litigation that could take as long as 15 years, according to a joint statement by their Johannesburg-based spokesman Alan Fine of Russell & Associates.

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