Summary

The claimants sue BHP in London over the collapse of the Fundão Dam in Brazil in November 2015. After the Stage 1 trial, Mrs Justice O'Farrell ordered BHP to pay 90% of their Stage 1 costs, £43 million on account, and interest on those costs at 1% above base rate from 1 August 2023 until 26 January 2026. The claimants had paid nothing towards their costs. They owe base costs and a success fee under conditional fee agreements only if they win.

BHP appealed the interest award alone, saying such interest is open only to a party that is out of pocket or has borrowed, and that the award recovered by another route the success fee which section 58A(6) of the Courts and Legal Services Act 1990 makes irrecoverable. The Court of Appeal dismissed the appeal. The power in CPR 44.2(6)(g) covers a party that must compensate a solicitor, insurer or funder for services given on credit, and interest is not the success fee.

Background and facts

The five month Stage 1 trial ended in March 2025. The judge held BHP strictly liable as polluters under Brazilian environmental law and found the claims were not time-barred; permission to appeal those findings has been refused.

Interest ran from the date by which half of the fees had been incurred. The judge reasoned that the claimants would pay success fees reflecting the cost of funding the litigation out of any damages, which was a contingent liability for costs, and that the risk taken by the solicitors and their funders did not alter that.

The appeal court saw only indirect evidence of the funding. BHP accepted that success fees generally carry an element of compensation for a solicitor's funding costs.

The issue

CPR 44.2(6)(g) allows the court to order interest on costs from or until a certain date, including a date before judgment. Since the Legal Aid, Sentencing and Punishment of Offenders Act 2012, section 58A(6) has provided that a costs order may not require one party to pay another party's success fee.

BHP relied on Hirachand v Hirachand [2024] UKSC 43, where the Supreme Court held that a success fee could not be included in an award under the Inheritance (Provision for Family and Dependants) Act 1975, because that award was itself a costs order caught by section 58A(6). It also relied on the old CPR 44.3B(1). The claimants accepted that they had to be out of pocket in some sense, and said they were, being contingently bound to compensate their solicitors for late payment through the success fee.

The decision

Sir Geoffrey Vos MR, with whom Zacaroli LJ and Cockerill LJ agreed, took the scope of the power first. Interest on costs before judgment is not an exceptional order. It makes good the cost of being without money over time, and the discretion is at large.

There is, however, nothing in the wording of CPR Part 44.2(6)(g) or elsewhere to suggest that such interest can only be awarded if the receiving party has actually expended money on costs or has borrowed money to pay such costs.Sir Geoffrey Vos, Master of the Rolls, paragraph 36

The application should not normally involve a minute examination of how the litigation was funded. The power reaches a party kept out of its own money and a party liable to compensate its solicitors, an insurer or a third-party funder for legal services provided on credit. Through the success fee, the claimants were in the second class.

The Supreme Court in Hirachand had decided whether a success fee could form part of substantive relief under the 1975 Act.

Hirachand actually had nothing to say about the scope of the power in CPR Part 44.2(6)(g), nor about its interaction with section 58A(6).Sir Geoffrey Vos, Master of the Rolls, paragraph 45

An order for interest on costs is separate from the costs order and from any order allowing a success fee. Barring interest wherever a party has agreed a success fee would cut down the CPR discretion and be unjust to funded parties. The contingent liability is the trigger for the claim to interest; it does not fix the amount.

The amount awarded is based on what funding the costs would reasonably have cost the class of persons of which the claimants form part, as opposed to the value of the success fee itself.Sir Geoffrey Vos, Master of the Rolls, paragraph 51

The mischief behind ending recovery of success fees, that claimants had no reason to negotiate them down, did not arise on these bespoke arrangements. CPR 44.3B(1) was always subject to the court ordering otherwise and had nothing to do with interest on costs. BHP said nothing in oral argument on its second ground, the exercise of the discretion, and the court held the judge was entirely right.

Practical implications

A party funded by a conditional fee agreement, an insurer or a funder is not shut out of interest on its costs because it paid nothing before judgment. The question is whether it was kept out of its money or must compensate someone else for credit, and the court will not take the funding structure apart to answer it.

The rate follows what funding would reasonably cost litigants of that class, not the success fee. In a long group or project dispute, interest on costs from well before judgment is real exposure to price into any offer.

Município de Mariana and others v BHP Group (UK) Ltd and BHP Group Limited [2026] EWCA Civ 1319, Court of Appeal (Civil Division), judgment of the Master of the Rolls, Sir Geoffrey Vos, in which Lord Justice Zacaroli and Lady Justice Cockerill agreed, handed down 16 October 2026 following a hearing on 6 October 2026, on appeal from Mrs Justice O'Farrell, [2026] EWHC 73 (TCC), case numbers HT-2022-000304 and HT-2023-000058. BHP's appeal on interest on costs before judgment was dismissed.