Município de Mariana and Others v BHP Group (UK) Ltd and BHP Group Limited [2026] EWHC 73 (TCC)

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Município de Mariana and Others v BHP Group (UK) Ltd and BHP Group Limited

[2026] EWHC 73 (TCC) | High Court of Justice, Technology and Construction Court (KBD)

Before Mrs Justice O'Farrell DBE | Heard 17 December 2025 | Handed down 19 January 2026

Interactive Process Flow | Stage 1 costs, payment on account, interest and permission to appeal

Case Analysis Process Flow

0 of 7 nodes explored

1. Case Overview

Case: Município de Mariana and Others v BHP Group (UK) Ltd and BHP Group Limited [2026] EWHC 73 (TCC)
Court: High Court of Justice, Technology and Construction Court (KBD)
Judge: Mrs Justice O'Farrell DBE
Hearing Date: 17 December 2025
Judgment Date: 19 January 2026
Case No: HT-2022-000304 and HT-2023-000058

Following the Stage 1 judgment establishing BHP's strict and fault-based liability under Brazilian law for damage from the Fundão dam collapse, the court decided costs, the immediate payment, interest, timing of assessment and permission to appeal. The claimants claimed £189 million of costs and sought £113.5 million on account (paragraphs 1-7 and 16-78).

Central Legal Test: Costs followed Stage 1 success but could be confined to that trial and reduced for discrete lost issues. The payment on account had to be a cautious estimate of likely standard-basis recovery. Interest was compensatory; immediate detailed assessment depended on disruption; permission required a real prospect or other compelling reason (paragraphs 8-15 and 24-78).

Stage 1 Success

The claimants established strict Environmental Law liability, alternative Civil Code fault liability, prescription findings and municipal standing, while losing some alternative statutory and settlement issues (paragraphs 1-3 and 16-24).

Costs Evidence

The claimants' high-level material combined UK, Brazilian, call-centre, counsel and disbursement costs but did not clearly map people and workstreams to Stage 1 (paragraphs 27-41).

2. Procedural History

Consequentials Hearing

The court addressed five issues after the 14 November 2025 liability judgment: costs scope, account payment, interest, assessment timing and appeal permission (paragraph 3).

Stage 2 Pending

Individual and group damages remained for Stage 2, so success in the whole litigation and general claimant-onboarding costs were not yet determined (paragraphs 16-18 and 40).

3. Defendant's Position

BHP argued that costs should wait for Stage 2 or be limited and reduced, that the requested account payment was excessive, pre-judgment interest was unjustified and the Stage 1 judgment should be appealed (paragraphs 6-7 and 59-75).

Partial Success

BHP relied on its success under Article 927, Corporate Law and parts of the settlement issues (paragraphs 19-24).

Costs Quantum

It relied on poor workstream detail, sign-up expenses, funding items and the disparity with its own lower costs (paragraphs 27-41).

Appeal

It alleged failures to engage with material issues and give proper reasons across liability, prescription and standing (paragraphs 59-75).

4. Claimant's Position

The claimants said they had won the defining liability issues, sought all costs to Stage 1, a 60% account payment, interest at 1% above base and immediate assessment (paragraphs 4-5 and 27-58).

Overall Stage 1 Winner

They relied on strict liability, fault, prescription and standing results as justifying an immediate order.

Funding Cost

They said contingent liability for funding expenses would reduce damages and justified compensatory interest even though claimants had not paid legal fees directly (paragraphs 47-52).

5. Court's Analysis

Immediate Stage 1 Order

The claimants won the major liability issues, so costs should not await Stage 2, but recovery was confined to costs of and incidental to Stage 1 (paragraphs 16-18).

Ten Per Cent Reduction

Discrete expert and trial work on unsuccessful Article 927, Corporate Law and settlement issues justified reducing Stage 1 recovery to 90% (paragraphs 19-26).

Account Rebuilt from Evidence

Sign-up and collateral costs were excluded, funding and insurer items reduced, and the likely recoverable base estimated at £80 million. Applying 90% and then a cautious 60% produced £43 million (paragraphs 33-42).

Interest and Stay

Interest at 1% above base from 1 August 2023 was awarded. Payment was stayed until permission or any appeal was determined (paragraphs 43-52).

No Immediate Assessment or Appeal

Detailed assessment would be complex and disruptive during Stage 2 preparation. The proposed appeal grounds had no real prospect and no compelling reason supported permission (paragraphs 53-75).

6. Decision and Outcome

Winner: The Claimants at Stage 1 (Município de Mariana and scheduled claimants) succeeded.

Result: BHP had to pay 90% of the claimants' Stage 1 costs on the standard basis, with £43 million on account after the appeal process, plus pre-judgment interest at 1% above base from 1 August 2023. Immediate detailed assessment and first-instance permission to appeal were refused (paragraphs 24-26 and 42-78). The Defendants (BHP Group (UK) Ltd and BHP Group Limited) did not succeed on this application.

Practical Effect: The claimants obtained a large but cautious interim costs payment tied only to Stage 1. Final assessment and wider costs awaited conclusion of the litigation, while BHP retained the right to seek permission from the Court of Appeal.

Costs

90% of Stage 1 costs on the standard basis (paragraphs 24-26).

Payment

£43 million on account, stayed through the permission or appeal process (paragraphs 42-46).

Appeal

Permission refused, with 28 days to apply to the Court of Appeal (paragraphs 73-76).

7. Key Legal Principles and Practice Points

Split-trial Costs

Costs should ordinarily follow a major issue when decided, even before final damages, but the order should not assume success on unresolved stages.

Percentage Orders

A proportionate reduction may reflect substantial discrete losing issues more efficiently than separate issue-based assessment.

Payment on Account

The court estimates likely recovery with an error margin and may reconstruct the proper base where the receiving party's schedule is too broad.

Funded Litigation Interest

A contingent funding liability can justify pre-judgment interest where it will reduce any eventual damages recovery.

Practice Implications

For Claimants:
Map costs by stage, issue, workstream, fee earner and date. Separate claimant acquisition, funding, jurisdiction and later-stage costs before seeking an account payment.

For Defendants:
Identify discrete losing issues and quantify their actual expert, witness and submission burden. Test whether high-level costs material includes work outside the ordered stage.

General Practice Points:
In mass claims, the size of an account request does not relax evidential requirements. The court needs a traceable path from work performed to the stage-specific order.

Legal Disclaimer

This interactive process flow is provided for educational and professional development purposes only and does not constitute legal advice. The content reflects interpretations and analyses that may not apply to specific circumstances. Contract interpretation depends on specific wording, jurisdiction, and factual context. Always consult qualified legal professionals before making decisions based on this content. SCCSI and its contributors accept no liability for reliance on this material.