Município de Mariana v BHP Group: High Court awards £43m costs following liability victory

The Technology and Construction Court has ordered BHP Group to pay £43 million on account of costs following the claimants' success in the Stage 1 trial concerning the 2015 Fundão dam collapse in Brazil. Mrs Justice O'Farrell DBE delivered the consequentials judgement on 19 January 2026, addressing costs, payment on account, and permission to appeal.

Stage 1 trial outcomes

The November 2025 judgement established several key findings favouring the claimants, led by Município de Mariana. The court determined that BHP Group entities were strictly liable as "polluters" under Brazilian Environmental Law (Articles 3(IV) and 14) and alternatively liable based on fault under the Civil Code (Article 186). Critical rulings on prescription periods and municipal standing further strengthened the claimants' position.

The defendants' alternative arguments under Article 927 of the Civil Code and Articles 116-117 of the Corporate Law were rejected, though these failures subsequently affected the costs assessment.

Costs principles and allocation

Applying CPR 44.2, Mrs Justice O'Farrell found the claimants were the successful party entitled to recover their Stage 1 trial costs. However, the court imposed a 10% reduction reflecting issues where the defendants prevailed, including the Article 927 alternative claim, Corporate Law arguments, and settlement agreement principles. Each matter had required substantial expert evidence and hearing time.

The court rejected the claimants' application for costs of the entire proceedings to date, limiting the order to Stage 1 trial costs. Matters relating to individual damages claims would be determined following the Stage 2 trial.

Payment on account assessment

The claimants sought £113.5 million (60% of their claimed £189 million costs), but faced judicial scrutiny over the extraordinary sums involved and limited supporting detail. The defendants' costs for the same period totalled £125 million despite bearing greater disclosure burdens.

Mrs Justice O'Farrell made substantial deductions from the claimed figure. Approximately £117 million in costs related to sign-up operations, walk-in centres, call centres, and Brazilian legal teams were excluded as forming part of overall proceedings costs rather than Stage 1 trial costs. A further £7 million reduction addressed funding and insurer-related expenses.

After applying the 90% entitlement and adopting a cautious 60% interim payment approach, the court determined £43 million as reasonable on account pending detailed assessment.

Interest and assessment timing

The court awarded pre-judgment interest at 1% above base rate from 1 August 2023, recognising that whilst claimants had not directly funded litigation, they would bear contingent liability for success fees reducing any eventual damages recovery.

The claimants' application for immediate detailed assessment was refused. Given the complexity and scale of costs disputes, the court followed the general rule that detailed assessment should await conclusion of proceedings. An immediate assessment would prove disruptive whilst parties prepared for the Stage 2 trial.

Permission to appeal refused

The defendants sought permission to appeal across nine grounds, primarily alleging procedural irregularity through inadequate judicial reasoning on strict liability, fault-based liability, limitation, and municipal standing.

Mrs Justice O'Farrell systematically addressed each ground, demonstrating that the original judgement had engaged comprehensively with disputed issues, evaluated competing expert evidence, and provided reasoned conclusions. The court noted that responding to every point in lengthy submissions would have produced an unhelpfully prolix judgement.

Finding no real prospect of success and no compelling reason for appeal, permission was refused. The defendants may seek permission from the Court of Appeal within 28 days.

The £43 million payment remains stayed pending determination of any appeal application.

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