£43m Payment On Account In BHP Dam Litigation

In determining a £43 million payment on account from a £189 million costs claim, the court adopted a cautious approach where costs evidence was limited, stripping out collateral sign-up costs and applying a 10% reduction for issues on which the successful party had failed.

Where a party has succeeded on the key liability issues determined at a split trial, it is generally appropriate for the court to make an immediate order for the costs of that trial, rather than deferring the issue until the final outcome of the litigation. The fact that the ultimate recovery of damages remains uncertain does not preclude such an order. [13], [16]
In determining the scope of a costs order following a split trial, the court will distinguish between costs that are properly incidental to the issues determined at that stage and the general costs of the overall litigation. Costs incurred for tasks such as signing up claimants and processing their details are likely to be characterised as part of the latter, not recoverable as costs of the discrete trial. [18], [40]
When a successful party has failed on discrete issues that required separate evidence and court time, a percentage reduction to its recoverable costs may be applied to reflect the time and effort expended on those unsuccessful points. The reduction is assessed by considering the fair and proportionate impact of the failed issues on the overall costs of the stage. [24]
When ordering a payment on account of costs under CPR 44.2(8), the court will adopt a cautious approach where the evidence in support of the costs claimed is high-level and lacking in detail. In such circumstances, the court may make significant deductions from the claimed total to arrive at a reasonable estimated sum for an interim payment, particularly where concerns exist as to the reasonableness and proportionality of the overall costs. [38], [41]
The court may award pre-judgment interest on costs under CPR 44.2(6)(g) to compensate a receiving party for the cost of funding the litigation, even where that party has not made direct payments but is subject to a contingent liability to pay success fees or other funding expenses from any damages ultimately recovered. A pragmatic approach to calculating the period for such interest, such as using the date by which half the fees were incurred, may be adopted. [51], [52]