Costs Update #26

The CAT’s January 2026 decision in McLaren v MOL/NYKK reinforces an increasingly clear theme in collective proceedings: costs must be transparently evidenced and demonstrably proportionate if priority payment is to be approved. 

The Tribunal confirmed that funders and lawyers can, in principle, be paid from damages before distribution to the class. 

However, such payment remains subject to active judicial supervision. 

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What did the Tribunal require? 

Before approving release of the £20m costs pot, the CAT required: 

• Detailed summary schedules 
• Disclosure of hourly rates 
• Evidence of internal review 
• Proportionality justification 

In practical terms, the Court expected material comparable to a summary assessment bundle.

Contractual funding arrangements did not displace that scrutiny. 

A consistent direction of travel 

This approach sits alongside the earlier Bulk Mail decision, where the CAT required the Class Representative to appoint an independent costs specialist during the life of the case to audit and monitor legal spend. 

Across these decisions, the Tribunal’s message is measured but consistent: 

• Independent cost control is expected 
• Funding viability must be balanced against class protection 
• Proportionality needs to be demonstrable, not retrospective 

For those involved in funded or collective claims, early attention to cost reporting structures and audit processes can materially assist at both settlement and payment stages. 

Postscript: In the Bulk Mail proceedings, the Class Representative appointed Practico as independent costs specialists to support cost control and reporting. For assistance with collating, auditing and presenting costs information in collective actions, please get in contact with us.