Manolete Partners Plc v Ian Russell White

Approved Judgment

This judgment was handed down remotely at 10.30 a.m. on Thursday 12 December 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

This judgment deals with a short but important point relating to so-called pro bono costs orders made under section 194 of the Legal Services Act 2007 (“section 194”). The question is whether, and if so, how, when considering whether to make such an order, the court should take into account the fact that the successful party who was represented pro bono owes a large and unsatisfied judgment debt to the potential paying party?

The issue arises following the judgment which we handed down in this matter on 15 November 2024: see [2024] EWCA Civ 1418. We allowed an appeal by Mr. Ian White against an order of HHJ Hodge KC (the “Order”) which had required Mr. White to exercise such rights as he might have to draw down the entirety of his occupational pension fund so that the monies could be applied towards satisfaction of a judgment debt (the “Judgment Debt”) of over £1 million that he owes to Manolete Partners plc (“Manolete”). We held that the Order was prohibited by section 91(2) of the Pensions Act 1995.

The issues

There are three amounts in issue.

The first element relates to Mr. White's costs of resisting the application made by Manolete for the Order. Mr. White was represented by solicitors and counsel at the hearings before the judge. He incurred costs of £51,708 in respect of the main hearing on 13 March 2023, together with some additional costs for the further hearing on 22 May 2023 for which a schedule of costs was not available. It is agreed that in the conventional way pursuant to section 51 of the Senior Courts Act 1981 (“section 51”) and CPR 44, Manolete should be ordered to pay Mr. White his costs of the application to be assessed if not agreed. It is also agreed that we should make an order that Manolete's liability for such costs should be set off in reduction of Mr. White's liability under the Judgment Debt. Mr. White seeks an order for a payment on account of £35,000 to fix the minimum amount of such set off. There does not appear to be any opposition to such an order in principle, and I would be prepared to make such an order, but in the lesser sum of £30,000.

Secondly, Mr. White seeks a similar order in respect of the costs of filing his Appellant's Notice and associated documents, when he continued to be represented by his former solicitors and counsel. Those costs, which are likely to be relatively modest, remain unbilled. It is agreed that Mr. White should be entitled to an order for such costs (when billed) to be paid by Manolete in an amount to be assessed if not agreed. As with the first set of costs, it is further agreed that the court should make an order that such liability should be set off in reduction of Mr. White's liability to Manolete in respect of the Judgment Debt.

The main contention between the parties relates to the period when Mr. White was represented in relation to the appeal by solicitors and counsel acting pro bono. Having obtained permission to appeal, Mr. White appeared without representation at the first hearing of the appeal, stating that he could not afford to instruct a solicitor or counsel. Given the wider importance of the point raised by his appeal, the hearing was adjourned to enable him to seek pro bono representation via Advocate, the Bar's national pro bono charity: see [2024] EWCA Civ 356. Having, through its solicitors, drawn Mr. White's attention to the possibility of obtaining pro bono representation shortly before the hearing, Manolete very properly did not oppose that adjournment. Thereafter Mr. White contacted Advocate and was represented on the appeal by leading and junior counsel and solicitors acting free of charge.

Following Mr. White's success in the appeal, his pro bono lawyers now seek an order pursuant to section 194. Section 194 provides, in material part,

“(1) This section applies to proceedings in a civil court [including the civil division of the Court of Appeal] in which —

(a) a party to the proceedings (“P”) is or was represented by a legal representative (“R”), and

(b) R's representation of P is or was provided free of charge, in whole or in part.

(2) This section applies to such proceedings even if P is or was also represented by a legal representative not acting free of charge.

(3) The court may order any person to make a payment to the prescribed charity in respect of R's representation of P (or, if only part of R's representation of P was provided free of charge, in respect of that part).

(4) In considering whether to make such an order and the terms of such an order, the court must have regard to —

(a) whether, had R's representation of P not been provided free of charge, it would have ordered the person to make a payment to P in respect of the costs payable to R by P in respect of that representation, and

(b) if it would, what the terms of the order would have been.”

The “prescribed charity” for the purposes of section 194 is the Access to Justice Foundation (the “AJF”).

In accordance with CPR Part 46.7, Mr. White's legal representatives have submitted a schedule of the notional costs that they would have charged Mr. White if they had not been acting pro bono. After one correction, this amounts to £121,920.80. They seek a summary assessment of those notional costs, and an order for payment of that amount by Manolete to the AJF under section 194(3).

Manolete accepts that if Mr. White had not been represented on a pro bono basis he would have been entitled to an order for payment of his costs to be assessed if not agreed. However, it contends that the £121,920.80 claimed is unreasonable because of what are said to be the excessive fees of junior counsel, the disproportionate amount of time spent by solicitors on the case, and the excessive charging rate of the senior solicitor on the case.

More significantly, however, Manolete submits that if Mr. White had not been represented on a pro bono basis, Manolete would inevitably have obtained an order that its liability for costs could be set off in reduction of the outstanding Judgment Debt owed to it by Mr. White. Manolete contends that the court “must” have regard to this under section 194(4), and that the court is accordingly required, so far as possible, to replicate such set off in its order.

In correspondence, Manolete suggested that the court should do this by making an order (i) that Mr. White make payment to the AJF of an amount equal to the assessed amount of the notional costs, and (ii) that his liability to Manolete under the Judgment Debt should be reduced by the like amount of such payment, £ for £.

I do not think that such an order is permitted by section 194. Although section 194(3) enables an order to be made against “any person”, section 194(4)(a) is drafted on the basis that “the person” is someone who would have been ordered to make a payment to “P” (the party who was represented pro bono). It is thus implicit that an order under section 194 cannot be made against “P” himself.

Doubtless recognising this, in its written submissions, Manolete suggested an alternative. It submitted that the court should make an order under section 194 that Manolete pay a sum equal to the assessed amount of the notional costs to the AJF, but subject to a condition that such payment should only be required to be made if and to the extent that Manolete were to recover money from Mr. White in respect of the Judgment Debt.

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