Ruby Keeler-Williams, Author at Elysium Law

‘Who is really controlling this litigation?’ Non-Party Costs Orders

Posted on 01 Dec 202214 Jan 2026 by Ruby Keeler-Williams

In this article Richard Gray Barrister looks at the courts power to issue costs against a non-party; that is a party who is not directly involved in the litigation. Such orders may be considered against directors of an impecunious company formed only to protect the real litigators by the proposed use of the Company to litigate the claim.

The Statutory basis and the overall grounds for the award

Section 51 of the Senior Courts Act 1981, which is governed by CPR 46.2, gives the court power to award a non-party costs order. The award can be made in any court and the court is asked to exercise its jurisdiction to make it.

Generally, the only criterion for its application is whether, in all the circumstances, it is just to make the order. This is fact specific in each case.

Considerations for the Court to make the order

The court must consider whether the non-party is the (real) party interested in the outcome of the litigation, or

(i) whether they have been responsible for bringing the proceedings; and

(ii) that those proceedings were brought in bad faith; or

(iii) there is some other conduct, which in all the circumstances, justifies the court in making the order.

It is not enough simply that the non-party is the sole director and controlling mind of a company. If, however, the interests of a company and its director were so close, it could be considered just to make the order against the director personally, the court will do so. Again, much is fact dependent and needs to be considered during the litigation.

If the non-party acted without impropriety or on legal advice, this does not prevent an order being made against them. However, a non-party costs order may be more likely to be made when the applicant can show improper conduct of litigation. See Turvill v Bird and others [2016] EWCA Civ 703

It will be exceptional for an order for costs to be made against a non-party where the applicant has a cause of action against the non-party and could have joined them as a party to the original proceedings.

There must be a costs order made against the primary party and there is no power to order the non-party to pay costs beyond those ordered to be paid by the claimant or defendant in the particular litigation.

Litigation Funders for Claimants

Generally, the jurisdiction will not be exercised against litigation funders meaning “those with no personal interest in the litigation, who do not stand to benefit from it and in no way seek to control its course.” (Hamilton v Al Fayed and others [2002] EWCA Civ 665)

Conversely however, there is authority to say that such orders can be issued against third-party funders who fund defences. See Merchantbridge & Co v Safron General Partner & another [2011] EWCH 1524.

Note however that if the funder effectively controls or participates in it, then they may be liable. See the case of Arkin v Borchard Lines Ltd and others [2005] EWCA Civ 655

Causation

This is by no means settled law and the review of the authorities as to its necessity is beyond the scope of this article.

In Byrne v South Sefton Health Authority [2001] EWCA Civ 1904 the court said that it was necessary to determine whether the conduct complained of was really an effective cause of the costs incurred.

Generally, if there is no causation, whilst it may be possible to obtain the order, the granting of such orders will be rare.

An Application for Security for Costs – is it a prerequisite to the making of the order?

In any proposed litigation brought by a Company, a seasoned litigator would apply for security for their clients costs pursuant to CPR 25.

Those considerations will be the subject of a separate article given the litigation Our Clients are threatened with currently.

Principles that the Court will consider in granting the order against a director

The court will consider the following non-exhaustive) principles:

(i) Despite not being a party to the litigation, does the court consider that the non-party director properly be described as ‘the real party to the litigation’

(ii) Where proceedings by an insolvent company are funded by a non-party solely or substantially for their own financial benefit, they should be liable for the costs, if the action brought or defended fails.

(iii) To succeed impropriety need not be shown.

Section 51 orders may be made to avoid the injustice of an individual director hiding behind a Company and engaging in what they see as risk-free litigation for his own purposes (Re North West Holdings PLC and another [2001] EWCA Civ 67).

Such orders will not be made however where the Director is acting in proceedings to, for example protect shareholders. Of note here is that where a liquidator brings proceedings, the court will not usually make such an order.

In order to assess whether the director was the real party to the litigation, the question will be whether the individual director was seeking to benefit personally from the litigation.

It follows therefore, that before embarking upon funding of such litigation parties and their advisors are warned to consider whether in doing so, they are placing themselves at risk of being the recipient of such an order.

Conclusion

The courts power to award costs against non-parties is a significant incentive to dissuade others to encourage risky litigation. Where claims are made by Companies, litigators instructed to defend such claims should consider this power early in the proceedings and warn the other side in any pre-action correspondence.

If you require more information or are think of instructing a firm to act for you or your Company in litigation, then please email clerks@elysium-law.com or visit our website.

Contractors – the ‘loans’ you never needed to repay

Posted on 08 Nov 202204 Apr 2024 by Ruby Keeler-Williams

In this article, Ruby Keeler-Williams and Richard Gray Barrister of Elysium Law consider claims made against loan charge contractors and the litigation which subsequently ensued and is contemplated going forward.

The ‘Contractor Loan Scheme’ Planning

The ‘contractor loan scheme’ was part of a large-scale marketed tax avoidance scheme. The user would usually be an individual working for what is called an umbrella company or for their own personal service company. Normally, that would attract tax and NICs on a PAYE basis. The responsibility for paying such statutory deductions falls upon the employer. However, in an attempt to reduce tax liability, the employer, who would be acting under a contract of employment would pay the employee the minimum wage and then do one of two things:

Pay lumps sums to a trustee who would ‘loan’ the employee (now beneficiary under a trust) money (remuneration) with the arrangements setting out the terms of the repayment.

Alternatively, the employer would directly loan the monies collected and then assign the loans to a trust later.

By way of example; if an employee was paid a salary of £150,000, only a basic minimum wage would be paid. Then 85% of what was left (collected by the umbrella company) was ‘loaned’ to the employee and the umbrella would take what was left. It was argued under these schemes that the loan did not constitute earnings and as such was not taxable. “Don’t worry we have Counsel’s advice” was the normal selling point.

Another and more significant inducement was made to the employee that the loan would never need repaying. We have a particular legal view on that arrangement but at he very least it was a misrepresentation which materially induced the employee to enter the contractual arrangements.

The Assignment out of the Trust

Unusually, the purported ‘loans’ in many cases have been assigned out of the Trust and have either directly or via other companies ended up being assigned to a company named Felicitas Solutions Ltd, which was formed and based in the Isle of Man. The company appeared to be purposely set up to receive these assignments and pursue claims for reimbursement from behind the corporate veil, as they threatened to do.

The users of these schemes were then contacted with demands for repayment and as a result many sought advice from Elysium Law and we were instructed by a large group to defend these claims.

The Claims

The ‘demand for repayment’ letters received by Our Clients did not constitute a compliant Letter of Claim under the Pre-Action Protocol. As such, we insisted that prior to providing a response, a compliant Letter of Claim must be produce supported by evidence.

In early 2021, this was provided to us and some 107,000 pages of documents were disclosed and reviewed.

It was clear from the review of these documents, together with evidence from Our Clients, that the loans were ‘circular’ and were never intended to be repaid. This was clearly a tax avoidance arrangement, and the loans were, in our view, unenforceable.

Our stance was to offer a mediation in order to narrow the issues in dispute.

Following that Mediation, Elysium Law subsequently served upon Felicitas a comprehensive letter of response that rebutted the claims on the following grounds:

Collateral Contract and/or Misrepresentation, in that a legal assignment is subject to existing causes of action which are not avoided by assignment (Bibby Factors Northwest Ltd v HFD Ltd). This means that the Beneficiaries may raise against the assignee, any defence, set-off or counterclaim which they could raise if sued by the assignor. Here, there was a verbal collateral contract made that this was a tax avoidance arrangement and that the ‘loan’ would never be enforced against them.

Breach of Trust, in that the Trusts into which the user’s money paid was subject to both express and implied fiduciary obligations. The assignment would likely have substantially devalued the assets of the trust and has exploited the beneficiaries.

After service of the letter of response, to which we received no reply, the threat of litigation seemed to disappear.

However, Elysium Law are now aware that last week, a large number (if not all) of these ‘loans’ have been assigned by Felicitas to a company known as West 28^th Street Limited, who have subsequently sent letters demanding repayment, albeit they have made an offer to settle at a reduced rate of 50% adding that if the offer is not accepted they will instruct Solicitors to claim from the recipients. We have been contacted by our previous clients seeking further advice and have organised conferences after hours to assist them.

Our view is that action must be taken to ensure that these demands for repayment and subsequent assignments do not continue.

Elysium Law have a litigation strategy to bring these claims to an end. If you have received one of these demands from Felicitas or West 28^th Street Limited and wish to have advice on this matter, please contact Elysium Law on 0151 328 1968 or via clerks@elysium-law.com.

Causes of Action in Failed Off-Plan Developments

Posted on 27 Oct 202204 Apr 2024 by Ruby Keeler-Williams

In this article Ruby Keeler-Williams of Elysium Law considers actions in relation to failed fractional off-plan developments. The article takes a look at the courses of action together with the potential heads of loss.

During the past 5 years we have had the privilege of representing a number of large, multi-national groups in claims for professional negligence, breach of trust and breach of contract against conveyancing solicitors relating to various off-plan fractional residential development schemes.

The Facts

These cases have inevitable followed a similar formula, in that a Developer markets and sells an off-plan project, predominantly to overseas buyers. These buyers intend to let the units upon completion. The development use a fractional sales model and buyers typically pay large deposits of 50%-80% of the total purchase price. These deposits were due to be used to fund completion of the project and were held on trust within a ‘buyer company’, usually with the Sellers solicitor as director, pursuant to a legal charge.

The money held within the buyer company was all spent on construction and more pertinently marketing and the buyers lost all of their deposits with little to no building work completed.

The Potential Defendants

There were 3 potential defendants to consider in these matters: the Developer, the Seller’s Solicitor and the Buyer’s Solicitor.

The Developer in these cases inevitably went into administration, with the freehold of the development site as the only asset. The buyers were creditors, however the typical recovery tended to be between 10 to 20 pence in the pound of their loss.

Action against the Seller’s solicitor was contemplated, but ultimately not pursued. This was because the funds were being held by the buyer company in accordance with the Agreements for Sale, upon which the Buyer’s Solicitor had been instructed to advise. Further, the release of funds was in accordance with the authority given by the Buyer’s Solicitor. This matter was contemplated in detail in the case Various North Point Pall Mall Purchasers v 174 Law Solicitors Ltd [2022] EWHC 4 (Ch)

This left the Buyer’s Solicitor as the relevant party to pursue in obtaining recourse. The Buyer’s Solicitors were often on a ‘panel’ of solicitors presented by the developer and/or the sales agent. The buyers, who were almost all based overseas, typically received a ‘legal report’, which was brief in it’s explanation and was not expanded upon in meetings with the clients. The clients invariably did not understand that the transaction they were entering into was not a standard conveyance.

Causes of Action

There were 3 grounds pursued in the claims against the Buyer’s Solicitors. These were:

Professional Negligence in failing to conduct due diligence into the contracts and other documentation which were contained in the ‘Seller’s pack’ (such as the Agreement for Sale, the Lease, the Management Agreement);

Breach of Contract, in failing to properly advise their client and failing to properly carry out due diligence under the letter of retainer; and

Breach of Fiduciary Duty and/or Trust in allowing the monies to be paid over to an unregulated ‘buyer company’ account.

The Legal Issues

During the course of these matters, various legal authorities were considered. These included (but were not limited to):

Barker v Baxendale Walker Solicitors and another [2017] EWCA Civ 2056 in considering the solicitors specific duty to warn as to the risks inherent in the purchase;
BPE v Hughes Holland [2017] UKSC 21 in relation to the approach to assessing damages for loss of chance in a professional negligence claim;
SAAMCO in considering whether the solicitors were retained to provide information or advice;
Dreamvar (UK) Limited v Mischcon de Reya; P&P Property Ltd v Owen White & Catlin LLP [2018] EWCA Civ 1082 in considering the buyers entitlement to equitable compensation.

Conclusion

Elysium Law has been successful in obtaining many multi-million pound recoveries for client groups based across the globe in this area of law.

If you have been involved in a failed development similar to this, please call us on 0151 328 1968 or contact us via clerks@elysium-law.com to see if we can assist you.

Data Breach: What Are My Rights

Posted on 19 Oct 202204 Apr 2024 by Ruby Keeler-Williams

In this article, Ruby Keeler-Williams of Elysium Law considers the consequences of a personal data breach and what rights you have. The article briefly looks at the legislation and considers quantum and case law.

The General Data Protection Regulation (GDPR) and the Data Protection Act 2018 set out rules as to how data is collected, used, stored, and protected.

Under the legislation, any organisation which holds and determines the purpose of the processing of personal data must implement appropriate technical and organisational measures to ensure that the processing of personal data complies with the rules.

A breach of personal data can occur if appropriate measures are not in place. A breach of security may lead to the destruction, loss or unauthorised access to personal data.

This infringes your rights as an individual and can have serious consequences. We have been instructed on matters where a breach in the security of a company led to the unauthorised disclosure of employee identity documents and bank details. These details were then distributed to criminal groups and companies were fraudulently set up in the employees’ names.

If a company that holds your data processes it in breach of the legislation or holds your data in such a way that it is disclosed in an unauthorised way, whether accidentally or deliberately, then you are entitled to claim for compensation.

If your claim is successful, you will receive damages, also known as compensation. You will be able to claim for any identifiable losses which have arisen from fraudulent transactions caused by identity theft. You will also be able to make a claim for general damages if the breach in your data has caused you distress. We will discuss your case at length and identify which damages are relevant to your specific matter.

Your level of compensation will depend on the nature of the data breached. If the data breached does not contain sensitive information (such as name alone) and/or is quickly remedied, then whilst you have a right to claim, in reality the claim will be worth very little and may not be worth pursuing. It is for this reason why you should seek legal advice at the earliest possible opportunity.

Decisions in recent years illustrate that the High Court will not condone claims that are exaggerated and unnecessarily complex. An example is Stadler v Currys Group Ltd [2022] EWHC 160 (QB), whereby a refurbished device was resold without a factory reset to remove the previous users purchase details, leading to a £3.49 purchase being made on the user’s account. The Claimant issued high court proceedings seeking £5,000 in damages for breach of confidence, misuse of private information, negligence and breach of data protection law, seeking injunctive relief. The defendant made an application to strike out the claim and was successful save for the breach of data protection law. The judge also transferred the claim down from the High Court to the County Court and suggested that the small claims court was the appropriate allocation.

In some cases the data breached is sensitive, such as medical records, identity documents, bank details, etc. In these cases, there will be a substantial claim for damages.

Due to the relatively recent developments in technology and the sensitive nature of such claims, there is limited case law detailing the quantum of awards of damages. Many cases settle before they reach the courts. Each case will be assessed on its own merits and due to the individual nature of a claim for distress, a group of individuals who have suffered the same category of data being breached may receive different awards.

Generally, damages for breach of data will be awarded within the following guidelines

Personal details (home or email address, date of birth, etc) – £1,000 to £1,500
Medical information (depending on who it is disclosed to/the nature of the information) – £2,000 – £5,000
Financial information (depending on who it is disclosed to/the nature of the information) £3,000 to £7,500

If you have suffered as a result of a breach of your personal data, please contact us via telephone on 0151 328 1968 or via email at clerks@elysium-law.com to have a discussion with the team. We will have a free, no obligation discussion with you to help determine the merits of your claim and can advise you on the next steps if you wish to pursue it further.