Sellers: Anexo boss advised on original claim
A court has rejected an application for a non-party costs order (NPCO) against listed legal and credit hire business Anexo Group over the work of its subsidiary law firm.
His Honour Judge Luba KC, sitting in Central London County Court, said the fact that a law firm had a financial interest in a particular case did not mean that its owners did too, even though they may ultimately benefit from the overall profit made by the firm.
“That would place all owners of solicitor’s firms in the potential frame for receipt of a NPCO,” he pointed out.
He described Soares v Wilson [2023] EW Misc 11 (CC) [1] as a “significant attempt” to broaden the ongoing “forensic legal war” between motor insurers and those who help claimants bring modest compensation claims, particularly around credit hire.
Anexo owns all of the businesses involved in the underlying claim – personal injury law firm Bond Turner, credit hire provider McAMS and engineering report provider PALS – while the claimant’s counsel back in 2017 was Alan Sellers, the barrister chairman of Anexo.
The claim settled for £9,000 plus costs and disbursements. There was a dispute about the basis for assessment of those costs which the defendant won on appeal. He was awarded the costs of the appeal and of the initial hearing before a costs judge.
As a result, the claimant only recovered £4,455 of the £21,895 claimed in costs.
HHJ Luba recounted: “That left the successful defendant in the costs proceedings (or, in practical terms, his insurers) with the benefit of a costs order dwarfing – in amount – the costs that he had been liable to pay consequent upon settlement of the original claim.
“But recovery of the balance of those costs, against the claimant personally, would normally be prevented by QOCS [qualified one-way costs shifting] and, in any event, impracticable because the claimant had been asserted to be an impecunious individual.”
The defendant’s insurer then made Anexo a party to the proceedings so it could apply for it to pay the costs owed, arguing that the claim was “clearly a vessel for Anexo to profit from”.
Dismissing the application, HHJ Luba noted that Anexo had not even been incorporated when the claimant had his accident, sought a hire vehicle on credit or instructed solicitors.
He continued: “The undisputed evidence is that Anexo Group PLC knew nothing of the claimant individually, even after its establishment.
“It not only knew nothing of his individual claim or of his precise arrangements with his solicitors, but it had no knowledge of the dispute being pursued in relation to the assessment of the costs of his claim or the appeal in those costs proceedings.
“It certainly did not fund, direct, control or in any way manage that dispute which led to the costs order in the costs proceedings which it is now said to be just that it should meet, despite it not being a party to the proceedings.”
While Anexo’s publicity said it had “in-house” lawyers, the claimant had instructed a firm of solicitors independently regulated as a discreet entity by the Solicitors Regulation Authority.
“The solicitors at Bond Turner would have been acting in breach of their obligations and their professional duties, both to their client and more generally had they disclosed to Anexo, as one of the firm’s owners, the instructions they had received or were receiving from their client about his claim or the costs dispute arising in it.”
This was not an issue of having to pierce the corporate veil – the judge said he would have been able to make an NPCO had he been satisfied that Anexo had directed Bond Turner to use the claimant’s name in pursuit of its own interests.
HHJ Luba added that Anexo could not be the “just recipient” of a NPCO simply because it owned Bond Turner, “unless the circumstances are such that those solicitors would themselves have been made subject to a NPCO had the application been directed against them”. This had not been established on the evidence.
“The authorities binding on me underscore good policy reasons for concluding that NPCOs should not ordinarily be made against solicitors seeking to maximise the outcomes of litigation, pursued in the names of their clients, even if, as in respect of costs, they are ultimately pocketed by those solicitors.”
It also did not follow from the fact that Bond Turner may have a financial interest in the outcome of a particular case that Anexo – even though it which may ultimately benefit from any overall profit made by Bond Turner – was “in any sense either the party or a party with a financial interest in the particular case”.
The judge said: “That would place all owners of solicitor’s firms in the potential frame for receipt of a NPCO. Anexo is itself owned by others. Logically, if the applicant here is right, they might also potentially be exposed to a NPCO.”