--- title: "Manolete Case Study: Costs Order against Manolete Upheld Despite Outstanding Judgment Debt (Section 194 LSA 2007)" url: https://lexlaw.co.uk/solicitors-london/manolete-case-study-costs-order-against-manolete-upheld-despite-outstanding-judgment-debt-section-194-lsa-2007/ date: 2024-12-12 modified: 2026-06-02 author: "Muneeb Zahid" description: "In Manolete Partners PLC v White, the Court of Appeal ruled that a pro bono costs order under Section 194 LSA 2007 for £85,000 payable to the Access to Justice Foundation (AJF) was unconditional and could not be set off against the pro bono party's outstanding judgment debt, reinforcing the distinct legislative purposes of the provision." categories: - "Case Law" - "Case Study" - "Civil Litigation" - "Civil Procedure Rules" - "Costs" - "Costs" - "CPR" - "Legal Fees" - "Litigation" - "Pensions" - "pro bono costs order" tags: - "Access to Justice" - "Access to Justice Foundation (AJF)" - "AJF" - "Civil Litigation" - "Civil procedure" - "Civil Procedure Costs" - "commercial litigation" - "Commercial Litigation Costs" - "Conditional costs order" - "Conventional costs awards" - "costs" - "Costs Disputes" - "Costs law" - "Court of Appeal" - "Court of Appeal Judgment" - "Director claims" - "Indemnity principle" - "Insolvency" - "Judgment debt" - "Judgment Debt Set Off" - "Litigation" - "Litigation advice" - "Litigation Funding" - "litigation funding risks" - "Litigation in England and Wales" - "Litigation news" - "Manolete Partners PLC" - "Manolete Partners PLC White" - "Pensions Act 1995" - "Pro bono costs order" - "Section 194 Legal Services Act 2007" image: https://lexlaw.co.uk/wp-content/uploads/Manolete-Case-Study-Pro-Bono-Costs-Order-Upheld-Despite-Outstanding-Judgment-Debt-Section-194-LSA-2007.png word_count: 1752 --- # Manolete Case Study: Costs Order against Manolete Upheld Despite Outstanding Judgment Debt (Section 194 LSA 2007) *The Court of Appeal ordered Manolete Partners PLC to pay £85,000 in costs to the Access to Justice Foundation following the debtor’s successful appeal, rejecting Manolete’s argument that the costs should be offset against the outstanding judgment debt.* *The [Court of Appeal](https://www.judiciary.uk/courts-and-tribunals/court-of-appeal-home/)’s judgment in [Manolete Partners PLC v White [2024] EWCA Civ 1558 ](https://lexlaw.co.uk/wp-content/uploads/Manolete-v-Mr-White.pdf)clarifies the application of[ section 194 of the Legal Services Act 2007 ](https://lexlaw.co.uk/wp-content/uploads/s.194-legal-services-act.pdf)concerning pro bono costs orders. The [Access to Justice Foundation](https://atjf.org.uk/) (AJF) was entitled to a sum of £85,000 by [Manolete Partners PLC](https://find-and-update.company-information.service.gov.uk/company/07660874) for the pro bono representation of Mr White, even where a substantial judgment debt remained unpaid. The judgment also touches on the limits of creditor enforcement rights under the [Pensions Act 1995](https://www.legislation.gov.uk/ukpga/1995/26/contents) and the broader context of litigation funding and access to justice.* We are the leading UK firm defending directors against Manolete Partners’ claims due to our [expertise in insolvency litigation](https://windinguppetitionsolicitors.co.uk/post-insolvency-claims-against-directors/) and [strategic defence](https://lexlaw.co.uk/expert-legal-defence-against-manolete-transactions-at-an-undervalue-claims/) tactics. Our dual-qualified and experienced solicitors & barristers, based near London's Royal Courts of Justice, [specialise in countering Manolete’s aggressive pursuit](https://lexlaw.co.uk/solicitors-london/legal-guide-to-defending-claims-from-manolete-partners/) of transactions-at-undervalue claims e.g. by challenging evidence validity, leveraging limitation periods, and demonstrating good faith per the Insolvency Act 1986. We have a track record of [protecting directors’ assets](https://windinguppetitionsolicitors.co.uk/overdrawn-director-loan-account-insolvency-companies-act-liquidator-misfeasance-proceedings-representation-advice/), including family homes, while navigating complex financial and regulatory risks. Our insolvency law focus and experience with litigation funders ensures tailored, robust defence in high-stakes claims. [Get in touch about your Director's Duties case](https://lexlaw.co.uk/legal-case-assessment/). ## Manolete Partners PLC v White [Manolete Partners PLC](https://www.manolete-partners.com/) had secured judgment against Mr White exceeding £1 million, arising from a dispute over pension fund withdrawals. At first instance, the court ordered Mr. White to withdraw funds from his occupational pension to satisfy the judgment debt. However, Mr White successfully appealed this order, with the Court of Appeal holding that [section 91(2) of the Pensions Act 1995](https://www.legislation.gov.uk/ukpga/1995/26/section/91) protects pension rights from creditor claims, rendering the original enforcement order unlawful. During the appeal, Mr White was represented pro bono by legal teams coordinated through the Bar pro bono charity. Following his success, Mr. White applied for a costs order under section 194 of the Legal Services Act 2007, which allows courts to order payment to a prescribed charity-the Access to Justice Foundation (AJF)-to compensate pro bono legal representatives. Manolete Partners challenged the costs order, contending that any costs payable to the AJF should be offset against the substantial judgment debt Mr. White owed to Manolete or that the costs order should be conditional on Manolete recovering that debt. This raised the novel question of whether pro bono costs orders could be influenced by outstanding debts between the parties. ## Court of Appeal’s Findings in Manolete Partners PLC v White ### Are Pro Bono Costs Orders  Distinct from Conventional Costs Awards? [Lord Justice Snowden](https://www.judiciary.uk/guidance-and-resources/lord-justice-snowden/), while conducting an analysis on pro bono costs order under section 194 of the Legal Services Act 2007, it was noted that a pro bono costs order under section 194 differs from conventional costs order and the purpose of section 194 was to balance the litigation field for both parties. > *19. O**ften called a "pro bono costs order", an order under section 194 is not a conventional order for costs made under section 51 and CPR 44. It does not, for example, conform to the indemnity principle that underlies conventional costs orders**.** **As such, while section 194(4) in effect requires the court to have regard to the principles that apply to such costs orders, the power to make an order under section 194 must also be exercised having regard to the legislative purposes behind the enactment of that section.* > *20. The legislative purposes of section 194 are relatively easy to see. Before the introduction of section 194, a privately funded party who was litigating against a person who was represented pro bono had the tactical advantage that they were not exposed to the usual risks of an adverse costs order. The introduction of section 194 was designed to put the parties on a more equal litigation footing by exposing the privately funded party to a similar risk of adverse costs. In addition, the identification of a charity as the beneficiary of an order under section 194 and the designation of the AJF makes clear the intent that orders under the section should provide a source of funding to support organisations involved in the provision of free legal help to a wider cross-section of the public who might be in need.* This confirms that pro bono costs orders serve a different function from standard costs orders and are designed to support the sustainability of free legal services. ## Rejection of Set-Off or Conditional Costs Orders Lord Justice Snowden rejected Manolete’s argument that the costs order should be set off against the judgment debt or made conditional on Manolete’s recovery of that debt. It was noted that: > 21. *Parliament must have enacted section 194 in the knowledge that the majority of litigants who obtain pro bono representation do so because they do not have the financial means to pay for legal services. Parliament therefore could not have envisaged that an order for payment to the AJF should be made conditional upon such litigants finding the money to pay legal fees, because the practical result of imposing such a condition would be that in most cases, no payments would be required to be made to the AJF. This would defeat the statutory purposes which I have identified.* > *24. In those circumstances, agreeing with the submissions by Mr. White's legal team, I think that the conditional order proposed by Manolete gives rise to too much uncertainty and would not fulfil the legislative purposes behind section 194.* While agreeing with Lord Justice Snowden, [Lady Justice Asplin](https://www.judiciary.uk/guidance-and-resources/lady-justice-asplin/) stated that: > *29. I agree with Lord Justice Snowden for all the reasons he has given. As he points out, the underlying purpose of section 194 is not only to place parties on an equal footing by putting the privately funded party at risk of an adverse costs order but also to provide a source of funding for and to encourage the provision of free legal assistance to those in need of it. In my judgment, a conditional order of the kind which is now sought, would be contrary to that very important, albeit underlying purpose, for all the reasons which Lord Justice Snowden gives.* [Our team](https://lexlaw.co.uk/our-people/) possesses the in-depth expertise required to advise and represent you effectively on such specialist costs matters and complex commercial disputes, leveraging insights from important judgments, guiding you through the nuances of these challenging legal areas. [Instruct us](https://lexlaw.co.uk/legal-case-assessment/) for an initial consultation conference with our team of expert solicitors and barristers. ## Implications of Manolete Partners PLC v White This ruling confirms that pro bono costs orders under section 194 are independent of the underlying financial relationship between parties. It strengthens the position of pro bono legal providers by ensuring they receive costs awards regardless of outstanding debts owed by their clients. This has important consequences for litigation funders and parties involved in disputes where pro bono representation is common. The decision also highlights the judiciary’s commitment to access to justice, recognising that financial barriers should not prevent effective legal representation. It aligns with broader trends in civil procedure encouraging cost transparency and fairness. This case study demonstrates the evolving landscape of costs and litigation funding in UK civil justice. The *Manolete Partners PLC v White* judgment affirms the courts’ role in balancing access to justice with fair costs allocation, a critical consideration for litigators and funders alike. However, the ruling may raise concerns for parties like Manolete, who, despite being owed significant sums, must nonetheless satisfy costs orders benefiting third-party charities. This could prompt further debate on how access to justice funding is structured and whether state support should supplement or replace costs shifting in such contexts. ## Download the Judgment Here [![](https://lexlaw.co.uk/wp-content/uploads/Manolete-v-Mr-White-725x1024.jpg)](https://lexlaw.co.uk/wp-content/uploads/Manolete-v-Mr-White.pdf) ## Defending Manolete Director Claims and Costs Orders When advising clients facing pro bono costs orders or defending claims funded by litigation financiers such as Manolete, it is critical to undertake a thorough review of the underlying debts and costs entitlements. Forensic accounting can assist in clarifying the financial interplay and challenging any inflated costs claims. Early engagement with experienced [insolvency](https://lexlaw.co.uk/practice-areas/winding-up-petitions-solicitors-london/) and [litigation](https://lexlaw.co.uk/practice-areas/litigation-dispute-resolution-solicitors-london/) solicitors and barristers, is vital to explore potential defences, including jurisdictional challenges or procedural irregularities. Where appropriate, negotiating payment terms or seeking conditional settlements can mitigate exposure. Understanding the statutory framework of section 194, and its distinction from conventional costs rules, enables more effective case strategy and client counselling. As seen in our successful defence of wrongful trading claims, timely legal advice is critical in navigating complex cost and funding issues. Contact [our team](https://lexlaw.co.uk/our-people/) of expert solicitors for an [initial conference](https://lexlaw.co.uk/legal-case-assessment/). ### FAQs on Pro Bono Costs Orders and Manolete Claims **Why is this case significant for costs law?** This case clarifies that pro bono costs orders under section 194 Legal Services Act 2007 are independent of outstanding judgment debts, reinforcing the statutory aim to support free legal representation through payments to charities like the Access to Justice Foundation. **Can costs orders under section 194 be set off against debts owed by the successful party?** No. The Court of Appeal confirmed that such costs orders are unconditional and cannot be offset or made conditional on recovery of debts owed by the party benefiting from pro bono representation. **How does this affect parties owed large judgments?** Parties owed substantial sums may still be required to pay pro bono costs orders, which could create practical difficulties but reflects the legislative intent to fund access to justice initiatives. **What defences are available against Manoete claims?** Defences include challenging the validity of the underlying claim, procedural objections, and scrutinising the quantum of costs. Early legal advice is essential to formulate effective responses. **Does Manolete’s litigation funding model affect settlement negotiations?** Yes. Funders like Manolete provide capital and expertise, which can increase pressure to settle. However, understanding the funding structure helps in negotiating realistic outcomes. **Can a pro bono costs order be appealed?** Yes, but appeals are typically limited to errors of law or procedural irregularities. The Court of Appeal’s ruling sets a strong precedent supporting such costs orders. **What is the role of the Access to Justice Foundation?** The AJF receives payments under section 194 to fund pro bono legal services, ensuring sustainability of free legal assistance to those unable to pay. **Where can I get legal advice on defending Manolete claims?** Our team provides specialist advice on defending claims funded by Manolete Partners. See our [legal guide to defending claims from Manolete Partners](https://lexlaw.co.uk/solicitors-london/legal-guide-to-defending-claims-from-manolete-partners/) for comprehensive support.