Pro bono costs orders – a reminder from the Court of Appeal of their purpose

The Court of Appeal has addressed the question of whether, when considering a pro bono costs 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 paying party.

Pro bono costs orders broadly work in the same way as conventional costs orders: the unsuccessful party will pay the costs of the successful party.  This deters unreasonable conduct in litigation and encourages settlement of disputes.  The difference with pro bono costs orders is that payment is made by the unsuccessful party to the Access to Justice Foundation, rather than to the successful party (who did not in fact incur the notional costs in question, as they were represented pro bono).

In Manolete Partners PLC v Ian Russell White [2024] EWCA Civ 1558, Mr White already owed a large judgment debt to Manolete.  His pro bono representatives succeeded in appealing an order that he should apply his entire occupational pension to satisfy that debt.  The Court had to decide how to approach a pro bono costs order, to reflect Mr White’s success.

Manolete argued that if Mr White had paid for his lawyers, the sums already owed by Mr White to Manolete would have been set off against the sums payable by Manolete to Mr White. They said any pro bono costs order should therefore be conditional upon payment of the judgment debt by Mr White.  

The Court disagreed.  It was not bound to take the same approach that it would have taken if Mr White’s lawyers had not acted pro bono.  The Court underlined the discretion afforded by s194 of the Legal Services Act 2007 (which governs pro bono costs orders), and indeed its discretion to order a set off – or not – when making a conventional costs order.

In making its pro bono costs order unconnected to the payment of the judgment debt, the Court focussed on the legislative purposes of s194. That is, not only to put parties on a more equal litigation footing, by exposing privately funded parties to a risk of adverse costs but also, through the designation of the AJF as the recipient of costs payments, to provide a source of funding to support organisations providing free legal help to those that need it.  The case is a helpful reminder of the precedence of this latter purpose, and may encourage further pro bono costs applications.