ALERTER
Food for thought when bringing mass claims? Vanquis Bank Limited v TMS Legal Limited

By Toby Riley-Smith KC, Thomas Samuels & Douglas Maxwell

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On 26 June 2025, Jay J handed down his judgment in Vanquis Bank Limited v TMS Legal Limited [2025] EWHC 1599 (KB) (“Vanquis”). The litigation is a novel attempt to repel mass “mis-selling” litigation of the kind now frequently pursued by claims management companies and solicitors via the Financial Ombudsman Service (“FOS”) and the Courts, including by way of omnibus claims and group litigation.

The Claimant (“Vanquis”) faced mass allegations of unaffordable lending by current and former customers represented by The Money Solicitor Legal Limited (“TMS”), the majority of which were unmeritorious. It has therefore brought proceedings against TMS in the tort of causing loss by unlawful means, in particular on the basis that TMS had acted in breach of various contractual and fiduciary duties in pursuing claims without proper regard to whether each claim was viable. In doing so, it is said that TMS interfered with Vanquis’s relationship with its current and former customers, with the inevitable result that the Bank would suffer loss in consequence.

Jay J dismissed TMS’s attempt to strike out the claim. The decision demonstrates that it is arguable – at least on “egregious facts” – that a Claims Management Company or solicitor is liable for losses caused to defendants by pursuing generic volume litigation it knows (or ought to know) is not properly arguable.

Vanquis’s experience is far from unique. In May 2024, the Solicitors’ Regulation Authority (“SRA”) published a warning notice concerning firms’ obligations in relation to “high-volume financial services claims”.

Whilst this is an interim decision based on assumed facts taken at its highest, the future progress of the litigation merits close attention by those concerned with any kind of volume litigation. The key question is whether a similar approach might be permissible in the context of other types of mass claims.

FACTS

Vanquis specialises in lending to individuals with low or adverse credit histories. TMS is a claimant law firm specialising in allegedly irresponsible lending claims on a “no win no fee” basis. As noted at [14], pre-July 2024 it charged clients up to 45% of any redress obtained (including by way of debt write-off), since reduced to 30% due to SRA caps.

TMS brought thousands of analogous claims against Vanquis. All alleged that Vanquis had provided unaffordable credit to its clients in breach of various regulatory obligations.[1] The prescribed process for such claims requires clients to first raise a complaint with Vanquis. If dissatisfied with its final response, the complaint can be escalated to the FOS.

Once the FOS receives more than three complaints against the same lender within the same financial year, the lender is required to pay a fee to the FOS, regardless of the outcome. The fee was £750 per complaint, reduced to £650 in April 2024. As a result of claims brought by TMS, Vanquis was required to pay over £9m in FOS case fees.  Even where claims were totally without merit, Vanquis was unable to recover the fee or their costs.[2]

ISSUES

Vanquis’s pleaded cause of action was causing loss by unlawful means. It was contended that TMS owed legal and ethical obligations to its clients, summarised as follows at [15]:

“TMS must (1) act in the best interests of its clients, (2) have a system of proper governance, (3) obtain client authority before proceeding, and (4) only submit claims when it has reasonable grounds to do so and sufficient information on which to base a decision to proceed. It is said that TMS’s specific duties in respect of these claims (whether at the first stage or at the point of referral to the FOS) include undertaking reasonable enquiries to assess the viability of individual claims (and if such information is lacking, identifying the further information that is required and then obtaining it), confirming the client’s relationship with Vanquis, providing sufficient information for Vanquis to identify the account, warning clients about the likelihood of credit suspension, and exercising reasonable care and skill when presenting claims.”

It was submitted that TMS’s specific duties in respect of the claims brought against Vanquis (whether at the first stage or at the point of referral to the FOS) included undertaking reasonable enquiries to assess the viability of individual claims (and if such information is lacking, identifying the further information that is required and then obtaining it), confirming the client’s relationship with Vanquis, providing sufficient information for Vanquis to identify the account, warning clients about the likelihood of credit suspension, and exercising reasonable care and skill when presenting claims.

Vanquis further contended that TMS made “merits representations” to its clients to the effect that their claims are properly arguable and that the solicitors have sufficient information in their possession to make that judgment. It was argued that TMS made these representations with the intention that they be relied on by clients in permitting TMS to file irresponsible lending claims on their behalf. Vanquis’s argument was that these representations were made recklessly. TMS did not care whether or not the representations were true. Indeed, it knew from experience that many such claims were not properly arguable and/or that it did insufficient work to ascertain in any individual case whether it was arguable.

Vanquis’s case was that the deluge of unmeritorious claims brought by TMS in breach of duty had the inevitable result of causing Vanquis loss. Quantum was pleaded at around £13m, including the additional costs associated with dealing with defective claims and over £9m in fees to FOS.

THE DECISION 

The scope of the tort

TMS applied to strike out the claim and for reverse summary judgment, both on the basis of pleading points and matters of substance.

By way of what were variously described as “preliminary” or “core” submissions, TMS argued that Vanquis’s claim represented an inappropriate extension to, and/or strayed beyond the established bounds, of the tort of causing loss by unlawful means. Two such arguments are of particular note. First, at [40]-[41] Jay J rejected the submission that the existing regulatory framework gave the SRA, the Financial Conduct Authority and/or FOS sufficient power to investigate and sanction the improper pursuit of irresponsible lending claims. Such powers were not “an answer in public policy terms to Vanquis’s claim.” Secondly, at [46]-[47], Jay J likewise rejected the submissions that the tort applied only in two situations (1) where the parties are in direct competition with one another, and (2) where the claim concerns a labour dispute. While those instances may well be “paradigm cases”, “they are not defining categories. The correct analysis involves distilling out of relevant authority the principles and rules that underpin the tort, recognising always that the common law writes nothing in stone.”

The Elements of the Tort

Having dealt with those preliminary matters, Jay J considered Vanquis’s pleaded case by reference to each of the four well-established limbs of the tort (taken from Lord Hoffmann’s speech in OBG v Allen [2008] 1 A.C. 1, [47]).

(1) Unlawful acts used against, and independently actionable by, a third party

Noting that TMS raised no objection to Vanquis’s reliance upon alleged breach of contract amongst other matters as the unlawful means, Jay J held at [66] that there was “no difficulty with the proposition that Vanquis is relying on a number of unlawful acts for the purposes of this first limb of the tort.”

(2) Interference with the actions of the third party in which the claimant has an economic interest

Jay J noted that the touchstone of this limb of the tort remained (in essence) whether Vanquis’s ability to deal with third parties had been interfered with by TMS’s actions. In this case, the third party in question was the former or current customer on whose behalf TMS purported to act.

TMS set out a number of reasons why the second limb was not satisfied, summarised at [71]. Although said to be “more compelling” than TMS’s other arguments, Jay J concluded in relation to what Vanquis’s counsel termed the “general interference”, at [81], it is “at least arguable that causing a client, present or past, of Vanquis to lodge a complaint of irresponsible lending, undoubtedly a serious allegation, amounts to TMS bringing about an interference with the key relationship. This is particularly so if the complaint turns out to be without foundation. Further, it is at least arguable that the making of any complaint of this sort is likely to have consequences: it is not a neutral act.” As to the suggested “specific interference” – being that Vanquis was obliged to suspend credit to a customer who pursued an irresponsible lending allegation against it – Jay J likewise found the case to be arguable for two reasons. At [86]: (1) on any view, if it was acting pursuant to standard practice in the industry, Vanquis was not “acting with freedom to decide” whether to suspend credit; and (2) Vanquis did so directly as a result of the state of affairs brought about by TMS such that “there are no breaks in the causal chain.”

(3) Intention to cause loss to the claimant by the use of unlawful means

The relevant authorities set out that to establish an unlawful means tort there must be an intention to cause loss (OBG, at [62]). TMS made a number of submissions including a lack of proper particulars and the requirement to show specific intent in the circumstances (at [95]-[96]).

Jay J rejected these submissions, observing that “Vanquis’s economic loss (subject to TMS’s separate arguments on causation) was a virtually certain consequence of TMS’s actions and TMS knew this to be the case” (at [98]). Thus, “it is at least a possible inference that the masterminds of this economic model did possess the requisite degree of knowledge and intent” (at [98]).

Jay J further rejected TMS’s submission that Vanquis’s case would mean that any barrister or solicitor acting in such a claim on a CFA basis might become liable in the tort of causing loss by unlawful means. At [103]: “I simply cannot accept the contention that TMS’s intention would be attributed to any solicitor or barrister operating on a CFA.”

(4) Loss in fact caused to the claimant

Finally, on causation of loss, accepting the evidence provided, Jay J considered, at [108], “that it is fairly obvious that Vanquis may well have sustained the types of loss it has pleaded.” It will have “needed to do more work” and “to pay fees to the FOS which… would not have [otherwise] been incurred.” Further, “[l]oss of profit may well have arisen.” While the issue will ultimately “depend on a close examination of Vanquis’s financial data and other evidence”, those were properly matters for trial.

By way of general conclusion, Jay J noted that while the “facts of this case are novel” they are merely “the application of well-established principles to a new factual pattern.” He considered that the reason such claim had never before been brought was because it necessarily required “egregious facts” which, if Vanquis was right, TMS’s conduct would be.

DISCUSSION

Vanquis is, as acknowledged by Jay J’s decision, a novel application of the tort which, if it succeeds, could have significant ramifications for consumer bulk issues and group litigation, extending well beyond financial “mis-selling” claims.

In individual claims, often pursued on the small claims track in the County Court, the relatively high hurdle to costs recovery (per CPR r.27.14(2)(g)) results in (limited) adverse costs risks. In circumstances where it is not uncommon to see heavily templated pleadings and evidence on claims brought outside of the primary limitation period, the Part 27 costs regime arguably encourages the pursuit of comparatively speculative claims. Indeed, very many such claims are struck out or subsequently dismissed on limitation grounds, or in circumstances where the relevant statutory provisions relied on had not yet come into force at the relevant dates.

Similarly, in the context of threatened group litigation (by omnibus claim or group litigation order) it is not uncommon for there to be very many potential claimants who are either wholly fictional or otherwise obviously outside the scope of the threatened claim. For example, in the recent decision in Abernethy & Ors v Barclays Bank Plc & Ors [2025] EWCC 1, at [92] the Court noted evidence from the defendants that they had received pre-action data subject access requests on behalf of “Darth Vadar”,“Michael Mouse”, “Donald Duck”, “Adolf Hitler” and “Rishi Sunak”, as well as others whose dates of birth suggested they were “over 100 years old.”  Overall, it was suggested that there was a “lack of vetting … of the cogency of claims.” At [94], the Court endorsed the defendants’ concerns as to the accuracy of the claimants’ solicitors’ data and warned against “the metaphorical ‘dumping’ of claims at the doors of the court and of defendants.”

The decision in Momenta Holdings (PPI) Limited v Cheval Legal & Ors [2024] EWHC 3333 (Ch) provides another apposite example of potential failings in the vetting of mass consumer claims (there, by a third party to whom the solicitors had outsourced certain tasks).

Vanquis thus serves as a warning to unscrupulous claims managers and solicitors: ignore your professional obligations at your peril. It is no excuse that there may be no immediate cost consequence or that insufficient vetting of claimants is commonplace in such claims. As Jay J. noted, recalling his own experience in practice at [103], even in a case involving “30,000 clients…my solicitors and I proceeded on the basis that there was a duty to ensure that each individual claim was reasonably arguable.”

The extent to which the analysis in Vanquis could be regularly deployed by defendants facing such claims remains to be seen. It was an interim decision reached upon assumed facts and must therefore be treated with some caution. Moreover, TMS’s failings arguably directly interfered with Vanquis’s relationship with its clients since it was required to suspend credit pending resolution of their irresponsible lending complaints. That requirement is a fundamental feature of the tort which may be more difficult to make out in other cases.

Nonetheless, the future progress of the Vanquis litigation merits close attention for those bringing and defending such claims.

Toby Riley-Smith KC
Thomas Samuels
Douglas Maxwell
3 July 2025

This Alerter is available to download as a PDF below. 

[1] See, for example, Kerrigan v Elevate Credit International Ltd (t/a Sunny) (in administration) [2020] EWHC 2169 (Comm).

[2] Albeit from 1 April this year, a case-handling fee of £250 also applies to “complainant representatives” (such as TMS): FCA Handbook, FEES 5.5C.

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