Thomas Barnes & Sons Plc (in administration) v Blackburn with Darwen Borough Council [2026] EWHC 24 (TCC)

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Thomas Barnes & Sons Plc (in administration) v Blackburn with Darwen Borough Council

[2026] EWHC 24 (TCC) | High Court of Justice, Technology and Construction Court

Before HHJ Stephen Davies, sitting as a High Court Judge | Heard 12 December 2025 | Handed down 13 January 2026

Interactive Process Flow | Non-party costs against funders of insolvent-company litigation

Case Analysis Process Flow

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1. Case Overview

Case: Thomas Barnes & Sons Plc (in administration) v Blackburn with Darwen Borough Council [2026] EWHC 24 (TCC)
Court: High Court of Justice, Technology and Construction Court
Judge: HHJ Stephen Davies, sitting as a High Court Judge
Hearing Date: 12 December 2025
Judgment Date: 13 January 2026
Case No: HT-2020-MAN-000023

After Blackburn with Darwen Borough Council successfully defended a substantial construction claim brought by Thomas Barnes & Sons Plc in administration, it sought the unpaid balance of its costs from family members and an estate that had funded the litigation and expected creditor recoveries. The court decided whether they were real parties to the failed claim for section 51 purposes (paragraphs 30-47).

Central Legal Test: A non-party costs order under section 51 of the Senior Courts Act 1981 is exceptional and must be just in all circumstances. The touchstone was whether the funders were real parties in important respects, assessed through funding, control, expected personal benefit, warnings, security and the policy supporting officeholder litigation (paragraphs 30-45).

Failed Claim and Shortfall

The council defended the claim through trial at budgeted cost of about £995,000. Security produced about £583,000, leaving at least about £412,000 before detailed assessment (paragraph 38).

Funding

The respondents funded the company's legal costs and security because the administration lacked money and they expected recovery as secured creditors or through the estate (paragraphs 38-42).

Control

Thomas Barnes supplied extensive factual assistance and exercised real control alongside the administrators; the other respondents backed the litigation financially (paragraphs 40-42).

2. Procedural History

After Trial

The application followed the council's successful defence and the insolvent claimant's inability to satisfy the remaining costs.

Detailed Assessment

The order attached to the outstanding balance ultimately found due on assessment if not agreed (paragraphs 45-46).

3. Defendant's Position

The council said the funders pursued the claim for substantial personal creditor recoveries, controlled or supported it throughout, and should bear the defence-cost shortfall rather than council tax payers.

Real Parties

It relied on funding, control and the respondents' substantial financial interest as showing they were real parties in critical respects (paragraphs 38-42).

Warnings and Security

Costs warnings had been made and substantial security negotiated, but neither deterred continued funding (paragraph 43).

4. Claimant's Position

The respondents said the administrators controlled the litigation, Thomas assisted as a former director, and policy should not chill creditor funding of proper claims by insolvent companies.

Officeholder Decision

They relied on the administrators' formal decision-making and professional control of the claim.

Funding Policy

They argued that costs exposure would deter secured creditors from enabling officeholders to pursue company assets.

5. Court's Analysis

Substantial Benefit

The respondents were the only persons, apart from modest preferential claims, guaranteed substantial recovery unless the construction claim succeeded very fully (paragraphs 38-40).

Funding and Control

All respondents funded the litigation; Thomas also exercised real control, notwithstanding the administrators' proper concurrent control (paragraphs 40-42).

Real Parties

Those facts made them real parties in important and critical respects, so justice favoured them bearing the shortfall rather than the successful council (paragraph 42).

No Chilling Effect

This was not an order against an officeholder or a disinterested director. Personal benefit and involvement meant the policy protecting justified officeholder claims did not prevent relief (paragraphs 43-45).

6. Decision and Outcome

Winner: The Successful defendant and applicant (Blackburn with Darwen Borough Council) succeeded.

Result: A joint and several non-party costs order was made for the outstanding defence-cost balance after assessment. The executors' liability was confined to their capacity as representatives of the estate. No contribution order between respondents was made (paragraphs 45-46). The Non-party funders (Thomas Barnes and the other respondent funders or estate representatives) did not succeed on this application.

Practical Effect: The council could recover the budgeted-cost shortfall from those who funded and stood to benefit from the failed insolvent-company claim rather than relying only on the company in administration.

NPCO Granted

The respondents were jointly and severally liable for the outstanding assessed balance (paragraph 45).

Estate Limit

The executors answered only in that representative capacity and liability attached only to the estate (paragraph 45).

7. Key Legal Principles and Practice Points

Real Party

Funding, control and expected personal benefit are indicators, not a rigid checklist. The court decides practically who was the real party in important respects.

Insolvent-company Funding

Creditor funding is not automatically protected where funders seek substantial personal recovery and materially control or support the litigation.

Security and Warning

Provision of security and prior warning are relevant but neither determines the section 51 discretion.

Practice Implications

For Claimants:
Funders of insolvent-company claims should document the officeholder's control, commercial basis, return structure and exposure to adverse costs before committing funds.

For Defendants:
Identify who funds, controls and benefits from an insolvent claimant's case. Seek security and give a clear non-party-cost warning while evidence is available.

General Practice Points:
Limited liability does not create risk-free litigation for individuals who are, in substance, the funders and beneficiaries of an insolvent company's claim.

Legal Disclaimer

This interactive process flow is provided for educational and professional development purposes only and does not constitute legal advice. The content reflects interpretations and analyses that may not apply to specific circumstances. Contract interpretation depends on specific wording, jurisdiction, and factual context. Always consult qualified legal professionals before making decisions based on this content. SCCSI and its contributors accept no liability for reliance on this material.