High Court refuses to strike out lender's claim against law firm for tort of unlawful interference in respect of irresponsible lending claims they advanced on behalf of the lender's customers

The High Court dismissed applications by a defendant law firm to strike out and/or obtain summary judgment against a lender's claim alleging the tort of causing loss by unlawful means. The unlawful means relied on is the submission by the law firm of tens of thousands of irresponsible lending complaints, allegedly without proper investigation and in breach of the law firm's obligations to its clients: Vanquis Bank Limited v TMS Legal Limited [2025] EWHC 1599 (KB).

In deciding that the claim can proceed to trial, the court found that each essential element of the tort of causing loss by unlawful means was met on the basis of the facts as alleged. The decision confirms that the tort of causing loss by unlawful means is a flexible remedy capable of addressing novel forms of economic harm. While the judge recognised that a claim of this sort had not been pursued previously, he noted that this might be because it could only succeed on egregious facts and that, if the allegations were correct, it "would be an example of egregious conduct" by the law firm. This highlights the potential exposure of law firms operating high-volume complaint models to claims from third parties affected by their conduct.

The case will now proceed to trial, where the factual and legal issues will be examined in full. HSF Kramer Partner Neil Blake, Senior Associate Christopher Cox, and Associate Josh Hearn are acting for Vanquis in relation to this matter.

Background

Vanquis is a "second chance" lender that offers credit to individuals with limited or poor credit histories. TMS is a law firm that advances financial mis-selling claims on behalf of customers. Between October 2022 and August 2024, TMS submitted over 33,000 irresponsible lending complaints to Vanquis and the Financial Ombudsman Service (FOS), alleging that Vanquis did not undertake adequate checks prior to issuing credit to customers. At all material times, TMS employed only one qualified solicitor. The overwhelming majority of those complaints were ultimately rejected or withdrawn.

Vanquis brought proceedings against TMS for the tort of causing loss by unlawful means. It alleges that TMS breached its express and implied contractual and regulatory obligations to its clients by submitting complaints without adequate information or a proper assessment of their merits. Vanquis also claims that TMS made misleading representations to its clients regarding the strength of those clients’ claims and failed to warn them about the consequences of pursuing complaints (particularly suspension of credit). These actions disrupted Vanquis's relationship with its customers and led to significant damage, including costs incurred in investigating complaints that should never have been brought, lost profit from customers whose accounts had been suspended and associated FOS fees.

TMS applied to strike out Vanquis’s claim and/or obtain summary judgment on the basis that one or more of the four essential elements of the tort of causing loss by unlawful means is not met and thus that the claim is legally untenable.

Decision

The High Court (Mr Justice Jay) refused both applications, holding that Vanquis's claim was based on the application of well-established principles to a novel fact pattern.

It was common ground between the parties that the tort involves four essential elements: i) unlawful acts independently actionable by a third party; ii) interference with the actions of the third party; iii) intention to cause loss; and iv) actual loss. The court addressed each of these issues in turn.

Unlawful means

The court said that it had "no difficulty" with Vanquis's reliance on various alleged unlawful acts by TMS for the purposes of meeting this element of the test. These included alleged breaches of express and implied contractual terms, breaches of fiduciary duty and deceit.

The judge rejected TMS’s argument that the existence of regulatory oversight by the Solicitors Regulation Authority (SRA), Financial Conduct Authority (FCA) and FOS precluded a private law remedy, noting that these frameworks do not provide compensation to Vanquis. Their existence does not displace common law remedies where the pleaded facts fall within established tortious principles.

Interference

On the issue of interference, the court noted that Vanquis relied on both “general” and “specific” interference with its customer relationships. Vanquis argued, in a general sense, that bringing an unmeritorious complaint that it had acted in breach of contract and regulatory duty was sufficient to satisfy the test for interference. Alternatively, Vanquis argued, specifically, that its response to such complaints (including the suspension of credit) was standard market practice and was also required by the relevant regulatory provisions to which it is subject, and therefore satisfied the test for interference.

While the judge accepted that TMS's submissions on this point were "more compelling than they were elsewhere", he accepted that interference need not be coercive or total. It was sufficient that TMS’s conduct disrupted the bank’s commercial dealings with its clients, particularly where Vanquis’s standard practice was to suspend credit on receipt of such complaint.

Intention to cause loss

TMS advanced two main points on this issue: i) that TMS's means of achieving its end was by submitting complaints in the hope that they would succeed rather than specifically submitting complaints that were unmeritorious and were likely to fail; and ii) that if the intention limb was made out on this basis, this intention would be attributed to any solicitor or barrister acting under a CFA. The court disagreed with these arguments.

On the first point, the judge noted that causing loss to Vanquis did not have to be "either the predominant part of TMS's intent or TMS's desired end" but rather that it "was a virtually certain consequence of TMS's actions and TMS knew this to be the case". The judge held that this was a possible inference on the basis of Vanquis's case.

On the second point, the judge noted that his experience when working for claimants on a CFA was that he and his solicitors had "proceeded on the basis that there was a duty to ensure that each individual claim was reasonably arguable". 

Loss

The court concluded that Vanquis had adequately pleaded that it suffered actual loss as a result of TMS’s conduct. The pleaded losses, including FOS fees, staffing costs, and lost profits, were not speculative and could be tested at trial. The judge noted that Vanquis’s claim was not premised on the idea that all complaints were invalid, but rather that the volume and manner of submission without any regard to each complaint’s merits (or lack of them) caused avoidable harm.

Note: The Court of Appeal has refused permission to appeal.