Simon and his wife Laura equally owned a business (S&L) that ran a pet shop. Laura was in charge of the bookkeeping and Simon dealt with the practical side of the business. They were also jointly involved in two other small businesses owned by other family members.

How the problems started

In 2017, Laura was admitted to hospital with a serious illness. After she was hospitalised, Simon realised that Laura had been neglecting the bookkeeping for one of their companies and it faced serious financial difficulties. He found stashes of money hidden around the house and realised that many bills hadn’t been paid. This put a huge strain on family relationships and their marriage began to crumble.

After she left hospital, Laura asked Simon to leave the house and refused to keep him up to date on the finances of their joint company, effectively stopping him from being involved. During their divorce proceedings, Simon was prevented by a court order from participating in the business but tried and failed to find out what was going on financially. Later that year, to his complete shock, Simon was told that S&L was in dire financial straits and needed to be wound up. He said: “I couldn’t believe it. My family had put money into it and everything. It was built on my inheritance from my mum and I took that very personally. It was a profitable business, but the bills weren’t being paid.”

In early 2018, Simon appointed a liquidator for S&L and a year later, he received a letter telling him that S&L was intending to bring a £200,000 claim against him personally for alleged breaches of directors’ duties, including taking a loan and failing to pay it back, misappropriating money from the business and misusing company money. “I was absolutely furious because I had nothing to do with it and all I was trying to do was get up to date with the bills. I couldn’t physically have misappropriated the money because I was prevented from accessing the business.”  The liquidator who had brought the action against Simon in fact sold the claim to the well-known litigation funder, Manolete Partners. Known for their aggressive prosecution of claims, Manolete pressed forward with trying to recover the alleged debt of around £200,000 through the courts. 

Going to court alone

Simon was devastated and denied any wrongdoing. Proceedings were issued against him and he failed to understand that he had to provide a defence, explaining that “with everything going on in my life at the time, I did miss things.” The claimant tried to get a judgment in default and Simon went to court alone. He was offered help from the Chancery Litigant in Person Scheme (CLIPS), which provides free on-the-day representation. Tom Foxton from Brick Court represented him and HHJ Johns granted Simon extra time to file his defence. Simon said: “Tom was fabulous. He was allocated to me through CLIPS and he made contact with me. We spoke several times in the evening until late and then he spoke to the judge for me the following day. The judge understood my position and was very kind.”

Tom recommended that Simon apply to Advocate for help and his case was picked up by Edward Armitage from Maitland Chambers.

Edward helped Simon with some advice on the merits of his claim and drafting for his defence. Edward realised that the claim was complex and valuable, so asked for solicitor assistance through Pro Bono Connect. Dentons volunteered and worked with Edward to achieve the best possible outcome for Simon.

Reaching a settlement

The Dentons' DR Insolvency team was led by Mark Price and had day-to-day contact with Simon. Matters were complicated when Manolete applied for a charging order against Simon's home, which had been up for sale for some time but had tenants in it. Significant efforts were made to push back on the final charging order, which would have had a damaging effect on Simon's ability to settle his many other debts. Simon's legal team assessed the strength of the claims against him and effectively resisted Manolete's attempts to pressure Simon into accepting an unfavourable settlement. Simon also effectively resisted the attempts by Manolete to make the interim charging order final. 

After a lot of negotiation, the claim was settled with Simon agreeing to pay £30,000 of the £200,000 claim in three £10,000 tranches. While this is still a significant amount of money, the claim was concluded more swiftly than if it had gone to court. Simon agrees and says: “The result would have been significantly worse had I not had assistance. More than anything else, it’s for peace of mind. I wouldn’t have known what to do or say and I didn’t have money for a solicitor. I would have felt very vulnerable without the backing of Edward and Dentons. They were a real emotional, supportive and knowledgeable crutch.”