Clifford Chance

On 25 June 2025, the High Court allowed a bank's claim for loss by unlawful means – brought to stem the tide of claims issued against it by a legal services provider – to proceed, dismissing the legal services provider's strike out application. The claim will be keenly watched by defendants facing claims from claims management companies ("CMCs") as a creative strategy in responding to those mass claims.

Background

TMS Legal Limited ("TMS") represented customers of Vanquis Bank Limited ("Vanquis") who issued claims against Vanquis for allegedly failing to conduct adequate affordability checks before issuing credit cards or increasing credit limits (the "TMS Claims"). TMS operated on a 'no win no fee' basis and submitted approximately 33,000 claims between October 2022 and 31 August 2024 on behalf of Vanquis customers.

The TMS Claims were subject, by Vanquis, to an internal complaints procedure resulting in a written response. The customer could also decide whether to make a subsequent complaint to the Financial Ombudsman Service ("FOS"). The FOS imposed a processing fee on Vanquis for each TMS Claim given their volume, regardless of outcome.

In this separate action, Vanquis sought to turn the tables by issuing a claim against TMS, alleging that TMS had caused Vanquis loss by unlawful means by issuing thousands of claims, which it either knew or should have known would never succeed, but with which the bank was forced to engage and respond, incurring costs regardless.

Vanquis claimed that the TMS Claims were hopeless, including because of TMS' use of questionnaires which did not address the key financial and affordability issues. Of those complaints considered by Vanquis before being referred to the FOS, Vanquis partially or fully upheld just 7.8%. Of the TMS Claims considered and resolved by both Vanquis and the FOS, Vanquis partially or fully upheld 6.3% and the FOS upheld 9.9%. Vanquis alleged that TMS sent documents lacking the necessary details that would allow Vanquis to appropriately assess TMS Claims and appeared to have done no screening themselves in order to advise the customers of the merits, which in part explained the low proportion of successful TMS Claims.

Vanquis claimed losses in excess of £13 million, including the costs of engaging temporary staff to handle TMS Claims, wasted management time, lost profits and fees paid to the FOS (by far the bulk, at over £9 million).

The applications

TMS applied for strike out and/or summary judgment and these applications were dismissed by Mr Justice Jay on the basis that Vanquis' case was at least arguable and should proceed.

In order to succeed in its claim, Vanquis would have to prove that:

• TMS committed unlawful acts – Mr Justice Jay considered the most persuasive were (i) that TMS had breached express and implied terms of contract between TMS and its clients (containing express and implied obligations); (ii) that TMS had breached its fiduciary duties; and (iii) a tort of deceit claim.
• The unlawful means interfered with the actions of a third party – Mr Justice Jay considered it at least arguable that TMS was interfering in the relationship between Vanquis and its customers. Vanquis also argued in the alternative that the general practice in the banking industry was for a customer's credit to be suspended upon receipt of a complaint (in light of the matters alleged). This meant – according to Vanquis – that by bringing complaints on a customer's behalf, TMS was causing the cessation of the relationship. Mr Justice Jay stated that expert evidence about custom and practice in the banking would be admissible at trial, and held that the point was at least arguable.
• TMS intended to cause loss to Vanquis – Vanquis argued that TMS' business model relied on bringing a large number of claims, only a small proportion of which would succeed, and thus it did not have to spend time investigating whether a claim was viable before bringing it. Vanquis' position was that TMS did intend to cause Vanquis economic loss in this way, albeit this was on a secondary or inferential basis, rather than being TMS' predominant aim. Mr Justice Jay considered this at least possible.
• TMS' unlawful acts did in fact cause Vanquis loss – Vanquis identified over £10m in damages, including the cost of engaging additional temporary members of staff, wasted management time, loss of profits and fees paid to the FOS.

Mr Justice Jay ultimately dismissed TMS' arguments in respect of all four elements of the cause of action.

Implications

It is not necessarily surprising that TMS' applications were dismissed, given the high bar that must be met to succeed on strike-out/summary judgment, albeit Mr Justice Jay noted that he was "not to be understood as expressing any view as to whether Vanquis' case is right" (see the full judgment here). TMS has applied for permission to appeal the decision.

However, Vanquis' claim is an interesting and novel approach to dealing with the burgeoning claimant / claims management industry in the UK, and to hit back at what Vanquis clearly sees as unmeritorious claims which cause a heavy financial burden on its business. The mere fact of bringing such a claim may well dampen the enthusiasm of claims management companies and claimant solicitors in the near-term.

Indeed, the SRA has been increasingly concerned by some of the activity in this space. TMS was separately subject to regulatory action in 2023 relating to complaints from two banks concerning its handling of claims against them concerning mis-sold packaged bank accounts.

On 2 May 2024, the SRA published a warning notice (here) aimed at law firms and individuals undertaking claims management activity where those claims relate to financial services and products, expressing concerns about (i) clients' instructions not being sought for claims being brought, (ii) poor due diligence during client onboarding leading to low quality and/or inaccurate claims entering the financial services redress system, and (iii) failures to act promptly or adequately in response to client instructions. The SRA published a further update on 3 July 2025 (here) aimed at those representing the public in respect of motor finance mis-selling claims.

Against this backdrop, the use of a novel cause of action may indicate the development of a new tool in the defensive toolkit for financial institutions (and other defendants) responding to large-scale vexatious claims going forward. The case will also likely shine a further spotlight on claims management and the obligations to diligence claims properly more generally, should it proceed to a full trial.