The family of the owner of a collapsed contractor have been ordered to pay a council’s £1m costs in full, years after losing a legal battle over a bus station job.
Close relatives of the late owner of Thomas Barnes & Sons – which is now insolvent – unsuccessfully took legal action against Blackburn with Darwen Borough Council (BDBC) in 2022.
They were seeking damages from the council over its “alleged wrongful termination” of a contract to build Blackburn bus station in 2014.
The family originally sought to claim £684,714 in damages. However, this figure was reduced to £357,000 when the case went to trial.
BDBC’s court costs after it won the case stood at £995,000.
It was able to recover £583,000 through securities the family were ordered to make but a shortfall of £412,000 remained outstanding.
This led to BDBC lodging a non-party costs order at Manchester’s Technology and Construction Court against the family of Thomas Barnes to seek full payment.
The original case was brought by Thomas Barnes’ late-owner Brian Barnes’ wife Pamela, his sons Craig and Scott and his brother Thomas. Barnes died in 2015.
As a result, in its claim, the council said the respondents were “the real parties to the litigation” rather than the firm, which collapsed in 2015, as they funded the case and had a direct financial interest in it.
In a judgment handed down on Tuesday (13 January), Judge Stephen Davies, who sat on the original trial, ruled in the council’s favour.
He said despite there being “warnings” that the family could lose the case, they continued to trial and it was only “just” that they footed the legal bill rather than the taxpayer.
In addition, the family were ordered to provide the substantial security for costs prior to the trial, which the judge said still “did not dissuade them”.
“This is not a case where there were no warnings at all,” he said.
“They were still prepared to fund the claim on that reduced recovery basis at a lengthy and expensive trial.
“It is just that they, rather than BDBC as the successful defending party, should have to pay the costs of the successful defendant.”
Preston-based Thomas Barnes, a £14.2m-turnover business, entered administration in 2015. The administration ended in 2023 with preferential creditors left out of pocket.
Asad Laher, BDBC’s deputy director of legal and governance, told Construction News the council “should not be left to bear” the financial burden of a “meritless” claim.
“The council had no choice but to robustly defend what was a long-running, multimillion-pound claim that lacked merit and incurred significant costs in doing so,” he said.
“The judgment supports the council in protecting local taxpayers and reinforces the principle that public bodies should not be exposed to unrecovered legal costs where claims are pursued for private financial gain.”
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Nicola Harley