Manolete Partners Plc v White – The Limits of Enforcement

The Court of Appeal’s decision in Manolete Partners Plc v White tested the enforceability of a judgment debt against a debtor’s occupational pension, raising fundamental questions about creditor rights, statutory protections, and the economic realities of post-insolvency recovery.

The Case in Brief

Mr White, the sole director and shareholder of a company that entered liquidation in 2017, was also the only member of a small self-administered pension scheme (SSAS). Manolete Partners, acting as litigation funder, acquired claims from the liquidator for breach of fiduciary duty and secured a judgment of approximately £1 million against Mr White. With the judgment unsatisfied, Manolete sought an order requiring Mr White to draw down his occupational pension and provide bank details to facilitate enforcement.

The High Court granted the order. However, the Court of Appeal overturned it, holding that the order breached section 91(2) of the Pensions Act 1995, which prohibits any order “the effect of which” would restrain a member from receiving their occupational pension.

The Court of Appeal held that the order created a pre-planned sequence of events intended to allow Manolete Partners to enforce its judgment debt over Mr White’s pension and thus had the effect of preventing Mr White from receiving his occupational pension.

Economic and Policy Implications

The judgment arrives at a time when insolvency practitioners and litigation funders are under pressure to maximise recoveries in a challenging economic climate. With corporate failures rising, the cost of living crisis and a possible recession looming, pension pots often represent one of the few remaining assets, and the temptation to pursue pensions as a recovery route is understandable.

However, the Court’s decision draws a firm line. It shows that economic expediency cannot override statutory safeguards. This may frustrate creditors and funders, but it also preserves the integrity of the pensions system, ensuring that occupational pensions remain a reliable source of retirement income.

It is also worth noting that it was Manolete, the litigation funder, who took assignment of the claim from the liquidators and pursued Mr White. Perhaps this shows the economic climate in which the UK finds itself – it is likely we will see a rise in the number of insolvencies due to economic instability, and scenarios where litigation funders may become more common adversaries. It also suggests that creditors will seek more unusual avenues for enforcement of debts, which may prompt litigation funders to apply a more rigorous assessment of the viability of claims at the outset, particularly when judgments highlight pension pots as the primary asset.

From a policy perspective, the case highlights the tension between creditor enforcement and social protection. It invites renewed debate about whether the current framework strikes the right balance, particularly in cases involving misconduct or fraud.

While the Court of Appeal was unanimous, the door to a Supreme Court appeal remains ajar—though the unanimity of the judgment may make that an uphill battle for the litigation funders.